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Our guest today is NutriSense’s Co-Founder and Chief Operating Officer, Dan Zavorotny.
NutriSense is a metabolic health company that helps anyone discover and reach their health potential.
Under Dan’s leadership, NutriSense has become one of the fastest-growing startups in America. Leading the company through rapid growth, he’s built a team of 120 employees to serve tens of thousands of members in just over two years.
Before co-founding NutriSense, Dan worked as a Healthcare Management Consultant at KPMG, where he advised Fortune 500 clients and two of the top five hospitals in the US.
Passionate about travel, Dan visited over 100 countries before he was 30.
In This Conversation We Discuss:
- How NutriSense is fulfilling an important health tracking need
- How NutriSense’s intuitive software integrates with 3rd party glucose tracking devices
- How to utilize influencers as a most cost effective way of fundraising
- How to set a rejection ratio to help gauge yourself for however many rejections you will get before the conversion
- How to manage a remote team that resides in 32 countries
Resources:
Connect with Dan Zavorotny: LinkedIn
NutriSense – https://nutrisense.io
Connect with Cameron: Website | LinkedIn
Get Cameron’s latest book: The Second in Command – Unleash the Power of Your COO
Subscribe to our YouTube channel – Second in Command Podcast on YouTube
Get Cameron’s online course – Invest In Your Leaders
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Our guest is Nutrisense‘s Cofounder and Chief Operating Officer, Dan Zavorotny. Nutrisense is a metabolic health company that helps anyone discover and reach their health potential. Under Dan’s leadership, Nutrisense has become one of the fastest-growing startups in America. Leading the company through rapid growth, he’s built a team of 120 employees to serve tens of thousands of members in just over two years. Before co-founding Nutrisense, Dan worked as a Healthcare Management Consultant at KPMG, where he advised Fortune 500 clients in 2 of the top 5 hospitals in the US. Passionate about travel, Dan visited over 100 countries before he was 30. Dan, welcome to the show.
Cameron, how’s it going?
Good, really well. I got a whole bunch of stuff I want to ask you just off that bio. I’m super intrigued about the travel because my wife and I are living globally and traveling. I’ve always had a goal to make sure I’ve been to more countries than my age. You’re already in the Century Club, so 100 countries. Can you give us your top three?
I’m always a big fan of segregating information to different data points. I always say best for food, best entertainment, best for sightseeing. It’s hard to cap us all of it. For food, my favorite is Peru. Peru, it’s a mix of Japanese plus Mexican in some way. That fusion like that. People don’t realize, but a lot of time, the former president of Peru actually was of Japanese descent. There was a lot of immigration from Japan that happened in the early 1900s that brought a lot of cultural mix in there. A lot of the food is mixed up in that kind of flavor. Ironically, from the landscape, I think Japan is the place I really like.
Number one on my wife’s list is Japan.
It’s incredible. I think what the Japanese have done that’s really well is they’ve insulated their culture. Meaning, whether you go to France, London, you see McDonald’s everywhere, you see Burger King, Starbucks, we Americanized the whole world, which is great for us as an economy. Culturally, sometimes you feel like you’re still partially in the US. We could find a little US, a little mini island. In Japan, they’re really good at maintaining their culture and keeping things the way they were. It feels like a really authentic experience. That part is fascinating to me.
From a more entertainment perspective, this one’s a little harder because it depends what you’re looking for entertainment. Countries that are usually on the southern hemisphere or somewhere with warmer weather like Columbia, Brazil, Spain, they’re usually a lot more fun because I think people love the siestas, have a glass of wine in the middle of the day for three hours. That’s the entertainment. It depends what you’re looking for.
Columbia is super high on my list. My wife just went a month down there, and she loved it. Now, it’s really gone shot up pretty high on my list after hearing all of your stories.
It’s always hard because we as Americans love to work really hard. Some of the cultures, they look at work as a way to pay the bills to enjoy life. Sometimes having that mindset shift is a little bit difficult for us because we want to take a break, but it’s just hard.
It’s an important shift. Talk to me a little bit about the business that you’re running. We’ll switch gears and go back into Nutrisense. Tell us a little bit about Nutrisense. What is it you do? I know you said that it’s a metabolic health company. What exactly does that mean? The tens of thousands of members, what exactly are the members doing?
When I was working in healthcare consulting, I was consulting for some of these big hospitals, and I saw over and over two facts that stuck out to me. Fact number one was that we keep spending more per capita every year on healthcare while simultaneously people getting sicker and sicker. Right now in the US, about 89 million Americans are pre-diabetic. That’s 1 in 3. No one is slowing that number down. When somebody becomes Type II diabetic after pre-diabetes, we try to help them manage their diabetes through insulin, dietician advice, exercise, but why don’t we just stop that ahead of time?
Managing A Remote Team: In the US, about 89 million Americans are prediabetic, and no one is slowing that number down.
A lot of this is based on bad lifestyle decisions. We as Americans are incredible marketers, and sometimes we’re a little too good at marketing poor-quality foods to people. People eat food that’s not healthy. They don’t exercise. They work too much and they gain unnecessary weight. We cause a dilemma in our country. We said, “Why don’t we stop you from becoming Type Ii diabetic in the first place?” We focus on people at the earlier stages. We’re like, “Maybe you have some glucose control and we help you before you even reach that point.” Or, “Maybe you’re actually healthy, but we want you to understand so you don’t get unhealthy in the future.”
We give you this device called a Continuous Glucose Monitor. It’s a device that’s been historically used by Type I diabetics only. It’s become more affordable now. You take this device, you put it on your arm, and it tracks your glucose 24 hours a day, non-stop for 14 days straight. It sends it to our app. Our app is basically a food tracker that combines that data with glucose. Now, all of a sudden, you could see, “I ate a banana. How was my response? I ate an orange. What was my response?” You’re able to start correlating what foods impact you in what ways in real-time.
Historically, if you think about people when they want to get in shape, they will use a scale. The problem with scale is like, “Is it muscles or fat? Did I eat earlier? Did I not? How much water do I have?” This is telling you specifically to your body how you’re responding. What makes us unique is that we start realizing that like, “I will eat rice, it has no impact on me. I eat potatoes and looks like I’m diabetic for two hours.” There’s such uniqueness in this information that we start realizing what is helping us, what is not. You don’t know what you don’t know. You think you might have a healthy diet in your entire life, but it’s actually hurting you.
How unique is diet for the individual?
Extremely. A lot of times, people say, “We’re all unique.” When you see in real-time, literally you eat something within five minutes, you see in your phone, and you see how you respond. You, all of a sudden, are in shock. You’re like, “I’ve been eating blueberries for ten years. People told me blueberries have all these antioxidants, but my body responds negatively to them.” There are different reasons for it. Some of it is genetic, microbiome, some of it actually is how you slept last night, or did you exercise earlier? Did you not exercise? Those factors all play a huge role.
I can give you an example. I used to eat bananas and blueberries, strawberries for breakfast. I thought, “I’m getting my vitamin C, my potassium.” My glucose kept spiking like crazy and then it crashed. I was just like, “I thought I’d been healthy for a decade.” I wasn’t. I was actually hurting myself and causing fatigue. Other folks just have a smoothie for breakfast and they love it. It gives them better energy levels. Just because we’re so unique, people don’t realize it.
Coffee is a big one where some people drink coffee and they actually have an increase in energy, and it improves them in every possible way. For some people, it’s absolutely terrible for them. They don’t know, they’re just doing it because everyone’s doing it. Some people have no impact at all, by the way, which is fascinating too, just zero.
It’s super intriguing. I had to pull this up on your website because my wife is big into nutrition right now. I think we’re going to take a look at even getting both of us hooked up to this. Who are your typical clients?
It ranges. This is for people who are Type II diabetics that don’t use insulin. We don’t take people who do insulin because we want to make sure we can help them in a natural way through data and coaching. All the way to Olympic athletes. We have a lot of Olympic athletes signed up for this as well. Professional athletes, Olympic athletes, some actors. It’s from super ultra-healthy to early-stage Type II diabetes, non-insulin.
How the hell did you get into this? It sounds like you were in the fitness space or you were in the health space before, but you were doing Fortune 500s and hospitals and that kind of stuff. How did you make the transition into becoming a cofounder and an entrepreneur?
I was consulting. I saw these trends I mentioned earlier. I was in San Francisco for a healthcare conference. I ran into one of my childhood friends that was living in Silicon Valley for a couple of years. He just sold a company in a childcare space. We had lunch, and he was wearing one of these devices. He said, “Do you know anything about this?” I just so happened to be an expert in this area. We’re both from a healthcare perspective, as well as my sister’s Type I diabetic. She had been wearing these for ten years. We saw the progression of these things. They used to last 6 hours, then 12 hours, then 1 day, then 7 days and 14 days. I saw technology improve and the price dramatically dropped.
I just happened to know more. He’s like, “That’s great. Nobody else does. Everyone I talked to think I’m a cyborg. I’m thinking about starting this company. Would you be interested in joining me?” I said, “There’s no person better to start than someone who’s been doing companies for four times.” He’s constantly been an entrepreneur, either joining early-stage companies or starting companies himself. I said, “If I’m going to do a first-time company, I might as well do it for someone who knows what they’re doing.” I quit my job three weeks later and we started a company.
I dated a Type I diabetic as well. She was a child onset diabetic from the age of two, wore an insulin pump, the whole deal. It was strange. You know what it’s like when they have a tube. You’re getting intimate and you got this device hooked up from across the room or the bed. What’s the price? How does your pricing work?
Pricing is still relatively higher end. It ranges from $200 to $300 a month. The reason is because first, the devices are still expensive. They require medical prescriptions. We write digital prescriptions off 50 states. There are regulatory laws around this. Then there’s software and we also give people a dietician, as well.
Why are there laws around using the device to monitor your health? Why is there regulation? That doesn’t make any sense.
That’s a good question. I don’t know. I don’t have the answer to that. I know in Europe, this is not required a medical prescription. You can walk into any pharmacy in Denmark and just pick it up.
Your device or other companies’ devices?
This device. We use third-party devices. These are third-party devices. What we built is a software on top to make it more intuitive and help people gather all this data. You can also do a finger prick. You can pick it up at a pharmacy in Spain. I don’t have the answer to that. I do know it’s regulated. What makes it more complex is every state has different laws for medical prescriptions. You have to be licensed in all 50 states compared to their laws. Some of the laws are like, “Send us a paper document filled out by hand.” We have to wait six months. There’s complexity and costs there associated.
Also, we realized not everyone is going to be an expert in glucose. We also added a dietician to the platform. You get unlimited dietician support. What’s fascinating is people a lot of times will say, “I don’t want a dietitian. I know how to eat. I eat all the time.” They forget that there are a lot of bi-directional relationships between food and stress, food and sleep.
Sometimes even between food and food. We were on a cabin roundtrip down in the Grenadines. Our chef that was on board is a dietitian and health expert. She was telling us about certain foods that if you eat them against another food, they’re bad. If you eat them separately, they’re both good. We’re like, “What?”
There’s a rule in timing or sequencing of food. For example, if you have 3 things on a plate, 1 carb, 1 fat, 1 protein, if you eat the protein or the fat before the carb, you actually have a much better response from a health perspective. The exact same meal, just the order of the food.
The order of operation, that’s interesting. Last question about this, then we’ve got to go running on the business. I’m super intrigued about the product. You said it’s monthly. Is this something that people sign up for six months, and then they know enough and they can get off of it, or it’s something you want people to be on it for life?
Our ambition is to help people with this. We have a ton of blog articles. We write about nutrition and specifically, glucose control. People can actually not spend any for this. Just listen to shows like this. We do a lot of health podcasts and just learn as much as they humanly can on their own. They don’t need to spend a dollar with us. If they choose to spend some money with us, then it’s people who sign up for 3 months, and they do it 3 months, let’s say once a year. They learn, then they leave. They try and change their life and they come back a year later and try again for three more months.
That’s what I thought as well. I used to coach a lot of the CEOs, and I told them that after 12 to 18 months, I wanted them to fire me because I didn’t want to become a shrink. I wanted to teach them how to scale a company. That whole story of, “If you give a man a fish, you feed him for a day. If you teach him, you’ll feed him for a lifetime.” I didn’t want people depending on me. That’s what you’re doing is you’re trying to grow them and then they’ll be advocates. They can knock and check in. That’s great.
The one thing to remember is this, people don’t realize, but their body changes so much. Think about it. People go through menopause, women get pregnant, we all age. Even when we change where we live, the pollution in the air actually impacts the way you respond to food. People don’t realize that. One of the things we’ve noticed is that when somebody goes to Europe from the US, they eat the exact same foods. Their response is actually not as bad for glucose when they eat the same bread in Europe than the US. It’s the chemicals we have in our food.
I spent six weeks in Italy and I ate pasta 2 meals a day for 6 weeks, and meats 2 meals a day for 6 weeks, and I lost weight. I was also walking around constantly, but if I ate two meals of pasta and meat a day, I would literally have become obese and didn’t have them.
It’s fascinating, but we just don’t know what we don’t know. That’s the thing. This gives you information about you. You hear all these diets where someone goes, “Be vegan.” Someone else says, “Go be keto.” Someone says, “Be a carnivore.” For who? We’re all so unique. This tells you, “For you, you should do this.” This isn’t my advice. You literally eat something and you see your body’s response in real-time. There’s no guessing here. There’s no, “What do I believe? Is this an idea? Is this a theory? Or is this a fact?” This is factual for you.
I want to find out a little bit about when you were starting out the company. This is something we actually talked about at a recent COO Alliance event. We talked to a lot of our members about how did they and the CEO divide and conquer. How did you split up the roles between you and the CEO? How did you and the CEO decide who was going to do what?
We were in a very unique position, those two of us. My cofounder comes from an engineering background. He said, and he brought this up to me and it made a lot of sense, “In the early stages, only two things matter: build product, sell product. I’m going to build, you’re going to sell.” I actually said to him, “I don’t know how to sell. I’ve never done sales. I’ve worked in finance my entire career.” It was a finance strategy and then before, it was corporate finance.
Then he asked me a simple question, “If I’m building, what the hell are you doing if you’re not selling?” I said, “I’ll do finance.” He’s like, “Finance for what? There’s no revenue. What are you doing?” That’s how we decided to conquer it. My goal is to figure out how to do sales and marketing. Started doing that and then started ramping up. First month, we’ve got ten customers. Next month, we got 25, next month 35, next one 50, next one 100. Every month just kept growing it.
Have you raised money?
Yes, we’ve raised money for venture capital firms. We’ve had a couple of rounds of funding.
Can you talk about how much you’ve raised? I know the history of going through.
Sure. Historically, we’ve raised $6.4 million, and we’re planning to raise more.
$6.4 million gives you a pretty solid base or a bench to build and grow this off of. That allowed you to then grow it. You didn’t necessarily grow organically. You did have the benefit of having some of the VC money, which is smart.
That’s what I would say would be the better, but that’s not exactly what happened.
What’s the rest of the story?
What actually happened is we started this company and I said, “Let’s go raise the venture capital money.” I quit my job and I was like, “We’ll raise money.” I have my founder who’s been a former founder as well. We started this about three months before COVID. We started pitching investors two weeks before COVID started, and then nothing. It just dried up. We had to say, “Do I go back to work? Could you go do something else? Or do we keep going with this?” We had this point where we said, “We’ll just use our savings.” We started draining our savings, paying our employees, trying to grow the business.
We actually, at that point, didn’t raise any money really. We had a couple. I think we had maybe $150,000 from a thing called Techstars. It’s an incubator that we used. Again, that doesn’t last very long with employees. We did that and kept grinding, paying people from our savings accounts. Finally, when we came out of the early stage of COVID, maybe 9, 10 months later, people were like, “You survived that and you grew 20% or 30% month-over-month for the last 9, 10 months.” Then they were interested in investing, and that helped.
How much had you and your cofounder put into the company at that point when you were draining your savings? How much do you think you guys have invested? The stuff that nobody ever talks about.
It’s interesting, it’s one of the things I try not to think about because we kept seeing the checking accounts go down, but probably a couple of hundred thousand each or something.
Everybody’s like, “It’s so easy to grow a company. You just go get VC money.” Are you really prepared to drain everything and not take home a paycheck?
That’s what happened. We thought the exact same thing, “We’ll just raise venture capital money and it’ll be great,” and then it didn’t happen. We’re like, “How does this work?” Before, every month you have money coming from a job, so your income goes up, and your bank account goes up. Here, you’re paying for your expenses and then other people’s expenses. You see this constant drip, and it’s pretty fascinating.
Neither one of you was a marketer. You were, as you said, finance, he was more engineering. How did you approach marketing? Did you use agencies? Did you hire people? Did you just wing it?
The first year, I did it all by myself. I had a belief that, “How can I hire someone if I don’t understand it myself?” The first year, I basically said, “I need to learn what marketing is.” I actually just googled marketing strategies and all the marketing opportunities. There were a hundred Facebook ads, Google ads, Twitter ads, Pinterest ads, everything you can imagine. The problem is that my budget is very limited. I had to pay people’s salaries. I couldn’t just go send thousands, hundreds of thousands of dollars on marketing, as well.
I basically looked up and said, “What are the cheapest ways to do marketing? Better freer.” Influencer marketing popped up as the number one way. I basically started talking, just reaching out to people on Instagram, messaging hundreds of people on Instagram, who are celebrities in space like, “Do you want to work with us?” Most people said, “Sure, give me $25,000. Give me $100,000.” I said, “How about I give you $100 or $50 for every conversion we have?”
Most people ignored me. Some people said, “Okay.” Then we started doing it that way where this person market for us, we generate revenue, and then we pay them out 30 days later. We didn’t have to use any of our own cashflow to actually pay them. That started helping us. The nice thing about it, we started working with influencers as a way to build more relationships with more influencers.
We started networking with them, made more friends to influencers, started working with more marketers and who are helping us, and then we started scaling from there. Once we got to a place where we had a good network of influencers, then we said, “Now, let’s start doing things like paid media, Google, Facebook, Instagram ads, things like that.” It took more than a year to even get to that stage.
Has your website always been so clean?
It’s been pretty clean from the beginning. Alex, my cofounder, he’s got a brilliant eye for design. He’s always been very detail-oriented. We started that day one. I will tell you that when we started, our page was just one page “pay here” for the first three months. That’s only the whole website was just “pay here” and had a credit card for him, nothing else for a while.
It’s very clean. What percentage of your clients are women? What percentage of your clients are men?
I would say about 65% to 70% are women. What’s fascinating when we started this, and this is where it’s important to be flexible. When we first started this, we actually thought it was going to be what we call tech bros, 20, 30-year-old men, Silicon Valley, biohackers. We quickly realized that’s not our audience. Our audience is people who care about longevity, about their health, about the importance of their health, or even understand what glucose is. Most people, especially men, have no idea what glucose is, “Why is it important? Why is glucose control so important?” Women understood that. What’s interesting is a lot of times, women brought their husbands, boyfriends, fathers in to educate them.
It’s interesting because most of the photos on the website are women. When you get down to some of the testimonials, the men start to appear. The women talk, and women share information. I always think if you’ve got a product this time, it’s better to focus everything on the women because they’re the ones that are going to talk about it for real.
There’s actually a book called Trends by Tom Peters and Martha Barletta. She said that women never stop talking. Women take an idea and they share it with everyone. If a guy and a woman both stay in a five-star hotel and they both have the same mind-blowing experience, the guy tells no one. She tells 74 people. If you’re going to market to people, market to the people that are going to share your story. It seems like you guys have done that. Was that a cognizant decision?
We, first, were just marketing to market because we need some customers to pay some of our employees. We were like, “We’re going to run out of money.” Then as we saw that the men would come in and we try and they were like, “This is cool.” Some people stay forever and they keep liking it, “I’m going to try it for a week.” They’re like, “Great,” and then stop. Whereas, women found more value.
We saw the results continuously where women improve glucose control, some would lose weight, and some would improve other things like thyroid issues or Hashimoto’s. There are other areas that they were able to find improvements in, and they start telling everyone. Referrals started going up and we started getting this flywheel of constant feedback of new customer acquisitions organically. We found a lot of value in that.
Another product question. Are people able to sign up and use the app if they’re buying the devices separately? If someone was buying a device where I am in Denmark and they actually just use the app on top of the device or do you need to use your devices?
No, we let people do that. If people really want to do that, we let people try that out because we found people find value in that as well. Our goal is to help people improve their health. We believe that long-term, as you help more people, you get this positive karma that we believe in, that will drive more value to our customers and us.
You really are building this more as an app and a SaaS company than you are off the product.
Exactly, yes. If this becomes more over-the-counter and everyone can buy it, we’re more happy. Our customer base will be 10X or 100X.
Who are you selling to? Are you selling direct to consumer? Are you selling through businesses? Are you selling through fitness?
All direct to consumer. Again, I said influencers, then we actually started doing podcast marketing, specifically around health and wellness. Then we exploded, and started doing everything you can imagine, Pinterest, Facebook, Google, Instagram, Twitter. TikTok is huge. Probably one of our biggest growing channels is around TikTok.
A few of my former clients from the COO Alliance and also coaching clients are pretty massive influences in the health space. I’m curious if they’re clients of yours yet. If they’re not, I’ll introduce you. Dave Asprey from Bulletproof Coffee, has he ever used your product?
He’s tried it. He isn’t currently using it, but he’s tried it before.
He’s quirky as f***, so that’s okay. Dave and I are good friends. He’d be totally good with me saying that. Ben Greenfield?
Yes, I know these guys. He has never used our product, but I know who he is.
That’s interesting. We’ve got to get Ben doing it because his COO, Angelo, from Kion, was a COO Alliance member as well for a couple of years. JJ Virgin would be another one.
JJ Virgin actually has used our product. I think she has worn it a couple of times. I’m pretty sure one of our VP of Health actually was on our podcast. JJ is amazing.
Do you know Michael Fishman from the Consumer Health Summit?
I’m trying to think, I should double-check.
Make a note and I’ll introduce you to Michael, but you guys should really connect with Michael and the Consumer Health Summit. You guys would be a very interesting brand to dovetail in with all of these spectacular companies that are in and around health. I’ll introduce you though.
Great, thank you.
I love what you’re doing.
I appreciate it.
You’ve never done this before. You have to figure out the role of the COO. I’m sure it hasn’t all been easy. What were your big struggles and pain points? Where have you had to grow the most?
One of the things with starting a company, there’s a lot of rejection. I wish somebody told me that like, “You should have a ratio of rejection to yeses.” Somebody said, “For every yes, you’re going to get 99 noes.” It helps your stability.” It’s like, “I’m at 45 noes so far.” Versus, every time you get a rejection, it hurts. No matter what, no matter how confident you are, it hurts the ego. If someone’s telling you, “You need to get 99 noes to get one yes,” then you have this frame of mind where like, “This is normal.” Nobody told me that. Every time someone’s like, “No.” It just daggers into your heart like, “Am I failing?” and you question it. They call it Imposter syndrome.
Managing A Remote Team: You should have a ratio of rejections to yeses.
Now, looking back, and I talked to more founders and they’re like, “You only got 99 noes for one yes? I got 199 noes for one yes.” He’s like, “You’re killing it. You’re doing really well. 1% is an incredible conversion rate.” Having that framework of what is the ratio of good versus bad, I think it’s going to be very helpful. When you’re growing fast, it’s constantly switching new jobs because every single time your company grows 2X in value, you yourself have to grow 2X in information or skillsets. You mentioned we have 120 employees. This is when I sent you that email, now we’re at 145. From that email a month ago, we had 125 more people.
Every day, this is the biggest thing you’ve ever done.
Exactly, every single day. I look at my team members where within two and a half years, people went from individual contributor to manager to director to VP to C-suite. People have to get upscaled constantly or replaced. In corporate world, it takes 20, 30 years to do this, and here we’re doing it within 6 to 9 months.
I was talking to the Founder of Infusionsoft, Clate Mask. He and I were talking at an event that we were out together we were both speaking at. He and I concur that a mid-level manager can only go through two doubles in the size of the company before they’re unable to stay in their role for the third double. If you go from $2 million to $4 million, from $4 million to $8 million, they’re probably not going to be able to run the company at $16 million. Or if you go from $10 million to $20 million, $20 million to $40 million, they probably can’t really do the $80 million. It’s because they can’t keep their skill levels up.
I launched a course called Invest in Your Leaders just to give managers those skills to really excel as leaders. What are you doing internally to grow the people and to help them continue to grow so that you don’t have to replace them? Often, we don’t have to replace them, we just have to have somebody that they start reporting to, then we bring in the external hires. How are you growing people internally?
There are three ways we do it. I think the first one is we try to actually coach people consistently. We consistently have coaching and evaluation of upskills. The second one is we try to find mentors for every individual who is specifically 2 to 3 years ahead of them. The problem we’ve seen people do is they’ll be like, “I found this person who’s a CEO of a Fortune 500 company.” That person is like, “They have 10,000 people. They can’t help you. They’re too far ahead.”
We always look for 2 to 3 years ahead of someone who’s doing something similar. We specifically say, “If we’re a direct-to-consumer, who else is a direct-to-consumer and maybe in the health and wellness space in 2, 3 years ahead?” Specifically, that position. That’s the second one. The third one is, funny you say it, but of course, we’re trying to assign people for courses or bring in outside folks that teach people. Again, my belief is that at a certain level, for example, when you become a VP or higher, everyone has to be extremely good at finance. Everyone has to be really extremely good at recruiting. Everyone has to be extremely good at self-awareness. These are skills.
If you were, let’s say, a dietician, you might be the best dietitian in the world, what do you need no finance for? Now all of a sudden, you’re expected to be an expert in finance. Whether you’re in engineering, whether you’re a dietitian, whether you’re operations, you have to have these skills at a certain level because you’re no longer writing code, you’re no longer answering or supporting questions. You’re now leading organizations. You’re not even people managing as much as you are thinking about the vision and the grand vision of, “What does this look like now versus the future? What does the budget need to look like?”
Managing A Remote Team: You must have skills at a certain level because you’re now leading organizations.
I’ll give you one of the seed access to my Invest in Your Leaders course as well because I love what you’re doing, and I’m obsessed with your product. I’ll send you a link to it. I’ll give you access for yourself.
Thank you.
These are the tools that I used to help grow 1-800-GOT-JUNK. I took 14 employees to 3,100 employees in six years. If I hadn’t grown people constantly, we wouldn’t have been able to scale up the business. How about yourself? You talked about having to grow and learn sales. What are you focusing on growing yourself now?
The way we’ve done this is I will take over the function, I’ll learn it, and then I will basically try to hire someone to take over that function. My ambition is to always hire someone who’s at least 3X better than me. If someone is not at least 3X better than me, then there’s a problem. If I’ve been doing this for six months, and this person has been doing it for 10, 15 years, and they’re worse than me, or not, you’re already thinking they’re the same level. That’s a problem. By the way, you’d be amazed how people are worse than me after I’ve been doing it for six months. I’m always amazed by that.
What I’ve also noticed with a lot of seasoned executives is they’re not necessarily seasoned. They’ve just been doing it for a lot of seasons. Somebody who’s got twenty years’ experience might really have four years’ experience five times in a row. They know better off than they were when they were 26. They just happened to be 46. You’re right. How do you assess whether their skill level is 3X better than yours?
A couple of things. One is I specifically try to learn topics. If I want to do Facebook ads, I’m not just going to go interview people for Facebook ads. I go and I run some Facebook ads, number one. I actually just execute it. Number two is I try to deep dive on the knowledge of whether it’s books, podcasts, interviews, whatever it is I need to do about Facebook ads.
The third one is what I did for other people, I do for myself. I go find mentors who are experts on Facebook ads who are 2, 3 years ahead of me. I look at the revenue of the company and say, “Who are the people who have 2, 3 times the revenue where we are?” Then I go get 5, 6, 7 of those mentors, and I set up weekly calls to these people. They teach me everything I can. I dive into details because you’re not going to get those random ad hoc questions or this really in-depth knowledge unless you have that. It’s a way to streamline because I think it helps you skip decades of experience sometimes by doing that.
Most people just do surface-level knowledge. I try to go deep where I’m obsessed with the topic. I may spend one week, I might say, “Facebook ads is my week this week.” I’ll spend 89 hours just obsessing about Facebook ads. Then next week, I have hundreds of questions I have. They’re very nuanced. People don’t even know what they mean half the time. I get to call these experts and ask them questions, all those, and I try to get answers to all of them.
The key there is to remember, you will always have the one person who’s contrarian, and you want to listen to them or not. The nice thing about if you have 5, 6 people, if you have five people saying, “Do this,” and one person saying, “This,” you can ignore that piece, and you use a five-people ratio versus the folks that sometimes you listen to one person and they might’ve gotten lucky. The person might have gotten lucky, but they think that’s the way the world works.
You have to make sure you now listen to just one-person device or something. There’s this confirmation bias all the time where someone succeeded and immediately imagined they’re the ones that did it. Sometimes they were just there at the right time, the right place, or they joined the right company. Sometimes people that fail actually learn more than people that succeeded. Having a couple of people to choose from, and then looking at what the majority are saying, is a good way to think about it, especially when you don’t know the topic deeply.
I love that. I had a guest on the show and he said, “Get a second opinion on the expert opinion.”
When I interview people, I actually pull in these folks during my interview process. On the last round, I’ll have them jump in and interview that candidate as well to confirm, “Am I missing anything or not?” The amount of times they caught something like, “This is not the right person.” I’m like, “Great, thank you. I missed it.”
Did you guys ever have an office or have you been entirely remote because you started right as COVID was starting? I think you said it started about six months before.
Yes, we started even earlier. Not really, we worked at a coworking space for a couple of months, but again, fully remote. We are over 140 people now. I lose track of that, I’ll ask HR first. We’re based in Chicago. There are three people in Chicago. We’re registered in 42 states. Our team is in 36 countries.
What are some of the complexities of managing a team that’s that distributed, that remote? How are you dealing with some of those complexities?
There are negatives. I can’t lie and say everything is a positive. There’s the cultural idea of, “Let’s everyone be friends. Let’s everyone hang out.” It becomes harder to replicate than in the office. It’s also hard to tell when people work too hard. Some people are really type-A people and they get burnt out, and it’s important to slow them down. There are a lot of times when I see people working too hard and I need to be like, “Please do less because I want you here for the long-term.” There’s the other side where people probably could just do nothing, watch TV, and how do you know? It forces you to be very KPI-driven, which again is a double-edged sword. It attracts certain types of people and it repels other people. You have to realize that’s something you have to sacrifice in order to get.
Do you think we are going through this stage where many employees are burned out? Or do you think we’re going through a stage where many employees don’t understand hard work and they grew up on participation ribbons? “I came ninth and I got a ribbon.”
That’s a good question. It’s hard to say that. It really depends on the person, I think. I think the bigger piece is it’s hard to distract yourself. It’s more of a, “You can come to work really hard, but once 5:00 PM hits, maybe you can clock out and you’re done and your brain turns off.” When you’re at work, you never turn it off. Even if you’re not doing any physical work, it’s always in the back of your head like, “Another Slack message, another email, another notification.” That’s number one.
Number two is as much as it’s great to spend family time, not everyone understands. Your kids may not understand that just because you’re on a computer, they may think you’re having fun. Or your wife might understand that a Zoom call doesn’t mean a Zoom call. I went to my parents one time, and we had a meeting with a very important person. It was probably the top 100 richest people in the world.
My dad just came in and asked me to shovel the snow. I’m like, “What are you doing? I’m on a phone call.” My dad didn’t understand the concept. He’s like, “It’s Zoom. Just tell them to call later.” The concept doesn’t make sense for us. Whereas if you go to a physical location, they can’t do that. We don’t have the same awareness. It’s the ability to constantly manage at-home situations plus work. It’s hard. Even when we work remotely, I usually go to a coworking space. I’ve heard a lot of people do this, coworking space, coffee shop. The mix of the personal and professional makes it very difficult in my mind.
I definitely find that when I miss a location like that, I have a little bit more heads down and focused, and I don’t get as distracted. I’ve worked from home now for fifteen years, so I’ve been used to it. I also started with my first company from home when I was 21. I have been doing it both pre-tech and post-tech. Then, I’ve worked in offices for years as well. I didn’t like it.
One thing people sometimes forget is they always say, “I don’t like being micromanaged.” I hear a lot of people say, “I hate micromanagement. That’s why I want to work remotely.” What they confuse is micromanagement and managing. A lot of times people will be like, “Go do stuff.” Then they’re like, “What do I do? How do I do it?” You’re like, “I thought you didn’t want to be managed.” People take these extreme views on things when there are a lot of gray areas you want to be in between.
Managing A Remote Team: A lot of times, people confuse micromanagement and managing. They take these to the extreme when there are a lot of gray areas in between.
That’s actually 1 of the core 12 modules in my Invest in Your Leaders course is on situational leadership. It shows the leaders or managers how to actually adapt their leadership style on a situation-by-situation basis for the same person. At some point, they absolutely want to be micromanaged. They wouldn’t call it that, but if they’re brand new at something or if they’re overwhelmed or if they’re confused or if it’s a bigger problem they’ve ever solved, they want to be totally told exactly how to do it. Once their confidence goes up, start up and adapt, but if managers don’t lose that, they’re dead.
I find it fascinating the amount of times people tell me, “I just want autonomy. I hate that someone’s always checking my work.” Then you give people full autonomy and they’re like, “What do I do? How do I do this?”
Where is your cofounder and CEO based? Is he in Chicago?
He is in Chicago, but he’s currently in France. He’s been in France for a while. To give you guys context, in 2021 I was probably ten months abroad. He was probably also ten months abroad where he was in France for a while, in Ukraine. I was in Austria, then Malta, then the Canary Islands, then Spain, then Mexico. We met up in Mexico. Our company is fully remote.
People always talk about the difficulty of hiring talent, which is very true in the US right now. One thing we said is, “We can’t pay the salaries that Googles and Apples and Facebooks pay. We just can’t. How do we still attract good people?” We realized that we have to give up something else, and we want fully remote. When we say remote, you can live anywhere in the world. We have folks who we hired who are Americans who will live six months in South Africa, six months in Mexico, six months in Australia.” That flexibility lets people feel comfortable maybe taking a pay cut. You’re able to get some really talented people.
Or they show up with a lot more loyalty because they know that you care about their achievements.
We’ve recruited this one woman. She’s an Olympic athlete, went to Stanford, worked at Facebook. She’s top-notch and she travels the world. Another woman, every month, she goes to a new state in the US. A lot of companies say they work remotely, but what they really mean is as long as they stay within the same state. It’s not really remote. Or remotely but from your house where you live and not moving anywhere else. We truly believe in fully remote work. Even hours, we say, “As long as work gets done, we don’t need to have meetings all the time.” Again, people want to be in meetings all day. We try to be anti-meetings as much as humanly possible.
I like it. Let’s go back to the 21, 22-year-old Dan. If Dan had to give Dan Zavorotny a little bit of advice, you’re just starting out in your career, what advice would you tell yourself back then that you know to be true now?
It’s the feeling of being comfortable with failure. I had such a fear of failure even now. The fear of failure is what really stops you from starting. It’s the concept of, “What if this happens?” It’s this paralysis by analysis. It’s like, “What if this happens? What if this happens? What if this happens?” Sometimes you just got to just do it, and it’s okay. This, I learned from my co-founder, he just does things and he fails. I don’t know anyone who fails as much as me and my cofounder now, but I got that from him.
First of all, I’m like, “You’re failing all the time. What are you doing? You’re just constantly failing.” He’s like, “Yeah, but we got it done in a week. It would have taken you two months to do it.” I failed seventeen times, but we got it done way faster. This concept of being okay with failure. It’s specifically for early-stage startups and mid-stage startups.
If you think about the corporate world, the goal for them is different. The goal for them is to grow 5% to 7% year-over-year, and they play the game of risk reduction, how to reduce every possible risk. They’re actually quite the opposite. They don’t want to fail at all. They want to make sure they eliminate all failures. If you’re starting a company and you’re trying to grow the company, the opposite. Speed is what you have. You don’t have money. You don’t have the brand. Speed still matters and failing is okay.
I’ll give you an example. If you want to bring a new, let’s say, shipping software to your company and you’re General Electric or Google, it didn’t take you a year and a half to two years, just to get approvals to implement that. We will go and literally buy seven pieces of software and test every one of them. Within a week, we’ll have the best one that works for us. It creates a mess for that week but now we have the best one that works for us, no question about it.
Momentum creates momentum.
The nice thing about it is we know it’s the best, versus a lot of corporations, it’s who the best salespeople are that sold you on that. It’s like, “Maybe Google had better salespeople than Facebook, and then before you bought the Google product versus the Facebook product.” Here, you get to test it out.
I’ll tell you something you’re doing well. You said one of the very first things you had to get better at was sales. You are good at selling the business and good at selling the product, and you clearly are passionate about what you build. I appreciate that.
Thank you so much.
Dan Zavorotny, the Cofounder and COO from Nutrisense, super appreciative of your time. Thanks very much for sharing with us on the show.
Thanks for having me, I appreciate it.
