James Beshara on building Magic Mind into the #1 health shot in natural retail with only 10 senior employees and no meetings

Magic Mind coming on down for a very refreshing, very different pace of interview hopefully.

Great to meet you, John.

Great to meet you.

We We actually We actually met I believe we met briefly in 2013.

No way.

Because we were using Crowd Tilt

at Soilent.

Oh, well then yes, of course. Oh, actually that was a hell of a meeting. We gave you all a huge like $800,000 check.

They they gave us a huge check, a physical check this big.

Yeah, we printed I literally like an hour before I was like do whatever we need to do to get one of those kind of you know just TV checks because y'all had one of the biggest crowdfunding campaigns of all time at that point.

Yeah. Yeah.

I was just chatting uh with AJ from our team about Rob.

He was the one that was the leader on project yesterday. Yeah. And uh yeah, that that was that was uh such a wild thing because we had applied to get on Kickstarter and at the time they said like no food products, nothing but like board games I guess or whatever they were doing at the time and you guys were like we'll help you out another YC company. You guys built it in like a weekend and uh it worked flawlessly. Also, I found out like you guys were basically like running digital ads for us and acting as our Facebook uh like like promotion engine crowdfunding platforms.

It was so helpful

relatively marketing groups.

We just didn't have any marketing skills or any real like just you know we were so busy with other things that if we hadn't if you guys hadn't done that we probably would have ended that campaign like way

lower. We took I still do take customer obsession to the extremes and yeah we saw it it was like hey this helps both sides we should we should lean into it the uh but yeah and for

for listeners for viewers Soilent was I mean that was so gamechanging the whole internet was talking about y'all for weeks super viral

and uh and it was um for Y cominator and by the way both of y'all and I'm I don't know if if someone's just tuning in you know three months ago and then they are like, "Hey, these are this is just the best hair on the internet and that's why I tune in. These guys are journeymen and tech and don't it's so cool to listen to y'all because it's not a journalist that doesn't know how to actually build or what goes into uh creating a a company, a startup or sees a trend from a journalistic point of view. you guys many in the arena through

the founder perspective which is why I'm bringing y'all a

s ton of magic mind for y'all let's do it round

and as soon as I saw as soon as I saw yeah we should do some shots as soon as I saw I think it was on a Sam Alman interview

that Jordy was doing and he was chugging a magic mind

oh yeah I was like

I'm going for a max we had a long weekend

let's let's magic mind max it today.

I love it. So, uh Yeah. Yeah. Explain explain what this is. What are we consuming here?

Yeah. The I'll get the the 10second uh commercial out of the way, but you just

This is peptides. Yeah, exactly. Peptides, and amphetamines, and steroids, uh allin-one, but you shake it, slam it back. Jordy's the king of the slams.

Delicious mental performance spot. Oh, it has some caffeine in there.

And it does. So, Max is unique

some of that. And some of

Max is unique in that it is the world's first time release energy energy shot. So the uh you couldn't do time release in liquid form until about 2 years ago and we were the first to put it in a shot.

What did you learn from building software that you applied to CPG?

Oh my god. I think like right away my experience as a customer has been this like iterative approach basically versioning out like the product when you released it versus two years later was like night and day in my experience like just a much better product which is something that unfortunately I think a lot of CPG brands they kind of like make their product they ship it they get it into as many stores as they can they sell as much and maybe they don't even iterate that much on the product which puts you at which is just like extremely high risk from from my view, but that's sort of the stat.

It is it's it's a really high stakes experiment when you start shipping it to to stores and you get into a thousand doors and then you realize, hey, this is kind of a B+ product. We could make it better. And uh and yeah, we've chatted about this over the years basically since uh the beginning of Magic Mind of take t taking excuse me everything that that I could from Silicon Valley and my background was in building software into building a dream company which meant the first three and a half four years was just improving probably 150 iterations of making the product better better better before we went into stores because when you are DTOC and it is it is every time I say this out loud I can't believe um it's the case but as the first DTOC energy shot like it was I couldn't believe no one had done it before but one of the huge affordances is you can have version one version 1.1 version 1.5 and each time that we made the product better we saw the retention curve go up up and then we're like all right this thing's ready for retail and now as of last month it's the number one health shot in the country um in the natural channel

that's wild yeah I remember when I when I first tried it I was like okay I like what this gives me, but it hurt my stomach. And then you were like, "Try it again." I tried it again. Fixed it. And so I think that uh

Oh, God bless the early testers there. It was it was rough early on. Um and and it was like, "Hey, I'll I'll eat nails if it'll help my productivity, focus, and flow." But uh but it turns out most people wouldn't. And yeah, it was it actually Bis Stone, huge shout out to Bis Stone, the co-founder of Twitter. He's the one that put us in touch with

Yeah. Oh, really? No way. What college did you all go to?

North Eastern.

Oh, no way. Yeah. brilliant uh mind investor. He's the one who put us in touch with these oncology manufacturers. This oncology manufacturing company, this is the most overressearched beverage on the planet. So, we worked with them and utilize this technology to make everything so small that you can make it taste better than any of these ingredients have ever tasted before. So, my favorite ingredients called bakcopa. Bakopa maner decreases impulsivity by up to 50%. Which is amazing for focus if you want to be risk.

That's right. Yeah. Exactly. If you want it on the track, I mean, performance takes many different types.

Your advertisers don't want it for all the logos that are happening right all over here.

I I was I was skiing. I saw a guy do a backflip on skis with no helmet.

That's impulsivity in a beautiful way. It was not on magic.

He needs a magic mind to put on the helmet cuz that was actually extremely dangerous. Do not recommend doing a back flick up on skis with no helmet.

That's an that's a a non-magic mind for many people. Many people when you don't want to jump into social media or the 50 texts on your phone, you want

focus. Exactly. Yeah. You want to be less important,

but it tastes terrible until we found this technology.

So you took you took the iterative approach. The R&D actually brought this kind of like hardcore R&D to a category that many people would have just again shipped a project and been like it's good for me, let's run it.

Uh what did you not take?

What did you not take? I feel like that's great. So much of the way that you run the company is is incredibly uh unique and kind of at odds with maybe how you built your last company. uh there are a handful of things and this is one of my favorite things to talk about is just how we build the company um and magic mind and it's you know that that there's that uh line in literature of once you know the rules and you can break the rules and so I think my 20s of three different startups and a lot of it just failure to failure to failure but learning how other companies did it or the the playbook would be done and then recognizing and getting to a place and honestly just being able to fund it with my own capital I was like I'm going to do this my own way.

Yeah.

So, one of the things is we don't have any junior employees.

Oh, interesting.

Um, it's about 10 senior employees.

Everybody's senior. We have plenty of great contractor. There's plenty of great agencies that we work with. But because of that, one of the things that we do is no meetings.

Um, it is all asynchronous. Every once a month we have a team meeting and people can if you need it u you need to go to a meeting go for it. But the default is asynchronous. Love we love Loom. Uh, emails, texts instead of Slack. We don't I hate slack. Um a uh voice notes but

the senior aspect of the team members no junior team members means that the investment is very expensive per employee

but man do we it's like a hot knife through butter whenever there's a challenge you have senior people through and through on every aspect of the business. And I think with um my earlier startups and with with most startups, a lot of times you're hiring people that are doing something for the first time and say, "Hey, we need you to I know you've been a great engineer. We need you to PM as well for this thing." Because there's three or four of us. With Magic Mind, it was like, "No, I want someone that's done this two, three times before and is a veteran that knows how to do this."

It's super key in in uh retail role. Exactly. because like it just it's so hard to get on the phone with a buyer and actually build the trust if you haven't already sold them the last oh you were at the last company you were the one that brought in Vitin water to Costco so the Costco buyer loves you because you brought him a banger product you're going to try the next thing much harder to just take a cold call and break through

and you know I'm sure you know this with soil in fact what are some of the things that you remember from the retail the first stages of the retail role you would never

nightmare tell us more it's been a lot better with Lucy but Uh yeah, very very driven by uh trade shows, relationships, just being in some massive conference room, getting to know people over years and years and years, building trust. And then the only thing that can really accelerate it is that example of like bringing in someone who has a relationship on the other side where they delivered the goods and then they're putting their their reputation at stake, saying, "The last time I was with a smaller company, you took a risk on me. You were successful. We both made money because this product, you bought a bunch of it. You took your limited shelf space and you gave it to my previous company and it moved and you made money and you looked good. You got that promotion. Now you're VP. Uh do that. Take that risk again with this next thing. That's always been the best.

Take the risk and then also do it in the right sequential way to where you don't I think one of the things that one of the biggest cardinal sins in retail and I didn't realize this coming from software. You actually don't want to move fast and break things. If you get into, let's say you get uh uh what seems like a dream partner in Walmart.

If you don't move,

y

if the product doesn't move, and I didn't realize this until getting into retail, and my co-founder William is a genius on this stuff of just avoiding what makes you good. I said, we say this internally a lot, what makes you good is what you do. What makes you great is what you don't do. One of the things that the trap that is a doom loop in retail is you expand too fast. Let's say you get Walmart. You're like, hell yeah, we got Walmart. This is the 800lb gorilla. And then it doesn't move.

And then you have to start putting in.

It's not like Facebook. You launch an ad on Facebook, it doesn't work. You just wind it down.

No. Now it's like Walmart's like, "Hey, by the way, if you want to stay in here and you got one bite of the apple over the next 90 days, you've got to spend 400k in uh in spend and promotional spend." You're like, "400? I didn't we didn't expect we had 270 grand in the bank. You all aren't going to pay us for six months because of the payment terms you negotiated." and they're like, "Well, then we're going to have to take you off the shelves." So, then you go and raise some last last ditch effort uh round that goes towards you don't get quite to the 400, you only get like 300 and then it starts this slow doom loop and then you can't take it off the shelves because the worst graph in the world isn't flat. It's one that goes up and then down. Your revenue is flatlining or going down. Then you can't raise any investment. And I would say conservatively I'd say three out of four CPG brands get into that trap because they expand too fast.

Everyone starts DDC. The retail transition is the make orb break moment for like every new brand basically in my opinion. And the hardest part is always for me uh rethinking the CAC to LTV math. Like it's pretty easy on e-commerce to think about payback period. Maybe you're not doing rorowaz. Maybe you're doing LTV to CAC, but you're still looking at like a one-year payback. And when you get into retail, you're looking at much bigger tickets. It's not a hundred bucks on an ad. It's $100,000 or a million dollars of commitment with some chain. And then you might not see ROI on that because your margins are lower. You might not see ROI on that.

You're extracted from the customer. So, you don't really know what are they responding to, what messaging are they responding to. There's a this goes back to the two obsessions that uh that I have are on the product.

Yep.

Like everything in the product, every ingredient third party tested, everything's clinically backed the exact dosages on the product and then and that customer experience. And then the other obsession is on the communication.

And one of the things that you can do in DTOC that you can't do in retail is you can iterate like crazy on the exact every word on here.

Yeah.

Has been tested with course

millions of eyeballs. you go into retail without that that layer or you go in too early and it's a

some people have it though and they can just they can just like oneshot everything and then just go straight to retail but it is very rare and usually they have a retail background. Yes, they have a retail background and and one of the things that

survivorship bias they got really lucky that started some company where like their whole shtick was like the packaging is going to be gold and it's just going to like jump off the shelf at you and like it did and they sold the company for like a couple hundred million.

Oh, David's kind of doing that now. But I was think David's a perfect example where it's like every move is from

What do you think about pricing? I always think of uh was it Koya that was like $12 a bottle or something and they sold for great outcome and it just flew off the shelves and it was almost like a Vlin good like a Lamborghini or a or a Rolex or something where the higher the price people saw the higher price and they immediately thought like this is a better product so I'll buy it and that actually drove sales as opposed to duking it out for oh well we're the same price as the Red Bull so people will comp us to that versus like no this the the the the price tag is marketing. What do you think about that?

That is it's there's so uh there's so much discussion around that. I'm an investor in a handful of of CBG companies that you can get caught into uh a lot of just like triangulation and you end up with it's like you know uh you homeland style like triangulation with the red string and we'll do this in these stores and this and these stores. Yeah,

I will say Air1 sometimes gets into like $8 shots of Magic Mine we're not fans of, but uh it is the number one shot there. So, it is working. So, maybe it's a uh it's it could be uh maybe they've got a secret to it. But there is a um a really simple framework that we use which is um I wanted it to be the best hell shot in the world.

Yeah. So in terms of everything from the vitamins for D and C and all the B complex for uh immunity because some nothing will sap your productivity like getting sick all the way to the bakcopa uh citicoline. One of the things that caffeine does is it's a vaso constrictor. So it will restrict the blood flow to the brain which is terrible for lateral thinking and terrible for switching contexts. It's not great for a conversation when you're like oh I really want to absorb that new information but it is great for alertness. But if you add in something like uh city choline specifically this this uh supplier we have cognizant which took it was like a two-year weight that's cognizant it's amazing so it's in mastermind and cognizant improves blood flow to the brain so that improves the the academic term for creativity is lateral thinking improves lateral thinking all of these things are

you stack them up and they're pretty expensive so I was like I just don't care what the price is to be the best in the world and it's exactly what I had been taking for seven years before even thinking of making into a product. Then we work backwards and we're like, "All right, it's got to be this price." Uh, in the beginning $5.99. Now it's down to about 3.99 because of scale. We our batches are about 2 million. Like uh we're producing about 2 million bottles a month. So now with scale, you can get the price way down. But it was man, John, it was a freaking it was a pushing a boulder uphill to get people to be comfortable with that price point in the beginning. But I was like, nope, that's what the price is going to be.

What's your relationship like with the internet? Personally, dude, we do get out daily. Um,

no, no, I just like I'm No, specifically like walk like walk me through the last 3 days of your internet usage.

Oh, great question.

Because like I want to I'm trying to gauge how online you are because I feel like the the internet is just a a stress machine. It feels like it works.

This is my device.

Oh, interesting.

You don't carry a phone?

Yeah. So, this is a a Monday. I have it right now because of the GPS to get here and um and just uh being, you know, we Jordy and I live a few blocks from each other and uh and so I have the phone, but like literally I didn't charge it last night. It's 10% going to die. Rarely use

it is. Yeah. Okay.

And I rarely use this thing. Um the my relationship with the internet is uh

use it when necessary

and and then don't use it any other time of the day or week. On the weekend specifically, we have three little girls and I go watch only and pay the extra whatever like uh 14 bucks for it to have cell service. So that it's basically a dumb phone

and interesting.

And I've got text and and I've got uh phone calls on it, but outside of that it is a dumb phone.

You can't scroll. I can't scroll. And it's a um I've been I'll create apps like with Replet to where I like created an app that brings up quotes of uh the Bhagavagita and stuff like that's the only thing when I sit down on the toilet I might read a little bit of the Bhagavita on my walk and then I'm like ready to rock but I'm not where I was 10 years ago where it's like every

tiny little moment let me jump into the amusement park that is my phone and then get lost for 45 minutes and it's a uh God screen time is Yeah, I know.

I will say I I listen to you without meetings. I can deliberately and I love uh I will work from my iPad. Try to do 99% of my work from my iPad. Shout out to Replet there because I got a great iPad app and and there I will listen to y'all like this morning while I'm working out listening to y'all either on my, you know, the podcast app or on uh or on uh YouTube. But man, like it's like the iPad is I'm on going into the offensive. I'm gonna actually create something.

The watch is like I'm gonna be on the defensive if my wife needs me. Um otherwise I'm with the kids. But this is this somewhere in between

where I'm like I can't really create with this phone, but man do I get sucked into rabbit holes.

Let's talk about

Yeah. and you and you and you get into a situation where you know I've got 30 tabs open on my device which is just like pure chaos. Right. Right. And and these devices is sort of like are just due to their nature don't work very well to kind of multitask.

The two things that I talk about so often with founders as uh an investor in about 100 uh startups and I talk to them all the time again it's what makes you good is what you do. What makes you great is what you don't do. So deliberately for us really mitigating meetings or I end up telling about the devices that I love and the number one is the Apple Watch as a as a dumb phone. When you're at the gym, don't bring you can obviously most people do bring their phones but you might get sucked into an email. Certainly with kids my goal with them is by the time they're 10 spend 20,000 hours with them. Um and and that was uh scrolling um when I was I think I was listening to uh a podcast um on my watch actually. So no scrolling. And this this guest said that that was their goal. This is like a year and a half ago. I don't remember the guest. Don't even remember anything about the other the other points that they're making in the conversation, but that stuck with me. 20,000 hours before their 10 because and his logic was so sound. He said uh he could make $50 trillion and never get that decade back

with uh the little ones. And so I was like, man, I want to hit 20,000 hours with my kids. And that was basically the moment where I was like, the weekends, no phone.

Yeah.

And I'm just going to be with them in those hours. I'm going to be completely with them and not sucked in because I just know myself too well.

I was saying no phone, just Apple Vision Pro mostly.

Nobody and and I used I vibe coded auto scroll so I don't scroll. It just scrolls.

Yeah.

And it has all the Tik Tok and the Instagram reels and the X moderating the situation. Dude, and you're virtually there with you. So,

Exactly. Exactly. I agree. I

How is your approach to angel investing evolved? Because I feel like angel investing can start out as like a fun hobby, a way to blow cash, but then you get caught up in this FOMO and and there you're on other people's timelines like you're kind of fighting for allocation at different points. How how what's your approach?

It's it used to be uh more is better and it was and it's true. Um, so much of the game of investing is you go wide because the asymmetric returns one investor.

I don't know who the next Gusto is.

Exactly. And that was

Angel and Gusto.

I was Yeah, that was my first angel check. They were in our batch cominator. I know. It was nuts.

That's amazing. I'll tell you about

Gusto. Everybody,

the unified platform for payroll benefits and HR built to evolve with modern small and mediumsiz businesses. Go sign up.

Wow. That has never happened before where I've been able to mention an angel investment and then

get a live ad read.

Live ad read. Uh

what's your website?

Mine?

Yeah.

JJBbasher.com.

Yeah. But the but the company magic mine.

Oh, magicmindine.com.

Is that on Shopify?

It is.

That's amazing. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.

Continue. Continue.

Shopify is great. And as we get into the angel investing conversation, I bet a lot of ads will pop up because it is it has been I've been fortunate enough to to invest in a handful of great companies. Um, but I went wide honestly. Gusto did so well and uh and then a few others did really well. Mercury did really well and um and then I'll tell you my biggest miss.

What's that?

Open AI. And I'll tell you the story. It is f it is.

Can I curse on you? Can I curse on you? total total effing uh miss and um and it was so brutal because so I me and

it's all good there'll be another open AI you'll have another show

it's way different than missing just like a unicorn that comes up like you can find one IC you're good

it's it's I did the uh the math the other day it's basically missing 20 Googles

Google went public at a $20 billion market cap so it's missing 20 Googles now with their latest funding it straight up missing. It is missing 30 Google 35 40 Googles. So, uh, which is cool. That's all right. Um, I never calculated the amount. That's why you need the magic mind to clear your mind, load stress. I need to scroll

and it's there's so many things that I will in life where I'm like like the no meetings where I'm like I know I'm leaving money on the table. I we couldn't I couldn't imagine uh any other life any other life. I I feel very fortunate. Um, but I'll tell you the story. So,

I've only shared this once. Um, but it it definitely replays in my head pretty often. So, Sam and I, Sam Alman and I, we were advising and building out YC's YC research for universal basic income.

And this was in 2017.

Yeah.

So, every month we would meet in a conference room.

Yeah.

This dingy little office.

Yeah.

And the dingy little office, the conference room was where they were doing open AI research. Yeah.

So, every month and I was a full-time we had sold my last company to Airbnb and I was a full-time angel investor.

Yeah.

Full-time angel investor

waking up every day

working

thinking about Yeah. what are the next gamechanging company? And I'm like, yeah, Sam and the team, they're trying to do this AI stuff and it's research and and uh

that can be a problem when you're too close to to an operation. Whereas if you just get a pitch once, you're like, "Oh, this makes so much sense." But when you're getting all the information at all times, and they're like, "Yeah, we don't really know what this thing's going to be, and we ran into this issue."

Has that friends it sounds terrible. I ended up creating a rule of like friend starts a company like a real friend starts a company just invest

uh even no matter if you know like oh they've got this issue with how they operate or they've got this blind spot or you know all the problems that they're facing uh you just if you're too close to it you can just overthink it

dude I told Ahmad at Mercury when he was like because we had built financial technology and he is grad we're at the Airbnb cafeteria and he was and he told me the idea for Mercury and wanting to start uh a bank for startup And I was like, "Don't do it, dude." And I spent 45 minutes trying to convince him not to do it. And and then like two days later, he was like, "I appreciate that." Because we kept texting about, I appreciate the input, but I'm going to do it. And I was like, "Well, okay, I'll invest. There you go.

This is not a good idea." And good lord, was I a total idiot. But yeah, the opening, I was sitting every month saying no again and again and again. And even with the whispers of, "Yeah, I think we're going to have to spin it out, make it a a forprofit and uh and would you want to invest?" I was like, "AI." And it's, I'll be honest, smart investors got in my head that were like, "AI is so far off that it's like that's like a 2035 thing. We're so far off."

Um, and I was a total idiot.

Well, 40 Googles later, I still think about

later. But plenty of other opportunities, plenty of other investments, plenty of other products. Congrats on all the progress.

It was good. It was good to be humbled a little bit. You were on too much of a of a hot streak. It's good to be like, "Okay, I got I got to I got to lock in."

That is the benefit of building. I think for anybody listening, I think it's what makes you guys so good at what you do. It's what I think makes any creator really good at what they do is there are very few things. It's like going to the gym. You don't go to the gym for you think you're going there for the gains, but man, what you really get is the ego dissolution. It is so

It's so humbling. Yeah.

And anytime you put yourself out there, you think you're doing it for the gains, but you fast forward 10 years later and

you're the journey.

Yeah. It's the journey. It's the the ego just the humility that comes with it that only comes with doing it because man, if you're just

number two or number 2,000 at a big company,

you're just living in your head like I would have done it this way, I would have done it that way. But man, it's uh it is by putting yourself out there, it's quite um it grows your awareness in a pretty I'd say invaluable way.

Well, it's a great journey.

Well said. Thank you again for the oversized check and thank you for the oversized delivery of magic.

Thank you all for doing what you do in such a unique way. We appreciate you

for powering the show. We'll talk to you soon for us.

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