Główna High-hanging fruit: build something great by going where no one else will

High-hanging fruit: build something great by going where no one else will

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Rok:
2016
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Penguin Publishing Group;Portfolio;Penguin
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english
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230
ISBN 10:
0399562141
ISBN 13:
9780399562143
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		 			 			Portfolio / Penguin

			An imprint of Penguin Random House LLC

			375 Hudson Street

			New York, New York 10014

			Copyright © 2016 by Mark Rampolla

			Penguin supports copyright. Copyright fuels creativity, encourages diverse voices, promotes free speech, and creates a vibrant culture. Thank you for buying an authorized edition of this book and for complying with copyright laws by not reproducing, scanning, or distributing any part of it in any form without permission. You are supporting writers and allowing Penguin to continue to publish books for every reader.

			LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA

			Names: Rampolla, Mark, author.

			Title: High-hanging fruit : build something great by going where no one else will / Mark Rampolla.

			Description: New York : Portfolio/Penguin, [2016]

			Identifiers: LCCN 2016017393 | ISBN 9780399562129 (print) | ISBN 9780399562143 (ebook)

			Subjects: LCSH: Rampolla, Mark. | Social entrepreneurship.

			Classification: LCC HD60 .R348 2016 | DDC 658.4/08—dc23

LC record available at https://lccn.loc.gov/2016017393




Version_1





CONTENTS




			 				TITLE PAGE

				COPYRIGHT

				DEDICATION

				1. REACH HIGHER

				2. HOW GREAT IDEAS ARE SOMETIMES RIGHT OVERHEAD

				3. LEARN FROM THOSE WHO CLIMBED BEFORE

				4. FINDING THE BRAND WITHIN YOU

				5. IT WILL NOT BE THIS WAY

				6. GIVE UNTIL IT HURTS

				7. BOTTLE IT UP

				8. RUNNING THROUGH WALLS

				9. DANCING WITH ELEPHANTS

				10. YOU CAN’T LOSE WHEN YOU’VE ALREADY WON

				ACKNOWLEDGMENTS

				INDEX





To my parents, who showed me what it means to reach higher.





CHAPTER 1


			REACH HIGHER




			On an unusually warm and clear Saturday morning for December in San Salvador, we drove to the beach to meet friends for the day. The air was filled with that uniquely sweet Central American scent comprising notes of jasmine, bougainvillea, tropical humidity, crushed sugar cane, and burning trash. After several years living here it now smelled like home. Maura was asleep in t; he passenger seat. Six months into her second pregnancy she was struggling with an all-day version of morning sickness. Ciara, our eighteen-month-old, was conked out in her rear-facing car seat behind us. My work for International Paper’s (IP) packaging business had taken me to Argentina and Venezuela that previous week, and I was tired myself and looking forward to catching a few z’s in one of the hammocks strung between coconut trees at the little beach house that would be our refuge for the day.

			As we descended from the mountains to the coastal plain, I could feel my ears pop and the temperature rise. We drove into the sleepy port town of La Libertad. Maura awakened out of her slumber and spotted a roadside vendor, saying, “Agua de coco! That’s something I can drink. Can we stop?” I said sure, but reminded her that we were only ten minutes from the house. “You know Jorge will have one ready for you in five minutes and you can drink it while floating in the pool.”

			“Ah, that sounds perfect,” Maura said. “Keep going.”

			I pulled up to the tall blue gate we knew well and beeped twice. Jorge, the property manager, opened the gate and ushered us in. We chatted a little and I asked him if he could get us a bunch of coconuts for the day: “Maura está un poco enferma.” He said back to me, “Qué lastimá. Agua de coco fresca es exactamente lo que ella necesita!”

			After we parked, we watched as Jorge picked one of the coconut trees to harvest. He tightened a rope between his feet, wrapped his arms and knees around the trunk, and expertly shinnied up twenty-five feet or so to the top. He pulled out a machete from the sheath strapped to his waist and hacked away at a branch. Down fell a bunch of five or six coconuts still attached together.

			By the time I helped Maura from the car and took Ciara out of her seat, Jorge had hauled the coconuts to the palapa by the pool. Holding one in his hand, he used the same machete to slice the husk little by little until he breached its tender shell. I took a picture of Ciara standing, staring down, fascinated at the bunch of coconuts on the ground, while Jorge put a straw inside one and handed it to Maura. She took a long drink, thanked him, and melted into one of the lounge chairs.

			Within the hour, our group of friends was sitting poolside. There was Don, the deputy director of the Peace Corps, and his wife Candy, who was an executive with Save the Children. They owned the house. Dave and Terry, who both worked at the U.S. Embassy in San Salvador, were there. Lane and Kelly and their kids, who had recently moved from El Salvador to Guatemala, were the last to arrive. Lane was country director of Catholic Relief Services (CRS) and Kelly consulted for UNICEF. I loved hanging out with this group, although their professional dedication to good works and higher callings sometimes made me wonder if I was doing enough with my life.

			As we floated in the pool, we chatted about typical expatriate themes: safety, the economy, local politics, and the latest stomach illnesses. Inevitably, the conversation drifted to what we planned to do next in our lives. Expats tend to be transients, usually staying only a few years in a given job or location. Most of us had been in the country for at least two years and were all beginning to plan what came next.

			Dave, we learned, was being considered for a big promotion that would take him to Colombia. Terry wanted to move to Indonesia and hoped to shift from the consular section to the economic development track. Lane and Kelly talked about their dreams to move to Ecuador or Africa and continue their work for the poor. “What’s next for the Rampollas?” Terry asked.

			The question was timely. We’d been living in El Salvador for almost three years, and Maura and I talked constantly about the paths we might take: what was best for our young family, our careers, and us as a couple. Maura could do her public health consulting work from anywhere, but for me, I admitted, “That’s a tough one.”

			I told them that work at IP was going well and that I’d likely soon be running all of Latin America for my division, which made it worth staying a few more years. Then I would be ready to move on, and it looked like there might be opportunities for me in Europe or Brazil.

			“So it sounds like you’re on your way,” Terry said.

			“I guess,” I said, “but . . .” I looked around at the group. “The truth is that I don’t know that paper and packaging is really what I want to dedicate my life to. If I leave IP, I guess my next logical career move would be to run the Latin America operations for some big U.S. company. But I know what that job would mean: We live in Miami and I travel one hundred to two hundred days per year. And for what? So I can make a ton of money for the company, some for us, work my way up the ladder, and eventually retire and spend my days golfing? That’s not what either of us want, so I’m not really sure what we’re going to do.”

			Maura, worried that I was heading into an existential crisis, chimed in: “Mark, there’s a million things you can do. And yes, many of them are more interesting and inspirational than packaging.”

			“Maybe it’s time for me to move to the nonprofit world,” I said. “Maybe I’ll return to the Peace Corps and take over for Don when he retires. Or Lane, could you find me something at CRS?”

			“Mark, you’d be great in nonprofit but I think you’d be frustrated. Change is incremental and slow and it can be very political,” Lane said. “With your background and experience I think you can make a bigger impact in the private sector.”

			I thought back to my Peace Corps experience as a small business development consultant in Costa Rica. No doubt, I helped change a few lives but on a frustratingly small scale. I had always struggled with how to reconcile my belief in making a social impact with my interest in business. My dad was a nuclear physicist and my mom a counselor, artist, and teacher. Morality, spiritual purpose, social responsibility, and even war and poverty in El Salvador were regular dinner table conversations in our Italian/Irish Catholic family. My parents also practiced what they preached, taking us to swim at the all-black public pool in town, bringing an unwed teenage mother to live with us, and adopting a Bosnian refugee family from the Yugoslav wars.

			In college at Marquette University, I found myself drawn to study business after meeting friends with entrepreneurial parents, intrigued by their dynamic world full of challenging opportunities to shape the future and frankly to make a lot of money. This was the era of Gordon Gekko in the movie Wall Street, and “greed is good” was the maxim of the day. I struggled with how to reconcile what appeared to be disparate worlds. On the one hand, I wanted to become a young master of the universe. On the other, I was pulled toward my family’s value of social activism and a desire to give something to the world.

			After the Peace Corps, I continued to wrestle with these issues in graduate school at Duke University while pursuing joint MBA and environmental management degrees. One class would focus on profit maximization and the importance of shareholder value. In the next, I’d learn how businesses could have a devastating impact on poor communities and sensitive environments. While there I met Maura, who was pursuing her master’s in public health at neighboring UNC Chapel Hill, and we soon started dating. She came from a like-minded family and held similar values but also had a magnetic and near-uncontainable joie de vivre. Her enthusiasm added a whole new dimension to the equation: that of having pure fun and enjoying life.

			Because Maura and I were in serious debt from grad school, we decided I would take whatever job paid well and also gave me the fastest chance to actually run a business. That turned out to be old industrial International Paper. After two years of strategy and business development in their corporate headquarters in Memphis, Tennessee, and traveling to Europe, Latin America, and Asia, I was offered an opportunity to run a business in El Salvador and we jumped at it.

			Now, three years later we had “made it” by most traditional standards. We were happily married and building a family. My salary allowed us to pay down all of our debt, have a big house and a staff of three. I ran a multinational business with three hundred employees and was meeting with presidents, ambassadors, and dignitaries of various countries. I was on the fast track to the highest executive ranks of a Fortune 100 company. Maura consulted with public-health nonprofits and supported rural community projects. We dined in the finest restaurants, vacationed in exotic spots, contributed to worthy charities. I also considered myself (and believe others did, too) a good and ethical businessperson. We had it all. Or did we?

			Sometimes, the closer you get to your goals, the more you realize they’re not really your goals.

			As I talked with our friends that day, I knew clearly that something was missing. I was beginning to see the limitations of achieving “success” in business—at least how success had been traditionally defined. I noticed many others who had achieved so-called success sacrifice their personal health and destroy relationships with friends and family or make decisions that negatively affected the lives of dozens or thousands of people. Most businesspeople I knew were passionately competitive, but very few I met could give me a compelling answer to why they were playing the game in the first place.

			“Don’t worry about it, amor. We’ll figure it out,” Maura reassured me. “Instead let’s focus on the here and now. May I have another agua de coco with a little limón, por favor? The bebecita and I are parched. What in the world will we do without coconut water when we move back to the States someday?”

			Of course, at the time, we had no idea that we were holding the literal seed of a great idea right there in our hands. I certainly had no idea I would quit my lucrative job, we would move to New York, launch Zico, and struggle for years just to survive without knowing if we had risked it all for nothing. In that moment, we couldn’t have imagined that we would help to catalyze an eight-billion-dollar global industry that would revolutionize the beverage industry, contribute to the health and wellness of millions of consumers, and lead to billions of dollars of investment in developing countries and the employment of hundreds of thousands of people. We didn’t know we would build a great team and engage yogis, nutritionists, celebrities, and athletes to help tell our story. And we certainly had no idea that in addition to achieving conventional success and greater financial freedom than we could have imagined, this whole process would strengthen our marriage and family, improve my health, and help us to become more spiritual and realize what was truly important in life. Yet, when I think about how it all started, my mind goes back to the memory of watching Maura, six months pregnant, drink down the water from those freshly harvested coconuts that day by the pool.

			The idea was right there over our heads. We just had to reach a little higher.

			My journey from Peace Corps volunteer to corporate executive to becoming an entrepreneur was fundamentally motivated and guided by the pursuit of something higher. It was about more than money, more than conventional success. We achieved those, too, but they were the low-hanging fruit. Not to say they were at all easy, but they were more obvious goals. Right there, in front of us. Fortunately, by reaching higher, we achieved so much more. Building Zico and pursuing these higher goals wasn’t easy, and the path was never straight or clear. Maura and I navigated through the heart-wrenching pains of start-up mode; the all-consuming intensity of building a new brand; brutal competition; and all the physical, mental, emotional, and moral challenges that the modern business world could throw at us. Yet we survived and in fact achieved more than we ever could have dreamed, well beyond the typical entrepreneurial success story.

			In that often-told story, an entrepreneur finds some brilliant way to do something ten times better, faster, or cheaper than what was on the market before. They launch a risky new business with the goal of capturing a big chunk of some huge market dominated by a corporate behemoth. They face many challenges along the way but power through with brute force and determination to capture the hearts and minds of their customers. They go on to build a hugely profitable business, take their company public, sell to a corporate buyer, or stay at the helm for a lifetime. They amass a personal fortune, buy the big house on the hill and a ranch in Montana and fill them with art and all the toys. They vacation on yachts in the French Riviera or in rural eco-lodges in Cambodia or just “hang” with their celebrity friends in the Swiss Alps. They’re interviewed by Fast Company, Wired, and Fortune, and get invited to speak at TED, Aspen, Davos, or Summit Series to share their secrets to success. To “give back,” they start a foundation, fund a new building for their college, support worthy causes, and commit to giving away 50 percent of their wealth before they die. What more could a modern entrepreneur want?

			We often celebrate entrepreneurs who are willing to lay it all on the line for success. Yet all too often you can “win” by the conventional measures while betraying your personal values and some deep human needs like your desire to experience joy, creativity, fun, spirituality, beauty, and love on a daily basis. It’s possible to cruise off into the sunset after damaging the health of your consumers, profiting unfairly from the work of employees or suppliers, burning through precious resources, leaving a wake of environmental devastation, and leading a life utterly lacking in awareness and contemplation and filled instead with an obsessive pursuit of “just a little more.”

			Maura and I count ourselves among a generation of entrepreneurs and business leaders who are reaching for something higher. We reject the old adage, “Nothing personal. It’s just business.” In fact, we put our hearts and souls into making our businesses fundamentally and deeply personal. Success requires that our ventures reflect our individual values, personal priorities, and passions. Entrepreneurs who are guided by this sort of reliable internal compass are those who produce the products and services that make the world a better place while simultaneously minimizing their negative impact. They build businesses that have an uplifting, positive impact on everyone—including the founder(s), employees, families, suppliers, business partners, and investors—not just in some distant future but throughout the journey.

			Not only are we not willing to sacrifice our marriages, families, friendships, passions, health, and values for business success, we expect our ventures to enhance our families, strengthen our relationships, and align with our dreams, passions, and life ambitions. We are convinced our professional life must nourish us on a level far deeper than simply putting food on the table and money in the bank. We view our ventures as an opportunity to learn about ourselves: our strengths, weaknesses, values, and priorities. The idea of success for us is not a distant, hoped-for payout but something we work to experience continuously. In fact, if the daily journey of creating your business is a meaningful, challenging, and personal quest, it becomes an endeavor where you literally cannot lose. Regardless of the business’s eventual success or failure by conventional measures, the adventure will have been worth it, and the world will be a better place because you set and worked toward your intention. This is what I mean by reaching higher.

			Do those seem like high-minded goals that might make starting or succeeding in business even more difficult than it already is? I argue—and here is the key counterintuitive argument of this book—that your chances of “winning” by conventional measures are far more likely if you reach higher from day one. Passion is a magnet for the best and brightest talent. Great employees want to work for bosses who are driven by high personal standards and have the enthusiasm of being on a personal mission. Many investors are looking for these entrepreneurs as well, seeking to make an impact with their capital while they generate reasonable returns. Most importantly, today’s informed and engaged consumer is tired of being pandered and talked down to. They are scouring the marketplace for products and services that offer something meaningful. All these factors make this new breed of entrepreneurs dangerous to the established corporate order. They are poised to disrupt whole industries—from energy, transportation, financial services, and health care to apparel, technology, media, and food and beverage.

			The old guard will fight back and they won’t always fight fair. They’ll deploy advertising designed to manipulate consumers, promote unfair regulations, attempt to control routes to market, and employ armies of lawyers to defend their turf. But all these tactics will only delay the inevitable. Major corporations will either lose fighting these insurgent players or be forced to assimilate their values and mission.

			High-hanging fruit is not just about an incremental change to the old way of doing business. While social responsibility was an important step for major corporations to adopt, it is often used to justify, ameliorate, or offset the negative consequences of regular business practices, with profit remaining the only true bottom line. Social entrepreneurship generally attempts to use business to achieve social objectives, and expands the concept of the bottom line to include people and the planet. But the entrepreneurs I’m talking about set out as a given that their businesses must contribute to larger social goals and minimize environmental impact, and also add a new dimension to the triple bottom line: that of finding deeper meaning through business by pursuing one’s highest and best use and helping others do the same.

			This revolution is poised to disrupt the world by combining the power of entrepreneurship with deep personal values, purpose, and mission. Since we launched Zico in 2004 we have witnessed hundreds and know there are thousands of other entrepreneurs following a similar path. No longer do the winners have to be Harvard dropouts or serial entrepreneurs who can trace their business genius back to their days of franchising lemonade stands around the neighborhood. They might begin as teachers, backwoods craftsmen, social activists, environmentalists, small farmers, anthropologists, Jesuit priests, or cancer-surviving moms. I believe that most of our shared social problems, from the economic boom and bust cycles to income and development inequalities to environmental degradation, can best be addressed through this new style of entrepreneurship. This is capitalism 2.0, and we’re only at the beginning of this movement.

			High-Hanging Fruit is not a how-to book or a step-by-step instructional manual. It is not a rigorous scientific study across multiple test cases. This story is my personal reflection on the journey of attempting to build a business with these higher goals in mind. It’s about one person’s, one couple’s, one team’s attempt to reach higher. I will offer lessons, thoughts, and insights I’ve gained in attempting to disrupt an industry ruled by a few dominant players. I’ll share our intentions and triumphs, as well as my doubts, fears, and mistakes along the way as we tried to change the way business is done.

			People talk a lot about the importance of being true to your values and seeking something beyond material rewards in other areas like art, music, writing, science, teaching, and drama. It is time to apply this maxim to business: to see business as an equally noble pursuit measured by more than just a single dimension. That’s what this movement is about. If you choose to join us, your life, the lives of those around you, and the legacy of capitalism will never be the same, and the next generation will thank you for it. Good luck and reach higher.





CHAPTER 2


			HOW GREAT IDEAS ARE SOMETIMES RIGHT OVERHEAD




			“How flexographic printing is changing the world” was the name of the seminar I was sitting in on at a conference on printing and packaging in Miami, Florida, the winter of 2003. I was still a young mid-level executive with International Paper and so bored by the presenter I wondered what I was doing with my life.

			That night before I flew back home to El Salvador the following morning, I had dinner in South Beach with David Andrade, who worked for me as controller for one of the five IP beverage-packaging plants I ran at the time. We sat at one of the swanky restaurants on Collins Avenue, enjoying the ocean breeze.

			David and I ordered martinis and talked in Spanish about the conference and work in general. On the second round, we talked about our families and friends. On the third, we opened up and began to really talk about life, our hopes and dreams. At the time, I wouldn’t usually have conversations with employees that were so personal and revealing, but David had become a good friend and would soon move on to a job in the U.S., so I felt more comfortable being candid. No doubt the three martinis helped loosen my tongue a bit.

			“So, Mark, everyone knows you’re not gonna stay in El Salvador forever,” David said to me. “You’ll get promoted or recruited by some other big company, but what I want to know is this—have you ever thought about leaving and starting your own business?”

			The truth was that I had thought a good deal about joining a start-up, probably as the general manager or CEO who took over from an entrepreneur with a brilliant idea. Over the last ten years, I had become confident in my business skills. I was the guy who could build and lead teams, develop strategies, execute plans, reach goals, get things done. I could see myself taking a company from $1 million to $10 million, or $10 million to $100 million, or maybe even $100 million to $1 billion. But in those dreams, I never cast myself as the founder, the person who had come up with the new idea.

			“I’m not really the idea guy,” I said, looking out toward the night sky. “I’ve got friends who are always coming up with new products or services. That’s not me. But I would love to find someone with an idea I can believe in and passionately get behind. Assuming we can find the money we need, I think I could figure out the strategy and scale it.”

			When I looked back at David, he had a funny, expressionless face as if I had just said something idiotic. “Mark,” he said, gesturing around at the lively South Beach social scene, “the only difference between you and an entrepreneur is an idea, and you are as capable as anyone of coming up with one.”

			Despite the effects of three martinis, David’s simple statement hit me like a lightning bolt. Why had I been telling myself that I wasn’t creative or smart enough to come up with an idea?

			And when exactly had I convinced myself that creativity and follow-through were mutually exclusive? As a kid and even a teen, I had thought of myself as creative. In fact, one of my declared career goals, when asked, was to be an artist. My family had often referred to me as “project boy” for all the crazy schemes I pursued. But somewhere along the way I had persuaded myself that I was a left-brained thinker: a doer, not a dreamer. But was that just a stereotype I had imposed on myself?

			With David’s simple observation, I had been given permission to ignore the story I had been telling myself for decades and began a new one of possibility. A switch flipped in my brain, and I couldn’t turn it off even if I wanted to. I suddenly couldn’t stop thinking of new business ideas.





IDEAS ARE A DIME A DOZEN


			With David’s challenge echoing in my mind, I did what I always do: I dove in deep. On the plane ride back home to El Salvador, I began to make a list of ideas. I remembered a mantra I had often heard in brainstorming meetings: “There are no bad ideas.” By the end of the plane ride, I had already jotted down two dozen. I got three more walking by the airport stores and kiosks. Over the following weeks the list grew longer each day. The world suddenly seemed full of opportunities to start businesses. Why, I wondered, had I not done this before? David was right; not only could I come up with a great idea, I was an idea machine.

			Maura was happy that I was feeling so energized and excited. She knew me, in some ways better than I knew myself, and saw that the corporate career path I was on was becoming less and less fulfilling.

			Of course, I knew that whatever business I pursued, I needed and wanted full buy-in from Maura. So one evening, a couple of weeks into my manic brainstorming, I brought out my notebook after the girls went to sleep.

			Sitting on our patio overlooking the city lights, I flipped through my pages of notes and started with one I knew was a winner. “I want to consolidate the dairy industry across Central America.” I let the sheer brilliance of that sit in the air for a minute, and then went on to explain that in the seven countries of Central America, with a combined population of about thirty million and an economy the size of Ohio, there were twenty-five independent dairies, none of which were large enough to be efficient. The opening of free trade with the U.S. had undercut small-scale corn growers in Mexico. The same could happen with dairy farmers in Central America, I told her. I already knew most of the players, as the business I ran for International Paper supplied the paper cartons for the milk. The small-scale milk producers were all at risk unless they consolidated and ran more efficiently. “Dean Foods revolutionized the dairy industry in the U.S.,” I finished, “and we could do the same in Central America.”

			Maura thought for a moment, nodding her head.

			“Dairy,” she said, looking at me, both puzzled and bemused, “you’ve hidden your passion for the dairy industry from me all these years. Let me ask you this: besides the opportunity to make money, why do we want to be in that business? So we can go to more boring Dairy Federation trade shows in Chicago? Isn’t that sort of the industry you’re trying to get out of? How is this important for you and me and the girls and the rest of the world?”

			“Well,” I said, suddenly feeling like I was being attacked, “the girls drink milk.” Maura cocked her head at me, indicating the lameness of the answer. Trying to get my momentum back, I doubled down and tried to convince her that there was a fortune to be made in dairy.

			“Okay, I believe you,” she said, interrupting my lecture. “You can make a lot of money from consolidating dairies. Is that your main point?”

			Clearly, this idea didn’t impress her. I flipped through the pages looking for a better one.

			“Okay. What about trucking?” This one I was pretty sure would wow her because I had become something of an expert on regional trade. I was a board member for the American Chamber of Commerce of El Salvador and we were active in the negotiations of the Central American Free Trade Agreement between Central America and the U.S. One of the expected problem areas was trucking. I reminded Maura that there had been a boom in the trucking business when the U.S., Mexico, and Canada signed the North American Free Trade Agreement (NAFTA) and that the same was expected in Central America when this new agreement was signed. The trucking infrastructure that existed across the region was poor, limited, and inefficient. I knew this well as the business I ran shipped packaging across the region, and it took days and was triple the cost to ship from San Salvador to San José, Costa Rica, than from New York to Pittsburgh, roughly the same distance.

			“So I’ll raise some money,” I said to Maura, “buy a couple of the best trucking companies, and then figure out how to make them world-class with new technology, best practices, good benefits for drivers, better safety.”

			“Hmm,” she said. “Trucking?” All the questions she had asked before hung in the air. “Tell me, what is it about trucking that excites and inspires you?”

			“Um,” I stalled, knowing that I would likely regret anything that came out of my mouth.

			“Trucking just doesn’t do it for me,” she said, reaching out her hand for the list as I surrendered it. She read aloud idea after idea: shopping malls in Honduras, clothing manufacturing in Colombia, ecotourism in Costa Rica, exporting chocolate from Belize. When she got to trucking again she was laughing so uncontrollably she couldn’t keep reading.

			“All right now, I admit some of these aren’t that great, but don’t you know the first principle of brainstorming is there are no bad ideas?” I said, taking the notepad back but laughing with her at the same time.

			“Well.” She paused, taking a breath and regaining control of herself. “What we’re doing here is the step after brainstorming when we cull the herd. I don’t want to squash your excitement for becoming an entrepreneur and I have no doubt if you decided to launch one of these businesses you could succeed. But if we’re going to mortgage our lives to launch a business, it needs to be something we can both be passionate about. What about all the stuff we’ve talked about, Mark? Having fun, traveling to great places, making a positive impact on the world? Where does that fit into any of these ideas?”

			I looked back at my list, scanning it for ideas by which I could redeem myself. As moneymaking business ventures, I could make the case for all of them, but I could now see that they were hollow—and might lead me and us to the same exact unfulfilled spot I was in now. Making money was important to both Maura and me. We had our girls to support, after all. And we both wanted to become financially independent enough to be comfortable in life. But the truth was that we could work toward those monetary goals without leaving the career path I was on and taking on the risks and difficulties of starting something. To start a new business required that the venture profit us, and the world, in other ways as well. Maura was reminding me that the right idea had to have a motivation deeper and higher than just typical business success and making money.





A HIGHER FORM OF IDEATION


			As I thought about Maura’s questions, I realized I was starting from the wrong place. I had fixated on the business opportunities I perceived needed to be filled instead of leading with more fundamental and meaningful personal questions: What problem in the world do we want to address? What impact do we want to make? What meaningful good or service do I want to contribute? What do I have to uniquely offer to the world?

			For some people, the question of what they have to offer the world is relatively straightforward. We all love the stories of prodigies who show amazing aptitude at a young age—the adolescent violin virtuoso or the ten-year-old physicist—people who seem to be born great at something. At the other end of the spectrum are those who don’t really care about what they produce, so long as it has a market and is profitable, much like a celebrity CEO who might be a keen manager, wiz with numbers, and gladiator at the negotiation table, motivated to win big for his or her team, whatever team that is. Despite being an icon of success, his or her story answers all the important questions about achieving remarkable success except the most important one: why?

			Most of us, myself included, fall somewhere in between. We weren’t born with some preternatural talent to offer the world, and yet we want careers that are more than simply maximizing income and our social status. Increasingly, we expect our professional endeavors to line up with our values, interests, personal histories, and beliefs. We want to have a clear and deeply satisfying answer to the question, “Why did you spend all that time and effort producing that product or service or starting that company?”

			Of course, keeping this question in mind from the beginning will help you avoid getting off track. But that requires you to examine your personal history and inner desires to see what truly interests you. What are your talents, abilities, and passions? What excites you? What local or world problems would you like to try to solve? While you may not find the perfect idea or lifelong passion, with some hard work you can greatly narrow the field and select an idea that closely aligns with who you are, when you are at your best, and who you want to become.

			After that evening with Maura, I put my brainstorming notepad aside and over the following weeks Maura and I took long hikes together in some of our favorite spots around San Salvador. Instead of going straight for the big idea, we discussed our personal lives, histories, and dreams. We retold stories to each other of our families, people who influenced us and whom we admired. We examined supposedly “successful” people whose lives we never wanted to emulate. We reflected on when we were happiest, when we had the most fun, our proudest moments, and the dreams we had for ourselves and our girls. We weighed the pros and cons of continuing our nomadic expat lifestyle and discussed various countries, states, and cities where we might want to put down roots.

			As we talked, several guiding principles and key shared interests bubbled up right away. We had both grown up in religious households that emphasized our shared responsibility to others, especially the poor and underserved. We realized that this upbringing had shaped us substantially. Maura had dedicated herself to causes and organizations beginning in college to help people who didn’t have the same advantages she had. She said it kept her grounded whether tutoring inmates at Cook County Jail, comforting AIDS hospice patients in Chicago, or being a camp counselor for intellectually challenged kids. She worked and volunteered for nonprofits and then pursued a master’s degree in public health. After graduate school, she worked in various capacities championing women’s and children’s health and education. For me, my parents helped me develop my moral compass, which influenced my decision to attend a Jesuit college and subsequently join the Peace Corps. I lived in rural Costa Rica for two years, where I worked with small business owners, mostly single mothers, to help them grow their businesses through access to micro loans. When I returned home, I couldn’t see myself just getting an MBA so I also pursued an environmental management degree. While in El Salvador we built houses with Habitat for Humanity, supported schools in poor communities, and planted trees in urban areas. Whatever business we started, we determined we didn’t want to intentionally harm others or the environment and ideally wanted to make a positive impact on people’s lives and health.

			We also talked about how we wanted to stay healthy both for our own longevity and happiness as well as to be good role models for our girls. We were active and into biking, hiking, skiing, swimming, and yoga. We were part of a generation that was becoming ever more keenly aware of the interplay between mental, physical, and spiritual health.

			And while we were passionate about our own health, we also shared a concern about health trends at large. From our expat perspective, we could easily observe how the relative wealth most Americans enjoyed guaranteed neither health nor happiness. In fact, in many ways you could make the case that America’s wealth was part of the problem. Like a junkie that had won the lottery, a large portion of the population appeared to be intent on literally killing itself with unhealthy food, lifestyle choices, and stress. Those choices, it was also clear, were being shaped by a food industry that promoted and glamorized the unhealthiest foods and beverages imaginable. Obesity rates were skyrocketing in America, growing from one quarter of the population in 1990 to nearly a third just over a decade later. That drastic rise was costing people their health, but it was costing the rest of us a great deal, too. The annual medical costs and impact on economic productivity of preventable conditions were running into the hundreds of billions of dollars.

			Worse yet, these unhealthy lifestyle choices started gaining momentum in the rest of the world as the U.S. exported them through media, and big food. Globalizing the American style of overconsumption and poor health habits could lead the world into deep trouble, which deeply troubled us.

			Maura and I also talked about our passion for travel and how we never wanted to lose our deep love for and connection with Latin America. We had learned from the remarkable generosity and community spirit of hundreds of people we had met across Central America. Despite having suffered civil wars, natural disasters, and years of unrest, these communities managed to stay focused on what was best about us as humans—maintaining strong social bonds and creating remarkable music, literature, visual art, and food. Our family’s diet had changed and been significantly enriched since moving south of the border. The local markets were filled with fresh, seasonal vegetables and fish. We became connoisseurs of fruits that we had never seen in the U.S. and knew only by their Spanish names. Our girls were reared on fresh-pressed juices and blended vegetables. Our immersion in Latin American culture enriched our lives immeasurably, and we loved sharing what we had learned with families and friends who visited us.

			After a few weeks of dreaming and reflecting together, I was ready to revisit business ideation from quite a different starting point. Instead of brainstorming potential gaps in different industries, I made a list of screens, worded as questions, by which I could filter out business ideas that would not have a chance of passing what I started to call the “Maura test.”

			First were personal screens, questions that rose out of the conversations we had had on our walks—our individual values, histories, and interests. Was a business idea consistent with our values and lifestyle, and did it contribute to our personal goals and dreams? Would it directly and positively affect lives beyond ours? Would the world be better off if we succeeded? Would we think the project was worth it even if we failed? Would it have a positive (or at least neutral) environmental impact? Would it keep us tied to Latin America? Could I commit to this for the long term? At thirty-four years old at the time, I realized I had never held one job or stayed in one place for more than about two years. From my research I knew that launching a business successfully was a minimum five-year process and that I’d better be prepared to commit for a decade. This project would very likely define my career and in meaningful ways become my identity, so I’d better pick carefully. What would the girls think about this business when they’re ten? Sixteen? Twenty-five? Forty? If we were successful (or not), would the girls be proud that we had started it? Would they be interested in working there someday? These screens wouldn’t apply to everyone but they were critical to us, informed by what we had reflected on and determined as most important to us. We were now taking ideation way beyond dairy and trucking.

			The second set of screens were classic MBA-style ways to evaluate the potential and viability of a business. Is it audacious? Is it a big idea that captures our hearts and those of others? Could we attract top talent and rally employees, investors, and customers around it? Is it something we were excited to talk about? If I was going to dedicate a good part of my life to something, why not do something that’s a BHAG (Big, Hairy, Audacious Goal), as Jim Collins says. Does it have high gross and profit margins? I had run paper and packaging businesses with low margins, and I can tell you it’s tough! I wanted to be in a business that had higher margins to work with, which would allow us to pay people well and generate critical cash flow to fuel growth. Would it have strong growth potential? I knew we would start small, but why should it stay that way? It should be something that could grow continuously for years to come and potentially become a billion-dollar business. Could we differentiate? Is it new to the world or at least different from what’s out there today? I realized that the really exciting businesses were innovative, differentiated, disruptive.

			With these two sets of screens, we now had a framework to evaluate the many ideas I was generating, which only stimulated more. I compiled all of my ideas in a spreadsheet, and then evaluated them individually against the screens, which gave us context and common ground to discuss them. These screens also helped me avoid suggesting ideas that would never pass the Maura test. Coconut water was on the list from the beginning, but only by developing and using these screens did it eventually rise to the top. How did it get there and what made it bubble up to the top?





WHY COCONUT WATER?


			In his autobiography, Mark Twain wrote, “There is no such thing as a new idea. It is impossible. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope. We give them a turn and they make new and curious combinations.” What we often think of as new ideas are actually combinations of pre-existing observations or a new connection between ideas that already exist. But at the same time, looking through the shifting colors and mirrored images of a kaleidoscope can make the world become amazing and new.

			The idea of marketing coconut water, I’ll be the first to admit, was not a new one. As Maura and I discovered through our travels, in certain latitudes the product couldn’t be more ubiquitous. In El Salvador, we encountered it literally every day. And although it could already be found in steel cans in the ethnic aisles of some American supermarkets, in 2003 few seemed to see the billion-dollar market potential of importing the product as a mainstream drink for health-thirsty Americans.

			That this opportunity escaped the notice of so many is worth pondering for a moment. How many millions of business leaders, executives, entrepreneurs, development workers, and travelers have vacationed in Latin America, the Caribbean, or the South Pacific and sipped out of a freshly cut coconut? How many more lived near the equator, where their jobs were to bring regional products to the North American market? A billion-dollar idea was resting in the palm of their hands or just overhead. Why didn’t they see it?

			For a tourist, the coconut as a food, drink, and object is an interesting novelty happily experienced but easily forgotten. But for tropical cultures around the world, the many uses of the coconut run much deeper: so deep in fact that they are taken for granted.

			I first experienced some of that cultural connection to coconut water during my Peace Corps years in Costa Rica beginning in 1991. Relying on it as a safe and clean source of hydration was actually written into the Peace Corps manual. In our training classes we learned that coconut water can often be the best source of clean water in remote locations and that it could be used as an oral rehydration solution when someone came down with the inevitable stomach illness.

			In Costa Rica you’d always see the chest-high stacks of coconuts, with a little stand behind, along the sides of the beach roads. Often these coconuts were already partially dehusked and the vendor would just cut off a small flap of the soft shell at the top and pop in a straw. You could take the whole coconut, drink the water, and then scrape out and eat the tender white meat. Sometimes the coconuts were kept in a little ice chest and the vendor would pour the water into a plastic bag with the meat floating inside. Local kids made pocket money shinnying up trees to pick coconuts for tourists on the beach.

			The taste of coconut water had to grow on me, as it does for many, but soon I came to love the smooth and refreshing flavor. I remember taking a coconut on a hike up a volcano, machete in hand to protect against snakes and for splitting coconuts. I was also familiar with, let’s say, less-health-conscious uses. Coconut water was a great mixer with local rum. Coincidentally, around this time, I also learned there was no better cure for a hangover.

			During my backpacking through Central America post–Peace Corps I realized coconut water was not just a Costa Rican phenomenon but also a region-wide staple. Traveling through many parts of Central America pushes even the hardiest traveler’s intestinal resistance, and I was grateful for a fresh coconut as something I could keep down. While working in Mexico on a summer internship during graduate school, I saw it on beaches and roadside stands. I passed out once at work from dehydration while there due to a stomach illness and awoke to my co-workers holding a coconut in front of me ready to drink.

			Since most of my customers at IP were juice or dairy companies, I usually had beverages on my mind. In the hopes of finding ideas to help them grow (so we could sell more packaging), my team and I would discuss ideas for potential innovation outside of the typical milk and orange juice most of our customers sold. Rarely did they take our advice (IP is a great company but not exactly known as a beverage innovation powerhouse) but the possibility of new beverages, whether made from hibiscus flower, mango, or guava juice, or coconut water, all made it on my new list.

			As I began to dig into every idea on our list, my knowledge of coconut water grew. I learned that coconuts grow in eighty-five countries across the tropical world. Humans’ relationship with the drupe (as the coconut is technically categorized) likely goes as far as human existence itself. The uses are many: The meat is used in cooking, baking, and candies across the world, and the oil is also prized for both cooking and a variety of skincare remedies. The husk is used to make carpets, sandals, and as ground cover or mattress stuffing. The fronds serve as roofing material or are woven into baskets. The trunks are used for their flexible, dense wood. I learned that the magical water inside was so pure and in balance with the human body that there were well-documented accounts of it being used in place of plasma by doctors during World War II as drip IVs in the South Pacific and also in subterranean hospitals by the Vietcong during the Vietnam War.

			Despite the fact that there were already millions of hectares of coconuts planted (or growing wild) across the world and a multimillion-dollar market from their oil, meat, and fiber, interestingly, the water was usually discarded as a by-product. Across the world, farmers were letting coconuts rot on the ground if prices weren’t high enough, while in the oil and coconut meat facilities they would literally let the water flow down the drains as waste. What did make its way to market as coconut water (or sometimes called juice) was mostly sold straight from the coconut on a small scale. The small volume canned and shipped to the U.S. or Europe was often of poor quality, with added sugar and preservatives and cooked in a crude and damaging processing system. The sales volume exported prior to 2004 was at most in the low tens of millions of dollars in the U.S. per year, so not a big market.

			I began to assess whether coconut water could become a viable business. From keeping track of trends back in the U.S., I knew a multitude of new healthy beverages, including Vitaminwater, were getting lots of press and trying to go up against Gatorade or carbonated soft drinks. So, on a trip to New York, I tried Vitaminwater. The packaging and branding were unique, and the brand was definitely playing to an audience that wanted something healthier. But reading the label I realized that at its core, this drink was little more than sugar water, and though it had natural ingredients, it was still made by some guys in a lab. I expected (incorrectly for about ten years) that sophisticated consumers would also realize the health claims were questionable and reject the drink. I thought coconut water was better and realized that if we made it hip, cool, and tasty, the market opportunity might be enormous: we could market a wholly natural version of Gatorade.

			Given all our connections to the product, coconut water ended up on the short list of ideas. The more I looked at it, the more appealing it became. But would it pass the Maura test?

			Coconut water and the business we would build around it fit us personally: It was a natural product, from the tropics, and could be positioned around health, wellness, and sports. It would positively affect consumers’ lives by providing a healthier alternative to so many of the high-calorie, high-sugar, artificial beverages. If done correctly, we could also build a brand that would contribute to the growing cultural concern with health and active living.

			Coconut water could also have a massive positive economic impact across the developing world; perhaps more and better than coffee someday given that the water wasn’t the easiest product to process or transport. With its low acidity level and high enzyme content, it spoils quickly after being exposed to the air. It would require higher-paying handling, processing, and packaging jobs locally, whereas most of the value added to coffee is in the roasting process done in the U.S. or Europe. The scale of existing coconut production was already massive—on the scale of oranges—so theoretically no additional land was needed to build a multibillion-dollar industry, so the environmental impact could be negligible. There might even be positive benefits of taking that water out of the waste stream and rivers. I could clearly imagine our girls thinking it was pretty cool that their parents launched a brand that catalyzed a whole coconut water industry and helped the developing world where it originated (and they were born).

			Looked at in one way, going up against Gatorade, which was already a massive global brand, was certainly audacious. Owned by PepsiCo, Gatorade had been focus-grouped and test-marketed extensively over the years. But looked at another way, we were way ahead. We had a product that had been tested by humans around the globe for tens of thousands of years. We didn’t have to patent a new formula, make sure it was healthy, or even do the basic manufacturing. It was already being manufactured by nature just about everywhere you looked if you were anywhere near a tropical coast.

			We could likely source high-quality, minimally processed coconut water and build our brand as a premium one so we had the right sort of margin structure. If we could capture a fraction of Gatorade’s market or even a portion of the size of soy milk or other categories, a coconut water brand could easily be a business over $100 million in sales in a reasonable number of years. Differentiating from Gatorade and the proliferation of other sports drinks would be relatively easy. We had a claim on a manifestly healthy and natural drink that they simply couldn’t match. The fact that this idea was grounded in our own personal experience and values would also give us a critical advantage, we believed.

			As we got more excited about the idea, we began to get feedback from friends and family. On a visit back to the U.S. around this time, I remember a conversation I had with my father-in-law when he asked me what my hopes for the new business were. Without a beat, I told him my dream. “In twenty years I want to see kids everywhere drinking coconut water, regardless of the brand, instead of high-sugar, artificial junk and in general leading healthier, more active lives,” I said, rapid fire. “I want tens of thousands of people in developing countries to benefit from well-paying jobs in a healthy, sustainable, and growing coconut industry. I want our brand to live forever and stand for healthy, natural, active living, and I want everyone involved with the business to have the opportunity to learn, earn, contribute, and grow.”

			Silence followed. “Wow, that’s ambitious,” he said finally. “I thought you were just going to tell me you wanted to make a pile of dough.”

			I had to laugh. “To be honest,” I said, “I want that, too. I believe if we do all the things I just listed, we’re more likely to make that pile of dough. We’ll also have something to really celebrate if we achieve it all!”

			Now that I’m no longer running Zico and have invested behind dozens of entrepreneurs after listening to countless pitches, I understand how important it is to base one’s business in personal passions, mission, history, and beliefs. My first questions to many entrepreneurs, after they’ve gone through their carefully prepared PowerPoints, often catches them off guard. Why, I ask them, create this particular business above all others? Why do you want to spend your life doing this? How will it make your life better? How will it make the world better? Very few expect these questions, much like I hadn’t when Maura first posed them to me, but I can honestly tell you that the entrepreneurs who have meaningful answers to these questions are the ones I get the most excited about. They’ve looked beyond profits and deeply within themselves, which I have found improves the probability of their success.

			So now that coconut water looked like a viable idea to me, I knew I had to get buy-in from others. I figured I would test-drive my pitch with a friendly (though not weak) audience. Maura and I met my sister, Mary Beth, in the Bay Islands of Honduras for a weekend getaway. At some point sitting on the beach watching the sunset, I gave them each a freshly picked coconut, and pitched them the idea that coconut water was our breakout idea. We would develop and launch a coconut water brand and attempt to create a whole new category in the U.S. first, and then the rest of the world.

			We discussed the potential impact and scale, how well it aligned with what we wanted to accomplish in life. At some point we started to get down to brass tacks. Maura asked, “So exactly where and how are we going to produce it and ensure high and consistent quality?” I admitted that I didn’t have a good answer to that yet. Mary Beth asked how we would go to market, what I knew about distribution and retailers, and how it would actually get on store shelves. More good questions. Maura asked what kind of marketing we would need to do and how much money we’d need to raise and where that would come from. I started taking notes.

			The more I thought about it, the more I realized that I knew near nothing about the beverage industry. Yes, I was a supplier of beverage cartons and knew about packaging and a little about processing, but launching an actual beverage would be a whole new world. I had studied some of this for my MBA but I had no practical experience with product development, branding, consumer marketing, distribution, or retail sales—in short, everything it takes to start and run a consumer product business. But I knew how to learn and decided it was time for a crash course in the beverage industry.





CHAPTER 3


			LEARN FROM THOSE WHO CLIMBED BEFORE




			So let’s say you’ve done the hard work of coming up with a big idea, one that both fits with your values and principles and can make the world a better place. You’re excited and energized and ready to dive in, but as you begin to think more about it and talk it over with friends or family, you hit your first major roadblock: a full realization of just how many competitors you’ll face. No matter what industry you’re in, I can guarantee that the marketplace is crowded and the competition fierce. Once you realize this, your confidence may waver and you may even think about giving up before you’ve really begun.

			I fought through this roadblock not long after I began to get excited about coconut water. I hadn’t yet quit my day job when a business trip brought me to New York. I skipped out of a couple of meetings one afternoon to wander into Fairway Market on the Upper West Side. Walking into a massive American supermarket, particularly if you’ve just come back into the country, can be shocking. Though smaller in physical size than many suburban grocery stores, Fairway was so packed with product from floor to ceiling, aisle to aisle, front to back, that I wondered how any product could rise above the noise and attract a consumer’s attention. Competing in this crowded market of products seemed impossible.

			During my lifetime, the American consumer packaged goods industry had been on a tear, offering up thousands of new brands and products every month to appeal to every imaginable human need and desire. When I was a kid the average supermarket had around eight thousand different products on the shelves. Only a few decades later, the weekend shopper at the supermarket might now have to sort through upward of forty thousand. “Consumers have always had choices, but today options have exploded beyond all reason,” said Barry Schwartz, author of The Paradox of Choice. “It’s the ethos of American society; the idea that freedom is good, more is better, and you enhance those ideas by offering choice. Logically you can’t hurt anyone by adding options. That’s the theory, but in practicality it’s not true.”

			But as I began to examine the offerings on the shelves, the challenge of creating a coconut water brand that would be noticed began to be less daunting. So many of the “new” offerings were simply spins and slight variations of old standards. A gallon of Breyers vanilla ice cream might take multiple forms: “Natural,” “French,” “No Sugar Added,” “Extra Creamy,” “Lactose-Free,” and “Homemade.” Then there were the thousands of look-alike and generic products that were simply mimicking category leaders. Companies were grabbing valuable shelf space (and bumping up their margins) but not really presenting consumers with anything truly unique.

			These dynamics were particularly at play in the beverage aisle. The large amount of floor space allocated to beverages wasn’t surprising given that the U.S. nonalcoholic packaged and fountain beverages industry generated over a quarter-trillion dollars in annual sales domestically. In 2005, that represented nearly 36 billion gallons in product annually or 121 gallons per person each year. Americans were drinking the equivalent of about four 12-ounce. cans of packaged beverage every single day. In the U.S., Coke’s brands and product extensions accounted for around 40 percent of what was being sold. Pepsi, with a similar number of offerings, held about a third of the market, while Dr Pepper Snapple brands together (known as Cadbury Schweppes at the time) had about 15 percent. Every other company in the marketplace was way back in the pack, the largest in the low single digits.

			Despite all those brands, all that shelf space, the huge financial resources, and hundreds of employees tasked with bringing new products to market, these big companies were doing a horrible job on the innovation front. At that time, only seven individual brands accounted for almost two-thirds of all sales: Coca-Cola Classic (itself with nearly 20 percent of the market), Diet Coke, Pepsi, Diet Pepsi, Mountain Dew (a Pepsi product), Sprite (a Coca-Cola product), and Dr Pepper. Nothing else came close. As for innovation, Coke and Pepsi had a long list of failures at launching new brands even after investing hundreds of millions of dollars and spending years of effort. New Coke, Fruitopia, Tab Clear, Josta, and Crystal Pepsi all failed to gain real momentum. Their relative successes were mostly derivative of other bestsellers: Sprite (1950s) was a 7UP knockoff, Powerade (1990s) followed Gatorade, and Dasani (1999 by Coke) and Aquafina (1994 by Pepsi) were knockoffs of the many bottled waters.

			While Coke and Pepsi were category-leading brands and very well-run companies, outside of their core carbonated brands, they weren’t having much success bringing anything truly new to market. This put them in a bind because by 2003, traditional soft drinks were falling from their high watermark. Even if soda sales declined by only 1 percent per year in the U.S., that meant the big dogs—Coke, Pepsi, Dr Pepper—would lose more than $300 million in sales. That also meant that every three years people were drinking $1 billion worth of something else, more when you account for population growth. Industry experts were beginning to speculate that there would be $10 billion worth of beverage sales up for grabs in a decade if the decline of soda accelerated as expected.

			Though not evident in the main fifty-foot beverage aisle with sodas, teas, waters, and sports drinks, another section of Fairway existed that was significantly different and much more interesting. At the front of the store was a six-foot-wide refrigerated section that offered individual bottles meant as grab-and-go purchases. This cooler was stocked with brands, a few of which I had heard of, including Red Bull and Snapple, but others that were new to me: Monster, Rockstar, and other energy drinks; and Izze, Jones Soda, GuS, and other interesting spins on carbonated soft drinks. There were also bottles of Honest Tea, Steaz tea, and Fuze; Smartwater, Volvic water, Nantucket Nectars, POM Wonderful, Odwalla, Naked Juice, and Muscle Milk. More than any other brand, Vitaminwater dominated the display with seven different brightly colored bottles.

			Given the relatively small space available in that front-of-the-store refrigerator, it was hard to see these players as major competition to the legacy brands in the market. Then I reconsidered, as I witnessed half a dozen consumers step in and grab one or more bottles. Though buying one or two units at a time, their purchases were clearly adding up. In fifteen minutes I watched ten times the number of consumers take something from this shelf versus the main beverage aisle, which relied on purchases of multipacks, large jugs, and other volume formats. I also saw two restocking guys go to work in that time refilling the cooler from a cart loaded with cases of different brands. One of the guys, wearing a green smock, seemed like he worked for the store. The other was wearing a black Vitaminwater T-shirt. I asked him if he worked for Glacéau (I knew that was the parent company of the Vitaminwater brand). He said, “Como?” So I switched to Spanish. “Tú trabajas para la empresa Vitaminwater?” “No,” he said, “para Big Geyser, la distribuidora.” I made a mental note of that.

			I couldn’t find any coconut water in this cooler or in the main beverage aisle. That was good news. I did finally locate some in the ethnic aisle on the bottom shelf next to Cuban black beans and canned chili peppers, and there were three brands in tall, cheap-looking cans. Clearly, that wasn’t the place for the brand I was imagining. No question I wanted to see my product someday in that front refrigerated case with the exciting new beverages. But I knew I had a lot to learn about how to get it on that shelf and stand out from the crowd.

			Walking back to my hotel, I decided to take a peek at the shelves of a couple of little corner markets. The greater New York area has thousands of these small independently owned shops. One of the stores I walked into was filled with organic produce, fresh flowers, fine cheeses, and fresh baked bread. The beverage cooler, though smaller than the one at Fairway, had many of the same products. Clearly someone was buying these drinks, as I could only imagine what real estate cost in this neighborhood and I’m sure every inch of cooler space would be dedicated only to products that consistently sold at a high profit margin. I would later learn that for many of these bodega operators, the beverage “cold box” alone generated enough profit to cover their rent.

			Compared to, say, making a car, barriers to entry for beverages are relatively low. (It’s not a coincidence that setting up a lemonade stand is often a kid’s first experience in running a business.) I would find out later that over three thousand new nonalcoholic beverages were launched every year. Most of these new brands didn’t first appear in major retail outlets. They were being rolled out at farmers’ markets, county fairs, and in small mom-and-pop stores across the country like the bodega I was in. This is where the innovation was happening in the beverage industry.

			I shifted my attention from what was on the shelves to the customers doing the shopping. Given the markups in these small shops, I had a hard time imagining anyone filling up a shopping cart—in fact, shopping carts wouldn’t fit down these narrow aisles. This was a place to get things on the go. Some of the shoppers were construction workers grabbing a beer at the end of the day. Others were business professionals buying a coffee, Coke, or water.

			But there were also a number of consumers in their twenties, thirties, and forties who were different. They were groomed and stylish, in an understated sort of way. Though wearing distressed printed T-shirts and jeans that gave them the appearance of being down and out, their shoes gave them away. Here were the famed hipsters everyone was starting to talk about. Several women, I noticed, carried yoga mats under their arms, and many of the men were also clearly fresh from a workout. They were taking time to read labels and compare products, and I got the feeling that they were willing to spend money on quality food and drink. A couple bought some of the beverages that were new and different. I picked up a bottle of Fuze and while paying for it at the counter asked the clerk, “Does this sell well?”

			“Yes, yes, sell good, sell good,” he said in a strong Asian accent, not interested in talking to me.

			“Who brings this to you?”

			He said, “No time kwes-ton. Tree dollar, please. Many customer. You come later. A-na-der time. Aks kwes-ton. Bye bye.”

			I could have seen these entrepreneurial beverage brands in this small bodega as yet more competition, but I didn’t really think of them in that way. Honestly, I was excited to join them. Simply from my introduction to these products, I imagined the people behind them must be interested in the same sort of objectives and mission. Yes, they were potential competitors, but they were also fellow seekers and their success to date offered proof of a growing desire in the marketplace for something different, new, and healthier. Little did I know most of them would not see it the same way and that it was virtually a cage match to the death to try to get and keep that valuable shelf space. That Korean shopkeeper’s annoyance at my questions was my first clue. He was probably sick and tired of being quizzed by would-be entrepreneurs and pushy salesmen on an hourly basis. I later learned that these types of stores were on the front line of the new beverage wars and that this conflict was serious, brutal, and bloody. Any of the three thousand new beverages every year had about as much chance of surviving as any random high school senior getting into Harvard; in fact, less.

			When I got back home to El Salvador, I began to devote my early mornings and evenings to reading everything I could find about recent trends and successes in the beverage industry. As I had gleaned from my on-the-ground research, innovation in nonalcoholic beverages was coming from outside corporate offices. If the big guys did have a successful new brand in their portfolio, it was almost always because they had purchased it from an entrepreneur who had brought it to life.

			Further, the ranks of those successful beverage entrepreneurs came from a broad range of backgrounds rather than former industry professionals with an inside track. Indeed, students of innovation in all fields often conclude that being an outsider confers a big advantage: you’re not constrained by the conventional wisdom about why a particular product or approach will or won’t work.





WHO WILL YOU KICK OFF THE SHELF?


			I had learned that retailers, distributors, and others in the industry would tend to think about what product ours would substitute: “Who are you going to kick off the shelf?” the saying goes. So I knew my first goal would be to define the beverage categories that coconut water might fall into and then research the winners and losers in each. That first part proved easier said than done. Those who analyzed the beverage industry generally broke down products into a half-dozen broad categories: carbonated soft drinks, juices, sports drinks, energy drinks, bottled water, and ready-to-drink teas. Some had defined a category being referred to as “New Age.” These included herbal iced teas, specialty smoothies, some shelf-stable dairy drinks, and some nutritionally enhanced beverages. Others used the term “functional beverages” to describe drinks that claimed to provide a specific physiological benefit like hydration, increased energy, or wakefulness.

			Interestingly, coconut water wasn’t tracked at all in the industry numbers. Reliable data on the size of the market represented in the ethnic aisle was nearly impossible to find. I wondered how the beverage industry might categorize it once they decided to track it. I didn’t want to put our brand next to those tall steel cans from brands like Goya or Foco anyway, with their low price point, added sugar, and preservatives. Clearly, coconut water wasn’t a carbonated soda and it wasn’t a tea. But how it fit into the other categories wasn’t so obvious. I assumed coconut water was technically a juice. I also felt that because it had an exotic and cross-cultural appeal, it could work in the New Age category as well as offer an attractive alternative to bottled water. With all those electrolytes, it was certainly functional and could be seen by many consumers as a sports drink. I thought about the challenge of introducing U.S. consumers to something foreign and thought there was something to learn from alternative milks like soy. In the end, where would I suggest a store manager place our product on his shelves? I didn’t have a clue.

			One of my biggest learnings was that plenty of upstart winners in the beverage game were not experts when they launched. In fact, many were complete outsiders. For example, three New York City friends, two of them window washers and the third the owner of a small health food store, created Snapple. SoBe was created by John Bello, who’d had early stints at Pepsi and General Foods but had achieved his business success manufacturing and marketing jerseys, helmets, and other merchandise licensed by the National Football League. Bello decided to jump into this growing market with his own brand, South Beach, later restaged as SoBe.

			This discovery led to another: that outsiders who venture into the beverage business could employ a ready network of companies positioned to help out the growing number of entrepreneurs. As with the hopeful forty-niners on the way to the gold fields, there are many companies ready to sell the modern-day beverage or food entrepreneur the tools and resources they’ll need to succeed.

			Flavor houses, from industry giant Wild Flavors to more boutique operations like Allen Flavors (AriZona Iced Tea’s longtime flavor house), offered to help procure ingredients and get the flavor right. Packaging brokers like Zuckerman Honickman would procure bottles and cans for ventures that were too small to be worth the attention of big producers. Co-packers scattered around the country could work out the kinks and complete the first production runs. Distributors could test out new products and stick with the winners. These early experiments and help weren’t cheap, so entrepreneurs needed financing up front, and often gave away equity in their companies as well, to get access to this insider network.

			I came to understand that these suppliers, consultants, and middlemen companies were arguably the real success stories behind the new beverage bonanza. While they didn’t make headlines or sell their companies for lottery-size winnings, these companies (and there are hundreds of them) are the true backbone of the beverage ecosystem that, for a price, help bold entrepreneurs bring their dreams to market.

			This was particularly true of the distributors. Renowned independent distributor Big Geyser had helped put many brands on the map, including Nantucket Nectars, which then became one of the company’s most important brands in its powerful network of independent route owners across the city. When Cadbury bought Nantucket Nectars, they pulled it from Big Geyser and gave it to their own Snapple distributors in New York. The Big Geyser team lost a big brand and in their fury looked for another one to get behind in a big way. They turned their attention to a small, fledgling brand they already had on their trucks: Vitaminwater. By the time I was walking the streets of New York, Big Geyser was already proving that, though often overlooked from the outside, the motivations of a distributor can make or break a brand.





THINKING OUTSIDE OF CATEGORIES


			The industry focus on categories made for interesting reading, and I was learning the lay of the land, but partway through my research, I began to wonder whether these somewhat arbitrary lines between product groupings were really important. I also thought it might be one of the things hindering the major players in the industry from innovating successfully. As a consumer, I knew that I never once thought in terms of these categories when I bought a beverage.

			So I decided to pursue this line of thinking instead of researching the industry further: what was I thinking when I made a purchase? When you are looking to understand the consumer marketplace, you always have one consumer ready to give you endless amounts of time: yourself. Because I didn’t have the budget to conduct sophisticated or large-scale marketing tests, I decided to make a study of ourselves, which worked because I saw Maura and myself as target consumers for our coconut water brand. And it turns out that doing a deep dive on one consumer can tell you a good deal about an entire demographic.

			Clearly the beverages I bought were about quenching thirst, but they were most often related to occasions or time periods in my day. I was looking for something to give me energy in the morning, to replenish and rehydrate me after a workout, or to give me a pick-me-up in the afternoon.

			Remarkably, during my time in Central America coconut water had become my go-to drink during all those moments. It had pretty much replaced orange juice as my morning drink, especially as a base for the fruit smoothies Maura and I had almost daily. I drank it after a hike or swim instead of a sports drink in order to replenish, or in the middle of the afternoon to give me a boost of energy to get through the rest of the day. Plus, I found nothing was better to help my recovery after a rough night out on the town.

			Of course, other, more intangible reasons determined why I picked one product over another. Many of those can be traced back to my particular generation and demographic group. Most sociologists would mark me as a vanguard Gen-Xer. My parents were undoubtedly influenced by trends that came from the activist 1950s Catholic community. They were dedicated to social justice, the women’s movement, and racial harmony. These forces influenced them as consumers as well. The Rampolla household of the 1970s and 1980s was ahead of the cultural curve when it came to healthy, natural eating. I remember eating homemade granola, natural peanut butter, and preservative-free jam from the monastery on whole-wheat bread. Dad made buckwheat and buttermilk pancakes from scratch with a little wheat germ thrown in for good measure. The reality was that healthy eating was cheaper, too. Raising six kids on one salary meant giant pots of homemade soups and casseroles.

			Although my family’s eating habits were a little unusual in the working-class suburbs of Pittsburgh, I later realized that we were just slightly ahead of a major national trend. When I was a kid, the health food industry started to influence the public discussion about health and food in general, and it wasn’t long before it was leading the conversation. Similarly, during my childhood, the first health food stores started to appear. In their early days, they appealed to a very narrow consumer group—the true countercultural hippies. They had wooden shelves and a few hundred products: fresh fruits and vegetables, bins of whole grains and cereals, handmade soaps, tofu and soy milk.

			By the time I was out of college in the 1990s, exercising, eating healthy food, and avoiding highly processed products was no longer radical. It was mainstream. The juice and smoothie brands born in the 1980s, Odwalla and Naked, were clearly riding this cultural wave. The same was true for soy milk. When soy milk was launched in 1978, you could only find it in health food stores as a dairy substitute for the granola crowd. It took decades but the maturing of the health food market helped products like Silk to become billion-dollar brands. Honestly, I had hopes that coconut water wouldn’t take as long to reach the mainstream, and I had good reason to be optimistic. After all, the new health food brands launching wouldn’t have to change the country’s attitudes about food and health, since a previous generation of health food entrepreneurs had already done that hard work for us.

			The rise of the many companies in the once-ghettoized health food space was a remarkable and heartening achievement. For a hundred years, the beverage industry had made trillions of dollars playing only to a single innate human desire: sweetness. The taste for sugar is a powerful desire, but it is far from the only thing that people want or need. The major players failed to perceive other market demands. I realized that people, like me and our target consumers, want to have a long and healthy life. They want to know that what they put in their bodies will help them perform their best. They want to raise healthy children. They don’t want their teeth to fall out before they’re fifty. They want to maintain weight and fitness that suits their lifestyle. They want to look good and feel good, not just in the present moment but in the long term as well.

			In creating endless variations on sugary drinks, legacy beverage companies not only failed to satisfy these other consumer desires, they actually made these other desires more salient and powerful. As the general population became less healthy—in part because of their addiction to sugary drinks—the demand grew around what was missing outside of sugary options. Meanwhile the health food sector had started gaining momentum and changing the public’s attitudes and preferences. The health food market had done much in a generation, but the work was not yet done. It was time for a new generation of entrepreneurs to keep the momentum going.





TANKS A LOT


			That day of prowling markets in Manhattan had me feeling overwhelmed at first, but by the time I left I felt excited and hopeful. Given that I wanted to provide something new and innovative, I might have to compete for shelf space but I wasn’t competing against what was on the shelves. Upward of 95 percent of what was out there was a legacy brand, a copycat, or something that was narrowly derivative—and what I wanted to bring to market was entirely different.

			Whether or not we’d be able to execute as well or better than some of the great beverage brands was a huge unknown. Coconut water might be unfamiliar to many Americans but it wasn’t new to the world. We would do our best to make sure our coconut water was great tasting and nutritious, but we didn’t own a coconut farm and didn’t have a proprietary source or strain of coconut. The goal was also to keep the product to a single or very few ingredients: coconut water. We knew we’d have competition (little did we know that there would be a hundred coconut water brands in the U.S. alone within a decade), especially if we were successful, and we would constantly compete with all beverages for the so-called share of stomach.

			Did the countless product failures make me nervous? Of course. I can’t imagine who wouldn’t be unnerved by the fact that only a small percentage of new beverage offerings ever break through to make any real money. This was a market that not even the brilliant Sir Richard Branson could succeed in. Only a few years before I began to consider launching a coconut water company, Sir Richard rode into Times Square on a tank to launch Virgin Cola. Despite being backed by one of the most successful entrepreneurs in history, good luck finding that brand anywhere today (well, maybe Tunisia). Big-budget launches were mostly flaming out, and thousands of little entrepreneurial offerings were popping up and dying out so fast, no one could really keep track.

			Entering such a market was daunting. But I looked at all this activity in a more positive way. After my afternoon walking those cramped Fairway aisles, I realized that a crowded marketplace is also an information-rich one. I still had so much to learn, but with tens of thousands of other brands throughout history and thousands more coming online each year, I had plenty of case studies to learn from. If I did my homework, I didn’t have to make their mistakes. No tanks for me. I couldn’t afford to rent one and wouldn’t know how to drive it even if I could.





CHAPTER 4


			FINDING THE BRAND WITHIN YOU




			As I started to think about creating a brand of coconut water, I studied one product closely: Vitaminwater. Everyone else in the industry was doing the same because it was taking the beverage market by storm. By 2003, industry analysts estimated the company had revenue approaching $100 million. Sales of the brand were rivaling Propel and even Gatorade in some markets, and it was growing by 30 percent per year in New York and more than 50 percent overall as it expanded to new markets. There was even talk about Vitaminwater becoming the next billion-dollar brand. Clearly, if I was going to be a player in this industry, I had to understand why they were so successful.

			During that same business trip to New York in 2003, I bought a flavor of Vitaminwater called Revive and sat down on a park bench to take a look. Their bottle and packaging was designed to look pharmaceutical, which appealed to a consumer who wanted to look smart and educated but also tapped into some interesting American lore—the days of old-time apothecaries. (Kiehl’s hits the same cultural note, to great success, in the personal care world.) I read the label, which had a catchy, sassy story: “HEY!! How’s it goin? IS THIS TOO LOUD FOR YOU?? OH SORry? there. better? . . . we’ve all been there: last night’s outfit doubled as last night’s PJs . . . on days like these we recommend hydrating with this bottle.”

			I opened the bottle and took a sip. In terms of the drink itself—the ingredients, functionality, and taste—Vitaminwater was hardly an innovation. It was sweet and tasty but no more so than other products. What it did offer was a better story about itself at just the right moment in American culture, communicating a narrative of which consumers wanted to be a part.

			J. Darius Bikoff, the brain behind Vitaminwater, had been messing around in the beverage industry for a few years by that time. He formed Energy Brands, Inc., in 1996 and launched his first brand, Go-Go energy drink, a female-focused beverage line. That brand struggled and was clearly too early (and perhaps too narrow with the female focus) for the energy drink boom, so Bikoff developed a premium water brand called Smartwater, under a parent company with the cool European-sounding name Glacéau (with meaningless accent mark, of course). Smartwater began to gain some traction in New York and the Northeast mainly in natural and specialty food stores, in part because Bikoff took cases in the trunk of his Mercedes door-to-door to retailers to gain shelf space. Glacéau then introduced Fruitwater, but it wasn’t until 2000 when they introduced Vitaminwater that sales started to really take off.

			The timing was perfect for something to bridge the soda and water gap, and Vitaminwater was catching the wave at just the right moment. Consumers were becoming aware that too much soda was not good for them and they were looking for a change. Bottled water was suddenly on the rise even though most of it was just tap water and it was a bit boring. In stepped Vitaminwater. It positioned itself as healthier than soda but better tasting than water. A little dose of vitamins and fun names like Detox and Revive made it clear when, how, and why to drink them. The company turned to a leading flavor house to develop tasty and creative concoctions using ginkgo biloba, green tea, pomegranate: all things consumers had sort of heard about, sort of believed in, but weren’t sure how to use unless told how to do so. They tapped designer Philippe Starck to come up with a unique bottle shape and label design. They used bright, fun colors. They used natural flavors and real sugar (not high-fructose corn syrup).

			The brand was designed to look authentic and smart, which was working well for Vitaminwater. The problem I saw was that it was mostly a fake message. As anyone who actually read the label would discover, Vitaminwater was basically sweetened, flavored water. Worse yet, they were capitalizing on an old trick in the beverage and snack industry: they served the stuff in 20-ounce bottles clearly designed for single use, but the requisite labeling showed that there were 2.5 servings in each container. So instead of getting the 13 grams of sugar stated on the label, you were getting 32.5 grams if you drank the whole bottle. That came to 125 calories, which is pretty near the 140 calories in a can of Coke. Oh, and that peppy feeling you got from the drink wasn’t from the vitamins and minerals; it was the 150 milligrams of caffeine (at least in the Revive flavor)—the equivalent of two strong cups of espresso and almost twice the dose in a can of Red Bull.

			The folks at Glacéau had to be assuming customers weren’t going to read the label carefully. They also must have assumed that those who thought they were being smart and healthy would be so disconnected from the sensations and reactions of their own physiology that they wouldn’t notice how bad they felt after the sugar and caffeine wore off. I came to learn that this cynical subterfuge was widely discussed. The brand was built on hype and misrepresentation. Those vitamins in the water? “Pixie dust” was what Maura would call the minute amounts each bottle contained.

			I was certain that Vitaminwater was due for a consumer backlash but I was wrong about how long it would take and how high the brand would climb first. For four or five more years the brand continued to be a juggernaut. The people at Coke thought that the trend would continue and would scale across the world, because in 2007 they bought Glacéau for $4.1 billion, more than ten times its revenue at the time. Bikoff reportedly made close to $1 billion on the deal. By 2013, BevNET reported “sales of Vitaminwater are in the midst of sustained slide, pointing to a consumer that wants something else.” (However, the sister brand, Smartwater, would more than make up for that loss.) In recent history, no other beverage brand achieved such massive success followed by such a stunning fall from grace as Vitaminwater (with perhaps Snapple under Quaker Oats’s “stewardship” a close second).

			The lesson for me was that if a brand could tell a compelling story, it could change behavior. Vitaminwater told a great story, was beautifully designed, chose the right early adopters and cultural influencers, and appealed to the health aspirations of a generation. But it wasn’t authentic and it wasn’t honest. Vitaminwater was proof that consumers were looking for a healthy alternative to soda. What would happen, I wondered, if we created a brand of coconut water with an equally compelling cultural positioning that was actually natural and healthy, and that told a story that matched the product and was truly authentic?





CRACKING THE RIGHT NUT


			Despite having what might be a good idea, at the beginning of founding Zico (before it was even called Zico) I was hardly an insightful entrepreneur and really wasn’t much of a marketer at all. My first impulse in bringing coconut water to America was to target the Hispanic market beginning in Los Angeles or Miami. That quickly growing demographic was all the talk among the consumer products industry at the time. So I thought I had struck gold when on a plane back from El Salvador my sister, Mary Beth, met Jose Gonzalez, former president of Publicis Sanchez & Levitan, a prominent Hispanic advertising agency that had developed a marketing strategy to help mainstream brands go after the Hispanic market. He and his friend and fellow Hispanic marketing expert Roberto Ruiz had recently started their own marketing agency, and I hired them to develop the brand positioning and marketing strategy for our coconut water.

			After examining the thriving marketplace, however, Gonzalez and Ruiz gave me advice that wasn’t what I expected. While Hispanics had more knowledge of coconut water as a beverage, they also had some solidly embedded cultural associations that would be hard to rewire. First of all, most Hispanics in the U.S. were now second generation. Since they were born and raised in the U.S., they had about as much firsthand experience with coconuts as I did growing up: next to none. For those who already liked coconut water and drank it regularly, they would gravitate toward the Hispanic brands they knew and could buy in specialty stores in the U.S. for a dollar. (I knew we’d need to charge much more than that for our higher-quality brand). For many others, the drink represented something that they had culturally moved on from—or something that only their parents or grandparents drank. Marketers had great success convincing young Latin American consumers that Heineken was cool, but that’s because that brand had already become a cultural icon itself. Selling a partially known quantity like coconut water and a completely unknown brand would be much harder. Their conclusion: if I wanted to build a mainstream brand like I hoped to, don’t target the Hispanic market first.

			Gonzalez and Ruiz could have told me what they knew I wanted to hear, but thankfully they didn’t. If I had tried to appeal to the American Hispanic market, it would likely have been a disaster. As much as I felt connected to Latin American culture, my knowledge only ran so deep. Even with Gonzalez and Ruiz’s sage advice, I doubt I could have hit the right cultural note for this community that would overcome all these obstacles.

			Who was I creating this brand for, then?





BRANDING WITH VALUES


			Living abroad gives you fresh eyes on changes in your home culture. When Maura and I came back to the U.S. from Central America for visits in the early 2000s, we’d point out to each other the new trends and products that had surfaced in the time we’d been away. We began to notice products that suggested something new was going on in consumer culture—people were tiring of the mass produced, and the overly processed and artificial. We were, too.

			Consumers were increasingly gravitating toward products with character—things that were from a specific place with interesting stories. Maura and I found Burt’s Bees in the skincare product aisle, offering creams and ointments that defied the glamour- and youth-obsessed beauty product industry. These products had a personality and told a story of northeastern backwoods know-how and connection to nature. Like many families, we became devotees of the brand—trusting it enough to use on our girls. I don’t remember seeing any advertisements for Burt’s Bees but somehow it still communicated a sense of authenticity to us.

			Burt’s Bees wasn’t alone in creating a brand that communicated purpose, passion, and values and gained our loyalty. Patagonia, which became a favorite of Maura and mine, fully embraced their customers’ commitment to the environment. The whole ethos of the company, from the quality of its products to its commitment to the environment to its origin story, all spoke to an utterly different way of thinking about clothing and business. It was founded by Yvon Chouinard—the most unlikely of clothing moguls in the most unlikely of places: a backyard blacksmith shop. At heart a tinkerer and inventor, Chouinard created a brand that was an expression of his fresh and quirky view of the world and his love of wilderness adventure. It not only brought enthusiastic consumers but also informed the entire enterprise. His management style was new and counterintuitive, as evidenced by his book on the topic, Let My People Go Surfing.

			The most exciting and successful brands are imbued with this sense of mission, personality, and personal values. More recently, Hampton Creek, which creates mayonnaise and other foods out of only plant-based ingredients, is taking the food industry by storm. Founder Josh Tetrick is a human- and animal-rights activist who is committed to remaking our food system to be free of animals. Thrive Market, founded by Gunnar Lovelace and Nick Green, is democratizing healthy food by bringing Whole Foods–quality products, with a Costco membership model and delivered like Amazon, to average consumers and so-called food deserts at low prices, so everyone has access to affordable healthy living.

			These founders are clearly and honestly proud of their businesses; they were almost badges of honor not only in terms of the specific products but also in terms of the brands. Roxanne Quimby, behind Burt’s Bees, was evangelical about the efficacy of all-natural products. Tetrick takes out Wall Street Journal ads encouraging young entrepreneurs to compete with him to offer more plant-based foods. Thrive Market gives away one free membership to a low-income family for every one they sell. These entrepreneurs are on a personal quest not just to get rich, but also to change culture and to try to make the world a better place.

			All of these brands have something to teach the new entrepreneur but none of them are possible to mimic. They are as individual and unique as a great piece of art—their uniqueness is what creates their authentic feel. You can look to these successes for inspiration but you can’t look to them to find the thing that you have to offer.

			I didn’t have a particular set of traditional skills to begin with but nevertheless, I still wanted to display that same pride of ownership and personal connection to whatever we created. I wanted my brand to be a badge of honor: for me, our family, our eventual team, producers and suppliers, and consumers.

			In thinking about how to create an authentic brand, our only hope was to employ the same logic that got us to the idea of coconut water in the first place. It had to be a brand that appealed to Maura and me first and foremost. We had a commitment to our personal health, and the health of others and the environment. We led active lifestyles and loved adventure. We aspired to live a long, interesting, and healthy life and see the world become a better place for the next generation. We liked to have fun, party, and let loose. I assumed there were millions of people that were very much like us. But thinking about a group that large was an abstraction. I realized our best chance of creating something authentic was if we focused on the values and drive behind the idea, and kept ourselves, the people closest to us, and our hopes, values, and desires in mind at every turn.





SEED CAPITAL


			In my research of successful upstart brands in the beverage industry, I learned that they all needed money: lots of it. Some years earlier, SoBe had supposedly built its brand for under $8 million in total capital raised. By 2004, Glacéau seemed to be raising that amount of investment every few months. Maura and I certainly were not going to finance anything close to that ourselves. We were going to need plenty of OPM—other people’s money—and need it fast, before we took any further steps.

			By the second half of 2003, I had done enough research and had enough confidence to begin telling people about our big idea. Up to that point, I had kept the concept just between Maura, Mary Beth, and me. Many entrepreneurs stay stuck in this spot for too long, guarded about talking about their idea for fear of someone stealing their brilliance. The downside to trying to protect your idea from being copied, however, is that you miss out on learning from people who can help in critical and sometimes surprising ways.

			My approach was to talk about my idea to anyone with ears. In retrospect, I see how this approach helped me avoid many pitfalls, allowed me to make critical adjustments early, and maximized the serendipitous good luck that was crucial to our success. The truth is, you don’t know where the most help will come from. The guy sitting next to you at the hotel bar might be a hungry young executive of a distribution company, a successful serial entrepreneur, a venture capital bigwig, or have a good friend who is a buyer for Whole Foods. Talking to literally everyone about your idea increases the odds you’ll experience that magical moment where someone says, “Interesting, I actually know someone you should talk to . . .”

			And that’s exactly how I found all of our earliest investors. I wasn’t just looking for those willing to write a check; I wanted investors who believed in me and the project, who shared my values and could add knowledge, insight, and connections. Finding these types is not easy but by telling my story to anyone and everyone, they started to appear.

			I was fortunate that my International Paper job had brought me into personal contact with many Central American businesspeople. Over a business dinner, I laid out the idea to two of my top customers in my day job, Mario Carvajal and Hernan Bravo. Hernan had been a marketing executive for Coca-Cola in Central America, and together he and Mario owned and operated a beverage company that owned a brand called Kapo, which they distributed through Coca-Cola Central America. I would typically never discuss something like this with customers but we had become close friends. I admired them, wanted their advice, and never directly asked them to invest. They both loved the idea of coconut water and had a barrage of difficult questions about how I would go to market. Before dinner was over Mario said he wanted to invest. Hernan was helpful with advice and was interested in investing but wanted to see more before he would commit.

			At the end of the dinner, Mario wanted to know how committed I was. What would I do, he asked, if IP gave me a big promotion while I was still getting the business off the ground? “I’d turn them down,” I replied. It was a prescient question. In the next year, I would be offered two su