It’s Cyber Monday. Stop reading this.
Go push one more email. Go send one more text. Go make sure your media buyers + support team know you love them.
Then, come back …
Because we’ve got two exclusives you do not want to miss 🎁
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Mike Beckham
President, Simple Modern
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I’ve been an entrepreneur for 15 years. On Friday, I took the biggest swing of my career.
Our brand new brand went live.
It’s called Trevi. Its flagship product — electrolyte powders. Over time, we’ll expand into more consumable product categories (fast-moving CPGs) as well.
We are investing millions.
If I’m wrong, it’ll be the most wrong I’ve ever been about anything in my professional life. That’s why, today …
I want to walk you through our thought process + playbook.
I also want to invite you to experience it for yourself through an Operators exclusive!
- The Decision
- The Opportunity
- The Structure
1. The Decision
Why are we starting a new brand — and why now?
I first considered entering the consumable space in the spring of 2023. Simple Modern pays close attention to all the players in hydration. We noticed an increasing crossover between drinkware and hydration.
Gatorade is known for its drink but sells tons of squeeze bottles and jugs. Cirkul is a drinkware company that has cleverly integrated flavoring into its core product.
In addition, I was aware of several companies seeing phenomenal growth in the powdered electrolyte space. Liquid IV is the most prominent, but others are posting high 8-figure — and even 9-figure — revenue numbers.
Hydration has become a huge health focus; increased consumer spending powerfully bears this out.
When I shared the idea, I got two pieces of feedback …
- We should do this
- But not right now
In 2023, Simple Modern experienced its biggest year of growth in company history.
Sales doubled; profit quadrupled. That level of growth is exhilarating and exhausting.
We’d spent eight years building a company that generated $100M+ in annual sales. 2023 was like piling another company of the same size on top.
Everyone was stretched thin. We just couldn’t take on a significant product initiative. Should I have pushed us forward despite the challenges?
In retrospect, last summer would have been a much better time to launch than today. The market was still developing. Gaining wallet share would have been easier.
Regardless, we decided to wait.
Over the last 18 months, customer demand exploded. Six months ago, it became obvious we needed to move.
2. The Opportunity
What makes you think you can be successful?
A few months back, we hosted Taylor Holiday on the Operators podcast. During that episode, we asked if he thought it was a good time to launch an ecommerce business.
His paraphrased response was: “No. Not unless you have a unique competitive advantage.”
We definitely aren’t early to the electrolyte game. If anything, we’re at a competitive disadvantage regarding timing. But we do possess several unique advantages thanks to Simple Modern.
1. We have an enormous number of existing customers
In 2024, we sold our 50,000,000th unit. We’re nearing a billion dollars in retail sales. And around 20-25 million households have purchased our drinkware. I recently reflected on how wild it is to have so much reach.
In the history of the world, how many companies can say they sold to more than 20 million households?
The problem is that our user values are tiny compared to almost any other company.
We have massive scale — small LTV. Our customers give us exceptionally high marks on satisfaction surveys like NPS. However, we can’t easily translate that into dollars.
We need an offering that allows fans of our brand to spend more money. The most straightforward answer is consumables.
It’s crazy to me when I think about the value proposition of our product compared to consumables. You can buy a water bottle from us that lasts five years. Or you can buy a meal for two from Chipotle for the same price; it’ll be gone in fifteen minutes.
Simple Modern is a business with very hard economics.
As Bill D’Allesandrio recently said in an Operators group chat, “Simple Modern is like a quadruple axle in difficulty.”
Here’s a breathtaking stat about Trevi …
If only 2% of Simple Modern customers drink Trevi regularly, our business value will triple!
Expanding into consumables allows us to use the goodwill we have developed with tens of millions of customers in a business format where the odds are much more favorable toward success.
2. We have a broad distribution network
Simple Modern has built an incredible omni-channel distribution network. We sell at Target, Walmart, Whole Foods, Sam’s Club, and Costco. We have a substantial wholesale relationship with Amazon + significant expertise in DTC.
People will tell horror stories about the dangers of working with big retailers, but that hasn’t been our experience.
We have found that they are partnership-minded. Once they find a brand they can depend on for sell-through, they’re very interested in finding ways to buy more from the partner.
All things being equal, big retailers want to buy more from existing partners instead of adding new ones.
We are in the very early stages of discussing Trevi with our retail partners, but the initial response has been fantastic.
We expect to have Trevi on the shelves of at least one major retailer by next summer.
3. Electrolytes are complimentary to drinkware
Simple Modern is known for drinkware. We have built tremendous trust with millions of customers.
If you trust us enough to drink from our bottles … will you trust us to provide what you drink out of them?
Only time will tell the answer, but our customer focus groups make us optimistic.
Customers have communicated that we have earned the right to compete for their attention in this category. There are other examples of this crossover working in the market.
As I recently remarked to close friends, “It’s like I have been selling razor blade holders for 10 years and suddenly realized I can sell the razor blades, too.”
4. We have a path to activations
When you have your second child, you discover if your first child was easy or difficult. Our second child (Kenzie) taught us that our first (Carter) was a cakewalk.
Carter would eat anything. Not Kenzie. We’d put food on her plate, and she would scream. Being a typical man, I decided I would outlast her. One night, I put pasta on her plate and let her wail. After about 90 minutes, she broke me. I have never seen a person more averse to eating new things.
There’s a little bit of my daughter in all of us. Once we know we like something, eating or drinking it again is easy. Unfortunately, getting people to put something new in their mouths is hard.
For consumables, it’s chicken versus egg.
You can’t get someone to buy something they haven’t tried. But they can’t try it unless they buy it.
The solution is sampling or “activations,” which allow people to try before buying. The problem is that activations can be incredibly expensive and difficult to scale.
Some channels do this more effectively than others.
For example, Costco and Sam’s Club do this best of all the physical retailers. But getting into Costco and Sam’s Club requires significant brand traction + sales. Ecommerce has much lower barriers to entry. But you cannot understand how something tastes by looking at it on a screen.
To start a consumable company, you must have a cost-effective and scalable way to get new customers to try it. No matter how good your product tastes …
Without this, you will fail.
Simple Modern sells millions of pieces of hydration each year. Can you guess our plan for activations?
5. We have a great product for the entire family
We selected a manufacturer already serving two of the fastest-growing brands in the electrolytes space. We spent hundreds of hours developing our proprietary formula and flavors in the lab.
I firmly believed we had the best-tasting product in the market, but I wanted to be sure. We held a blind taste test using several top competing brands.
The results? Trevi tastes great.
Ultimately, consumer businesses are about products. The right strategy + marketing will only get you so far.
Your success eventually hinges on the product. I’m confident Trevi meets the Simple Modern standard of quality.
Moreover, many of the products on the market are designed for specific use cases — such as recovering from a very intense workout or suffering from a hangover.
We have created a product that appeals to everyone and has a massive total addressable market (TAM).
We are especially excited about appealing to the family and kid's market. In the weeks ahead, I will have a lot more to share about our optimism in that realm.
3. The Structure
How should we pursue this organizationally?
It is very difficult to produce new growth categories in a large, profitable company.
Clayton Christensen's “The Innovator’s Dilemma” and “The Innovator’s Solution” discuss this phenomenon. The crux of the matter is that a company’s decision-making and resource allocation will always be dictated by its core business.
No matter how promising innovations might be for future performance, the company will almost always starve them of the resources they need in favor of the cash cow.
There are countless examples of companies developing a brilliant next-generation product internally whose competitors nonetheless disrupted them.
Legacy giants who were never able to focus their attention + resources on the product of the future.
Blockbuster had the opportunity to transition to streaming, even testing its own version of an online platform. Still, it remained heavily focused on its physical rental stores, which were its cash cow. Netflix, which started as a DVD-by-mail service, shifted to streaming and dominated the market.
Kodak invented the first digital camera in 1975 but failed to capitalize. The company focused on its highly profitable film business, believing digital technology would cannibalize it. Competitors like Canon and Sony embraced digital photography and overtook Kodak.
Xerox’s Palo Alto Research Center (PARC) developed groundbreaking technologies, including the graphical user interface (GUI), the computer mouse, and Ethernet. However, Xerox failed to commercialize these innovations, focusing on its core photocopier business. Companies like Apple and Microsoft capitalized, reshaping the tech industry.
For those reasons, we have launched into the consumables market with a separate company.
Trevi and Simple Modern will be wholly owned subsidiaries of Simple Holdings.
We have asked two of our all-star team members to lead the new project — Corbin Wallace and Jack Jamison.
Corbin has served as Chief Growth Officer of Simple Modern over the last three years. During that time, the company has nearly tripled in size. Jack has a background as an analyst and a key growth team leader.
Losing their talent from Simple Modern is painful, but it gives the company the best chance of success because it provides single-threaded leadership.
For Trevi to be successful, we need to have a team that spends 100% of themselves making it everything it can be.
Everyone’s challenge is no one’s challenge.
Launching this as a part of Simple Modern would limit it in the short and long term. We believe this product can be successful in spaces that Simple Modern has not.
We also believe that it has the potential to create a virtuous feedback cycle where Simple Modern introduces new customers to Trevi; Trevi, new customers to Simple Modern.
So, Here We Go!
This is the extreme version of building in public. I just laid out most of our playbook. Why?
Because the heart of the Operators Network has always been builders helping builders. I hope the level of transparency is helpful to you in your business.
As a holiday gift to you, our readers …
You can get a 28-pack for $1 + shipping!
But only the first 500. To claim yours, go to Trevi and pick one of our 28-count packs. Use code Operators1 or click here to apply the code to your cart automatically ↓
This is my small way of saying thank you for the incredible encouragement I have received from this community.
I would deeply appreciate any support you can provide.
If you have found anything I’ve shared on the podcast or social media helpful, you can show your appreciation by helping make this launch a huge success.
Black Friday, Cyber Monday Pulse Check
How We’ll Be Tracking, Analyzing & Maximizing Our Results
Please show Mike your support. If Trevi fails, he’s going to blame me. But I’ve also got a Cyber Monday exclusive.
10 of these are up for grabs. I will sign them.
I won’t even make you pay for shipping.
To get 1 of 10 LIMITED EDITION ONLY you must respond to the newsletter with a relevant meme.
If more than 10 of you write back, I will post them on X and have people vote.
This week’s top-five trending news stories, curated by the editor of CPG Wire
1. Shopify Crushes Black Friday: NBC News
Shopify merchants drove a record-breaking $5B in sales during Black Friday. At 12:01pm EST, merchant sales peaked at $4.6M per minute on the platform — a staggering figure.
2. Paine Schwartz Bets On Promix: PR Newswire
Paine Schwartz Partners, a private equity firm with $6B under management, has acquired Promix, a fast-growing purveyor of vitamins, supplements, and nutrition products. Co-founded by Albert Matheny and Devon Levesque, Promix is best known for its science-backed, clean-label products. Lately, there has been a lot of dealmaking in this category.
3. Represent Secures Investment From True: The Industry
Represent — a UK-based streetwear brand that will surpass £100M in revenue this year — scored a minority investment from True, a consumer investment firm with $1B under management. Represent was founded in 2011 by brothers George & Michael Heaton. True’s other investments include Maude, Urban Legend, Sneak, and more.
4. PepsiCo Doubles Down On Dips: Pulse 2.0
PepsiCo has acquired the remaining 50% stake in Sabra and Obela, two leading hummus brands. Sabra and Obela were established as 50:50 joint ventures between PepsiCo and Strauss Group in 2008 and 2012. Sabra is the largest hummus brand in the US, with nearly $400M in retail sales.
5. Uncrustables Continues to Deliver for J.M. Smucker: Twitter
Uncrustables, the PB&J sandwich brand that J.M. Smucker acquired for $1M in 1998, continues to post impressive growth. During Q2, net sales increased 16% year-over-year, and J.M. Smucker expects Uncrustables to surpass $900M in revenue by the end of the fiscal year. Impressive.
Like Sean said … go support Mike.
Click here to get your 28-pack of Trevi for $1 — first 500 only!
Please don’t share the link or code.
After that, hit reply with your “relevant meme” to score one of 10 limited-edition Sean Frank t-shirts.
With thanks and anticipation,
The Operators
