Look—we all have goals. For some of us, that goal is not lying when we tell the dentist we floss 2x a week. For others, it’s getting a 183-year-old consumer goods giant to buy our 2.5-year-old company for $100 million.
Look—we all have goals. For some of us, that goal is not lying when we tell the dentist we floss 2x a week. For others, it’s getting a 183-year-old consumer goods giant to buy our 2.5-year-old company for $100 million.
Moiz Ali belongs in the “others” category. As the founder of natural personal care (read: deodorant) brand Native, he brokered the kind of deal young startups only dream of when Procter & Gamble bought his company. But once the ink dried on the contract, the hard work began.
This week on Morning Brew’s Business Casual podcast, Moiz takes us on a guided tour of the acquisition process—how to stand out, how to keep your head down, and how to make a graceful exit.
Even if you aren’t shopping your growing business for billionaire buyers, this episode has something for you:
FYI: When you make it to the end of the episode, you’ll be looking for a very specific link pertaining to Moiz’s daily routine. Here’s that link.
FYI x2: Make sure you subscribe to Business Casual and leave us a rating + review on your platform of choice.
Note: Business Casual transcripts are generated using speech recognition software and human transcription. They may contain errors, although we do our best to avoid them. Please check the corresponding audio before quoting a transcript in print. Questions? Errors found in a transcript? Email email@example.com
[00:00:01] [sound of coffee being poured]
[00:00:04] [intro music plays]
Kinsey Grant, Morning Brew business editor and podcast host [00:00:05] Hey there, and welcome to Business Casual, the weekly podcast for Morning Brew, answering your biggest questions in business. And if you're wondering how we do that, it's by bringing in highly intelligent, highly successful people like Moiz Ali, who I’m about to speak to in just a second, the founder and CEO of Native. I'm your host and Morning Brew business editor, Kinsey Grant. And now, let's get into it!
Kinsey [00:00:26] Moiz, welcome to Business Casual.
Moiz Ali, founder and CEO of Native [00:00:28] Thanks so much for having me. I’m super-excited to be here.
Kinsey [00:00:30] Yeah, I'm really excited to talk to you. You've been kind of on my list of people to talk to for quite some time now.
Moiz [00:00:35] Great—awesome!
Kinsey [00:00:36] Finally getting a chance to do it. It's like I mentioned, founder and CEO of Native, which started as a natural deodorant company. Right? You guys have since expanded into other products as well. But tell me a little bit about what you guys do, what kind of products you're creating.
Moiz [00:00:50] Yeah, sure. So we launched the business in July 2015. It was a natural deodorant business that was sold exclusively online for the first 2½, 3 years of the business. We grew the business really quickly, sold the business to Procter and Gamble in 2017, then started selling into the Targets and Walmarts and Walgreens and CVS’ of the world and then expanded beyond deodorant. So now we sell body wash, bar soap, and toothpaste as well.
Kinsey [00:01:15] Right. And the big kicker [laughs] of all of this is that sale to Procter and Gamble, P&G, which is kind of the fever dream for a lot of these startup founders who are creating these kinds of products is, you know, one of the big [indistinct]. Even just that deal itself was a big deal. It was only 2½ years after you launched. Right? And one of the biggest deals that P&G had done on its own right in 10 years or so.
Moiz [00:01:38] Yeah. So it was—yeah, it was about 2½ years after we launched. It was actually the first deal that P&G bought—or the first business that P&G had bought in about 10 years.
Kinsey [00:01:46] And they spent a 100 million.
Moiz [00:01:47] And they spent about a $100 million [laughter]. And we were like, when we were sort of selling the business, we were talking to a bunch of different players and P&G was part of that conversation. And a lot of the M&A process is about reputation. Like, do you actually do deals? Do you sign the paperwork? Do you try and negotiate the price—renegotiate the price at the last second? And P&G hadn't been in the market for like a decade.
Kinsey [00:02:10] But you have experience with this. You had—you sold your previous business, Caskers, a couple years before that as well.
Moiz [00:02:14] Yeah, that's right.
Kinsey [00:02:15] So you’ve been through the process.
Moiz [00:02:16] I've been through the process. Certainly not one with as many players and as many large players where you're trying to understand reputation.
Kinsey [00:02:23] OK. So we are definitely, definitely going to talk more about the P&G deal and kind of deals in general in just a little bit. But today, just to set the tone here, we want to try and kind of get an answer to how a brand in a perceived crowded category can kind of stand out, how that brand can succeed, and eventually meet the goals that that brand and the founder CEO sets from the outset. So, you started this company in, you said 2015?
Moiz [00:02:52] Yeah, July 2015.
Kinsey [00:02:54] July 2015. You know, deodorant is not exactly [laughs] a nascent area for a startup to decide, Hey, we're gonna make deodorant. In 2019, the global antiperspirant and deodorant market was estimated to be worth 74.6 billion. That's a lot of dollars.
Moiz [00:03:09] That is a lot.
Kinsey [00:03:10] [laughs] How did you stand out? And, you know, the shortest answer possible.
Moiz [00:03:15] Sure. The U.S. market is about $3 billion. I guess the way we stood out was we said, hey, look, you've been—you've made the switch from like drinking Coca-Cola to bottled water. And you made that switch because you're concerned about the products that you're putting inside your body. You should probably be concerned about the product that you're putting on your body as well.
Moiz [00:03:34] And so why are you still using the same antiperspirant that you were using in the 1990s, in 2015, 2016? We've sort of had this much healthier transition, in certainly in the United States, where people are more cognizant of the products that they're consuming. Why did that not exist for deodorant? And so what we said is like, look, we're making a deodorant with ingredients that you can pronounce. Turn over the back of a stick of Dove or Axe, and you will not be able to read one of the ingredients on the back of that thing. You know, turnover our ingredient, turnover a stick of Native. And it's things like baking soda and coconut oil and fractionated coconut oil. And it's much more easy to understand. And so that was the sort of genesis of Native and that was the way that we were able to differentiate ourselves in the market.
Kinsey [00:04:17] So what would you say came first? The idea for Native to be better, more natural deodorant or this sort of movement that we've seen in the past couple of years, especially in the United States, toward these healthier options, be that water instead of Coke or Lola tampons instead of Playtex?
Moiz [00:04:31] Oh, it was certainly the move—you know, we we rode the wave of that movement. That movement came way before us.
Moiz [00:04:37] That movement started with like Whole Foods starting in the 1980s or 1990s and getting the very, you know, tail-end of the market who is really concerned about what they were consuming into Whole Foods. And then it went from Coca-Cola to bottled water. And I think it went from many other products before it came to deodorant. But deodorant made a lot of sense. It stays on your body all day, every day. You put it on after you take a shower, and it has 95% penetration in the United States, like virtually everyone who's old enough to use deodorant, uses it on a daily basis.
Kinsey [00:05:09] That's a super-attractive addressable market.
Moiz [00:05:10] Yeah, exactly. [indistinct] When you think about it, it makes a lot of sense. I guess, in 2015, I'm not sure a lot of people were thinking about it. And so I think we were in the right place at the right time. But when you think about it, you're like, oh, yeah, why would I not be concerned about this thing that's on my body, all day, every day?
Kinsey [00:05:24] Right. Do you think that there was a struggle in the early days of convincing people to buy something that is simply more expensive than, say, buying a Dove, a Dove deodorant or a Secret deodorant or something? Native is like $12 —
Moiz [00:05:36] Native is $12, which is three times the average price of a conventional deodorant. And yeah, the price point has been an issue. And more than that, even just trying a natural product had been an issue. And so I think we had to sort of get people over that hump and say, hey, we understand that you've tried this other product. You may not have loved it. That doesn't mean the whole category is bad. Why don’t you give us a shot?
Kinsey [00:05:57] So how did you do that? What was your form of education or communication with possible new customers?
Moiz [00:06:03] Yeah, I think once we got people aware of the brand and sort of what we were doing and saying, hey, we're aluminum-free. There were two ways that we used to get people over that hump. One was reviews. We were really aggressive about trying to get reviews from consumers, not only written reviews that people would write on our website, but video reviews. We tried to get people—and we got hundreds of people—to do reviews of Native in their own bathrooms, like sort of holding it up and doing a selfie with them with an iPhone. And that was really effective because anyone can fake text reviews. And I think everyone's a little concerned about the reviews they read on Amazon or on Yelp. But video reviews that we were generating could not be fake. It was clear that these were very authentic people sitting in their homes talking about the product.
Kinsey [00:06:48] And while [indistinct talk by Kinsey and Moiz] And then it's true. It's the easiest way to convince people that we are doing is worth it.
Moiz [00:06:56] And then I think the second thing that we did right was we offered free shipping and free returns. We’re like, hey, look, if you don't like this product after a month, send it back to us. We'll eat the—we'll pay for return shipping and we'll give you a refund. We're willing to take the risk that our product is not effective for you. And I think that gave people a lot of confidence that, hey, this product, like they're trying to stand behind what they're making. And so we're willing to take that risk.
Kinsey [00:07:18] Did that squeeze profits in the early days when you had to assume that kind of risk?
Moiz [00:07:22] I wasn't sure what we were getting into. The [indistinct] one just came out and they have something like a 20% return rate. It's not insignificant. You know, it's material. For us, it's less than 1% of people that want to return the product.
Kinsey [00:07:38] So talk to me a little bit about the decision after deodorant proved itself [laughs] to move into other product categories.
Moiz [00:07:44] Yeah, I think it was pretty natural. Like, oh, look, one of the things—for lack of a better term—it was [indistinct]. [Kinsey laughs] You know, it was—we branded ourselves in order to be able to do this type of thing.
Moiz [00:07:57] You know, I think what are the difficult parts for a company like Dollar Shave Club to expand into other categories is it's called Dollar Shave Club. Like it very much stands for shaving. For us, we were intentional about it when we launched the business and we said, hey, look, if this works, we think we can go into other categories. And certainly the name carries over. And then it was obvious that consumers wanted that in other products as well. And I don't think we're done after, you know, body wash bar soap and toothpaste. And so we're trying to do that for a portfolio of different personal care categories that makes sense for us and that our consumers want. And I think one of the things that we're being really conscious of is trying to remain in the personal care category. We don't want to turn into a beauty company.
Moiz [00:08:35] And so I think the second product that we created, we gave a lot of thought to, because we're like, look, if we create a face wash or something that's very much geared towards women, how quickly do we become a beauty company versus a personal care company? And so we want to remain sort of that unisex personal care, daily basics company, and that so is very intentional in terms of the next few products that we've created.
Kinsey [00:08:56] OK. So let's talk about—as you know, we kind of talk about creating new products and expanding the business. You recently tweeted that you have a goal of generating $1 million in revenue per employee, per month at Native. You're also the fastest growing CPG company in the United States.
Moiz [00:09:12] It's very hard to know that. It's also hard to know that because there could be a company that went from $10 in sales to $500 in sales. [Kinsey laughs] And so that's very different scale than we're at.
Kinsey [00:09:23] [indistinct talk by Kinsey and Moiz] — in your peer group.
Moiz [00:09:25] Yeah, exactly.
Kinsey [00:09:26] Those are pretty lofty goals, and goals that you are meeting and maybe on track to meet. You've kind of done this without raising really any money at all, which is pretty astounding. You guys raised, what, like a little over 500,000?
Moiz [00:09:39] Yeah, we raised about $500,000.
Kinsey [00:09:41] Which for anyone listening, is pennies in this kind of an industry, especially something like Native that was generating a lot of buzz. You would expect the venture capitalists to kind of come knocking. What was the reasoning behind the decision to raise so little money?
Moiz [00:09:55] So when they were coming knocking. They're really good at what they do.
Kinsey [00:09:59] Would you go to a lot of dinners and drinks? [laughs]
Moiz [00:10:00] Yeah. Like Rebecca. Actually, I met her because she came knocking.
Kinsey [00:10:05] Right, Rebecca, who was on Rebecca Kaden from Union Square last week on the show.
Moiz [00:10:08] And I love her. She's great. And I was just like, how did you find us? Because, you know, at the time, I think we had three people on the team, and we had done no PR and no one had ever heard of us. And that was also very intentional. We were like, if things are going well, let’s not like, you know, we don't need to thump our chests. And so I remember my first question her was like, how did you find out that we exist? Because we're trying to stay under the radar. And she was great about it. I don’t remember her answer, but she's great about it. Oh, yeah. VCs came knocking to us. Why did we raise so little? Like things were going right and we were just generating a lot of genuine EBITDA, like we were, you know, the month before we sold the business. We sold the business in November 2017. In October of 2017, we generated about a million dollars in EBITDA. We had no debt on the balance sheet.
Moiz [00:10:54] And by the time we saw that we'd raised $500,000. When we sold the business, we had 12 million in cash. We grew—it actually a genuinely successful business that was operating well, that was producing cash, and so we didn't need a lot of cash. Like the VCs came knocking and for a while we were listening to them. And then we're like—we have a little bit of money now and we have no idea what to do with the money that you'd give us. We can't spend the money that we have. So, like, what are we doing here?
Kinsey [00:11:22] OK. So two things. First, EBITDA—earnings before interest, taxes, depreciation, amortization.
Moiz [00:11:27] That's right.
Kinsey [00:11:28] Those of us who maybe snoozed through accounting. Second question, how did you ensure that you had something like $12 million cash when this deal happened? I mean, was it every single deodorant sale had to be profitable? And also, how many people were you employing at the time that you were sold?
Moiz [00:11:45] Yeah, we were super-frugal. And I think that, like, there's two ways a business can go out of business. One is the founders give up because they've tried long enough and they think that they can spend their time doing something else and it'll be more productive. Or two is you just run out of money. And, you know, I could control number one by sheer force of will. I could not control number two by sheer force of will. And so we just said no to virtually anything that cost any money. We squatted in people's office spaces that were for free. We were just frugal.
Moiz [00:12:15] We like when influencers were like, hey, we want to do this. We're like, we don't think this is going to make any sense for us economically. And so we can't afford this. You know, we didn't try and do any type of really expensive advertising because we couldn't afford any of that. And we were really lean with our operations. So we hired our first employee when we had about a $3 million run rate. So I was the only person working at the company for the first year. And then we hired somebody when we were doing about 250K a month. And then when we sold the business, we were probably doing—I don’t know—somewhere between four and five million a month and we had eight people on the business. And so we were —
Kinsey [00:12:48] Frugal is understated. [laughs]
Moiz [00:12:50] Yeah. Yeah. I looked at people that were running the business. Nobody was getting anybody's coffee. You know, like people were doing genuine actual work. And, you know, I used to think, OK, look, if you can save $100,000—if you can save us $100,000 this year by spending a day doing something, it's probably not worth it. Go spend your time trying to save us more money than that because there's so much low-hanging fruit at this company. And so we were doing real work. It was operating well. We were like a close-knit team and we had found product market fit really early on. And so, yeah, I think that's how we were able to remain independent and not beholden to investors.
Kinsey [00:13:32] And I want to talk in a second about being beholden to investors. But first, you mentioned that you didn't spend a ton on social or at least on advertising. At the time that Native was kind of hitting its stride, Instagram ads were super-cheap. A lot of social media ads were super-cheap. Is that how you relied on that kind of growth? What was your strategy?
Moiz [00:13:52] So we relied on word of mouth and then we relied—yeah—then we ran Facebook ads. We ran Pinterest ads. And I think you're right, like Instagram ads were great back then. They're still great today. I think everyone says the heyday of Facebook ads was when they were building their business. I think if you talk to the [indistinct] guys, they'll say it was 2012 and 2013. If you talk to people—we might say it was 2015 to 2017, although I still think that they're fantastic. And if you talk to a new brand that's launching today, if you talk to Billie, which was sold to a P&G, you know, they probably say it's 2018, 2019.
Kinsey [00:14:22] What was the cheapest way, aside from word of mouth, for you to acquire new customers?
Moiz [00:14:26] Facebook.
Kinsey [00:14:26] Facebook.
Moiz [00:14:27] Actually, it changed between Facebook and Pinterest.
Kinsey [00:14:30] Interesting. Do you think that it's possible to build a business using those same strategies today?
Moiz [00:14:34] Yes.
Kinsey [00:14:35] [indistinct] yours?
Moiz [00:14:36] Yes, I'm sure it is [Kinsey spoke indistinctly]. I'm very, very confident that that's the case. I mean, look, there are incredible advertising channels and they have scale that virtually nobody else has. Like today, we advertise on podcasts, we advertise in through direct mail, we advertise on television. We're doing a subway purchase—or buying a bunch of subway ads in New York. We have a—we're gonna launch a pop-up store, but there's a lot of different advertising channels that we have. Facebook and Pinterest both have immense amounts of scale. You know, in 20—I started advertising in my first business on Facebook in like 2013.
Moiz [00:15:10] And I likened it to shooting a Revolutionary War cannon, where you pointed the cannon in a direction and you hoped the cannon ball went in that direction. And sometimes it blew up in your face and like, you know, it took all of your money. And today, it's having a laser-guided missile where you're like, I want to reach a woman who drives a pink Cadillac Escalade and lives in Venice, California, and Facebook’s like, got it. No problem. [indistinct talk by Kinsey and Moiz] And so it's just been incredibly effective.
Kinsey [00:15:36] OK. So if these ads like on Facebook to find that very highly specific person are still pretty cheap, why do the things like, you know, a capital-intensive pop-up? You know, some might say you're wasting money advertising on television.
Moiz [00:15:50] Yeah, that's a great question. And I think we're still frugal about that. And we're measuring results. We're not just like, let's spend money on TV and then go home. We're like, OK, what how much traffic does this bring us when we advertise on television? And I think, like for us and for any other brand, at a certain point, you want to start diversifying channels of acquisition. It may not be early on, I think like, you know, a lot of people will say you want to diversify channels of customer acquisition really early on so you're not devoted to any brand, to any one channel. The problem is you're not going to be good at five different channels of acquisition. I've never met anyone who's good at Google and Facebook, for instance. Like those are two very different channels of customer acquisition. One is intent-based and one isn't. And so if you try and spend money on five different channels, you're going to be a jack of all trades and a master of none of them. And so we want to be where our consumers are. And that requires us to go beyond Facebook at this point.
Kinsey [00:16:41] OK. We'll talk more shortly about being where your consumers are. But really quickly, let's take a short break to hear from our partner. —
Kinsey [00:16:50] And now back to the conversation with Moiz Ali from Native. I want to hear a little bit more about your perspective from the start. Was it always, we want to sell this brand to a bigger consumer packaged goods company in 2½ years or did you have any sort of vision of, you know, hey, maybe instead of P&G buying us, we become the next P&G?
Moiz [00:17:11] Yeah, I think like, one that like, that's great that you think my ambition was that high when we launched the business.
Kinsey [00:17:18] Hey, you never know. [laughs]
Moiz [00:17:19] It was more like, I wonder what happens when you sell deodorant online? Are people crazy enough to buy it? And so I think our mission was like, ah, my ambition personally was like, let me see what happens when I start doing something like this. And, you know, within a few months, it was clear that we had good product market fit and that the business would have legs. And then it wasn't to sell to P&G or to even become the next P&G. We were more like—people always ask me like one, how do you compete with P&G? And then two, what do you think of them? And I was like, I never think of those guys. Before we sold to them, I never gave them one thought. I was like, I'm focused on the millions of consumers that are purchasing our product and are happy with it. And the ones that are unhappy with it, I'm focused on making those people happy with it—or not hating us.
Kinsey [00:18:02] You really never thought about P&G?
Moiz [00:18:04] I wasn't like, oh my God, what is Old Spice doing today? What is Secret doing today? First, they're not doing anything that day. Like they're much [indistinct]
Kinsey [00:18:12] [indistinct] They're kind of lumbering around.
Moiz [00:18:15] Yeah, exactly. They're not going be as nimble as us. And two, like my business is growing 10x and then 5x. I don't have time to spend time being like, oh, what are—what is this old stodgy company doing? I don't care. This is working really well. And I've got millions of consumers that have purchased our product. Our brand is on fire. Like, that's what I need to focus on.
Kinsey [00:18:34] Do you think that's a common mentality among startup founders today?
Moiz [00:18:38] I don't know. I think it gets harder the bigger you get. And I think it gets harder the more money you raise from investors, because I think when you have those genuine board meetings, like, you know, some guy in a suit is gonna be like, well, what do you think of, you know, Unilever creating this new scent for Axe? And you have to have a response to that and sort of being like, who gives a shit?
Kinsey [00:18:57] [laughs] Only target middle-schoolers anyway, right?
Moiz [00:19:00] Yeah. Yeah. Exactly. And that would be my response. And you can't say that in front of one of your investors because you have to be like, more respectful and more thoughtful than that. And so I think it gets harder the more money you raise and the bigger you get. And I think when you're—when things are working really well and you're accountable to no one but basically yourself, you're just like, this is what's working. Let me ignore all this other noise.
Kinsey [00:19:19] Was there ever a time that you wished you could be one of those companies that raised a ton of money?
Moiz [00:19:25] Yeah. All the time. You know, I walked into friends’ offices and they were beautiful and they had like, you know, you go to [indistinct] office and they've got like a Michelin star chef back there.
Moiz [00:19:35] And, you know, you're over here eating gummy bears and you walk into other people's offices and they're just—they have amazing MacBook Pros and you're using an old MacBook Air and, you know, your office smells bad. Like, I wish I had all like, when I walked into their offices, I was just like, wow, you guys have—you guys seem successful. And that's why I didn't look, that is a real reason why people end up raising money, because they're like, I need to be able to provide this to my employees and I need to look an aura of a successful company. And so they end up doing, that while for us, we were just like—we were just trying to keep our heads down and keep the lights on.
Kinsey [00:20:08] Right. So I want to kind of like drill down just a little bit more here on the CPG becoming the next P&G versus selling. Do you think that having that kind of mindset is something that a founder today has to consider in the early days? Do they have to say, hey, it's possible we might be operating the way that Native is operating, or do they have to say at the beginning, I want to be P&G? Can you—can you change your mind?
Moiz [00:20:33] You can definitely change your mind. I think the real question is like, are—the mindset you have to have is no matter what happens, I'm going to be—I'm gonna solve that problem.
Moiz [00:20:40] Like you're going to have manufacturing issues, you're gonna have shipping issues, you're going to have marketing issues. And if you're like beholden to one set of ideas or one like philosophy or one vision, you're going to have issues because things are going to come up and you're going to want to like, you know, you're gonna have to call an [indistinct] when you get to the line. And so I think like having that flexibility is probably the most important thing you can do. You know, certainly we had the vision of like, OK, when things were going well, we're like, how do we become the number one deodorant in the category? And we still have that vision. I mean, it's hard to do—like Secret’s been around a long time. Those Old Spice and Dove, we've been around for 4½ years. But like that is our goal. We want to be the number one deodorant in the category. And whether we're a part of P&G or not a part of P&G, like that's still the goal.
Kinsey [00:21:23] OK. We will talk more about this P&G relationship in just a second. But really quickly, let's take a short break to hear from our partner. — All right, so we've talked about this P&G acquisition quite a bit, but the news is that you are leaving P&G right at the end of January.
Moiz [00:21:40] That's right.
Kinsey [00:21:46] What is behind that decision? What's your strategy? What's your game plan? Why?
Moiz [00:21:46] Yeah, we've been a part of P&G for virtually as long as we've been an independent company. So about 2½ years by ourselves, 2½ years as a part of P&G, I feel like I've learned a ton, both independently and as a part of P&G. Like, today when people ask me how come P&G can't create the next Native, I say, when you look at a bird, do you think you can fly? Like it's not their DNA in the same way that it's not in our DNA to learn how to fly just by watching a bird. But I've learned a ton about how to structure an organization, how to grow a team, how to lead that team, how to launch products into brick-and-mortar stores, how to be operationally efficient. And I feel like that learning curve is starting to plateau. And, you know, my nature is also to, like, run my own thing and be an entrepreneur.
Moiz [00:22:28] And so, you know, I felt like we hired—we had gotten really good talent in place to continue to organize—like to continue our momentum. You know, 2½ years ago, when we sold the business, I felt like I was a one-man show. Today, I feel like it's a 20-man show. Like the, you know, all the employees contribute and contribute materially and significantly. And I'm really happy about that. And so I feel like we're in a place where I can leave and the business will still be successful. And I feel like I'm in a place where, in my life, it's time for me to start exploring for new—exploring for new opportunities.
Kinsey [00:22:56] OK. We've kind of seen this sort of founder exodus in the recent maybe year-and-a-half, 2 years of companies—their startups that had been acquired by a larger company—the founder says after a couple years, hey, I've learned a lot, but I'm ready to go. I want to do something different. Do you think that this is because of these kind of different management styles or different ideas for what the trajectory of the business is?
Moiz [00:23:17] Yeah, I don't think it's like, you know, I feel like people are always like, oh, they're leaving. Something is happening. It's wrong. You know, it's in our DNA or it's in founder's DNA to go and start something new. And when I leave P&G, I don't do it in a way where I'm like, wow, I really hate those guys. I do in a way where I was like, I really appreciate the opportunity, both to sell my company to you and to learn from you. And like, they put up with a lot when they're dealing with me, you know, like inside their own organization. Basically, everyone is a lifer at P&G. If you work at P&G, you work your way up. And, you know, by working your way up, you're required to do what your bosses want you to do.
Moiz [00:23:52] And when people ask me to do things, I'm like, no, I don't want to do that. What are you gonna do? Like, I don't want to be CEO of P&G. That is not, like, a personal aspiration of mine. And so, I'm OK not working my way up this corporate ladder. I'm OK making independent decisions. And you know, that's not easy for them, and cannot be easy for like the people that I work with around me. And so I think, like, you know, they've learned to be flexible with me in the way that I've learned to be flexible with them. And I think we've both been, like, had a win-win relationship.
Kinsey [00:24:20] I feel like at the end of the day, there's this sort of inherent friction between the big companies that acquire these smaller startups, because, I mean, like you mentioned, P&G is P&G. It's a household name, but it's also a giant company.
Moiz [00:24:30] Definitely.
Kinsey [00:24:30] You're never going to be that. You don't want to be that yet. It's not your aspiration. So is there, is there a limit to what each can get from the other? Right? So if the founders eventually leave, P&G loses that innovation that they spent a $100 million acquiring, and then you stop learning from P&G at a certain point.
Moiz [00:24:49] Yeah, there's definitely a cost to that. And I think—so I think you're right about that. Like they lose the entrepreneurial spirit that I bring to Native, but they also gain the benefit of a brand that will do nine figures in top-line revenue and like eight figures in bottom-line EBITDA this year. And so it's not like they only bought the entrepreneurial ability of Moiz Ali. They bought a very successful brand. And, but I think there—so there are certainly costs to leaving. But the synergies there are, like of us working together, last beyond, you know, my existence at Native. But has there been friction between me and like the people that I work with?
Moiz [00:25:21] Of course, there has been. Like there's no way you're gonna get to, you know, there's not like the person who I report to is really successful within P&G. You know, from an entrepreneurial perspective, I was pretty successful with Native. Like we're both Type A personalities that want to control decisions. And so, of course, you're gonna get butting of heads. But I think it's how you resolve those issues as to whether you have like a good relationship or whether you don't have a good relationship. And I feel like I've had a good relationship with P&G.
Kinsey [00:25:48] So how do you how do you resolve those issues?
Moiz [00:25:50] I guess it depends on the issue. Like, sometimes I'm like, look —
Kinsey [00:25:53] Do any come to mind that you're like, that really sucked. And it was a shitty time and we had to figure it out.
Moiz [00:26:00] Yeah. [Kinsey and Moiz talking indistinctly and laughing a little] One was P&G wanted us to launch into other categories where they felt that we could be really successful in.
Moiz [00:26:12] And I was like the brand isn't meant for those. Like the brand is not ready for those categories. I was talking to you earlier about how I want to create personal care basics and like daily essentials that people use and that are unisex. We're not ready to launch into like mascara and beauty products. And you know, there was pressure for us to do other types of categories that I felt like we weren't ready to. And so there was a lot of tension to do that, like, you know, they were like, we have to do it. And I was like, I'm not going to do it. And so they're like, well, what happens now? Because other—look, we haven't been in a situation where we said we have to do something. And the other guy says no, and just sits there and says, no.
Kinsey [00:26:45] Yeah, you got your way.
Moiz [00:26:46] Yeah. And so, you know, that was not easy on their part. But then there are other times where I'm like, you know what? Like this isn't a big give for us. So we're happy to do that. And so, you know, we're like, I feel like we—you come to a compromise. And in that way, it may be like a marriage where you're like, OK, let's figure out—I've never been married, but let's figure this out so that we don't destroy the relationship right now.
Kinsey [00:27:09] [laughs] Well, yeah, 50% of them do end in divorce.
Moiz [00:27:10] Fair enough.
Kinsey [00:27:11] [laughs] But I guess there are lawyers to ensure that doesn't happen.
Moiz [00:27:13] That's right.
Kinsey [00:27:14] So one of the big parts of this P&G acquisition was that you guys got into these stories that you've been mentioning throughout this conversation. The Targets, the Walmarts, things like that. What did that mean to you?
Moiz [00:27:25] It meant a lot. Like, the day, like the first month that I launched Native, I was like this brand—I'm gonna build this brand [indistinct] and be really successful there. And like, that was a personal aspiration of mine. And when we were trying to sell the business, I wasn't shy about that. Like I told everyone that we were trying to sell to us, like, look, this brand is meant to set a target. We haven't developed the operational expertise to meet the demand that we have online, much less meet the demand of a target—a customer like Target. But this brand is meant to sit there.
Kinsey [00:27:56] OK. What percentage of your sales are coming from these wholesale-type partners like Target? What percentage comes still from online?
Moiz [00:28:03] It depends on the month because like when we sell it, like for instance, we just got into CVS. And so December, like, you know, CVS had a big—placed a big purchase order. I'd say they'll—look, the majority is still online, but it's not the vast majority any longer. It's closer to 60/40. But in certain months, it could be 40/60 because we're doing a display or we’re selling into a new retailer. And so things go more towards the retail side of things than the online side of things.
Kinsey [00:28:27] OK. I'd love to hear your take on this—the sort of the broader trend of P&G especially has bought several startups—personal care and beauty startups—since they bought you in 2017, [indistinct], Walker and Company. And those are just kind of the past couple of years. What do you think of that kind of strategy? Good, bad, sustainable?
Moiz [00:28:48] I think that like, you know, I think it depends on what you're aiming for. Like, if they're aiming to sort of outsource R&D or to develop new brands to startups, makes a lot of sense to me.
Kinsey [00:28:59] R&D meaning research and development.
Moiz [00:29:00] Yeah. And like the brands, like they're being very cautious and disciplined with their investment, look with their purchases, like they're not out there buying $10 billion, you know, new startups. They're not—they haven't paid a billion dollars for a startup. They've paid billions of dollars for other acquisitions that have a ton of history and economics that are very consistent, but not for a startup.
Moiz [00:29:22] And so I think they're being disciplined. And I think, like, you know, if Native is, like I remember when I—when we sold to P&G, I told the guy that I was reporting to, I was like, the person who's going to benefit from this acquisition the most is your next acquisition, because this is going to go wildly successful for you and you're going to wildly overpay for the next one [Kinsey laughs] because you think this is going to happen all the time. And then that's going to go poorly. And then the third person is going to be like, you know, like, you know, you're going to underpay for.
Kinsey [00:29:49] Right.
Moiz [00:29:50] I'm not sure if that happened or not. But like, I feel like they can get good deals. They've got the aggressiveness. They've—they're like smart and disciplined, like acquirers. So good—I think Native deal is gonna work out incredibly well for them.
Kinsey [00:30:07] Right. And I think we so often think of it from the perspective of just the P&G side of the acquisition. But I was talking with producer Josh a couple of days ago after we learned that Visa had just bought Plaid. Yeah, this is great for Visa. It's a sexy company. It's a company that you're doing really good business. But at the same time, Plaid is probably aware that it's never going to completely wipe Visa out of the market. This is good for both parties, at least from our arms-distance where we're watching.
Moiz [00:30:35] Definitely. And I think, like, you know, P&G is a $300 billion CPG company. Like they have brand—like if you added up all the direct-to-consumer brands that exist in the United States, it would not equal one Pampers.
Kinsey [00:30:48] Yeah.
Moiz [00:30:49] Like that —
Kinsey [00:30:50] Crazy.
Moiz [00:30:51] And so when we think that, look, DTC is disrupting these legacy brands, yeah, we are definitely taking market share, and Native is taking a lot of market share in the deodorant category. But the idea that like, we're going to overthrow a massive conglomerate with 150 years of history in the next five years is insane. Like, you know, Pampers does billions of dollars. Tide does billions of dollars in revenue. There is an entire aisle at Target devoted exclusively to Tide. Like that takes a lot of effort and time to disrupt and it's not an overnight success. And so I certainly think that there's a lot of successful DTC companies that exist today and they can be had in the future. But like, becoming the next P&G is not—like P&G is the size of Facebook and Facebook is enorm—or like, you know, I guess half the size now, Facebook stock has gone terrible, like it's an enormous company. It's really difficult to build a $300, $300 billion CPG company. It does not happen in even one lifetime, really.
Kinsey [00:31:45] Generation of people and of business leaders to make it.
Moiz [00:31:47] Yeah.
Kinsey [00:31:47] All right. So we are through the hard stuff. Now we are going to take out the world famous Business Casual wheel and have you take a little spin around. So go ahead and hit the middle button to see what you got stuck with.
Moiz [00:32:03] A little nervous. I think this is the hard sell. [Kinsey laughs]
Kinsey [00:32:06] OK.
Moiz [00:32:07] Truth or truth.
Kinsey [00:32:08] You got truth or truth. What is the most outrageous sent suggestion you've gotten?
Moiz [00:32:13] Great question. Poison ivy
Kinsey [00:32:16] Poison ivy?!
Moiz [00:32:17] Yeah.
Kinsey [00:32:18] What does poison ivy smell like?
Moiz [00:32:19] I don't know.
Kinsey [00:32:20] Well, here's my question. Who got close enough to poison ivy to be like, Oh yeah, this would make a great deodorant?
Moiz [00:32:25] I think it's a great—I think it's a great idea because like, people are outraged by it. They're like, does this make me itch? What does this do? And like, it's a plant and it's a natural. But like, it's not good odor. [Kinsey talks, not not distinct] Yeah, exactly.
Kinsey [00:32:37] OK. And also, I recently saw on your Twitter, usually truth or truth is just one question. But I was just too curious. I have to ask. I don't know if you were tweeting or trolling or what was happening, but you [laughs] tweeted a Wolf of Wall Street clip. Said that you watch it every morning.
Moiz [00:32:52] Yeah. Yeah.
Kinsey [00:32:53] That clip about Jordan Belfort going into the office and giving a very inspirational speech [indistinct]
Moiz [00:33:00] Yeah. Yeah.
Kinsey [00:33:01] Do you really watch that clip every day? [indistinct]
Moiz [00:33:02] I watched if not every day, virtually every day. [Kinsey speaking, but indistinct] It's like, you know, there's like hype videos that LSU has, have you seen that, like those videos that, like, get you hyped up to go into work. And that's what it does for me. I when I walk in, I'm like, OK, I'm ready to do this.
Kinsey [00:33:18] Throw a $40,000 watch into a [indistinct].
Moiz [00:33:21] I'm not ready to do that [Kinsey laughs], but I'm ready to like, I'm like, hungry and ready to, like, start making business decisions. I like listen to it on the walk to work and I'm like, oh, by the time I get to work, I'm like, OK, let's go now.
Kinsey [00:33:33] That's [indistinct]. OK. Take another spin around the wheel and you get, oh, shit. So, when was there a time in your career—this can be either good or bad—oh shit moment that you realize either everything was about to change or you made a huge mistake or your life was just headed in a completely different direction.
Moiz [00:33:51] We were working with a different CM, a different contract manufacturer. And you know, she called me up one day. It was just when we launched and she called me up and she's like, Moiz, this business is taking off. I mean, we're saying 500 units of deodorant a week. It wasn't a lot at the time. She's like, this business is taking off. We're gonna do this together and really build a successful business together. And I was like, great. And then like two days later, she called me and she's like, my son is sick. I'm out of this business.
Moiz [00:34:13] Like, I'm no longer making Native deodorant any longer. And I was like, oh, shit. You know, we're doing like 500 units of [indistinct] in a week. So we're talking about $5,000 of revenue a week. $20,000 a month. It's not anything material. We're barely breaking even if we're breaking even. Look, should I just fold this business like, OK, this is gonna be too hard to replace this. And so let's, like, forget about it. And so I doubt—there is definitely a oh, shit moment when that happened. And then, you know, I spent a day and I was like, oh, should I do this or should not do this.
Kinsey [00:34:48] Toss a coin. Eeeny, meeny, miny, moe.
Moiz [00:34:51] I was just like—what else am I gonna do if I stop doing this? I'm gonna go back to watching like “Star Trek” at 2 p.m. And so that's—that’s a lot of fun. But I've seen every episode 10 times now, so I should probably just keep doing this.
Kinsey [00:35:02] We can thank “Star Trek.”
Moiz [00:35:03] Yeah, exactly. And so I can thank the Netflix reruns, like I'm tired of these reruns. And so went back to working and then we found somebody else for those. Definitely the oh shit moment.
Kinsey [00:35:12] OK. Take one last spin around the wheel and it's going to be the one thing. So what is one book or read, a conversation, movie, quote—anything like that that has had, what you would consider, an outsized impact on your career or your life?
Moiz [00:35:28] Great question. One book or—I'm sorry, what were the other options?
Kinsey [00:35:31] Anything—book, quote.
Moiz [00:35:33] Sure.
Kinsey [00:35:34] Maybe “Star Trek.” [laughs]
Moiz [00:35:35] Yeah. No, I really like, you know, Ray Kroc, who's the founder of McDonald's, wrote a book or founder of McDonald's, not the founder, but like the guy who really scaled it, depending on who you ask, he might be the founder. He wrote this great book about how he built McDonald's. And, you know, he started when he was like 55, like a 55-year-old guy, saw a single retail McDonald's. And it's like, I'm gonna put this across the country. You guys don't realize what you have here. You have something really special. Forget about retiring. I'm going to go do this and make this huge. And he had incredible tenacity. And like, you know, he wanted to do it his own way. He, like, rejected everyone else's ideas.
Moiz [00:36:11] And he's like, this doesn't make any sense. I'm gonna do it my way. And like, you know, he had his friends become—buy franchises and it was friends, operators [indistinct] franchise does really poorly. He wasn't like, oh, that's OK, you're my friend. He's like, fuck you, dude. I'm not gonna be your friend anymore if you don't clean up the trash at your McDonald's. And he had this like incredible devotion to making his [indistinct]—making like his dream come true. And I've always been inspired by that.
Kinsey [00:36:36] All right. That's awesome. What a way to end the conversation, right? Inspiration. Fire your friends if you need to.
Moiz [00:36:42] Yeah.
Kinsey [00:36:43] Oh, thank you so much, Moiz, for coming on Business Casual. I have had a blast talking to you. You've got a really interesting story. I'm excited to hopefully see what you do next—if you want to tell us quickly before we go.
Moiz [00:36:55] Sure. Yeah. I feel like, you know, I'm trying to put out a lot of content about the story about Native. I'm doing a lot of investing in terms of ecommerce companies and trying to advise ecommerce companies. I really love the industry. And so I'm trying to become more involved in a way that requires less day-to-day operational ability and more like, you know, forest for the trees.
Kinsey [00:37:14] So not starting another DTC brand tomorrow.
Moiz [00:37:16] Not tomorrow. But sooner or later.
Kinsey [00:37:19] OK. Got it. So if people want to keep track and follow along with what you are doing in your second act, where can they find you?
Moiz [00:37:26] Yeah. I'm on Twitter @MoizAli. M O I Z A L I. I’m at MoizAli.com, and I'm on Instagram @Moiz.R.Ali. Someone has the MoizAli handle for that. [laughs]
Kinsey [00:37:36] [laughs] For now. Not for long. OK, awesome.
Moiz [00:37:39] Thanks so much.
[00:37:40] [sound of coffee being poured]
[00:37:44] [outro music starts]
Kinsey [00:37:44] Thank you so much for listening to this week's episode of Business Casual with Moiz Ali. I hope everybody watched the conference championship games this weekend because on Tuesday, we are talking about the business of the Super Bowl with the NFL legend Michael Lombardi.
Kinsey [00:37:59] I'm really excited. And I want everybody to share this episode with all of your friends so that you are the smartest person in the room when the Super Bowl actually comes. And just so you know, @Bill Simmons, I’m coming for your crown.
Kinsey [00:38:10] See everybody on Tuesday. [ding sound]