by: Yuri Elkaim

Today on the podcast, I am interviewing the founder and CEO of Thrive Market, Gunnar Lovelace.

If you’re not familiar with Thrive Market, it is an online delivery service that provides the most popular organic, non-GMO groceries at 25-50% off normal prices. In just three years they have seen a ridiculous amount of growth—going from one to five hundred employees.

Gunnar is a serial entrepreneur, focused on using business and health as vehicles for social change. In addition to Thrive Market, he is also the co-founder and co-owner of Love Heals—a jewelry business with over 75 employees—and he has started two technology companies that he has since sold. He has also started two nonprofits in education and environmental sustainability!

I had dinner with Gunnar three years ago, and I knew right away that we would be lifelong friends. Not only is he a great entrepreneur, but he’s just an amazing dude in general. Check out the podcast for a bunch of awesome lessons and important nuggets.

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Click here to subscribe to the Healthpreneur™ Podcast on iTunes

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In This Episode Gunnar and I discuss:

  • The importance of an MVP
  • Gunnar’s fascinating childhood story
  • Rejection, and lots of it
  • The complexities of being a manager
  • Lessons in accountability
  • Keeping yourself healthy in order to be productive

4:00 – 9:00 – Gunnar’s personal story and motives

9:00 – 12:00 – Getting the MVP out there

12:00 – 23:00 – Rejection: The story of Thrive Market

23:00 – 29:00 – Being an effective leader

29:00 – 38:00 – Focusing on individual skills

38:00 – 43:00 – Accountability

43:00 – 48:00 – Rapid-fire questions

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What You Missed:

In the previous episode, our guest was Keith Norris.  Keith, along with his wife Michelle, started Paleo FX in 2011 with no business plan, but with the realization that there is a pressing need for a conference that helps people understand how to apply the insights of the ancestral health perspective.

Since then PaleoFX has grown to be one of the biggest events in the industry with speakers, interactive panels, fitness seminars, and endless amounts of grass-fed jerky samples.

In this episode, Keith gave some great insights on how to build momentum when starting out and how to use the power of influencers to help grow your business.

If you’ve ever felt like giving up on your vision, this is a powerful episode that will inspire you to follow your passion.

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Transcription

Hey guys, how’s it going? Yuri here. Welcome to the Healthpreneur podcast. Today is a very special episode—I’ve got a good friend of mine who also runs one of the fastest growing most successful health companies on the planet.

You’ve probably heard of them, they’re called Thrive Market—and Gunnar Lovelace is the man behind the company. He is an amazing person, and I’ll tell you a bit more about what he’s up to in a second.

So we actually had dinner together, I think about three years ago, on a rooftop in Los Angeles—and right away we just hit it off.

First of all, Gunnar is an amazing dude. He’s an amazing person with really great core values, and he’s very down to earth. He’s not one of these big wig, money hungry CEOs. That’s not who Gunnar is, he is just a great person and he’s been very successful in business. And when you can have both of those traits, it’s just a great combination.

So I knew after that dinner that things were going to start getting really cool. He went on to start growing Thrive markets at an exponential rate—I’m talking about ridiculous types of growth, year after year. And in only three years they’ve gone from one to five hundred employees, while the revenue—which we can’t disclose because of investor privacy issues—has obviously skyrocketed.

But anyway, let me tell you a bit more about him.

Gunnar is a serial entrepreneur—he’s focused on using business and health as vehicles for social change. He is the original founder of Thrive Market, which is all about making healthy living accessible to Americans by providing the most popular organic, non-GMO groceries at 25 to 50% off normal retail prices—not bad!

It’s kind of like Costco, Amazon, and Whole Foods combined—it’s wicked.

He’s also the co-founder and co-owner of Love Heals, a jewelry business in more than 200 high-end retail stores and with over 75 employees. To date, Love Heals has funded the planting of over 1.5 million trees and sponsored over 50,000 malnourished children.

Prior to Love Heals, Gunnar started two technology companies in Los Angeles, in software education and natural language processing—both of which he sold. And in addition to his for-profit companies, he has started two nonprofits in education and environmental sustainability.

So he doesn’t really have that much stuff going on. He’s pretty lazy to be very honest with you.

If you want to stay up to date with what he is up to—and more specifically thrive market—you can go over to thrivemarket.com.

 

Yuri:                Gunnar! How’s it going, my friend? Welcome to the Healthpreneur podcast!

Gunnar:          Hey how are you doing? It’s so great to be here.

Yuri:   I know, it’s great to connect. You’re a friend, you’re a great person, you’re building an amazing company—and those are things that I really admire about you. You know, you have conversations with people who come to mind when you think of success. You think of Richard Branson or Elon Musk or whatever—but you’re one of the guys that kind of comes to mind for me because you really have your stuff together.

You share a lot of the same core values as I do and I’ve just really admired the trajectory that you’ve taken with Thrive.

Gunnar:  Thank you. It’s been a lifetime adventure and like all entrepreneurial paths—fraught with uncertainty, difficulty, and challenges. But it’s been such a gratifying experience to be growing the business, and great to be here with you!

Yuri:                Awesome. So I’m sure everyone knows about Thrive, but I want to ask you—why did you start the business? Was there like, a pivotal moment? What was the journey that led you to start the company in the first place?

Gunnar’s personal story and motives

Gunnar:          I mean, very honestly, it just came from a very personal place. I grew up really poor, with a single mom, and I saw how hard she worked to make healthy choices. And it always seemed crazy to me that food with lots of chemicals and processing costs less than food with no chemicals and processing.

And so there were periods as a child where we lived off of… Bread and carrots, that my mom would blend together to make this sort of weird, simple carrot bread.

So really just a lot of survival trauma around food and just basic survival needs very early on.

And then when my mother remarried, my stepfather was running a food co-op out of a hippie commune in California, so I got to see firsthand the power of group buying—as a way to make food more affordable and build community.

And as I went on in my own entrepreneurial career, I always felt like there was an incredible opportunity and responsibility to disrupt access to healthy food. And again—at a very personal level—I’ve been a hypochondriac most of my life, so that’s made me very interested in all sorts of health regimens and supplements.

And even more broadly, I’ve been really fascinated by and interested in finding organizing principles that can bring people together around the common good at scale.

I really feel like expanding access to healthy food is one of those organizing principles. It doesn’t matter who you are, where you live or what you believe—people want to feel good in their bodies and they want the same thing for their children.

So it’s a lot of factors together.

Yuri:                That’s awesome—and I don’t think there’s a single person in the health space who doesn’t agree with you. But how do you take that desire—to want to make healthy food more affordable—and build this massive company? Whereas a lot of other people just continue talking about it.

You talked about the power of the collective—how did you build out this vision for Thrive? How did you get people on board? What was the business model for getting started?

Getting the MVP out there

Gunnar:          So I always tell my entrepreneur friends that it’s really important to test your ideas as quickly as possible with an MVP (minimum viable product). And having started and sold a couple of businesses previously with lots of failures (AKA: learning opportunities) along the way… I feel like one of the greatest lessons that I’ve learned is to test your idea as fast as possible—even if it’s really dirty and imperfect.

And that’s been a huge guiding principle for me personally, in the last ten years as an entrepreneur. I think it’s so easy to overthink our ideas in our armchair, engineer “the perfect mousetrap” and then we get out in the market and we realize that the consumer wants something completely different or something that’s very altered from what we originally set out to create.

Or, there’s great success.

More often than not though, I think the ideas we have go through a lot of evolution—which is really why I advocate for getting our business ideas out there as simply and quickly as possible.

So in the case of Thrive Market, the very simple MVP was…  I just literally went to my favorite brands and I set up wholesale accounts with them. Then I would do Facebook shopping events—so I would go out to my Facebook friends and say, “Hey who wants to buy Seventh Generation this week at 40% off? Who wants to buy Health Forest products at 40% off?”

The shopping events were so oversubscribed, there was so much demand and interest from my friends—and I was just doing it as an exercise a social experiment.

I’m receiving all the orders, packaging them and shipping them to people—and I realized two things…

1) There was a huge demand to access these products at wholesale prices.

2) I needed to find a more scalable way to do it—rather than one-off shopping events on Facebook.

Yuri:                That’s amazing. So I want to come back to what you said about just getting the MVP out there and getting feedback from the market.

What do you say if someone is sitting beside you and they’re like, “Well, I’ve got to make sure my product is perfect because the branding, etc. is so important to stand out and make an impact in people’s minds.”

What do you say to that person?

Gunnar:          Well, I think branding is important. I think it is important if it’s a consumer-oriented product. If it’s an enterprise type product, then the branding is still important but not as important.

I think that in the context of a consumer-based product, you can do really high-quality branding but keep it very simple. That can be splash pages or simple survey pages, sign up forms that have a landing page or a squeeze page that test an idea or a concept to see what the receptivity is at the top of the funnel.

So I think that can be done really simply, and I don’t think the two are mutually exclusive. I think we can have a really high-quality brand experience and recognize that we don’t need to create every single detail page prior to testing the validity of our core thesis.

Yuri:                Yeah, that’s great. So you started doing these Facebook shopping events, they’re doing really well—you’re like, “Okay I’m not going to continue packaging and shipping all these myself.” What’s next? How do you get from that to starting Thrive?

Gunnar:          So I think, most broadly, the success of any organization—nonprofit, for-profit—is really based upon the quality of the team. I used to be a terrible micromanager, so it’s been a real evolution for me…

But I knew this was going to be a hard, very complex business—lots of moving parts, a huge backend, huge middleware of technology and a huge consumer-facing marketing competency. So based upon that, I wanted to have really great co-founders.

I found my first co-founder—-Nick Green, who’s now the CEO of the business—and that was probably the best decision I’ve ever made. We complement each other so well. And then our third co-founder who’s also just incredible—he’s our CTO—and a fourth co-founder—Kate, who helped us initially set the brand.

Rejection: The story of Thrive Market

So I think we really had a great kind of core competency base covered between all of us. And I think—we can talk more about what it means to really nurture a team later—but I think the other piece that we transparently really struggled with was raising money.

So after Nick came on as the first co-founder, we were self-funding the business. You know, doing the classic venture capital roadshow between L.A., San Francisco, New York, for three or four months.

We met with over 60 venture capital firms—every single one of them rejected us.

And obviously, it’s a total pain in the butt—nobody likes asking other people for stuff and then being unanimously rejected. But ultimately, it was the best thing that ever happened to us.

We ended up pivoting our strategy and raising the first $10 million for the business from influencers like yourself, who really understood the problem and heard from their audiences that they want to live a healthy lifestyle—but they can’t afford to do it or aren’t near a health food store.

And so we had this whole community of influencers come in as actual investors in the business—often investing in us as the first time they’d ever invested in a startup company.

And then as a result of building this whole coalition of relationships and friendships that evolved out of these partnerships, we built an internal content marketing agency and competency in really harnessing and complementing and synergizing the capabilities of these influencers that have really engaged audiences as a way to grow the business.

Yuri:                Amazing. So take me back to the sixty rejections from the VC firms… What’s the discussion there? What’s the mindset? Where does the fortitude come from to keep going when you’ve dealt with that much rejection.

Gunnar:          So VC firms typically are male-dominated, and they didn’t understand the market as well. There were two main arguments…

1) “We think the solution is already solved—go to Whole Foods.”

2) Nick and I had never done e-commerce before. So they didn’t believe that we could execute on something as complex as this.

And so those are the two prevailing themes and the rejections—and I think that persistence is really one of the most important attributes of an entrepreneur. I grew up really poor, so I didn’t have the luxury of being stopped by rejections.

I mean my first company that was a web development shop first flashed a database company in Los Angeles in 1989. I would literally get on the phone at 5:00 am, and cold call ad agencies from the East Coast and I would just follow the sun to the west coast—and literally cold call for 12 to 14 hours a day.

And so, you know, I got like… Hundreds of rejections.

But I would cultivate relationships and there would be a few accounts that would land, and that was what we grew our business off of. So while it’s discouraging to get rejections, I think one of the most important things for an entrepreneur—particularly in the context of how many challenges we face as a species—is to really be honest with ourselves about finding things that we love to do and that we’re truly motivated to do.

Because at the end of the day if we don’t have real conviction about what we’re doing, we’re not going to have the staying power and fortitude to make it through the necessary challenges.

Yuri:                Yeah, that’s a great perspective. What I get excited about is when I see someone who has a past in like, door-to-door sales selling knives at some MLM company—and they’ve dealt with constant rejection.

Those are the people that I want to have on my team. I don’t know if it’s a skill set, but it’s almost like a second skin you develop—finding alternative routes to the same outcome.

And I think it’s just such a great part of development, whether it’s from a sales perspective or just kind of connecting with humans and seeing what really works as opposed to what doesn’t. So it’s cool to see that you went through that.

Gunnar:          Yeah, and it doesn’t mean that it doesn’t hurt. You know, I’m a deeply insecure human being. And at a certain level, I think most of us are—we’re confronted with regular, daily fears and insecurities that we have from the conditioning we’ve received, traumas that we’ve had in our life.

These are the things that make us who we are and these are the things that we have to work with, and there are blessings in our curses.

I’m still very much confronted with my own limitations and insecurities, and I think that one of the most important things that we can do as a species and as entrepreneurs is to really recognize and push through those things.

I mean, one of my favorite teachers that I’ve been doing meditation with for about 20 years—I love what he says about courage. Courage is not the absence of fear but the willingness to persist in the presence of fear.

Yuri:                That’s so true. So talk to us, give us some ego boosting facts and numbers about Thrive. Like, when did you officially launch Thrive? Was it around four years ago?

Gunnar:          It was actually a little less than three years ago—we launched in October, end of October 2014 with a soft beta and then formally launched in November 2014.

You know it’s been a total rocket ship. I mean there was one employee out of my house four years ago, we’re over 500 employees today. We have over 800,000 square feet of warehouse space that we own and run.

And after being rejected by over 50-60 of the top venture capital firms, we pivoted our capital strategy and ended up raising money through influencers. The business was able to really leverage that coalition of partners to magnify the growth and subsequently, we’ve been able to raise over $160 million for the business.

A lot of great success, a lot of huge challenges along the way. And at the same time, we’re just a little gnat. I mean, the grocery market is a trillion dollar market, so we have a long way to go before we really feel like we’ve come close to expressing our mission—which is really democratized access to healthy food, and that healthy food and healthy living is not a privilege for the wealthy few but a basic human right.

Yuri:                Well I think you guys have been very disruptive in the sense of what you’re doing in terms of making healthy food more affordable. But also I think from a business model it’s been disruptive because I can’t really remember if there are any other businesses that had a capital raising model similar to what you guys have done.

But subsequently, I’ve noticed probably half a dozen in the past year or two that are now kind of emulating your successful business model—which is pretty awesome. I guess it’s nice and flattering when others copy you.

Gunnar:          Yeah I mean I think at the end of the day it just makes a lot of sense, right? Because if you’ve got value aligned stakeholders who can really move the needle for you—why not share with them generously?

I think the other key thing for entrepreneurs that I’ve had to really work through and learn is… It’s not how much of the pie you own; it’s how big the pie is.

And whether it’s with your co-founders, whether it’s with your employees, whether it’s with key partners or suppliers that can really make a difference in the unit economics of your business, whether it’s with marketing partners… Why not align incentives?

Obviously, have it be performance driven—but I believe in really generously aligning incentives across a broad pool of stakeholders, particularly if you’re solving a big problem that requires a lot of hands to help make the vision into a reality.

And I think that’s been a really unusual strategy. We have over 350 investors on the cap table and that’s very unusual for a business our age. I think it’s a great thing that people are emulating that, and I think it’s a really powerful way to think about capitalizing a business and growing a business outside of the normal institutional capital framework.

Yuri:                So how did you go from someone who was kind of a self-declared micromanager, to being okay with giving up a lot of your stake in the company, and saying, “Okay, let’s build a bigger pie and I’ll take a smaller piece of it”?

I think a lot of people also have this discussion—is it better to have a smaller business that is more profitable or a big business that is not as profitable? I think a lot of times people confuse the two. They look at it like it’s either one or the other.

But what have you noticed from day one, as you’ve grown Thrive to where it is now? In terms of maybe, profit margins or your personal lifestyle? What are some of the insights that you’ve garnered over that time?

Being an effective leader

Gunnar:          Yeah, so you’re asking a bunch of great questions there.

You know, I think that with the micromanagement piece… I had some really good success as an entrepreneur, dropping out of college and starting an educational software company and then selling that really quickly—I got really, really fortunate.

So that really set me up, that changed my whole dynamic. It moved me from extreme survival orientation as a full ride scholarship student—having to steal all my food in college and dumpster dive and live illegally in the woods—to selling a company a couple of years later.

So even in the midst of some of that early success, I subsequently had a lot of failures after that. I think that when I really looked at the realities of the life I wanted to live and the impact that I wanted to have—I recognized that I needed to really improve my leadership skills. And I think that’s a constant process; it is never done.

The complexities of being an effective manager I find to be one of the most interesting and humbling arenas to play in, and I really view it as one of the most complex difficult forms of yoga and spiritual exercise that I can imagine. It’s much easier to go retreat somewhere than it is to be a positive, happy, healthy entrepreneur and set up a positive, effective work culture.

So I think that’s a really big piece. And you know, basic tools like The Seven Habits of Highly Effective People by Stephen Covey has been a great ally for me in that. I keep re-reading that book over and over again, even today.

So that’s one piece, and then the second piece you touched on—a small profitable business versus a larger partnership oriented business… Again, I don’t think there’s anything wrong with having a small profitable business and really, the most important thing that we need to do is get clear about what we want. That’s a primary organizing principle that allows us to make decisions from a place of real clarity and purpose.

And if our goal is to have a simpler life, have a healthier life… You know, throw off a lot of cash… There’s nothing wrong with a small profitable business, and that’s a really beautiful, respectful decision to make. If the goal is to solve a really large complex problem or grow a truly massive business… Well, we all need partners and stakeholders and then it really becomes kind of a broader process—how do we set up the ownership structures and the incentive structures to really align incentives across the organizational capabilities that are required to execute on that mission?

Yuri:                Yeah, I mean, it’s so complex that I can’t even wrap my head around it. It’s amazing, the evolution you go through as a leader, as an entrepreneur, as a person—to be able to handle new challenges and just grow yourself so the company can grow as well.

I want to talk about teams in just a second because I think you’ve touched upon the importance of that. But you talked about some challenges that you guys obviously have faced in your time growing the company… What’s the biggest challenge you guys faced, what did you learn from it and how did you overcome it?

Gunnar:          So at a very personal level, the continued challenge of being an effective leader has been the most humbling thing that we as co-founders have gone through. And it’s just a very different type of organization when it’s 5, 10, 20, 40 people than it is when it’s 500 people.

So that’s a challenge in and of itself that has been monumental. And we’ve made a lot of the classic mistakes that, you know, are really difficult. And then I think the truth is that the type of person that can handle a business at $5-10 million in revenue versus $100 million in revenue versus a billion dollars in revenue—it’s a very different type of capabilities and it’s a very different type of organization that can really handle, and channel, and facilitate that type of scale.

So on one hand, we’ve had the challenges of really nurturing and building a positive workplace culture… And on the other hand, we’ve had to really be critical of ourselves and refining the capabilities of the team more broadly to align with the scale of where we’re taking the business.

And sometimes those things clash with each other—when there’s a need for bringing in new leadership, for example… Players in the organization aren’t always able to grow as quickly as the business is scaling and so how do those dynamics get managed?

And that’s a very natural challenge for a fast-growing business. But it’s one that we’ve clearly struggled with as well.

Yuri:                And what’s your take on hiring “A” players versus kind of young, coachable up-and-comers and kind of molding them through the process? Especially in a fast growing company, where sometimes the company might grow faster than you know your capabilities can manage.

Gunnar:          Sure. I would say that “A” players can be moldable folks in themselves, but I think that the truth is, if you’re going after a really complex big problem, generalists that are willing to do anything early on are fine. But as the business matures you really need people that understand those areas and have pattern recognition from previous experience at scale in the same areas so that they aren’t making the same mistakes.

The organization can’t afford to be making rookie mistakes that a really well-intentioned, highly capable, motivated generalist might make approaching a problem for the first time.

And, transparently, I’m a generalist. Nick is a generalist. You know, we’ve become experts in areas but we’re not supply-chain logistic experts. We’re not product development experts. We’re not engineers.

And as a result, we’ve had to really consciously go out of our way to find amazing people and really get them excited about the vision. And I think we’ve benefited as a business. I think this is another really important contextual opportunity—if the business is focused on solving a problem bigger than just making money, but it actually has a well-articulated mission, it will attract and retain a different type of person that isn’t going to approach it just as a 9-5 job.

They recognize that, yes they’ve got a livelihood, they’re making a good income, they have options to make more money, they’re part of the equity pool… But perhaps as importantly and more importantly they recognize that everybody is part of a greater mission.

I mean, we did a giving activation yesterday with our employees when we were packing boxes of food that are donated from our members at checkout. And it’s just so beautiful to see all the departments in the company represented, and how excited and passionate people were. And what kind of like relational fiber and positivity it generates amongst the folks that participated in that volunteer work day. And then everybody goes back into the employee pool and they feel really happy and connected to our mission as they go back to their respective expertise.

Yuri:                That’s pretty awesome, man. So with 500 people in the company… You, as the visionary—what does your day-to-day look like nowadays?

Gunnar: You know it very much changes. So, my goal—and our goal as an organization—is to just add outstanding value to our members and constantly think about every decision we make from the perspective of making our members feel like they’re getting value out of their membership to Thrive Market.

And that means, at a very basic level, saving time and money, accessing organic groceries that they love at wholesale prices shipped to their home…. But it also means connecting them to the broader set of initiatives that we do around our social mission, the content building community, the advocacy work we do.

So that’s just kind of fundamentally the way we think about building our brand. And every strategic decision is informed by, “how do we add value to our members?” So when I think about the things that I can do, that I’m uniquely capable of—you know, I’m just constantly thinking about those areas—my natural superpowers gravitate me towards partnerships, press, the social mission, evangelizing the business, some product development…

And then, just frankly, I’m so in awe of my co-founder Nick, as CEO of the business now. He’s got so much on his plate—he just had a baby—and so I’m constantly trying to look at ways that I can support him because at the end of the day he’s really holding it all together at this point.

Yuri:                That’s awesome. How do you know—let’s say it’s day one and you’re building your company, and you are the entrepreneur, the visionary, the CEO—at what point do you get to where you know, “Maybe I’m not the CEO or COO. Maybe I’m the visionary. I need someone else to run the company.”

How do you know when that happens and how do you find that person if you need support?

Accountability

Gunnar: Yeah. So, I think there’s no perfect answer to that. I don’t think there are any absolutes in that. I think the core thing is—if the business is struggling, or growing really quickly and struggling under that growth; it takes a real honest assessment of, “what does the business really need?”

And also, “what works for me?”

You know, I’ve been grinding away for 20 years as an entrepreneur, ever since I dropped out of college, and I still work very hard but I’m not actually as effective in my ability to contribute if I’m not sleeping well, and I’m not handling the basic things. Like, when I sleep well, get exercise, eat well—I’m able to see really clearly and see opportunities that can have really significant outsized impacts.

Nick and I were co-CEOs until recently and that was fabulous—we learned a lot, we share power well, and I think that’s a core dynamic. At the end of the day, it’s not about being right; it’s about getting it right together. That’s a really important kind of mutual understanding that needs to exist amongst partners.

If people are coming together and there’s a heavily competitive dynamic—it’s just not going to work. And that doesn’t mean that healthy competition isn’t a good thing, but in the context of core partnership, senior leadership—it needs to be a culture of reciprocity.

That doesn’t mean that we don’t challenge each other and have a debate of ideas—you know, we have no doors on our office and we encourage everybody to bring anything to us directly anytime they want—but at the senior leadership level, we’ve really gone out of our way to build a culture and model behavior that is very performance driven and metric driven, but also a culture of reciprocity, generosity, and respect.

And I think that with Nick coming in as the second co-founder of the business—we had the opportunity to really do that with each other for the first time as entrepreneurs at scale. And as a result, that kind of behavior gets modeled out in the organization.

It doesn’t mean that we get it perfectly or our team gets it perfectly, but I think really having a commitment to cultivating personal emotional intelligence and taking radical responsibility for ourselves, recognizing that we ultimately have the power to affect this—positively or negatively—and that the organization is a direct reflection of where we’re at in our consciousness and our leadership style.

So something isn’t working in the organization—yes, there may be a specific employee or problem that needs to be resolved, but more importantly, it’s actually a reflection of a problem with our leadership style.

Yuri:                Yeah, that’s a great perspective. The book Extreme Ownership talks about how, as the leader, you pretty much have to assume responsibility for everything that happens underneath you because in some way it trickles down from you whether it’s through modeling or the culture or something else.

And that’s very mature in that respect because not everyone has that same perspective.

So you mentioned performance and metrics as being something really important for helping you guys grow and part of your culture. How do you guys keep track of that? Do individuals have specific metrics and KPI’s they have to hit, or are they kind of team based? And if those goals aren’t met, how do you deal with those types of situations?

Gunnar:          Yeah, so every department has reports and KPI’s that roll up into our master KPI’s that get recorded daily, weekly, monthly, quarterly. So the whole organization has accountability and transparency.

Now there are things that don’t have hard KPI’s, like our giving program—yes, we can measure how many people come in, how many people purchase, how much money our members are donating, that we need to give away. But there’s softer, brand building stuff there.

So not everything is going to have a hard black and white KPI. But you know, at the end of the day we’re very much a logistics technology company and those things are KPI driven. So our service level agreements across the organization—whether it’s “What’s the response time when the site goes down?” “What’s our response time when somebody places an order to how long it ships?” “What’s the response time when someone submits a complaint?”

So, we have a lot of different interlocking service level agreements between departments as a way of really driving constant improvement to our member experience base.

Yuri:                Nice. And if someone on a team or within a department isn’t performing to the level you want them to—based on set metrics—is there a policy in place? To say, “Okay, lets coach this person a little bit more” or “Okay there was a miscommunication…” or is it like a “two strikes and you’re out” type of thing.

Gunnar:          You know, it depends on the leader and how they manage the department. But we have a whole human resources team that we call our talent team. And we do a lot of things that create opportunities for people to communicate challenges that they’re having and for managers to provide feedback.

And we haven’t totally gotten there consistently, but one of the most important things—I think—is that it shouldn’t be a surprise to anybody when there’s a real performance conversation happening. It should be obvious along the way.

And that’s a really important distinction. If it’s coming as a surprise to somebody, as part of a quarterly or bi-annual review… Then there’s a real breakdown in the ability for bi-directional information to flow freely—and I think that’s a real problem.

Yuri:                That’s a good distinction. That’s a big one. So I want to ask you about—either in Thrive or maybe one of your initial companies— what’s a big mistake you’ve made in business? And I guess, something like really bad—maybe you’re not too proud of talking about it, but what was that? What was that mistake, and what did it cost you?

Gunnar:          I mean, I think that the two we already touched on… First of all, overthinking a business before getting market feedback.

So, I had a startup called Good Life and you we just way over thought the business. We could have licensed a piece of technology that wasn’t perfect for $7500 and gotten out in the market in literally 60 days. And instead, we spent more than a year pissing around trying to build something perfect and 2008 came along and wiped us out even as we launched that product that we’d spent a lot of time perfecting.

We were already generating about $60-80,000 a month in revenue. But by the time we had spent as much money as we had in as much time as we had… We were just in a very vulnerable place and then 2008 came along and just wiped us out.

Yuri:                Wow. Alright man, this has been an amazing conversation. I’m really pumped that we’ve been able to have this. Are you ready for the five questions? The rapid fire?

Rapid-fire questions

Gunnar:          Yeah! Bring it on. I mean, I’ll do my best. I’m on my toes, but I’ll see what happens.

Yuri:                Alright. So, Gunnar—your biggest weakness?

Gunnar:          I think it’s that piece of really constantly developing the really optimal positive work leadership culture. And I’m a super passionate human being, so I’m constantly working to moderate the intensity of my passion so that I don’t overwhelm my team members or the managers that I interface with across the department. Because, you know, I get really excited about stuff and it can be overwhelming for people.

Yuri:                [laughing] I don’t think any entrepreneur can relate to that. What is your biggest strength?

Gunnar:          Ummm, I mean… I think I would also say my excitement and enthusiasm. I think it’s a curse and a blessing. I’m really good at sharing ideas with people and getting them excited about those ideas.

And I think one of the things that I love about life and entrepreneurialism, in general, is the ability to have an idea, and then set up the conditions to manifest that idea into reality. And I literally think of it as a magic thing that we are able to do as human beings.

And we’re so blessed to have the problems that we have and the capabilities that we have—I just think it’s such an amazing time and we have such a profound opportunity to really set ourselves up in a better way and that whole act of creation is really at the core.

Yuri:                Yeah, it’s so true. And that’s why I love entrepreneurship—because we are magicians. We take things out of the ethers and turn them into physical solutions.

Gunnar:          Yeah, it’s so, so awesome.

Yuri:                It’s amazing. Alright, so one skill you’ve become dangerously good at in order to grow your business?

Gunnar:          I think that I’ve become really good at content marketing and really understanding user behavior and how to align incentives and drive powerful content. We’re in this really fragmented 21st-century media economy where people don’t trust their traditional sources.

And so if you want to build a consumer brand using the Internet you really have to understand how to do it. You know, the era of a monolithic brand is dead. And we need to have the capability to flex our brand into different channels—and that’s something that I am constantly learning about, but I’ve developed a lot of skills around.

Yuri:                Awesome. Can you give us one example of how you guys run a content marketing idea?

Gunnar:          Just bringing influencers in as investors and then—what’s the type of content that we work with our bloggers to share with their audiences? So, it might be a content piece about why we should care about toxic ingredients in our cleaning supplies and it’s an educational piece about hormone and endocrine disruption and how your pores dilate when you take a warm shower.

And then, really problem solution framing—that’s how we tend to do all of our content marketing around problems that we’re trying to solve. So it’s just working with our stakeholders to get those types of messages out in a way that aligns with their values and what their audience is expecting them to communicate to them.

Yuri:                That’s great. Super smart, and it’s simple too. It’s not like, rocket science, but I think you guys have done a great job with that.

What do you do first thing in the morning?

Gunnar:          You know it really depends. I either try to get exercise first thing in the morning… Or, you know, I do have a kind of an unhealthy habit where I’ll snuggle with my girlfriend and our dog in bed and I just read news for a little while. I know that’s not the best use of time but I like lounging in bed for 15 or 20 minutes and reading a little news.

Yuri:  That’s cool! It’s so funny because everyone has their perspectives on morning routines and rituals and stuff—and I think there’s a lot of shame and guilt that people have. They’re like, “Oh my god! I didn’t get up early enough and do my thing!”

But I agree with you. I’ve got three boys and sometimes if I don’t get up early I just want to snuggle in bed with them, you know? And I think it’s okay; it’s good—because those times are not going to last forever, and I think you just have to honor yourself and where you’re at.

Gunnar:          And look—we’re going to be on the planet for a very short period of time and then we’re going to die, and that’s just the way it is. So we need to create opportunities for us to have those types of basic human experiences. And that actually gives us the fuel to fight the good fight.

Yuri:                Exactly. Alright, last one—complete this sentence.

I know I’m being successful when…

Gunnar:          I know I’m being successful when I am positive, well-rested, and organized. I think at the end of the day if I am able to get enough sleep I’m able to bring my most positive self to every day.

Yuri:                Love it. That’s great man. Gunnar, this has been awesome my friend. Thank you so much for opening up and sharing a lot of the stuff happening behind closed doors at Thrive.

Gunnar:          Yeah! And I so appreciate your work. The first time I had dinner with you, I knew we were going to be friends. I look forward to a lifetime of friendship and partnership.

Yuri:                Absolutely, likewise.

Gunnar: Have a beautiful day. Thanks, everybody.

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Yuri’s Take

Okay. So first and foremost, if you’re not currently a Thrive Market customer, you probably should be if you’re in the U.S. I don’t actually know if they ship to Canada yet—I’ll ask Gunnar that but I’m not quite sure they do.

But if you’re in the U.S. and you want amazing, quality, organic goodness delivered to your house at wholesale prices—then get a membership to Thrive Market.

And to make your life even easier, we’ve got a special discount for you and the best way to get that bad boy activated is to head on over to the show notes at the blog, healthpreneurgroup.com/podcast, find the episode with Gunnar Lovelace and you’ll find our special link with your discounts to enjoy all the goodness from Thrive Market.

I don’t know if I’ve ever seen a company with such explosive growth in three years. It’s crazy. I remember when Gunnar was just launching Thrive, and to see where they’ve come in such a short period of time…It’s beyond what you think is possible.

I mean it’s crazy to go from one employee to 500 in three years—logistically, what that looks like, it’s just incredible. And as Gunnar talked about in this episode, for him one of the big challenges is this continual growth of being a leader and how to really lead and build a team that is going to help satisfy this mission that they’re on—to make healthy food accessible to everyone.

So again, whether or not you’re building a massive company like Thrive Market… That’s not the point. The point is, what are the lessons we can take from those who’ve walked in front of us? What are the lessons we can learn from somebody who has built a monster business? Again, we can’t talk about revenue numbers because obviously there are some privacy issues with their investors and so forth. But we’re talking about a very, very, very, very large company.

What are the lessons you can learn from what they’ve done? Some of the mistakes that they’ve gone through. Some of the things that you, as a solopreneur, if you run your own business or maybe with a small team. Things you’re not thinking about that might allow you to get ahead of the curve after having heard this conversation with Gunnar.

Again, these are conversations—for the most part—that you’re not going to really have access to unless you’re coming out to one of our live events like Healthpreneur Live and so forth, where a lot of these individuals might actually be coming as attendees or speakers.

But I want to bring these amazing people to you, so that you can enjoy these conversations and discussions from the comfort of your own home, from your iPhone, wherever you are, and really learn from them. Take a few notes, get that “aha!” moment and move forward with that.

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Sign Up For A Thrive Market Membership 

As we mentioned earlier, if you’re in the U.S. and you want amazing, quality, organic goodness delivered to your house at wholesale prices, get a membership to Thrive Market.

And to make your life even easier, we’ve got a special discount for you by clicking on our special link: https://thrv.me/yuri-20off3

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https://thrivemarket.com

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