Gary Vaynerchuk Former Employee is a Branding GENIUS - Full Interview | My First Million 06/03/2020

Mike Cessario

One of my old bosses... I used to work as the Creative Director at VaynerMedia. So, Gary Vaynerchuk was like my boss, essentially.

Shaan Puri

What's up, Sam? We have a guest, Mike Cesario. Welcome, welcome to the podcast! Thanks, guys.

Sam Parr

There's a lot of crazy stuff going on right now. This hour will be a little bit of an escape. We talked about everything going on in the last podcast. I think let's try to make this at least a 45 to 50-minute escape for people, and we can kind of talk about...

Shaan Puri

Some interesting stuff. Exactly! It does kind of feel silly to be like, "Oh, here are some business ideas," when, you know, the whole world is really in a tilt, whether it's through coronavirus or the different protests that are going on. But like you said, I think, you know, for me, I'm glued to Twitter and the news and all this stuff all day. Then, by 7 or 8 PM, I just need a break. I go walk my dog and listen to some mindless stuff about sports or whatever else, just to calm my mind. So hopefully, we could be that for some people—a bit of a diversion or a bit of an escape from the heaviness that's going on. So, you know, Mike, I'm glad you're here. You have a product that we've talked about on the podcast before, which is Liquid Death. So, okay, if somebody doesn't know what Liquid Death is, give them the rundown. What is Liquid Death? Then we're going to talk about how you started that, and we're going to brainstorm some cool ideas and spaces around what you do.

Mike Cessario

Sure, so I mean, I guess at the heart of what Liquid Death really is, we're completely trying to change the way healthy food and beverages are marketed. At the end of the day, most of the most hilarious and memorable ad campaigns that you ask most people about from the last 10 years, they'll tell you Bud Light, Dos Equis, Snickers, Doritos, Skittles—like all junk food and alcohol. That's the funniest, most memorable kind of youth culture, owning energy drinks like Red Bull. That's like the most...

Shaan Puri

let's not leave old spice out

Mike Cessario

Well, it's not really a poodle beverage, but yes. It's like all the junk food and alcohol that does all the funniest, coolest youth culture marketing. Whereas healthy food is traditionally marketed to moms. It's quiet and responsible, or it's like, "Look better!" You know, showing fitness models drinking bottles of water. It's a very different approach. They don't use fun to market. Whereas unhealthy beverages, stuff like that, they want to own fun. So we're basically doing that with water. We want to be able to take the healthiest thing you can drink, which most people don't drink enough of, and brand it. We aim to build a cool image around it, where it's something that you feel totally comfortable drinking, like Liquid Death, in a bar, at a house party, at a music festival, at work, or at the gym. We're just making it more fun to walk around and have a drink.

Sam Parr

And as you... you definitely made headlines when you raised all that money because everyone was like, "This is such a silly idea," and then you raised all this money. I didn't... it's a stupid reason. I mean, it's like an awesome company and totally worthy of going big. So it kind of worked, right? Like, you definitely ruffled some feathers, and I think that's good.

Mike Cessario

No, yeah, I think, you know, I always bring up... I listen to the Reid Hoffman podcast a lot.

Sam Parr

master scale

Mike Cessario

Master scale. Yeah, and it's like I love that he always pushes. He's like, "Truly innovative ideas are almost comical at first." Because if it seems like it makes a lot of sense right now, it probably means there are four other companies that have been working on it for five years already. It's like the things that are truly unique and innovative almost don't make any sense at first or seem laughable. I think that's kind of the case with Liquid Death. We're really trying to disrupt the category in a way that's not just disruption for the sake of disruption. You know, I think we strongly believe that, and I don't think it's something hard to understand in a category where almost all the products themselves are perceived as the same. People aren't assuming, "I only drink Fiji because it's got 0.75 more electrolytes than Smart Water, which has 0.5, and the pH is 7.7." It says 7. No, it's like most people assume water is the same. It's more of a brand play. We believe if we can make you laugh, we have a way better chance of you giving us your $1.69 than the faceless brand next to us who's trying to shout at you. Electrolytes? It all seems like snake oil to me. I feel like there are real human beings behind Liquid Death that I'd want to have a beer with. So, I'd rather give you my $1.69.

Shaan Puri

and let's talk a little

Mike Cessario

bit about the form factor so is

Shaan Puri

it's a it's a tall can is what I've seen are there other form factors or no

Mike Cessario

no it's just a tall can

Shaan Puri

Tall can, which is cool. The branding of it is sort of like, you know, almost like heavy metal or punk rock. How do you describe it? Yeah, yeah, yeah. I mean, yeah, I think at the end of the...

Mike Cessario

**Day**... you would say we're like an alternative punk metal-inspired design and vibe. I think the way I like to think about our brand is like we're a professional wrestler. It's all theater and fun, and no one thinks it's trying to be real. No one thinks the Undertaker is really an evil guy from the dead who likes metal. No, it's a character, and it's fun to have a character. Yeah, and that's kind of how we think about it. We're just playing this fun... sorry, a second... we're just playing this fun character. It's fun to choose.

Shaan Puri

to believe that yeah that this is

Mike Cessario

what it

Shaan Puri

Isn't it interesting how people perceive choices? If you're at a bar or a music festival and you choose water, it feels like you're opting out of the fun. In fact, they'll make you feel that way. You'll get the small, plastic, rinky-dink cup with a baby straw, right? Versus if you ordered an alcoholic drink or something else.

Sam Parr

It's kind of... that's actually good. I mean, I don't drink and I still go to bars. I always felt like... I used to order a Sprite with lime in it because I was like, "I don't want to make it feel uncomfortable." So I'll just... even though I don't like to drink soda, I'll drink it anyway. And I don't want to have no [drink] because I'm like, then everyone's just gonna... it's just gonna come up. And so it is a great alternative to that.

Shaan Puri

and and so mike I'm curious where does this idea come from

Mike Cessario

so I think this was really just like a culmination of all my passions and experience sort of like converged into 1 you know it's like I grew up in high school playing in punk rock and metal bands and skateboarding and you know I would do all of the show flyers and album art and stuff for our bands which kinda got like the entrepreneurial probably side of things because like you know we're booking shows and we're selling merch and like we're pressing records and doing all that kind of stuff then I got into a career of like graphic design which led into advertising so then I was like an advertising creative director for a long time and I worked on big brands like nestle and toyota and volkswagen and naked juice and all this kind of stuff so I I think I got a good sense of where I think big companies screw up I guess like where I think they're shortsighted like I can't tell you how many boardrooms I've been in or where I'm trying to convince people that social media isn't some like niche little thing you add on to your business like it is the internet now when you say I'm going on the internet 9 times out of 10 you're going on social media yeah you know and it's like I think a lot of brands are just way behind the ball to understand what it really takes to be successful in the social environment like your little social posts aren't just competing against other beverages you're competing against influencers who are uncensored and can do great easy off the wall stuff you're again you're competing against everything awesome on the internet when you're scrolling through your feed that's what your marketing is competing against so when you really think about it that way do you really think your little ad that seems like a typical beverage thing is gonna actually stand out in someone's quick scrolling feed amongst all this other amazing stuff probably not so I think the bar for what stuff needs to be is way higher and I think that's what I built liquid death around like we think about marketing like entertainment I don't ever wanna put something in your feed that feels like marketing I wanted to feel like actual entertainment that made you laugh or it was the funniest thing that you may be saw that morning that you wanna share with your friends or whatever that like we're never just sticking marketing in your face like it's always gonna entertain you or it's gonna do something of value that it gives you

Shaan Puri

I've got a question. I'm looking at their Facebook ads right now, and what you're saying is true. So, here are the two ads I see. I wish I could show this through a podcast; I'm going to describe it to you. The first ad features a giant can of Liquid Death in front of a mountain, and it says, "This is dumb, don't buy this." The second ad is a bit more complex. It's like the mountain from *Game of Thrones*, but instead of his head, there is a can of Liquid Death erupting from it. He has a muscular body and is standing in a grocery store aisle, holding an axe. The text says, "Liquid Death is available nationwide in Whole Foods."

Sam Parr

So, I’m gonna... I wanna ask a question about that. But first, is there any indication? Is there anything you can give me that shows, or the listeners, how big this business is? Like, what size you guys are?

Shaan Puri

yeah why should we why should we care about what you say

Mike Cessario

is this working or not

Sam Parr

I want you to like impress people

Mike Cessario

Yeah, I mean, I can't get into specific sales numbers, but since we launched nationally in Whole Foods, we basically launched the day the pandemic started. We went into Whole Foods on March 15th, and even though we've been in a pandemic where they've had like an 80% decrease in store traffic and everything else going on, we've had insane growth in Whole Foods. We're now the fastest growing water brand in Whole Foods, right?

Sam Parr

and you've raised like how much money to make this

Mike Cessario

9 10

Sam Parr

10 10 10

Mike Cessario

The grand total since the very beginning of everything, I think we've raised around $12,000 total right now.

Sam Parr

So great! Okay, so we kind of have an idea a little bit about sizing. When you were looking at this business and what to start, was that your perspective? What is something that, I mean, it sounds like you're into health and that type of stuff. What is something that is good for you but has poor marketing? How can I build a business around that? Was that your perspective?

Mike Cessario

In a nutshell, I think it really came from, you know, when I grew up playing in punk bands and metal bands and stuff like that. I was still, and a lot of my friends in that world were very much into health. Like, I was a vegetarian at age 16. A lot of my friends in that scene were even vegan. Many of them, you know, didn't drink alcohol. I do, and I don't. I think that's one thing that we've been misbranded about. Liquid Death is water for the straight edge crowd. That is not what we're trying to do. I think it's something that's been adopted by them for, you know, the reasons of, yeah, it is more fun to walk around in a bar if you don't want to drink than something like this. But I think another thing that the health food industry does, that I don't think we want to do, is we don't want to be preachy to people. We don't want to say, "You should be doing this," and "You shouldn't be drinking this," and "You shouldn't be doing that." We're like, "Hey, you want to go rip some shots in a bar? Fine! But maybe take a break and have a water for an hour." You know? Or like, "Hey, you want to smoke weed or whatever? It's like great! Maybe hydrate while you're doing it."

Shaan Puri

know right

Mike Cessario

Even if, like, "Hey, you wanna go buy a Monster Energy drink or whatever?" Great! Maybe buy a water too and have a water after you just pound a bunch of sugar and caffeine.

Shaan Puri

That's the good news! Anybody who adopts any lifestyle also drinks water. So, you can compare it to any lifestyle that you want. It sounds like you guys are trying to do that. Let me ask you, you've mentioned some kind of abstract ways, like, "We felt this was missing," blah blah blah. But I want you to rewind and make it real. So, take us back to the moment you had the idea. What's going on? Where are you? Where does the idea come from? Who are you talking to? And then, how did it turn into something?

Mike Cessario

Sure, so as you know, in the world of rock and roll, punk, metal, whatever, the only brands that have invested in trying to own that culture have been energy drinks, primarily Monster. So, Monster was sponsoring the Vans Warped Tour with all the punk bands. They sponsor all these different metal bands. You don't see that with many other brands doing that. I graduated high school in 2000, and that's when I think you really started to see that swell up. A lot of my friends were in bands, and we were at the Vans Warped Tour that was sponsored by Monster back in, I think it was around 2007. Somewhere around there, I was in Denver working for an agency. I went and hung out at the Warped Tour with my friends. They took me backstage, and we were hanging out with all the bands, you know, the bands' tour buses. I saw that they had huge stacks of Monster that these guys were all drinking. I was like, "How are you guys pounding energy drinks right now? It's like 98 degrees!" And they're like, "No dude, it's water." It was like Monster gives all the bands what look like Monster cans, but at the bottom, it says "tour water" because they know that none of these bands are going to drink this stuff in the sun. So, bands on stage are pounding what looks like energy drinks to all these kids, but it's really just water.

Sam Parr

that's right

Mike Cessario

I remember thinking, "That's so messed up." You know, I think that was the moment where it kind of started me down the path of, "Oh, why isn't stuff like water marketed in a cool way like this?" When you actually have a freezing cold can of water, it's just more refreshing to you psychologically.

Shaan Puri

right

Mike Cessario

There's actually a popular science study, I think it was, where they showed that temperature was the number one quencher of thirst neurologically. This is why, if you're really thirsty and you suck on an ice cube, it actually kind of quenches your thirst a little bit, even though no water is actually absorbing into your body. So, I think there was just that moment for me where I started thinking about why healthier options aren't more prevalent. None of my friends, when hanging out, actually want to drink energy drinks; we just want to drink water or beer, you know? But it's like, of course, you're banned. You gotta make money; you're touring. So, of course, you gotta take the checks from these companies. They play ball to a certain extent, but that's where I think the idea really started.

Sam Parr

What other verticals did you explore that you think would also work for this? Did you explore any other products that you think, "There's definitely an opportunity here if you do what we're doing but in this thing or that thing?"

Mike Cessario

so it's funny what I so that so that work tour thing happened in yeah like around 2007 2008 I started thinking about that but then it was a cup like maybe 2 years later I I was living in san francisco and I actually developed a spirits brand on my own called western grace and it was basically brandy so it was like hey how do we make brandy cool because I had brandy it was really good and I'm like why don't people drink more of this it's just like whiskey without the burn but every brandy bottle literally in the in the liquor store had dust on it it was like what your grandfather drank or some trying to be replica of french luxury with cursive golden text on the bottle but it was more similar taste profile wise to a whiskey which was the biggest fastest growing spirit so I had this idea to create a brandy that felt more like a whiskey and felt cool and sure enough like I found a brandy distillery in northern california who were like oh my god we've been waiting for someone to try to make brandy like mass and cool for like 20 years so they were like hey we'll make the brandy for you then I went and found some spirit industry folks who helped create hendricks gin and sailor jerry rum to kind of come on board they thought it was really interesting and then all of a sudden we have a brandy company and I moved back to my hometown of philadelphia where my partners were and we basically like I was only a couple years out of ad school no entrepreneurial experience no liquor industry experience and we started building this brandy company and it's still around today they're in probably 80 bars in la they're all over austin they're in nashville they're in florida but I left the brand a little bit early on because I just me and our the the spirits folks we brought in kinda like didn't see eye to eye on a couple of things from a marketing level so I said hey you guys keep growing it from here I'm gonna kinda go do my own thing and you know I'll I'll keep my little chunk of vested equity and best of luck to you guys like no hard feelings I'm sure you'll do great with it and then went to work for an agency in tennessee that a friend of mine started called humanot where I started doing a bunch of well humanot and I we did a bunch of funny work for the organic world we did this campaign called save the bros the first organic protein shake and we did this funny viral video that just went bananas and it was like the first time that like humor had really been done like in the world of organic and that was like the reinforcement of the warped tour thing where it's like right like why aren't more health brands like playing with the kind of humor and irreverent internet stuff that these other you know unhealthy things are doing and then that's really where I started building the nuts and bolts of liquid death and figuring out the production coming up with the branding and then it was I think maybe 2 years after that was when we officially kinda launched it

Sam Parr

That's pretty cool. Do you think that there's still opportunity for that?

Shaan Puri

I mean because when you go to 711 I mean I live

Sam Parr

I'm in San Francisco, but I'm in Austin right now. There are 7-Elevens everywhere, and it's only Muscle Milk that's available. That's the only protein-based drink. That is similar to your analogy of like an Evian or a Fiji or something—like a mass brand.

Shaan Puri

Well, I think if I'm not wrong, it would be more like taking cottage cheese and making cottage cheese fun than it is like Muscle Milk or the kind of protein shakes, which are already kind of trying to mass market and get in with different lifestyles. Whereas, you know, some random product category that is only trying to play it safe with non-internet-based marketing, those are the ones that you're talking about, right Mike? You think those have sort of a larger delta between what's out there and what could be out there.

Sam Parr

Yeah, I want to hear which of the others, if there are any, have that delta. That's what I'm getting at.

Mike Cessario

yeah it's tricky and I think that's where it's a so protein shake let's use that as as an example protein shakes if you think about who the protein shake consumer is probably predominantly male like dudes trying you know bulking up a lot of the time you know at least in that world and that's why organic valley when they came to the agency they knew that like all the ads they've been running because most of organic valley's products are milk and cheese and stuff that they sell at whole foods all their commercials are like picturesque sunsets over family farms and our family farmers they just care more than anyone but they knew that when they launched an organic protein shake it's a very different customer than the mom who's shopping at whole foods for their other products so they wanted us to come in and say hey we know that it's like a muscle dude that we're selling this to who's typically not an organic you know big time organic shopper maybe they are buying the tubs of of you know protein powder at gnc or they're buying you know muscle milk so they're like we still wanna appeal to that audience with this very you know a protein shake that's made by family farmers so we did this whole funny video that's like you know if bros like look all the chemical crazy shit that's in protein shakes if bros keep drinking them they might not last much longer and they'll go extinct and like who's gonna bring the beer pong table when they're gone and like you know like this whole idea of like save a bro get them on an organic protein shake that was sort of like the funny idea that we had that went really really well and it's because the product even though it was healthy is still a liquid that wants to be drank by a consumer who identifies with the marketing it's like if you just try to say alright we're gonna make an oat milk brand that feels you know bad ass and rock and roll the oat milk customer probably isn't guys who ride harley davison's like they're not drinking oat milk but you're trying to market to them so it's like that's probably not gonna work as well because you've got way more marketing education to do to try to convert new customers into something that they've never drank before water is different for us because everybody drinks water we don't have to explain how to drink water how to use it like everybody drinks water from harley dudes to metal dudes to yoga moms to everybody and now it's just about from a from a demographic or psychographic standpoint who just thinks this is a cool thing to be a part of their day with you're not trying to convince them why they should drink water

Shaan Puri

Right, gotcha. So, you also went through science. How did science get involved? Because when I first heard about this, it was like, "Oh, this is coming out of science labs." Did you bring the idea to them? Did you meet them and then incubate the idea? How did that happen?

Sam Parr

and then for for people who don't know what we're talking about

Shaan Puri

science science yeah

Sam Parr

Science is like this weird quasi-venture capital firm, but also like a weird incubator. They launched Dollar Shave Club and a variety of other things. It's a strange combination of a company builder and an investor.

Shaan Puri

based out of la

Mike Cessario

Yep, yeah. So, we launched Liquid Death in a bit of a backwards way than most beverage brands launch. We launched a year before we met science. We launched Liquid Death on social media before we ever had product because we knew that with such a crazy idea like Liquid Death, there’s nobody who’s writing me a check for the idea of Liquid Death. They’re like, “This is stupid. You’re crazy. Who would ever buy this? It’s a negative name. Retailers will never carry it,” yada, yada, yada. So, I knew that I had to prove it out as a concept on social first before I could actually make people feel like I’m derisking this thing a bit to actually raise. We designed the can to look like a 3D realistic can. We shot a $1,500 video and then we just put it on Facebook. No Twitter, no Instagram, just Facebook. We put maybe, I don’t know, $3,000 in paid media behind the video. Then, cut to three months later, we have more Facebook followers than Aquafina. The video has 3,000,000 views. We’ve got a range of DMs from, “Hi, I am a 7-Eleven franchisee in the Midwest. How do I get this in my stores?” or “Hi, I’m the biggest non-alcoholic beverage distributor in New York City called Big Geyser. How do we talk to a sales representative to distribute this?” And we didn’t even have product yet.

Shaan Puri

or

Mike Cessario

No idea of how we were even going to really make it. So then, I used all of that social traction, distributor interest, and retailer interest to start raising a small friends and family round. This way, we could actually produce a physical product. With cans, the minimums are really, really high; like, a quarter million cans is the lowest you can actually produce with a can manufacturer. So, it's a little bit capital intensive just to even start playing the game.

Sam Parr

How much is a quarter million? How do you calculate a quarter of a million in terms of product? What would that cost if you're just starting out?

Mike Cessario

I mean, it all depends on what you're filling in there. But, I mean, yeah, you're talking about $150,000 to $250,000 just to kind of get started, probably, you know, doing cans. So, once we raised a little bit, we started producing cans. We bottle—or I should say, we can—and source our water in Austria, in the Alps. Once we had physical cans, the people let me...

Shaan Puri

me ask you

Mike Cessario

what what

Shaan Puri

Does that mean whenever people are like, "Oh, this is spring water from this mountain," my head is always like, "This is BS." What does this mean? A) Is this true? B) Does that matter? So, why do you go get your water from Austria in the Alps? What is that? Is that branding? Is there something about water that I don't know? Why do you have to go there to get your water?

Mike Cessario

So, what I mean is, let's be totally honest: water, for the most part, I should say for most people, is water.

Sam Parr

yeah

Mike Cessario

Like, if you had people try to... even water snobs, if you had them do a blind taste test of Fiji versus Evian versus whatever, can they really tell the difference? Probably not, right? But...

Sam Parr

I've done this test many times as an Evian drinker. Evian versus Fiji tastes similar to me. However, Evian versus Crystal Geyser tastes different. I've bet money on it, and I've gotten it right before.

Mike Cessario

that's interesting but yeah I think the things that make water that affect the taste of of water are the natural minerals and how much of them there are in the water and the ph of the water is it more acidic is it more basic and what those minerals are affect how acidic or how basic it is so when you for us our water comes from the alps and it literally goes right from the mountain into the can obviously it goes through filters and things that filter out debris and all of that and then we put it through like a pasteurization process that makes sure everything you know it's all clean and good to go but everything in that water is that's the natural mineral profile of the water that has been built up over probably 100 of years in the mountain and it's like you know naturally alkaline at 7.8 or 7.9 ph it's got a nice mineral level nice mouthfeel when you're drinking it because of the level of minerals so that comes right off that way it's all everything's natural about it almost every major water brand in the us whether that's smartwater essentia aquafina dasani most of those brands they're using you just tap from the that then they reverse osmosis which strips everything out of water all the natural minerals all the bad stuff everything so it's literally just like empty water then they have to add in minerals back in to kind of make it taste good so they'll add in the natural things that occur in water but just kind of artificially with just doing it at the factory to kinda make something that has a decent ph and a decent mineral profile that tastes good so those are kind of the 2 options when you say something is spring water it's very strict from the fda of what that has to be like to call it spring water you cannot alter the original mineral profile of the water so even if you take it off the mountain if you put it through reverse osmosis and it strips out the natural minerals and you add them back in you can't call it spring water anymore because you altered the original thing so you know our water like I said that that that's kinda how we think about it everything we have in our water is natural that's how it comes off the mountain it's kind of its own perfect thing we don't have to go through the whole process of like using municipal tap water from the factory stripping everything out adding stuff in and kind of like creating a water right now that that that's good

Shaan Puri

Okay, and you know, I've never actually had Liquid Death. It's flat water though, right? It's not sparkling and it's not flavored.

Mike Cessario

we have a sparkling version but we have a still and a sparkling yeah

Shaan Puri

And so, just to sort of finish it, you took that, you know, you raised a little bit. You did the social media to prove, "Hey, we can build a fun brand that people resonate with." Then you figured out, "Okay, to produce the minimum run, I'm going to need a couple hundred grand to get this thing off the ground." You raised kind of the friends and family round. That was from Science, or afterward, Science came about and they wrote a bigger check.

Mike Cessario

We raised the friends and family round just to basically cover a super limited, you know, the smallest run of product we could do.

Shaan Puri

right

Mike Cessario

And then, once I finally had a physical can of liquid for the first time, which was probably around October of 2018, we had a guy that we knew who knew someone at Science. He said, "Hey, you guys should really talk to Science; they'd probably be all over this." So, we went and met with Science and brought them a physical can. Once someone could really hold it, and it wasn't just us showing digital images from social media, it made a huge difference. They understood the magic of it and how cool it would be to walk around with this, or how into this people would be. That's when we kind of decided to do a deal with Science.

Shaan Puri

gotcha

Mike Cessario

Over the next two months after that, they helped us gear up for our D2C launch, where we launched online in January of last year.

Shaan Puri

And do you think this will be mostly D to C? Do you think this will be retail? How do you think about that? Obviously, you're doing both. Where do you think the bulk of the business is going to come from?

Mike Cessario

I think we've always known it was going to be retail from the beginning. We just didn't know how soon we would start really pushing into retail. Water is something that you don't want to just order on the internet. You want to be able to buy water when you're thirsty, somewhere, right? So it's just naturally a retail play. Versus, you know, something like Soylent, which is a meal replacement. You could order those to your front door because it's not like you're just randomly deciding to go get one of those. But now they're pushing into retail as well.

Shaan Puri

What's your pitch on how big this gets? The way I like these pitches is kind of like a bottoms-up approach. So, rather than saying, "Well, Vitamin Water sold for this much, so maybe we can get that much or more because blah blah blah," I prefer the bottoms-up method. It's like, you know, there are this many grocery stores. I don't know if you think that way, but do you have that sort of analysis? Like, "I think this gets this big because I can say that there are this many venues or this many grocery stores or this much demand." So, I think when we grow up, we can become this big. Do you think that way, or how do you approach that?

Mike Cessario

Yeah, I think it's a combination of things. I mean, one, you can obviously start at what is the size of the bottled water market. In 2019, the bottled water market in the U.S. alone was **$20 billion**. For this bottled water, still water made up a little under **$15 billion** of that **$20 billion**, and sparkling water is about **$3.5 billion** of that **$20 billion**. So, it's a massive market.

Shaan Puri

and what's

Mike Cessario

the rest flavored like private label

Shaan Puri

okay

Mike Cessario

yeah and and flavored

Shaan Puri

gotcha

Mike Cessario

The biggest retail channel in terms of doors is convenience stores. There are over 150,000 convenience stores, and then I think there are maybe 30,000 grocery stores or something like that. In addition, there are about 1,000,000 restaurants and bars in the U.S. So, you can start looking at the velocities of what certain water brands do in convenience stores. We can look at some of our velocities that we're seeing and what they could grow to. Yeah, you can really start to forecast how big this gets. Well-performing water brands, just in 7-Eleven, can be doing $50,000,000 in sales, just in 7-Eleven scan sales for a decent water brand. And that's just 7-Eleven.

Shaan Puri

who who

Sam Parr

are the top 3

Mike Cessario

The top water brands in terms of scale are, as you could probably imagine, Aquafina and Dasani. They're both over $1,000,000,000.

Sam Parr

And it's owned by Nestlé. Or who are those owned by? Pepsi?

Mike Cessario

aquafina is pepsi dasani is coke

Shaan Puri

okay wow okay that's

Mike Cessario

And then Nestlé is the other big one. Nestlé has a couple of brands, like Nestlé Pure Life and the more budget-friendly value water. Yeah, they're another company that's over $1,000,000,000 as well.

Sam Parr

Who owns that? How much? So, Fiji is owned by Wonderful Brands. They're down near you in LA, right? Or I don't know if you're in LA. How much revenue do you think Fiji and Evian generate? I think Fiji is a privately owned company. Is Evian public? I don't know.

Mike Cessario

I don't know the exact numbers. I've seen a couple of things, so I can't really comment on whether they're accurate or not. But I assume that Fiji and Evian are probably somewhere around $500 million a year, something like that, I would guess.

Sam Parr

What would the margin on that be? Is it as big as I would think?

Mike Cessario

It's not as big as you think, really. The retailers want the most margin on bottled water. They want to mark up bottled water higher than almost any other beverage that they have in the store. So, the retailer wants a lot of margin. Then you've got distributors that need their margin. When you really get down to it, it's not like bottled water has some insane margin for suppliers compared to other products, you know?

Shaan Puri

right

Mike Cessario

like energy drinks probably getting more margin than than water is

Shaan Puri

Which I think the conception is, "Dude, they're just bottling water." That's like, you know, you're selling air. But in reality, the margin is probably, I would guess, sub 30%. Not above 30% is kind of my guess.

Mike Cessario

Yeah, I think in most beverages, they say a target, like a really solid margin for beverage, would be around 40%. If you hit 50%, you're really killing it, right?

Shaan Puri

and then

Mike Cessario

it's like I think you get down like to 30 it's probably like on the low end of what you want but yeah

Sam Parr

So, when I used to own a chain of hotdog stands in Nashville, it was called "Southern Sam's Wieners: As Big as a Baby's Arm." I would crush it on bottled water during the daytime. Bottled water would cost $2 or $3, and at nighttime, when everyone's drunk, you definitely add a little bit more to it. I think from Restaurant Depot, a bottled water was 14 cents or something like that. It was stupidly cheap. The hot dogs would make a little bit of money, but you could make $1,000 a day off bottled water. That was where the money was at—bottled water.

Shaan Puri

Yeah, that was definitely... if you need a sales guy, you got Sam here. Yeah, man, I was hawking water like crazy. That was where it was at. Mike, we had this question: if you had to make $1,000 tomorrow but I stripped you of all your current income streams and your current business, how would you go try to make $1,000 in a week or whatever? I think Sam's answer was, "I would go to a hot place, buy water for 14 cents, and go sell them in front of a stadium or something like that."

Sam Parr

in a corner like at at the at the stoplight you like yeah

Shaan Puri

yeah

Sam Parr

Because, like, people don't care about the water. They more so care about the convenience. Like, "Oh, forget it! It's right here." It's... I got... and I...

Shaan Puri

I totally overthought it. I was like, "Well, I guess I would create this online store." Then I thought, "No, it's too slow, too complicated." So, I decided to go sell.

Sam Parr

The water, dude! I would be like a vendor at a concert series, like the summer concert series that cities have. I swear to God, I would make $1,000 a day in bottled water sales. You know, that's not every day, but you crush it at those concerts just selling bottled water. Yeah, that was where I would make a killing. What other opportunities have you seen that, if you weren't starting this business, you would be very interested in? Like, things that you've discovered along the way.

Shaan Puri

There are two questions, right? Because our audience, the listeners for this, we have hundreds of thousands of listeners who are going to hear this. They are all entrepreneurial types, but really, you know, it's not like they're going to go and do one of these things. They just love to hear different perspectives. It's like you are in the world a few of us even think about on a daily basis. So you're seeing things and thinking about things that we don't see, which is why you came up with this idea to begin with. They really do love to hear, kind of like, "You know, I've always thought you could do this." It doesn't have to be a great idea; it could be, "I just noticed that these things really crush it," or "These are kind of backwards. I think it might be fun to try this." Do you have anything that could complete that sentence? Yeah, I mean, that is...

Mike Cessario

a tough one like I mean I guess obviously like you're always looking for white space right I think where I was really inspired most by my. Of view on business and branding is from virgin like richard branson what you know early in my advertising career when I worked in san francisco the main account that I worked on was virgin america the airline so I got like super deep into virgin and and I read you know richard branson books and I just would loved that their model was like we go and try to find a stale category and we make the one really cool fun brand within that category where it almost changes the category where the rest of the category almost has to start adapting like airlines like nobody was excited to get on an airplane or eat airplane food or anything and then they were the first ones to make planes with like neon blue lighting and like you know tvs in every seat which now is like a common thing in every airline right so it was like that really inspired my way of looking at where I would look for things that were like what is something that like you said like cottage cheese like what is something that is extremely boring or like what's a category that just nobody cares about where you can't think of one cool brand in and obviously like if it's something that seems like it could still have appeal it's just the victim of poor brands not getting it and you know just not innovating or whatever it might be and you see an opportunity hey this is actually could be a thing that people really would love but it's just been stuck in this like doldrums of branding for so long that it needs something because at the end of the day with especially with packaged goods like branding is so much more important than most suppliers or companies think right you know because most companies are started by business people in in the most part it's like someone with an mba someone who understands the nuts and bolts of building a business it's rare that businesses are started by creative people like artists and people that are you know graphic designers and stuff like it's it's 2 different things and usually what happens is the business folks think really rationally like okay my product contains this so the name of the product should be about that and I should list all the rational reasons why someone should buy this yeah right it's like and then that gets them a certain part of the way but then they end up hiring a creative agency to get all these creative thinkers in to build a story around this boring thing to make people actually care about so what I think is interesting is when you have creative people at the very beginning of the process where it's like just considering what the company should be what the name should be what the product should even look like will someone even care about whatever it is you're selling because I think the creative people do have a good sense of culturally what's going on what's cool what do people care about what's the climate business people not so much I feel like they're more in like the the nuts and bolts and weeds of like numbers and manufacturing which is hugely important which is why there's so many brands that never get the creative side but still they just become these logistical swiss army knives that still get acquired right but it's like just imagine if they had great creative too you might be a $2,000,000,000 brand

Shaan Puri

Right, you know, I'm speaking of water. I'm good friends with this guy, Scott Harrison, from Charity: Water. Have you ever met Scott?

Mike Cessario

yeah I've never met him I've heard of the brand

Shaan Puri

And so, you've heard of the brand because I think they've done a phenomenal job with it. We were brainstorming, thinking, "Oh, what's another category in a grocery store that you could do this with?" This is definitely a totally legit brainstorm we can do, but this is a very different analogy. I think he did the same thing. Scott was a party promoter. He came from a punk rock background, then moved into ads, and then went into this CPG space, which is not maybe the most conventional path. He was a party promoter and club promoter in New York for 10 years, convincing guys to buy $3,000 bottles of Grey Goose that they could go buy for $50 across the street to get table service. Then he had a "come to Jesus" moment and decided to give back. But all he knew was how to promote parties; all he knew was cool. So, he reinvented charity as a cool brand. He has this quote he shares when he tells his story, which is a quote from someone talking about philanthropy. They say, "Man, imagine if we could sell charity with one-tenth of the finesse that brands sell toothpaste. Imagine if we had one-tenth of their marketing power that they use on toothpaste. Imagine how much good we could do in the world." That's basically what he did. He said, "Alright, I'm going to make a brand that actually stands for these three things, and I'm going to have awesome design because every charity website sucks. It looks like they hired their eighth-grade cousin to build it for them." He decided to work with influencers, do print campaigns, etc. Now, he's been raising over $150 million for the cause. He's one of the fastest-growing and best charities out there because he did what you did: he applied cool to a category that was totally uncool before.

Mike Cessario

Yeah, no, totally. I think there are so many different places where you can think about this. I think "cool" is a weird word because it can be taken so many ways. It's less about being cool, but more about how you make it interesting or how you make it desirable. It's like, "I have to have this thing," you know?

Shaan Puri

but that's what I

Sam Parr

I want to go back to that first question that Sean kind of dismissed a little, where I was like, "What else is in that category?" Because I think that's really intriguing to me. Were there things that you've explored or you're like, "You know, this actually is one of those categories?" I'm busy now, but that would be interesting for someone to change that category.

Mike Cessario

I think we're even thinking about that with Liquid Death too. I think Liquid Death is so much bigger than just a water company. At the end of the day, we think about ourselves as a pop culture factory. We recently released a Liquid Death vinyl record. I don't know if you guys saw that, but in less than two weeks, we sold 700 vinyl records, which is more than most metal bands actually sell when they release a record on a major metal label. It was a funny idea where we took social media hate comments and made them the lyrics to this metal album. It's like, wow, a water company just became a record label for a minute. I think about all these other places where there could be innovation that ties into our general mission of health. For example, what if Liquid Death creates a chain of heavy metal yoga studios? You know, for people who want to do yoga but don’t want to listen to "Yanny" while doing it. Is there room for some kind of cool, totally new fitness experience?

Shaan Puri

You could do like "Tough Guy" multivitamins if you needed to, right? You could take a healthy product with multivitamins and be like, "Okay, cool."

Sam Parr

it's kind of interesting actually

Shaan Puri

You know, rainbows and Care Bears. Maybe we could just make this form factor a little different, brand it a little differently, right? To speak to a different audience who's, you know...

Sam Parr

So, you guys have raised, let's say, $10 or $12 million. You're not huge yet; you're definitely still getting going. How do you decide? At my company, we have a brand that people know. If we make stuff, people will buy it. But in my head, I'm always like, "I don't want to make other stuff. Let's just focus on what we're doing and kick ass at that." Then maybe eventually expand. Whereas you've done these little experiments, like the vinyl record. Maybe you're also trying to... maybe you weren't joking with your heavy metal yoga thing. In my head, I'm like, "No, no, no. Forget that. Focus!" What do you have? Logistically, how do you decide where to throw a budget at and throw money at in order to...?

Mike Cessario

So, let me ask you this. This is what I mean: all these other products that we could potentially make, that actually sell or actually succeed, they double as marketing for the water.

Shaan Puri

you know

Sam Parr

yeah it's just marketing that's profitable

Mike Cessario

It's profitable, exactly. It's like we made a vinyl record. I can't tell you how many eyeballs that got Liquid Death on from people reposting the album, sharing the album, talking about it. And that album, for us to execute, including printing the vinyl, cost us $12,000. Oh, okay. [We've] already made all of our money back, right, and more.

Sam Parr

how much staff did you have work on that

Shaan Puri

what's that

Sam Parr

how much staff who worked on it like you asked did you an agency

Mike Cessario

We hired a guy that we knew, a friend of a friend, who is an incredible metal musician. His name's Gus Rios. He wrote and recorded the whole album. His buddy mixed the entire album, and then his buddy mixed stuff for Justin Bieber and all these other guys. So, we got the whole album recorded. We made a commercial for maybe $2,000 using stock footage, and my wife edited the video.

Shaan Puri

was like

Mike Cessario

You know, that's all we launched with. It was a little launch video made with stock footage. We pressed record and sold the records in our merch store. It's like all that stuff adds together. That's why it's like, what would it cost to start, let's call it, a chain of five small heavy metal yoga studios in LA? Like small little studios, not a lot going on. You find some instructors, and maybe you could actually build that out for, let's call it, $500. Let's just say you can build a five-chain heavy metal yoga studio for $500. What does $500 buy you? If you try to run one TV spot during the Oscars, maybe you get a 30-second spot. What's going to see more lift and brand evangelism for your brand: running a $1,500,000 commercial?

Shaan Puri

during the oscars or building a chain of

Mike Cessario

5 heavy during the Oscars or building a chain of **5 heavy metal yoga studios** in LA that gets talked about by every publication. **Heavy metal yoga studio launches in LA.** People actually go to it. Everyone who goes takes photos, shares, and talks about it. It's like that's a way smarter way to spend your money, and you might actually make some of it back if it's a good enough business model, you know?

Shaan Puri

Right, this is like Elon selling flamethrowers, right? Yeah, he is the sort of Iron Man trying to be a badass with rockets, drilling underground, and electric sports cars. So, he comes out with a flamethrower for $700, I think it was, and he sold... I don't know, I think he sold like 1,000,000.

Sam Parr

of dollars

Shaan Puri

a shit ton I think it

Sam Parr

was 10,000,000 of dollars more

Shaan Puri

And the whole thing is basically just about feeding the evangelism, like you said, of the cult of Elon. Yeah, life should be a little more badass. We need a little more fire, a little more speed, and a little more, you know, rocketry in our lives. So, it fits the brand.

Mike Cessario

Yeah, and it's like, you know, when you curate your own new experiences for the brand, you can also control what goes on there. So at all these yoga studios, it's going to be cool as a liquid depth is the water there, right? You know, it's like, yeah, it all kind of can work together.

Sam Parr

My takeaway from this whole podcast is that I'm going to do a handful of things. I'm not going to launch a yoga studio, but a $12,000 vinyl release or something of that scale is super interesting. I need to do more of that. Do you have one person on your team who does these odd things, or is this just a project that you lead and coordinate?

Mike Cessario

So, we work with, you know, we do have creative agencies that we work with. Most of which are run by my friends who I knew from the industry. They've got small little startups. What's nice about Liquid Death is that because we want to do such cool, different things, people are willing to kind of work at a nice, homey rate. They want that thing up for their reel; we're not just asking them to make...

Sam Parr

something for it enough to be will you're open enough to like try that weird shit

Shaan Puri

To go to Nestlé and say, "Hey, look at this amazing thing we did with Liquid Death," and they want the Nestlé check, not the Liquid Death check. Yeah, right, right, right, right. But they need you to get the Nestlé check.

Sam Parr

well they're doing the same thing that you're they're doing they're doing the same thing

Shaan Puri

what you're doing with the vinyl they're like

Sam Parr

they'll maybe pay for itself but it's also marketing right

Mike Cessario

Right, exactly. So, yeah, I mean, we get a lot of smart, creative people that are throwing ideas into the mix. But, you know, at the end of the day, I'm a very creative-focused CEO. I think we've built a nice team around us that is really smart with operations and supply chain and that kind of stuff. It's not so much my strong suit, and I can focus more on the brand and creative side. You know, Liquid Depth, it's really a brand plan. It's so important. I think building out all these fun things we're talking about—like how do you build this brand that has such an evangelist audience to it and that continues to grow? That's really the focus.

Sam Parr

this is great

Shaan Puri

we're coming up on the hour sam did you have anything else you wanted to

Sam Parr

I'm taking notes. I'm gonna write an email to my team, and I'm like... because I have... I'm also creative, but I definitely am like fiscally conservative. And I'm like, "No, no, no, we gotta focus on this, focus on the cash cow." But I'm like, you're right. This dumb shit that seems dumb but is awesome, you can do that for way cheaper than you think.

Mike Cessario

Yeah, I guess it's just like... one of my old bosses, I used to work as the Creative Director of VaynerMedia. So, Gary Vaynerchuk was like my boss, essentially. I learned a lot from him in terms of marketing. Marketing is really just about day trading attention. It's all about attention, and attention is the price. The price for a billboard is what you're paying so much per eyeball that sees it. It's like, yes, it could be effective, but you're overpaying for it. Versus creating a yoga studio in LA, you might generate even more eyeballs and attention at a way lower spend. So, I think it's just always thinking about, "How do I get attention for my brand?" and what are all the different possible ways that you can get attention? What's like the most cost-efficient ways to get that attention?

Sam Parr

And I have to ask, was it awesome or not awesome working for him? Is the guy the real deal or what?

Mike Cessario

I love Gary. I think he's an incredible human being. You know, I've worked for a lot of corporate folks, and I think there's a lot of egos. There are people who don't care. I think Gary truly cares. Even if you're going to tell him you're quitting, he's going to be like, "Oh, awesome! Do you need any help finding your next thing?" You know, he just cares. I think that's what he's built his whole company on: you can build a massive company with a compassionate view of your people and not just be some tyrant kind of leader.

Shaan Puri

Do you think there's anything about Gary? Because he's a very public presence, right? He's personally out there a lot. You know, anytime you personally put yourself out there, you're putting a part of you out there, not the whole thing. Is there anything that either people don't really know about him or is a misconception that you've seen about him? Is there anything like that?

Mike Cessario

I would say that just talking with him normally, one-on-one, is obviously not as loud as when he's on camera. You know, because at the end of the day, he's an entertainer to a degree, right? Yeah, now he's an educational business entertainer, but he's still entertaining to watch. The way he talks, his passion, and how smart he is—there are plenty of business people who say smart things, but not as many that are like him.

Shaan Puri

many as yeah

Mike Cessario

Yeah, animated on camera. So, it's like in a way he's kind of playing, you know, a bit of his character. But off camera, he's way more mellow, I would say, than most people think. Like, you know, he's... you know.

Sam Parr

I was on his podcast, or like, I forget whatever it's called. He was very nice, and he turned it up slowly. But yeah, it was that.

Shaan Puri

just yeah

Sam Parr

he had it it he wasn't on right away

Shaan Puri

he had to yeah

Mike Cessario

yeah he had

Sam Parr

to get amped a little

Shaan Puri

That's awesome! Alright, well Mike, we'll wrap it up. Where should people follow you or find you if they want to hear more thoughts or about Liquid Death? You know, give people a shout-out on where they can get more of what they got today.

Mike Cessario

Yeah, I mean, most everything happening with Liquid Death is on Instagram. So follow us! It's @LiquidDeath on Instagram, @LiquidDeath on Twitter, and LiquidDeath.com is our site. And yeah, that's it.

Sam Parr

awesome this is awesome I'm looking at it right now thanks for taking the time man this is badass

Mike Cessario

yeah I I got a bunch of ideas

Shaan Puri

I'm sorry if my typing is something you can hear on the podcast. While he was typing and talking, I was like, "I need to write this down." I had three ideas while you were talking. Not exactly what you said, but you inspired something while you were talking. I thought, "I gotta write this down because we're going to do this, and if we don't do this, I'm going to regret it." So, apologies if everyone hears that.

Sam Parr

is typing in the background I do the same thing I'm like looking up everything you're saying

Shaan Puri

that's a that's a sign of a good podcast though

Mike Cessario

And it's all about speed. That's the one thing I always push. It's like the idea shelf life these days is very short. If you have a cool idea right now, if you don't make it tomorrow, someone else is probably making it in two weeks. You know, it's like that's just the reality.

Shaan Puri

right on alright mike thank thank you so much for coming on

Mike Cessario

alright thanks guys take care

Sam Parr

thank you