10 Jan 6 Things To Learn From a Privately Owned Company That Sold For $600 Million
With no venture capital or outside funding–just $5,000 invested by each founder, Peter Rahal and his partner Jared Smith sold their protein bar company to Kellogg’s for $600 million.
Here are six things you can learn from their success.
You don’t need investors to build a multimillion-dollar company
“I remember distinctly early in my business when I was asking my dad about all the investor money I needed to fulfill my vision for RXBAR. He told me very directly, ‘You need to shut up and sell 1,000 bars.'”
All Rahal needed was a kick in the butt. He started walking into coffee shops and gyms in his neighborhood.
“We would ask to speak to the owner and ask if we could put my bars on their shelves. We gave (them) away for free. We didn’t care. We just wanted people to start trying them out. We made these bars by hand. There was no huge manufacturing line. It was one bar at a time.
“It actually made our due diligence with Kellogg really smooth. We had a clean cap table. We were open books with them. Everything they wanted to know, we had answers for them,” Rahal said.
Iterate and learn
“I’m not a designer, but Jared and I knew that we needed to get to market as soon as possible, so we opened up PowerPoint and created the best packaging we could. I even put my cell phone number on the package. I wanted to make sure I was as accessible as possible. Feedback is how we grew,” Rahal said.
“We knew we were on to something pretty quickly. We went all-in [and] quit our day jobs. [We] moved our operations from mom’s basement and rented a small production space.”
Believe in what you’re selling
“We were sick of all these weak ingredients in protein bars. That’s when we decided to make something that was transparent. We knew the market wanted something like this. That’s why we put our core ingredients on the package. It really is ‘no B.S.'”
“One thing we say is, “We tell you what’s on the inside on the outside.””
This is truly one of the best brand promises ever. Embrace your culture and what makes your product unique.
Embrace your differences
“My partner Jared and I are very different. It’s a big reason why he’s been so crucial to the success of this business. I honestly don’t think we would be in business if it wasn’t for him. He enabled us to grow at the pace we are growing, without raising any capital.”
“We had manufacturing and distribution constraints, but we each played a role in solving problems.”
“These constraints helped us stay honest with ourselves,” says Rahal.
Culture is everything
“I don’t have a corner office. I sit with everyone else. I actually take most of my calls on speakerphone. I want to set the tone that I have nothing to hide an that we’re all in this together,” Rahal said.
Rahal also focused on creating dynamic job descriptions for his employees.
“Considering the growth we had in a short time frame, it’s important that the roles of our team members change as we grow. Just because you are responsible for one thing when you got hired, doesn’t mean that there aren’t other roles you can grow into. I made sure that was clear from day one.”
Just because you sold the company, doesn’t mean your work is done
“Some people might be surprised that I’m still working, but I love it. Also, you don’t sell your company and have less work. That’s not how this works! In many respects, we just got started. I still have a great job.”
“We picked [Kellogg’s] as a partner, because we felt they really understood our business, our vision and most importantly, I learned something from them every conversation I had.”