B4G EP 160 Edited

Paul Shapiro: [00:00:00] Matt, welcome to the business for good podcast.

Matt Tullman: so much for having me, Paul. I really, I'm grateful for you sharing your, your stage with me so I can share a little bit about our mission.

Paul Shapiro: I am so excited to be talking with you. I know that you have a long history though, as one of the progenitors of no meat athletes.

And so as somebody who has benefited tremendously from no meat athlete, I want to say thank you because I used to be like really into long distance running. It's not really part of my life now, but it was for a long time. And Matt Fraser was a big inspiration for me and I was happy to meet him and host him for a talk one time.

And so I want to say thank you for all the, all the lessons that I learned from no meat athlete.

Matt Tullman: Yeah, awesome. Well, that's, very kind of you to say. And Matt Frazier was an inspiration to me as well. And I was very fortunate to have an idea for a supplement company that I knew he would love. And we got together.

And the next thing you know, I stepped into a CEO role for for no meat [00:01:00] athlete. And we've been building that for Eight, nine years now, both of those companies compliment and no meet athletes. So, it's always awesome. I'll tell you really quickly, cause you emphasize how informal this, this conversation should be.

The, the weirdest thing that's ever happened to me is I was on an airplane. Of course I was on the phone because that's how you get onto an airplane in my life.

And someone stops me and says, like, are you Matt Tolman from Nomade Athlete? And they actually recognize my voice from the podcast. And I was like, what are the chances? So it's, yeah. A funny thing. So awesome to hear. It's always, it's always fun to hear that we've touched someone's life.

Paul Shapiro: Yeah, indeed.

Mine for sure. And, and we'll link to, no meat athlete and a compliment in the show notes of this episode for business for good podcast. com. So people can learn more about it, but what was the Genesis for you, Matt? Like, you know, you, you became the CEO of no meat athlete. Obviously you must have been a no meat athlete yourself and a business person.

So what happened that you came to be [00:02:00] interested in meat free living?

Matt Tullman: Yeah. Well, I was in. I was, almost nominated from, an early, age because I lost a loved one to cancer. And that was, a very eye opening experience because, he was given a terminal cancer diagnosis. And they sort of, you know, the mainstream medical establishment said there's nothing for us to do for you.

And so they sought alternative. Modalities of healing. And one of those was a raw vegan diet, and he found tremendous success, because our bodies are healing machines. And if you stop, you know, dealing these, these constant blows, right? The, the toxins and some of the carcinogens and, you know, not, not to mention some of the things that We think are okay.

Like, you know, refined sugars. Like if you, if you bring your body back to a state of healing, you can actually do a lot to, address things like cancer. And certainly I don't want to get into any of the woo woo, but that was my exposure, which really had a profound effect. And I was, I [00:03:00] was back in high school.

So it's been some 20 years since I've been meat free. I wasn't vegan or anything like that. And, one thing led to the other and I, I had the opportunity to sell my first company, which was an education technology and go and support a loved one in what would become end of life care. And being with someone dealing with heart disease and being with them through the end was sort of that.

That aha moment that really kind of transported me back to what I was exposed to with that first, brush with death, if you will. And that was all I needed to say, you know, I think one of the most important things we can do is, is, invest in preventative wellness and really think about, you know, the, the lifestyle that we are leading.

And how it can either promote healing and really kind of allow us to thrive. Or it can, unfortunately, you know, kind of tear us down. And over time that, that, wear and tear, you know, manifests in these chronic diseases that we see growing. And so that's when I decided to use my, my time and [00:04:00] treasure and really making my mission to, to spread this plant based gospel, which as you brought up, I've been so fortunate to, to do from.

The platform of no meat athlete is as well as compliment. And now, more recently, a himsa companies, which is our effort to promote these plant based foods more than just the media and supplements.

Paul Shapiro: Yeah, I want to get obviously into himsa and what you're doing that with it. But I do want to ask, you know, you mentioned, you know, you saw your first company, this education technology company, right?

So, you know, that means that you started a company. Yeah. And you exited it what happened that you decided that you want to start a company like what what was the story behind the decision let me know most many people have ideas but very very few people are ever going to take the leap and start their own company so obviously you had the entrepreneurial bug what what led you to do that.

Matt Tullman: Yeah, you know, I, I think for those who study it, which I do, and [00:05:00] I'm, you know, a little bit obsessed with that sort of entrepreneurial process, I, there's kind of a nature versus nurture debate, you know, can you teach someone, this, this, Skill set, if you will, whatever skills that that might be.

And it's very, very hard to define. It's certainly not something I could define. And, you know, I think if I look back, I've always just figured out ways to create value, you know, selling, you know, water bottles to maintenance crews at a nearby golf course. When I was growing up, you know, figuring out just.

Ways to make money and, that manifested into, you know, building things, teams and organizations. And, I can look back and through college and, you know, right out of college. I just had a. Predisposition to finding problems and trying to bring people together to solve those problems. And I was really blessed that I got noticed, by some, a gentleman putting together a venture capital fund, at that time, I couldn't have told you anything about venture capital could not [00:06:00] have spelled the word entrepreneurship.

I probably still can't spell the word entrepreneurship. But, it was an incredible opportunity just to have a lens, an aperture into that world. And, you know, I started pitching my own ideas and, you know, the rest is, is history.

Paul Shapiro: Nice. Nice. Well, congratulations on your first exit there. And now you are working with other companies if they want to exit.

So I want to get into that because you have been doing quite a lot in the entrepreneurial and the plant based space for a while. But there's this new entity. And very few people had even heard of it until very recently, this new entity, Ahimsa companies. Now, for those not familiar, Ahimsa is the Sanskrit word for non harm or non violence.

And so, this is a company. That has been formed for the purpose of trying to help other plant based companies survive. Am I correct about that? It seems like that's what you have said in other interviews that you want to help companies survive, right? That there's this, there's this contraction in the plant based space and you're, you want to make sure [00:07:00] that the good companies, the companies that really have something that you think is worth extending, that maybe they're going to be doing much better in the future.

And so it's better to acquire them now. Is that an accurate assessment of the thesis?

Matt Tullman: Yeah, I think that's certainly fair. I would probably describe it a little bit more. You know, we're, we are a, mission driven, but for profit entity. So it's not just about saving all the companies. I wish we could, I wish we could, the worst.

The worst part of my job is having to, you know, tell an entrepreneur that we're not going to be able to extend their runway. Which kind of brings me back to the origin story. You know, we, we looked at the market myself and, a group of co founders and, You know, notice that we've spent billions of dollars collectively as a community of, of investors who spent billions of dollars over the last decade, developing these awesome technologies, great products, teams we've, we've bought into [00:08:00] stores for distribution.

We've paid those slotting fees, and fortunately for a variety of reasons, you know, like many of rich macroeconomics, some inflationary rate, we've arrived at this point where, The capital markets have essentially dried up for consumer goods, particularly plant based consumer goods. It's a really, really tough market to go raise money.

And, and, and so, as you said, you know, we're, we're seeing a lot of companies who have spent, you know, a lot of money to, to create great teams, great products, you know, some distribution and, and we have the opportunity, the privilege to, To do in some cases, extend their lifespan, you know, and, and bring them under the company's umbrella and hopefully give them a new lease on life and a new, sort of mandate, right.

When, when built around, Really solid unit economics and frugality, right? A focus on profitability, because I think that's what's been missing in many cases from the last five [00:09:00] years of a very frothy, you know, largely venture capital type markets.

Paul Shapiro: Well, I'm very eager to delve into that more, Matt, but before we get to that, I want to ask you, like, how did Ahimsa come about, right?

It's a collective of a variety of investors who are pooling their capital together, and they made you the CEO.

Matt Tullman: Yeah, that's, that's close enough. , you know, I think,

Paul Shapiro: I mean, is there one lp? No.

Matt Tullman: Look, I, I, I think, you know, I was invited to take a look at a, a particular company, and, they were evaluating, you know, whether or not to put more money in.

You know, and I was just advising as to kind of how I would approach it and some of the things that I was seeing and that snowballed, you know, that conversation just organically led to, you know, Hey, how, how would you build, you know, this up? And there are more of these companies. So, you know, let's talk about what a strategy would look like.

And, you know, Our strategy is really predicated on those two things, right? One is sort of a macro trend, which is there's a lot of companies who are, in need of, [00:10:00] financing, right? They've reached the end of the runway. We're, we're in an incredibly privileged position to, to have access to capital that's, you know, mission aligned.

And then we have this other side of our, our strategy, which is really, around consolidation. And so just to speak on that for, for a moment. You know, our thesis is that it's very, very difficult for a new food company to scale past 10, even 25 million in revenue. And that's because, you know, most of these companies right off the conveyor belt, so to speak, you know, starting off kind of at a 50 percent gross margin, if you will.

And then if your net of trade spend and other deductions best in class, you're maybe in like that 20 to 30%. Gross margins, right? So before you even start running the business, like most of your revenue has gone into ingredients, you know, labor costs for production, grocery store fees, distribution, freight, packaging, all that stuff, it [00:11:00] leaves.

Quite a, you know, quite a small, dare to actually run the business. Right. And, to say nothing of R and D and marketing, which is critical for these food companies. Yeah. You have accountants, you, you have, you know, legal expenses, you have all. Sorts of operating expenses that actually allow that company to grow.

And so as we looked at these businesses, it just became abundantly clear that you need to reach a certain scale to make that work, to make a food business work. And, you know, I think that's probably somewhere between 25 and 50 million before you can really look to generate any reasonable amount of EBITDA and so.

Yeah, as we kind of looked at these businesses that range between, you know, we're looking at incubation. We have some, some R and D, going on, for a whole chicken breast, which I can speak to. And so we're, we're, we're looking at zero revenue today. You know, all the way up to call it 25, 35 [00:12:00] million in revenue.

And I think by consolidating those and building a best in class operating team, you really have the opportunity then to create a sustainable business that can nurture these brands and hopefully take them to their, their, you know, end point.

Paul Shapiro: Okay, so let's get into, you know, you alluded to this contraction and venture capital availability for plant based brands.

Certainly true, right? In 2021, the money was free flowing. Today in 2025, certainly not. Although it does seem to there are some deals getting made, but a lot of a big slowdown valuations for the companies are way down. You're seeing lots of companies fail, go under altogether. It's not just the venture capital is drying up.

You're also seeing revenues through like total, dollars spent on plant based meats go down. What is your theory as to why this is? Why was this so such a hot market four years ago? And now it's much less so.

Matt Tullman: Well, I think there's a couple of [00:13:00] things that I'd say. One is that, you know, I, I take the long view whenever possible.

Sometimes it's difficult, but if we really abstract ourselves from the moment, which feels really intense and really negative, you know, and, and look at it over the course of 30 years, right? Veganism, plant based foods, meat alternatives, whatever you want to call it. Like we're still at the height, like, like there's never been a better time to eat a plant based diet.

You know, I've got friends who have been vegan for 30 years and they will, they've told me stories about using, orange juice on their cereal. There was,

Paul Shapiro: yeah, I, I, I became vegan, 31, 32 years ago, 1993. Oh, wow. Yeah. And I do actually remember using orange juice on cereal. And I remember telling my mom, I bought soy milk, and it had two ingredients, soybeans and water.

And I remember mom that I would rather after, after trying it, I remember saying I would rather put orange juice on my cereal. But

Matt Tullman: the irony is [00:14:00] that it's like that saying, right? The more things change, the more things say the same, right? Like we peeked out of this like hyper processed milk and now you see people going back to just soybeans and water.

We're back to where we started.

Paul Shapiro: Yeah, it's funny because I actually, recently tried the Eden soy, like the original Eden soy, which is just soybeans and water. And I actually thought it was fine. You know, it doesn't taste like, like milk at all, obviously, but it tastes fine and actually it's, it's really high in protein too.

So, that was a nice plus, but anyway, you know, Matt, you're, you're making the case that you think things are cyclical and that things are going to look up for plant based meat in the future, which I, I agree with that assessment, but why do you think. We're in this part of the trough right now, but what what led to what led to the slowdown?

Matt Tullman: Well, you're right. I do think things will, will, look up and I'll just make one more comment on sort of the long do, which is, sometimes I remind myself that like [00:15:00] 100 years from now. Yeah. Like, do we think we're going to be looking back and saying it was normal to eat, you know, some 66 billion animals a year and to be cutting down the rainforest for, you know, grazing land and like decimating ocean ecosystems, right?

Like all that, like. No, I think it's kind of crazy. And so to answer your question in a reverse way, like I do think pendulum swing, right, and that, you know, we, we swung a little bit further and sort of poke to the bear, no pun intended. There are very, very large and entrenched industry interests. That, you know, if you start to take any, meaningful market share, if it appears, even are you going to take a meaningful market share, right?

Like you're going to provoke a response. And I think that there is some truth to, the criticisms of many, call it, meat alt products. I think that's one of the reasons why those criticisms have resonated so much in the community. [00:16:00] Mainstream population. Do I think ultimately, you know, a small percentage of by volume of methyl cellulose is worse than, you know, eating red meat?

Like, no, personally, like I, I prefer beyond meat, but I think that, you know, some of these, some of this reaction, right, is, is exactly that it's, it's, industry. That is. Marshalled its resources to create a lot of disinformation or misinformation out there, that has labeled, you know, broadly, plant based food as ultra processed.

Paul Shapiro: So when somebody goes into Burger King and they have a choice between the conventional Whopper or the impossible Whopper, do you think that that's the reason they don't choose the impossible Whopper? Because it has methylcellulose or is it something else is that they don't want to pay more or they don't think they're going to like the taste like, you know, I could see why, you know, somebody going to Whole Foods might say, Oh, I care about that.

But [00:17:00] in, in the mainstream food world, is this the issue that people think it's processed and that's why they want to get the regular Whopper rather than the impossible Whopper?

Matt Tullman: I don't, you know, I, I think it may be over simplistic to try to identify one thing. You know, I think there's a lot of things I think that, you know, the fact that, you know, on on a piece of meat, right?

It says like meat, right? But on an impossible burger, it lists out ingredients, right? Like, you know, no one stops actually wonder, right? Like, what is the biochemical composition of that piece of meat? As it turns out, right? Like this, there's, there's fats and there's, there's, you know, I was about to say, Carbohydrates and fiber, but not so much as it turns out, right?

Like there's, there are chemicals in our food, right? And I think that there is a lot to be said for, the oversimplification of, a lot of people's understanding of food, right? And, and their susceptibility, therefore, to saying, oh, this is a three [00:18:00] syllable word on the package. You know, that, that can't be good for me.

I think that's really resonating with a lot of people. And I think. You know, part of that sort of, I don't know, rear guard offensive that we see, you know, is, is kind of that RFK strain towards like unpasteurized milk, right? Like I was just talking to an entrepreneur who's in, the, ice cream novelties space.

And he said, you know, the, the types of ice creams that are winning. Or like these whole egg yolk, right? Like really like back to the farm type, right? Full fat, unpasteurized, he said unpasteurized, but I don't actually think that's on any mainstream grocery store shelves, but the point being, right, it's like, that's all part of this.

This movement, right? That people are looking for less processed, more natural foods. And, and look, you know, as a whole food plant based advocate, like, I think that's great. I think we should be eating closer to the source. I think minimally processed plants are [00:19:00] extraordinarily healthy. I personally think that plant based, right, or whatever you want to call it, meat alternatives are a great Gateway drug, it's a great transition food for the mainstream consumer.

And I, myself, my family, like we had, spaghetti and meatballs today. We had beyond meatballs. Like it's awesome. Like my kids also eat, you know, an entire tray yesterday. I'm not even kidding. An entire oven tray, three kids under the age of six, demolished, the roasted Brussels sprouts and chickpeas.

They didn't like potato chip, right, by the handful. Whole thing, my wife and I literally didn't have any, they ate the entire tray, it was amazing to see. And that's because they've grown up on a vegan diet, it's very natural to them. But they also, you know, I think it's fine to eat some beyond meat. And I think that's the message that we have to get out there, that, back to nature is a good thing, right, whole foods is a really good thing.

But at the same time, you know, Making sure that, people understand that, you know, this, this soy protein extruded, [00:20:00] you know, meatball is, is not going to kill you, you know, and, it certainly is not going to kill you any faster than the animal alternative. That's for damn sure.

Paul Shapiro: You know, when people talk about the problems of plant based meat, right, usually, you know, sometimes they bring up what you're bringing up, right, the perception, right, that it's ultra processed.

Some people bring up the price that it's just too expensive, and then other people bring up performance, right, that it just doesn't taste as good as animal meat to a lot of people. My guess is that Somebody walking into Burger King, they're not reading an ingredient list, right? There's no package to look at.

They just, they have a choice between the impossible burger and the regular burger. And my, I suspect that price is a bigger part of it. And maybe it's the thought that they now no longer think it's healthier for them. If they've seen some general thing, like the reason they would get it or they would spend more is because they thought it was healthier and they saw something that suggested that it might not be you and I know that it is, it has no cholesterol, et cetera.

Like we know what the reality is, but I think that [00:21:00] is part of it for people that, you know, why spend more for something that may not be healthier. And that you don't think tastes as good. I don't know. I, this is my speculation. It's not based on evidence. If you think that the processed food claim.

is the real concern is the cause of of this drop. What's the antidote? Do you think it is it? You know, is it beyond switching from canola oil to avocado oil? Or is it switching to mycelium? So you have whole foods rather than isolates like soy protein or pea protein. What's the antidote that will bring this category back up to the peak from the valley?

Matt Tullman: Yeah. Well, I, I think it's very well said and, and just to reiterate, I don't think it's, there's a single reason. I think price parity is really, really important. I think lobbying efforts, because we all know that like the price to, the, the price you pay for a piece of meat. It's not actually the cost of, of that [00:22:00] meat, right?

Like we, we all, there are externalities that are not accounted for. We're all subsidizing it as taxpayers. I totally agree with you. I think performance, as you say, taste, texture, really, really important. You know, all of those things we have to, meet at that, no pun intended. We have to meet it, you know, and be competitive on all of those on all those fronts, you know, and, I think the, you know, the reason I key into this ultra process phenomena is just having been an observer of the space for the last 10 years and seeing that right up.

Right. And seeing how game changers, right, the documentary and, you know, as far back as, as food matters, right? Like these stories that are told, not just about cholesterol, but about, you know, the inflammatory agents and a piece of meat, right? Like TMAO and everything that we, we now know about, animal products and what they do to our bodies on, on a cellular.

Level. I think the more that we can, you know, stick to the science, [00:23:00] right. And provide evidence based. Reasons not just about the human health component, but also about the environmental, as well as just the sustainability of feeding, you know, a growing, you know, there's no way to feed a 10 billion person human population, on a animal protein rich diet.

There's just not enough land and, you know, arable land and clean water to do that. It's highly resource. Intensive, and so I think telling all of those stories, is ultimately going to keep pushing it forward. In addition to, of course, the innovation that has to happen, which I know, you know, you've been, putting quite a bit of your time into, you know, I do think cell based, meat.

You know, is, is a, is a possibility. You know, and I think again, that's why I key into some of the, misinformation and some of, the, you know, the industry offensive against it. I mean, I, I think you probably saw it. Just today, what was [00:24:00] it North Carolina or something that, you know, put out a law that, lab grown or cell cellular based, I think with the two, terms that had to be printed on the package of those types of products, right?

Like you think to yourself as a government, you know, as, as a representative of the people, like, why, why are you focused on it? Like, it's not, it's, it's barely commercially. Viable, right? Like in, in all cases, you know, a certain political group would say like, you know, let's be hands off in the economy that the free market sorted out, right?

Like, yeah, let's be libertarians. And yet when it comes to this one thing, you know, like they want to get down to how a package is labeled. Like you have to kind of read through that and say like, no, there's, there's very powerful industry interests that are pushing this narrative. Bad. Oh, because it's lab grown.

It's not real. It's bad for you. And that's again. That's why I'm so focused on this ultra processed argument. I think it's [00:25:00] so important for us to confront it and try to work through it because otherwise people are going to continue to get turned off.

Paul Shapiro: Yeah, I definitely think the ultra process thing has a sway with some people.

And I, I think that price and, and taste are probably a bigger barrier for people, especially price. Like you look at these plant based meats and virtually not all, but nearly none of them are competing on price yet. You know, if you look at, so many other areas where animals have been displaced in the economy, It's because there's something that was like, wasn't a mimicry per se, but it came along.

That was way better. You know, it's not like, you know, Henry Ford invented a mechanical horse, right? Like he invented a car that displaced horses because it was so much better than a horse. We stopped using quill pens, not because somebody came up with a fake quill, but because metal fountain pens were invented and they were just so much better.

The telegraph was way better than a carrier pigeon, right? Like the list of all of Things that it was just [00:26:00] better and plant based meat has to be better in some way, whether it's taste, whether it's price, whether it's the perception of health, whatever it is, like, it's got to be better in order for people to switch to it.

And I think that unless we start making the case or making products that do compete on those, it's going to be tough to see it moving into a mainstream, displacement. But I want to talk about. A himza because you guys are making a lot of headlines lately and you put it and put it very well in an interview where you said recently I'm quoting you here.

You said we've got to step up and try to help these companies survive, right? So, you know, the thesis of a himza is essentially, you know. Take companies that you think are really good companies, but are struggling and then help them survive by acquiring them and bringing them under your umbrella and, and making them, more successful.

So you acquired wicked, the brand, the [00:27:00] plant based, CPG brand, you acquired a plant based, production factory. In Ohio, where you can now manufacture products for companies like wicked and others, you acquired nugs, which is owned by simulate. And are there other acquisitions that I'm missing? Aside from those, I think there are some others that I'm that I'm not even naming, right?

Matt Tullman: Yeah. And actually the, the one movie I'll, I'll use as a jumping off point is, again, I 100 percent agree with you, you know, the products have to be better and, you know, something that I've often, guided folks who are, are starting a business is like, is a great, Entrepreneurial thinker named Paul Graham.

He, he might've been the founder. Certainly he was a longtime president of Y Combinator. And he's got a great essay on this, which is essentially says that your product has to be 10 X better. And the competitor, because the, the, the switching costs, right. The inertia, like, yeah, trying to get someone to change [00:28:00] their, their habit.

It is so great that you really have to like win on all those, all of those dimensions, as you say, right. It's got, it's gotta reach price parity or better. Right. Like the taste has got to be great. It's got to have more protein. It's got to come in a biodegradable non plastic container. Right. And it's got to come to you with like, you know, a hard sun with a paper card from the founder.

Right. It's got to be like that much better to get people to change from what they know and love. So I'm a hundred percent. An agreement with you there. One of the acquisitions that you didn't mention is Blackbird. Blackbird pizza. Is that I really believe it is one of the, products that I'm most excited to back.

It is a better for you, you know, non dairy, pizza as well as wings, brand. So it's, Satan wings is a food service component as well. But, Oh, I'm really focused on the pizza because, you know, as, as a dad, for young kids, like I said, you know, we, we, we make [00:29:00] sure to get a lot of, whole, plant matter.

But there are those Friday nights where you're exhausted and a frozen pizza out of the freezer is like, You know, a godsend. It's it's super convenient. And unfortunately, my wife has a gluten intolerance, so we don't eat gluten either, and we end up, eating diet pizza, which, I will, I will go out on a limb here and say it's a terrible product.

I mean, like we, we buy it, you know, and we've bought it for years. We, you know, Blackbird is a fantastic. Pizza, it's made in Brooklyn, New York. So maybe it's something about the water that does fantastic. Like it's a really, really great product. And so that's an example of a business. They've done a fantastic job growing it over the last five years.

And now we're really in a, you know, feel privileged to carry it forward. Because, you know, we're investing in that 10 X. Better products. I really think that if more people could try it, we'll be able to take some of that market [00:30:00] share from from Daya.

Paul Shapiro: Interesting. So, I, too, like Blackbird. I like the people.

I like the product. I like everything about the company. I want to ask you, Matt, what are you looking for? In companies, right? So, you know, I, I presume they have to be struggling, which pretty much all of these companies are in this space right now. But, you know, if they're very well backed, if they have a ton of runway left, they're probably not looking for an acquisition by him.

But aside from that, aside from like the level of distress nature of it, what are you looking for that makes you determine whether a company is, as you call it, Best in class, right? Like, what is it about Wicked and Blackbird and Nugs that made you think, yes, I'm going to prevent them from going under?

Matt Tullman: You know, each of these deals is highly idiosyncratic, you know, and, I'll give you one example.

Well, and, and so that to offer you a couple, generalities, cause again, every deal has [00:31:00] to be looked at very, carefully in it and in its own light, but, you know, a couple of things that you look for in any investment, which is great people. And a great product, right? You know, and depending on the the stage at which company has reached, you know, the people, you know, might be more important than the product or vice versa.

Right? At an early stage company, it's all about the people, right? The product will change a million times, you know, the latest stage company, maybe there's some product market fit. You know, the people may have less to do with its success at that point than than the product.

Paul Shapiro: But I got to interrupt you and just say I But I have fucked this so many times.

Like for these early stage companies is like people were definitely betting on the jockeys, not the horse. And I've often said, like, that's when you really want key person insurance for your founders. But as the company matures, the founders become far less important in my view. And it's not to say that they're not important.

And you know, you're gonna have some like Ethan Brown are gonna be there and they're gonna be there even through the IPO and more. [00:32:00] But at some point I have thought like, You know, the product becomes far more what people were betting on than, than the people.

Matt Tullman: Totally. And, and probably nowhere else more, than in the grocery store.

You know, I, I think, again. Everything's so kind of case specific, I'm certain there are industries, you know, a business to business type consulting play, right? Like that founder is, you know, immensely, important through all life stages, but with food, I totally agree at the end of the day.

Yeah, you need a package that stands off on the shelf, right? So you have to grab that attention. You have to be, you know, as you've pointed out, right, at the right price. Or else, you know, it doesn't matter who you are, like you're, you're comparing these two things and one's half the price. It's always going to hurt you, you know, and then you have to have, you know, a great product that ultimately drives, the consumer to, to make the repeat purchase and to [00:33:00] develop that habit and to become a staple in their household.

And the founder is much less. Important. I think, as you say, once you reach that product market fit, you have so much of the operation that just becomes kind of a machine. If the founder does its job, of course. But I'll speak to one which is simulate. You know, incredible founder. Awesome people there.

As it turns out, we really were investing in the future of, a technology called fiber spinning. Thanks and that's because, most, plant based meats today. Are some form of, higher low moisture extrusion. So essentially you're taking the raw ingredients and you're putting it through a combination of, you know, water and pressure and, and amazingly, right, I think we take for granted, outcome something that looks and feels a lot like meat.

Again, it's all relative to those of us who have been, vegan for 30 years, like you, you know, if you're comparing it to a firm tofu, right? Like, this is a [00:34:00] lot like meat, and it's an amazing process that we take for granted. But, you know, I digress, that is, like, the state of the art, right? And that is, you know, largely how all of these, meat alternatives are, are made.

Certainly the ones that are mass produced on, on our local grocery store shelves. We're really excited about a different technology, which is called fiber spinning. And essentially it's, it's using principles that you would find in the textile industry to, to pull these threads. Of protein. I'm not sure if you're familiar at all with it, but, but it's a really incredible thing to see, and it's essentially winding these, these threads onto itself, right?

And creating this, this fibrous, you know, tissue like, structure, much as you would find in, in a human or an animal muscle. Right. And so it tears that way, you know, it has a lot of the same qualities in terms of mouthfeel and, and we do believe it's, it's that 10 X better, in fact simulates, products, [00:35:00] which was available direct to consumer where we're still, we're tweaking a little bit and making it a little bit.

More ready for prime time and, and, retail rollout. But it was actually microwavable. So to the principle of, of 10 X better, it's kinda, you know, it's gotta have 26 grams of protein, like a little four ounce. Serving, you know, it's got to be faster, right? So it's a one minute in the microwave, super quick.

You know, it's got to taste better than these high moisture extrusion, products, et cetera, et cetera. And I really think they did a phenomenal job there. And so getting back to your question of what are we looking for? It, it's something like that. But it's something that we feel like we can really push forward the movement by bringing forth a product that otherwise wouldn't have the opportunity to, to, to reach the marketplace.

And we think could really push things forward because look, let's be honest right now, when it comes to chicken, you know, you have chicken chunks and you have chicken nuggets, and you have chicken tenders, right? And [00:36:00] like how, how many, you know, adults. In the U. S. You know, eat animal based chicken in that form, right?

Like chicken nuggets is predominantly for kids, right? Or chicken tenders. You know, people eating chicken breasts. That's that's the food ingredient that goes into all of these different, recipes at homes, right? It's seen as being healthy. And so we're really, really focused from an impact standpoint of how do we bring a chicken breast to the grocery store shelf to to Bring that alternative to the masses, hopefully in a in a 10 X better way.

Paul Shapiro: Yeah, yeah, I, I, I think that that is true, that we need to get better at mimicking some of these other products that aren't just like, you know, you know, ground informed nuggets and so on for sure, or burgers or sausages and so on. And I am particularly enthusiasm and enthusiastic about the opportunity for fiber spinning and of mycelium fermentation, [00:37:00] which I think offers a lot of real benefits on this as well.

I think some companies do it better than others. There are some mycelium products that I really like and others that I don't like. But I do think like as a whole food, like it's a really promising technology. But let me ask you, Matt, like, you know, you're, you're buying low, right? You're buying these companies that are struggling at a time when.

You're preventing, you're, you're helping them to survive. What's the strategy for selling high? Are you looking to have these companies to sell these companies at a future date? Do you want them to IPO? Like how will a HMSA actually get a return on these, on these acquisitions?

Matt Tullman: Yeah. You know, I can't tell you the number of times investors and different companies have asked me a version of that company.

And I demur every time and say, you know, I, I. I think it's important to start with the end in mind. I think it's always important to be outcome oriented. But I think in this one case, the most important thing is to build a beautiful business. You know, to be maniacally focused on creating [00:38:00] a product that people want and to sell it and to get better at it every single day to bring a bunch of people to that team and get good at it.

And if you do that,

Paul Shapiro: Let's say math that you make these companies profitable, right? And you're, you are streamlining them. They're you're helping them meet all the metrics. They become really profitable at some point. The investors of a HMSA company are going to say, you know, when are we going to get our return?

So I'm not saying, Hey, what, what, what, you know, what, what, what do you predict years from now is the exit for these? But I mean, when, when somebody considers investing in a HMSA companies, I presume they're expecting to hear. How you're going to make, how the company will make money, not, not just how the portfolio companies will make money, but how the investors will make their money.

Matt Tullman: Yeah, I think it's, you know, kind of going back to the Senate, I think, you know, the first thing is, as you say, you know, get to a point where, you're, you're nicely cash flowing, [00:39:00] you know, creating a healthy EBITDA is important. From there, you know, food companies go. A few defined paths.

There's not a lot of innovation, you know, like the saying goes, at one place you don't want innovation is like with your lawyer, you know, like, the, the private equity, you know, often is a, is an excellent opportunity for these, businesses. You know, a rollup strategy is similar to ours, you know, an IPO.

I mean, that's tough, right? I think, I think Ethan threaded that needle perfectly. To time that market, I don't know if that's gonna, you know, if we're ever going to reach that, that standalone scale to justify an IPO for a food company, but yeah, eight companies or something control the, entire grocery store, right.

This industry more than others that I've seen. Really tends towards consolidation. And so if, if I was a betting man, I, I, you know, would probably say that, the path goes to some sort of strategic acquire, you know, [00:40:00] much as we've seen in any of these, I just saw Boca burger. Got bought by Kraft Heinz, which I, I somehow miss.

I'm not even sure how recent that was. Someone just sent it to me today. So that, that was, you know, but again, I, I don't really think about that. I think that's probably years off. You know, the, the real focus for me is how do you build a great team? How do you create great products? How do you deliver those in a, in a more compelling, more convenient way for the consumer?

Paul Shapiro: Yeah, well, I, I agree with you and I hope that that's what happens. I will point out about Boca burger that, that they did get acquired by Kraft Heinz. It must have been, I'm predicting more than 20 years ago. So it's not breaking news, but it's still pretty cool. And I'll tell you, I actually think the Boca chicken patty, that Boca spicy chicken patty is very good.

You know, it's an old school product, but I'm an old school guy. And I think that product is a really good one. So, props to Kraft Heinz for, for sticking with it. Okay.

Matt Tullman: I didn't even know Boca Burger was on the shelf, by the way. So that's super funny. It literally just came up in a conversation today.

So I [00:41:00] wonder why that person was talking about Boca Burger if that transaction happened 20 years ago. But, I should probably read the article that they then texted me.

Paul Shapiro: I just, I just looked it up right now. It's 25 years ago. But, anyway, Boca burger is on the shelf. If you go to Walmart where I do shop, it's, it's a big product there.

So I, I do recommend it. And I'll tell you again, spicy chicken patty. It's very good. It's a very good product. Okay, you have looked at so many companies, you've diligence to a lot of companies, you've bought a lot of companies, you run a lot of companies. There may be nobody better suited to answer the following question than you.

What companies do you wish existed? If somebody's out there thinking, I want to start my own company. And have, you know, create something that the world needs. What should they do?

Matt Tullman: Well, I assure you, I am not the most capable to answer that question. There are a lot of people who, I think would have, better answers.

You know, you [00:42:00] did warn me about that question and I didn't have a, a great answer at the time. The, the two that I've been joking around with, well, one, one is more of a joke and that is, I'd love for someone to figure out how to translate. Using ai, the, the brainwaves or the barks of animals.

So I really think that could actually advance, you know, the, the plant-based movement, you know, if you could actually speak to these animals and, for their, humanize them, I think that would be super cool. And, I, I mentioned that to your friend too. There's actually some people working on that.

And there's some AI companies that have, you know, translated brain waves for humans. I can't imagine it could be that far off, but it, that is a crazy, crazy idea. So that's why I hope someone else will do it. Cause it's probably not one that I would. The other one is like the grocery store model, is broken.

All right. Like it is. brutal for retailers. You are essentially selling your food products on consignment and there [00:43:00] are monopolies abound. I'm not gonna name any names because unfortunately I have to claim that space still. But I would love for for someone to figure out A better way for us to, buy food in this country.

I really think that it could, bring a whole renaissance of, of new, companies into, the next. Cause like I say, it's really, really hard to scale food companies in this market. So those are two that came to mind, on this topic. I've got a list of about 85. I'm trying to get to eventually, and, we'll see if I have time,

Paul Shapiro: but, All right.

Well, on the point of using AI to better communicate with animals, it's not lost on me that we have taught a number of animals to speak some human language, right? Like we've taught chimpanzees and gorillas, American. Line language and some of them have learned hundreds of signs so they can have, you know, they're not having philosophical conversations, but they can actually communicate in some type of human language with us, but we've never [00:44:00] learned a non human language, right?

Like we've never learned and and there are some examples now where this is starting to change like with prairie dogs. We've started to you. Decipher what some of their words are and understanding the, they even have regional dialects and so on. It's very interesting. And so we can, try to understand like when they're saying human or snake or hawk or whatever, we can understand that.

And so we're just beginning to understand some of the words that they are having, but we've never been able to communicate with them. In their own language, and there are many people who are working on this, as you mentioned, in fact, Noah Weiss is a entrepreneur who, it was, she was a past guest on this show, and I'll link to that in the show notes of this episode at business for good podcast dot com, but she's working with some folks who are also doing that with whales and so on.

And it's very, very interesting, so I, I too, I too wonder, like, how will this will revolutionize our relationship with other animals if we could actually have a meaningful conversation with them, Yeah. And as an aside, [00:45:00] you know, and all these movies were always communicating with the aliens and I always think we can't even have a meaningful conversation with an animal who shares our DNA and it's like we're going to have a meaningful conversation with some alien species.

I don't think so. But anyway, you look at it.

Matt Tullman: I love that how that's the, the part that you find unbelievable, but, I will say that, you know, I'm, I'm, I'm very interested to see how these brainwave pattern recognition, to sort of like verbalization technologies come to light because, yeah, to your point, I think most of what we've done in the past has been trying to use sounds.

And, and map, our language to sound. I think if we can bypass that and go straight to, you know, effectively what I've been looking into, which is, you know, the brainwave, right. And, and again, this is using AI to kind of figure out what. You know, almost a telepathic communication. I think it could be very, very interesting.

But suffice it to say that we're in for a wild ride [00:46:00] in the next 10 years.

Paul Shapiro: Yeah, yeah, for sure. I couldn't agree more. It's going to, the rate of change is going to be very, very rapid. Yeah. And maybe it won't be brainwaves. Maybe we'll, and maybe it won't be some, maybe it'll be pheromones like ants use to communicate.

Who knows? Anyway, okay, finally, Matt, I do want to also ask you as somebody who has started companies, sold companies, bought companies, run companies, you have a lot of experience. Have there been anything, any resources, books or otherwise, that have been useful for you that you would recommend to somebody else who's thinking, God, this Matt guy is so cool.

I really admire what he's accomplished in his life. What got him there? Was there anything that was useful for you?

Matt Tullman: I, I appreciate the question, you know, I, I think I would encourage anyone to read biographies, you know, I just think that, biographies have been so instrumental for me because, you know, it's like having that mentor that, you know, you can find the most, the most incredible people have lived.

You know, and now [00:47:00] more than ever, they're incredibly accessible through youtube, right? You can devour. So whatever industry you want to go into, whatever topics you want to learn, you know, you can go find a tremendous amount about this person. You can, you know, hear them speak. And I just really encourage people anything, you know, that helps you to see how, Yeah, we've all lived these diverse lives.

We've all been through some trials and tribulations. And the more you can connect with those stories and learn from people in the past or contemporaries, I think are awesome. I did jot down, I'm a big fan of, the hard things about hard things. So if you really are getting. Focus on entrepreneurial endeavors.

That's, that's, that's a great one. By Ben Horowitz of Andreessen Horowitz fame. It's just like a brutal telling of the, truth around entrepreneurship. And he has a great personal story that obviously worked out over time. More recently, I wrote this down. I, I really, I'm a [00:48:00] big fan of meditation.

And so I've more recently, become an advocate of anything Michael Singer has written. One's called, the surrender experiment experiment. And a lot of the things that you read, you know, Buddhist texts or, right. A guru who's been in a cave in the Himalayas, you know, they're, they're teaching.

These lessons about kind of letting go, right. And, and being in the moment, being present, being more, empathetic and more mindful on our daily lives. And those are all really important lessons, but really hard to connect with those lessons when they come from a guy who's been in the cave for 30 years in the Himalayas, it's like.

Look, man, you know, you don't know about stress until you've got four kids screaming, you're on a business call and like you're late to school and, you know, and, Michael Singer actually built, a very successful company while also being very in touch with this spiritual side. And it's a great story about how you kind of meld, meld those two worlds.

So I hope, if nothing else, that'll be the more [00:49:00] surprising, recommendation for your audiences and one that I, I really can't recommend enough.

Paul Shapiro: Okay, very cool. Well, we will include the links to both of those books in the show notes for this episode of business for good podcast dot com. And while I have not read the surrender experiment, I did read the hard thing about hard things, and I absolutely loved it.

And my favorite line from the book is when Ben Horowitz says that when you start your own company, you will sleep like a baby because you will wake up every two hours and cry. And I thought, Ah, that yeah. Is a good line and a good one to, to end on here. So, Matt, thanks so much for all your work in plant based eating.

It's a real pleasure to get to talk with you. And I wish the best for your portfolio companies and your investors.

Matt Tullman: Thank you very much. And thank you for educating me on Boca, Boca burgers, tenure under five times. That's a good one. I'm going to have to go kick somebody for, thanks so much for sharing your platform, Paul.

I really do appreciate it.