Liquid Death founder Mike Cessario on validating a product with a $1,500 video, scaling comedy, and launching energy drinks

of home with precision. Our next guest, Mike from Liquid Death, is in the ream waiting room. Let's bring him into the TVPN Ultra Dome.

What's happening,

Mike? How you doing?

Great.

Welcome to the show. What's new in your world?

You didn't get the memo.

What memo? Oh, no. He's not wearing [laughter] He's not wearing a Santa.

Yeah, we're the only ones wearing Santa suits today,

but we are feeling the holiday spirit. Merry Christmas.

Merry Christmas.

Yeah. Um, welcome to the show. Uh, first time on the show. There's a ton of stuff I want to talk about about marketing and launching this business and how comedy scales, but maybe can you just take us back and really quickly give us the intro on the actual launch? I feel like is it fair to say that Liquid Death had like a viral launch video strategy? Was that the cornerstone of the launch or were there other pieces that were at play in the early days?

Um, well, the way we launched Liquid Death was actually a bit different. So, when I had the idea, it it was a little bit too crazy to most people to find investment to make it. So, I basically created a Facebook page and we made it seem like a real brand just to see like what kind of traction did it get in the world if people thought this was a real thing.

Then we shot a cheap commercial for the product that didn't exist yet. And the we probably spent 1,500 bucks to to shoot the commercial. And, you know, we put a little bit of paid media behind the video, maybe like a few thousand dollars. And then after five months, the video had three million views. The Facebook page had, you know, 60 70,000 followers, which was more than Aquafina had on Facebook at the time.

So then I used all that kind of

market traction to then go raise like a small

I'm so surprised that that more CPG brands don't do that. Like it takes so long to make even a like like if somebody's making a drink like this, right? If they actually start working hard on it today, they might have something close to a product that they can sell in six six to 12 months, something in that range to like really go through rapid iteration and getting it made and scaling up production and testing and all that stuff when you could just actually make an image of something like this and just like start running ads against it and see like do people care at all? Do they click through at a good rate even with ads that aren't super refined? Uh I did that once on a project in uh in college. I had the idea I was shooting a lot of film photos and I was super frustrated. It was like a 30 minute drive to the place you drop off film and so I wanted to make like basically like kind of Netflix model for film so you could just like get send a roll of film, send it back once you were shot it and I was shocked. I just ran ads against it and uh I had like immediately like a $10 like customer acquisition cost. Of course I didn't actually have the service set up so I just refunded everyone immediately. But it it's so much easier to validate stuff and I think people waste so much time and when you're in that sort of like pre-ro pre-product in CPG is just like the death zone. Like it's just so hard to get people to care and like actually risk capital when it's like you don't even have a product that I can like sample and you want me to give you like $100,000 or 250k. It's just it's a big ask

completely and it's something I hear from people you know who are aspiring entrepreneurs or or have an idea. I think there's just like a general sense that, oh, I have this great idea for something. How do I now go raise money?

Well, the reality is investors like to invest in businesses, not ideas. So, how can you start in some way to prove out that there might be some traction, however, you might be able to do that. And that's going to get you a lot further than just saying, "Hey, I have this great idea. You know, give me some money." So far

the first uh so so that video that you described was that the animated video or that animated video happened later. Can you take me through like how like the the I mean I imagine that cost more than $1,500 to produce that. What was the story behind picking animation? I feel like a lot of brands were doing sort of like the founder testimonial direct to camera. you tell the vision of the business or you know you go on a podcast tour and and Liquid Death came out with that really aggressive uh animated style. What was the story behind that particular video?

Yeah, I mean with most most businesses I think you need to look at where are your strengths, what is your network, what are your connections and utilizing what you have near you to the best of your advantage. So, you know, another way [clears throat] put is play the hand of cards that you have.

Yeah.

That's unique to you.

So, for me, [clears throat] you know, I was a big fan of this animated TV show on Adult Swim called Mr. Pickles. It's this bizarre acid trip

of a violently funny cartoon. And I ended up reaching out to uh the guy who was the creator of it. Um there was two creators. He was one of the two. and in the early days of Liquid Death saying, "Hey, I'm a huge fan of your show. I feel like we have similar creative sensibilities. Maybe you'd want to be involved in this Liquid Death thing I'm trying to get going." And sure enough, he responded. We met. We got along really well. And he's actually the one who drew the skull that is the logo on all of our cans to this date. And then once the we actually got the brand off the ground and we had real product and we were selling and we were making, you know, real revenue, we had slightly bigger marketing budgets, you know, we were able to use the the animation firm that he was working on his TV show with and they said, "Hey, we'll do this for super cheap because Will's already here.

He could just do this on the side and you know, we can we can make it happen." So animation is very expensive. Like

you know 30 seconds or 40 seconds of animation is very expensive but we were able to get I think we spent all in like

30k on that but that should have costed probably a4 million dollars if you

were just trying to go do that normally minimum.

Um so yeah I was kind of like that that was something that was in our in our quiver and we were a big fan of it and uh we had some great resources there to make a really funny and that was always our thing. How do we make something that's the funniest thing someone's gonna see? Yeah. In their feed and spread it for us for free.

Yeah. I I I mean, obviously, we love comedy here. You're being interviewed by two Santa Clauses. Um I I'm interested to know, take me a couple years into my future. Do I regret this or or or or do I lose this? Um, like how does how do you maintain a level of humor while still, you know, coming to the customer and the business partners with like, hey, yeah, we're not joking around about quality assurance or something like there's a serious side of the business now. There's still some humor that's still there. At the same time, the marketing is probably not last minute anymore. How have you thought about like scaling comedy?

No, it's it's a really great question. It's something that I've had to push through multiple departments of the company, which yes, we're a funny brand in the way we market, but if you think about a brand like a person,

like think about someone you know that's funny, like they're not funny in every scenario. You don't tell them that, hey, my dad died and they crack a joke. Like,

yeah,

people, a lot of really funny people, they just know people really well. like they know how to make people laugh. They know when to tone it down. Like the number one rule of comedy is like know your audience.

So

I think it's important that it's always like hey when someone sends in an email saying hey my case of liquid death from Amazon got all screwed up in the mail you don't crack a joke like act very earnest. Hey

I am so sorry about that. Like that sucks. Like

we will completely figure it out. So, it's all about knowing where it's important to be, you know, real and authentic and caring and then where it's important to be funny and irreverent and that you always got to be cognizant of.

How much did you predict the death of the alcohol culture? It feels like this is perfectly timed. Um, we've talked to so many folks on the show about the next generation just drinking way less and it feels like you've been a beneficiary of this, but was that something where you had seen a chart and you'd actually seen a trend line or you just had a vibe or it just kind of came to you naturally or you just got lucky? Like how do you frame the fact that you're selling an alternative to alcohol in a ton of bars? I see it all the time. Um, at a time when people are looking for an alternative. Yeah, it was a little bit luck. I think the bigger conceptual drive behind Liquid Death's inception was that how do we make a truly healthy beverage company that markets more like a fun alcohol or junk food company?

Because you think about all the funny irreverent marketing over time, it's all like stickers, Cheetos, dockies, like it's beer, it's candy, it's fast food.

Yeah. My biggest criticism of of like healthy brands historically is they it's so hard to build a brand if you're not making people feel any like real emotion, right? Like how many healthy brands are funny at all? Like almost almost zero, right? It's like toned down colors, uh like just kind of like simple straightforward copy. There's not a lot of there's no energy coming through the brand. So, how are you going to make somebody feel something? And if you want to be remembered, you have to make somebody feel something.

Yeah, I I completely agree. And I think it's also just strategically unhealthy brands like in their marketing boardrooms, they're like, we want people to associate our products with fun. So everything we do is going to be centered around fun and like that we want this to be fun. Um or they think about their audience like, hey, we are selling to teenagers. Like this is how we want to make teenagers love us. for healthy products were not ever marketing to teenagers. They were marketing to 35 plus, you know, females and they would market a certain way there. So, yeah, part of what I love about Liquid Death and why I wanted to do it is so many healthy companies just preach to the choir, people who already make healthy decisions. How can I use a brand to get people who don't typically make healthy decisions to now every once in a while pick up a low calorie water just because they identify with the brand and they think it's cool.

Yeah.

Um then you still get the healthy people because they're already buying in those categories. But how do you start bringing new people into healthy categories who weren't there before?

What's your what's your philosophy on storytelling on on X? The last 24 hours everyone has just been debating. Everyone's been debating like do you need to hire a chief storyteller? I took the point of view of like truly the most elite storytellers are founders, CEOs who are the ones communicating to

customers and you know vendors and uh the media and and all that kind of thing. And if you're if you're feeling like you need to hire a storyteller, it's very possible that you just don't know what story to tell. But I don't know that hiring somebody off the street to to tell your story is gonna actually get you what you want, which is like a plot and, you know, meaning and and all these other things that great great stories and brands have.

Yeah. I mean, it's like storytelling is such a broad thing. It's like storytelling isn't everything. And as a founder specifically or if you work in sales, it's like just being able to tell a story is not just important to a consumer. How do you get employees to want to follow you if you can't articulate a vision, a story that gets people excited and believing in the mission? Like you're not going to be a very good leader either. Um because it's it's so important. So I don't know if hiring a a chief storyteller is like the equivalent of having like you know a language translator. Hey storyteller, tell everybody in the company why what I say, you know, matters. So,

but I think that, you know, great CEOs have been have been successful because they're great storytellers naturally and that goes far beyond just knowing how to tell a consumer story, but how to get investors excited, how to get employees excited. You got to be able to speak in a way that makes people believe.

Yeah.

You have an you have an advertising background. How do you work with ad agencies today? My another thing I was, you know, kind of sharing with the audience. My point of view is that more tech companies should work with traditional ad agencies to actually just like come up with like novel campaigns to try to cut through the noise. I think people get too focused on we just need a pretty website like that will solve our problem or we need a nice logo and it's like spending not enough time thinking about like really clear messaging and actually thinking in campaigns like I know companies that will spend $50 million next year on marketing and they're not thinking about they're not even thinking about like what campaign what campaigns are we going to do. They're just thinking about like what channels are we doing, how are we spending, who are our segments, and they're not thinking of this like kind of like throughine messaging. And so I think that that's an area that traditional ad agencies, not necessarily the biggest ones in the world, but the the sort of classic ad agency uh can actually really be really helpful on.

Yeah. I think another way to think about it is thinking about all different kinds of companies, tech or what have you, thinking about more of the full funnel because when you talk about campaign, you're kind of talking about top of funnel, like more general awareness around the brand and then you've got other marketing assets further down the funnel that are focused more on converting somebody into a customer. I think you have so much focus especially in the tech world on the lower funnel where you know hey I put this money in and then this much money comes out because of conversion but what happens is if you're not bringing in enough people at the top of funnel at the brand level you don't have enough people to convert then it starts getting really expensive to convert low-level performance people because you start running out of people and it just starts getting more expensive and I think like a great example is like AI. All the LLMs now are fairly comparable in what they can do. But still, Chat GPT is by far the biggest because it's the most notable brand. It's just [clears throat] the thing that people Oh, Chat GPT. It's easy to say. It's fun to say. I know that. I'm just going to use that one. Look at Google. How many other search engines tried to come about and just because of Google's brand and something that's emotional just made that the go-to place where nobody else could really come and and take it away. And to your point, a lot of that has to come from more brand marketing and not just like nuanced performance functional marketing.

How are you thinking about the new sparkling energy drink? I feel like there's there's a sort of like positive positioning. Hey, we're the only ones that have this particular benefit or there's the free of strategy where everyone else has this bad thing and we don't. Is that the framework you think about when you go to launch a new product? What was your thesis behind getting into energy?

I mean, we've been asked about when we were going into energy since probably like year one of Liquid Dap because people just think the brand is so much more like

it's got a lot of energy.

It does.

It's got a [laughter] lot of energy. Yeah. Um, and even it's still funny to this day, you know, in consumer research that we have, you know, we make flavored sparkling water, we make plain water, we make iced tea. Like 60% of the country has heard of liquid debt.

20% know that we make flavored sparkling water, which is our biggest actually category now.

Oh. But 19% of the country thinks we make an energy drink. So literally [laughter] our biggest category has as much awareness as a category we don't even make yet. Right.

That's crazy. Yeah.

Because the brand just sounds more like an energy drink than it sounds like a flavored sparkling water. So

totally

the reason we got into energy was because I think we finally found a way to stay to our brand ethos, which is to truly be a better for you brand. And we were able to find a way to do what we feel is a truly better for you energy drink product.

And now that the better for you segment of energy is the fastest growing within energy, the Celsiuses of the world, Alani, C4, these other brands that are low, zero sugar, low calorie, etc.

Um, it just became the right window for us to kind of offer something that really felt better for you within the category. And that's a combination of things with just we thought the category was getting a little insane with the caffeine. Like Celsius, Alani, all these brands are like 200 milligrams of caffeine. I think the

We started this show, by the way, John would have three Celsius in a single show.

It was insane. So bad. Now I do three Diet Cokes, which is like I think around 100 or 200 milligrams of caffeine. It's not too bad.

Yeah. I mean, most people don't think of Red Bull as a weak energy drink. It's the number one selling energy drink. Red Bull is 114 milligrams in a 12 oz can. So a Celsius is like pounding two Red Bulls at one time.

Yeah, it's crazy,

you know. So, and I don't think a lot of people realize that. And you know, the more we've talked to people, they kind of feel like, oh, I don't I stopped drinking, you know, Celsius or Lani because I don't know. I I started feeling a little like cracked out.

That's crazy. You know, I just thought there was like, you know, we we thought there was like a good opportunity to come in with something that was not weak, but this just was we're calling a sane level of energy in a category that I think is starting to go a little insane.

Do you have a tagline for it? Murder your sleep or something. [laughter]

Well, we actually have on the can uh it's like it's not really the tagline, but it's a small one. It says death to drowsy.

There we go. I knew it was going to be something good. Yeah.

What uh how what's the what's the go to market with energy? I I can imagine uh I I uh buddy of mine is like a pro skateboarder and like in skating there's like some fatigue around the the big energy drink brands and it feels like there's room uh like energy drinks have had a big place in the industry for a long time. So I can imagine there's like an athlete angle to this. there's kind of campaign uh broader campaign, but how are all the different ways you're planning to really bring it to market?

It's funny, it's actually not that at all because you know, Monster and Red Bull, both companies valued like upwards of 60 billion a piece.

They've got endless checkbooks to buy athlete. And that's the thing when you do sports marketing, anybody with a big enough checkbook can buy any athlete. That's how they make their money, right? So, if Liquid Death tries to go in and buy athletes competing with the checkbooks of Monster and Red Bull, we're never going to make enough of a dent to have it move the needle for us. So, for us, like what makes Liquid Death unique is we're arguably the funniest beverage brand in the world and we're better at being funny than anybody else. And big companies have a really hard time producing comedy because you go through that bureaucracy of focus groups and layers. It's hard to make something legit funny the way we can and no amount of money can fix that. So, we want to focus on being the only funny energy drink brand in a sea of extreme,

right?

I love that. I love that. Yeah, that's great. That's great. Different positioning. This is uh what a great guest for today. Uh thank you so much for hopping on the show. We got to jump to our next guest, but uh we'd love to have you back and go way deeper. This was

No one loves advertising more than me. Maybe you do. You're very elite in it. So, thank you. It's always great.

Super fun conversation. Let's do it. Let's do it again soon.

Let's do something again soon, please.

Congrats to the whole team on the launch.

Have a good one.

Appreciate it. Talk to you.

Bye.

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