Kevin is the founder of immi, a company that is making healthy nutritious instant ramen. Prior to this, Kevin was a venture capitalist at Pear and a product manager at AltSchool + Kabam. In this episode, Kevin talks about his journey to founding immi. Some highlights being:
- Gaming and learning how to meet strangers online
- Shifting his focus from investment banking and becoming a PM at Kabam
- Moving to the world of venture capital
- How he met his cofounder serendipitously at a noodle shop
- Building a CPG company with no experience during COVID and challenges along the way
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Check us out on the web at http://rollercoaster.life/ or get in touch with us on Twitter @rollerpod or emailing me at [email protected]
Music: Nowhere land & Wholesome by Kevin MacLeod.
Nikunj: [00:01:09] Welcome to the podcast, Kevin. How are you doing today?
Kevin Lee: [00:01:12] Doing well. Thanks so much for asking and thanks for having me on.
Nikunj: [00:01:15] To start with, I'd love to learn a bit about your childhood , where you grew up, who's in your family and anything you remember from your early years.
Kevin Lee: [00:01:24] That's a very interesting question. So I was born in California and I've actually been in Northern California for most of my life. Born in a place called San Jose, south of here to, to Taiwanese parents who immigrated here from Taiwan. Some Asian families do something where, for a portion of your childhood, you're left with your grandparents back in Taiwan.
So for me, my parents were just trying to make their way in America. They didn't have any money, no social capital, and it's very difficult to raise a child while you're just trying to, go to college or even make money here. So I spent a lot of time actually with my grandparents.
In Taiwan , they are produce farmers and they grow something called a Rose Apple. So I literally used to just run around in the fields with them picking stemming packaging, this fruit. In America just yeah, grew up at very standard. This was very standard childhood. I was very lucky. I would say just two loving parents.
I think that's, all you can really ask for in a family. And was lucky to have a great education and yeah, very happy about it.
Nikunj: [00:02:26] What were some of your early passions growing up?
Kevin Lee: [00:02:30] I think the funny thing is I'm like a Tob i Lutke, the Shopify CEO in that I'm really big on gaming as just something I encourage for everyone. It was harder as a child for me to make friends because I was his only child. I didn't have any siblings. So from a social perspective, it was just like at school, you go and figure it out. And , online games were away for me to have a shared interest with people very quickly. And that was a way where I would just make friends with people very easily. And guess I would consider it a passion because I did honestly play a lot of games.
And I think also what was really helpful for me is I learned to just make friends with strangers on the internet, which sounds creepy, you're playing this game together and when you play repeatedly, you just form these bonds with these people and you never meet them in person, but you're chatting with them, not just about the game, but about like things in your life.
And I think that's really helped me a lot, even as an adult where now I would say. More than 50% of my friends are internet friends. Many of whom I actually still haven't met in person yet. And I think especially in, current pandemic times, it's interesting how, we're all stuck at home and we have to figure out how to maintain a social life online.
And so I think my gaming childhood has served me very well during times like this to continue feeling social.
Nikunj: [00:03:51] What are some of your favorite games that you play even today?
Kevin Lee: [00:03:55] I don't play any games anymore. I think it's, it is harder to maintain that habit. I will sometimes watch games. I used to play every possible genre, like from like first person shooters to real-time strategy games. Like most people I played like the StarCraft Warcraft three, I played Dota Counter-Strike and I think ultimately a lot of these realtime strategy games are a combination.
It's like time management. It's, you have a finite amount of time and you really have to figure out how to allocate that time carefully. And you have, and then what you realize is you also have limited resources and it's about gathering resources and then figuring out how to maximize those resources.
And that's strangely, there's just a lot of these parallels that have now I've come to realize, even with the current company where I'm like, Oh my God, this reminds me exactly of that real-time strategy. I used to game, I used to play as a child. I have to figure out a, gathering your resources and work with my co-founder to maximize those resources and then allocate that, those resources accordingly to keep growing.
And it's pretty fascinating.
Nikunj: [00:04:56] I remember I used to skip school sometimes to play Counter-Strike and Age of empires and Age of Empires, especially, it reminds me of building and finding resources and putting them in the right way. So I definitely can relate a lot. So, you end up finishing school and then you decided to go to Berkeley for business.
Did you know what you wanted to do while you were in college or as you were entering college?
Kevin Lee: [00:05:19] Yeah in high school, I actually originally wanted to be a pediatrician. I love like kids and working with kids and just generally like youth education. I'm very passionate about. I am not the best at science. I will admit. I know that's probably a negative story. I tell myself what I've come to realize as an adult is that I think I'm more of a diffused networked thinker versus a linear thinker.
And I think that serves me well in certain fields, like business. Where I can apply more creative thinking, whereas in more science-related fields. I do think it comes down to a lot of like rote memorization to learn the fundamentals and at least the foundations. And I always really struggled with that.
So in high school, I had this pivotal moment, I think, in my late junior year where I realized actually I'm like super interested in all these business books. My dad used to make me read like the rich dad, poor dad, just to start learning about personal finance. And I really enjoyed it. And I would go to Barnes and Nobles or borders back when they still existed and just sit and go down the business section and read all these books.
I was lucky to realize early on that was an interest of mine. So it was an easy transition to go into Berkeley, wanting to focus on that as a major. In addition to that is I was also lucky at Berkeley to live with a diverse group of people.
So my college roommates one of them was an industrial engineering major. The other one was a biological science major. And so it wasn't just like all business. And I got exposure to different fields. And so my industrial engineering major roommate really showed me the beauty of that field, that it was called industrial engineering operations research at Berkeley.
And I ended up doing this certificate in industrial engineering, which basically it was like a minor And why I loved it is because one of the first books you get is a book called the goal. And it's just a book that uses a, it's a fiction book that talks about a guy who has to run.
He like takes over this factory and he has to figure out how to make it profitable or else, he's, I think he either he gets fired or like the company goes out of business and he has to rely on this. He learns from this mentor, who is this industrial engineering guy who teaches him about how to find the bottlenecks in the organization, how to optimize everything.
It was really fascinating for me. It's added to my kind of business foundation where I'm all about optimizing processes. Everything's a linear optimization problem. In my co-founder role, where I took on more of the marketing responsibilities, I think it's helped me a lot with structuring the way I think about marketing and growth.
Nikunj: [00:07:57] So you decided to leave college to become an ibanker at Merrill Lynch, but then quickly transitioned to the world of tech and joined your early interests gaming as a product manager. Can you walk us through how you made that transition? Because I know from personal experience, there's a lot of people who want to be a PM and break into tech, but that's historically been really hard.
Kevin Lee: [00:08:20] As a business major at Berkeley, back then tech wasn't as it wasn't the thing. And so really in the business school, you were trained effectively to move into either accounting consulting or banking. I moved into a tech banking role at Merrill Lynch and actually down in Palo Alto.
So it was right next to Stanford and I knew I loved tech and I thought that tech banking was exposure to tech because I wasn't like a computer science major or anything. What I found myself doing though, was that on the weekends where I wasn't in the office I would always walk to the Stanford campus and I would just knock on the doors of all the labs, especially like the education tech labs. And I would just tell them, Hey, I'm like a visiting students and is it okay if I like walk around and tour? And the people were super friendly and they used to let me in and I think over enough of a time period where I found myself continuously doing that, I realized that I just wanted to have more experience with hands-on building product.
And luckily I was also living with a high school friend who started as an associate product manager at Google. And so every day I would go home and I would just be super curious and ask him about what his job entailed and. I think all that exposure, reading answers on Quora about product management really led me to then want to work as a product manager.
And I interviewed for a bunch of roles. The first role I actually interviewed for was actually the Bill and Melinda Gates foundation on their education team. And I got pretty far in the process, but then last minute they were like, Hey, you don't have enough operating experience. And at the time the only company that gave me an offer was cabana mobile gaming company.
And it was good too, because I loved gaming. And so it felt like a natural fit that would also teach me PM skills. And it was also a very analytical role. And because I came more from like the finance background originally, it was an easier transition. So that's how my transition went into Kabam.
Nikunj: [00:10:19] Do you remember some of your hardest challenges that you faced working in product and how you were able to overcome them?
Kevin Lee: [00:10:27] I would say Kabam was a little bit different where product managers, there were given P and L responsibility very early on. Each PM is typically responsible for one game in the portfolio. And that means you're responsible for everything from engineering, design and the financials.
And you have to do the reporting up to management. I was very lucky in that sense, because when you're handed that level of responsibility, you really feel skin in the game very quickly. Especially when you have to report on PNL basically every single week. And I think a challenge for me then one was that because it was a very analytical role and you are shipping features very quickly.
I think what I didn't properly learn was the other facet of product management, which is user research. In gaming, because you have millions of data points, you almost treat the data as your user research, whereas in other roles where you don't have that you're either going off gut intuition, or you're actually speaking to the few users that you do have to figure out what to build next.
And I think. Perhaps it wasn't challenging for me at Kabam, but definitely when I moved from Kabam to old school, which was an education tech startup, it was just the opposite end of the spectrum, where we had, like 200 students max, and those were our users and we had, the 20 or so teachers and those are also users.
And then we had parents of those students. So we had these three user groups and. I would, I will admit it was very difficult for me to transition into that because I'm used to writing massive SQL queries, digging through the analysis, using that, to create a roadmap. And I really struggled at old school to conduct the user research, understand how to process that, understand when someone is saying something, but doing something else really just a fundamental piece of product management.
It took me a lot of time to adapt to that.
Nikunj: [00:12:25] One of the biggest pieces of advice, I give most aspiring PM just to have a lot of empathy. I feel most PMs are very analytical think more, a lot about the business, but not enough about the customer. And I learned that through a lot of my career as well, and can relate quite a bit.
You spend a few years, working in product and then you decided to make the switch to venture capital. How did you end up at funders club and then pear?
Kevin Lee: [00:12:53] I think the realization for me when I was at old school was I don't think I'm a great product manager for a a few reasons. And this is what I'll say is that I think as a product manager, you have to be extremely empathetic, but you also have to know when to detach your emotions from the feedback that you're hearing from your users.
It's very easy as a PM to hear a really loud user who you then internalize as, Oh, this is the problem. And I have to go solve that problem. It's much harder to detach yourself and say, Oh, hey, maybe that's an edge case. Maybe this is not what they're really asking. It's actually this. And we have to figure out how to build this.
And I think because I've been raised to be very service driven. I guess it's a very cultural thing. I found myself just being a little bit too emotional when it came to that user research and user feedback. There were a few mentors who guided me towards the venture capital world because in the venture capital world, you're almost like a music manager in a way, like you're working with these individuals they're founders and.
They are your partners and you have to do everything in your power to help them succeed. So they come to you with a problem that is your world. You have to figure out how to solve that problem. And you really are in their service at the end of the day. And I think my skillsets and my personality type, just lended itself a little bit better to that type of role where I just was really excited to do that to be in service of these founders, to champion them, to help them win.
Because you're believing in this people when no one else is believing in them. There's that funny video from years ago of the person dancing alone on a hill and then like over time, like someone else joins them. But like in the beginning, they're just the crazy person. And that's what founders are in a way.
And it's probably employees who are like the second person and then it's like the third person is the venture person coming to join them.
Nikunj: [00:14:46] After being in venture for two years, you decided to start Immi. Did you always have the startup itch or were you tired of being in venture and wanted to get back into building . What sparked the the desire to go start your own company?
Kevin Lee: [00:15:00] Yeah, I think there were a few reasons. So venture, I think my most recent role in venture was at pear ventures. It was started by two co-founders named Pejman and Mar and it's a generalist tech fund that, in their fund two started doing food and beverage investing.
And when I joined that team, I think it was also around that time period as I was getting a little bit older, I was in my mid to late twenties by then. I think I will admit in my earlier years of my twenties, I was very mind driven. I used to think of my mind as a software. My body is a hardware and it was like, no, I'd rather invest in my mind.
That's a software that can scale. And I think what happened was, as I got older, my body just started breaking down. It's not like it used to be, so my knees were completely worn down. Like when I ran this relay called the Ragnar relay, and I basically damaged my knees so badly that I couldn't run on concrete for the next three years.
I started getting carpal tunnel in my hands because I was typing so much. And I frankly just wasn't exercising that much and I wasn't taking care of my health. And so I think there was this progression where as I was entering my venture years, my body started breaking down. My health started breaking down and then my own family as well.
My grand mother is pre-diabetic and my parents told me that she got a stroke because of hypertension. And now she's half paralyzed and both my parents have taken medication for high blood pressure for many years. They've always been worried about it and I could be a high risk too for high blood pressure.
And so there was this culmination of all these things happening, where I started to just pay more attention to health and wellness, and then moving into what I was saying before at pear ventures. So I come from a food family and I never paid much attention to the food industry before, because I love eating food.
And I've always even in college I would study El Builli, which is this famous chef Ferran, Adria who like really invented a lot of like molecular gastronomy, as much as he hates that term. And I used to love it just for the pure, visuals. It was beautiful. It was like art to me.
And so I liked the concepts, but I didn't think about it as working in the industry. But at pear, Pejman used to start introducing me as, Hey, this is Kevin. He leads our food and beverage investing and he was super kind to do that because he knew I had an interest in it. And it was great because also, a couple of years back the industry was starting to shift where people now in the US care a lot about, better for you, food options. You compare a whole foods to a Safeway, every single product in the categories, every single aisle is completely different. And so this culmination where food as medicine.
My food interests, my family history, my body, and my family's health, like breaking down that kind of just led me to start thinking, wow, this is a really interesting space. And fortunately, a friend of mine, Kevin Chanthasiriphan, or we call them K Chan and call me Kaylee because we both are named Kevin.
We were both coworkers at Kabam around nine years ago, and he's always been super hardcore about health and nutrition. He's always done jujitsu. He studies health, like he's really obsessed about it. I think one of his family members has cancer and he's always been like deathly afraid of getting cancer.
He also comes from a food family. So his grandmother ran a pretty popular egg noodle stand in Thailand, selling noodles and his dad when he immigrated to the U S started running a Tyra Thai supermarket in LA, and then eventually opened a Thai restaurant concept on cloud kitchens actually down in LA.
And so both of us were like, hold on. Like we have interests in food and beverage, like health and wellness. Why don't we think about starting a food and beverage brand together
Nikunj: [00:18:40] When you guys met, did you have a concept in mind? Tell me more about the early days. What did you guys stumble through? How did the concept of what is now Immi came about?
Kevin Lee: [00:18:51] So Kchen and I, when we met around nine years ago, we were in the same PM org, but we didn't know each other. And in fact, I think, I even remember, he told me once he was like, yeah, I didn't even like you that much because you were this like young Klee, you came in, you took my name.
Like I used to be Kevin. Now there's another Kevin. And we didn't talk to each other at all, but one time we were both sent to Vancouver to work on the same project. And we both just showed up in the morning at the exact same noodle, restaurant in some strip mall. And we were like, hold on.
What's like, why are you here? This is so random. And we just bonded over noodles and we just became really good friends after that. So fast forward, nine years later when we got together and we started talking, it actually wasn't really that hard. Like people always say, did you do category analysis?
Like how much industry research did you do? And we were like, no, we actually just said, Hey we both love noodles. What's our biggest problem with noodles. They're super heavy. It feels like super carby. There's not really any like nutrition in them. And originally our plan was actually to make a healthier noodle, like a low carb high protein noodle, but the more we iterated on that concept, we realized that a noodle by itself is a strange product to work on.
In the U S. Pasta is the most popular category when it comes to noodles, but an Asian noodle, not so much, like it usually gets bucketed in a random aisle and it wasn't that hard to then think instant ramen. That's interesting. We both grew up eating this product. It's one of the world's most ubiquitous foods.
As we learned later, it is a $42 billion global market. It's pretty massive. And a lot of that's driven by Asian countries where it's effectively a staple food where people eat the stuff for breakfast, lunch, and dinner. It's not even like a random restaurant meal or ramen restaurant meal. It's literally like you eat it every single meal of the day.
When we learned that we were like, Oh it's pretty much the same concept albeit you have to add the seasoning packet, which generally is the worst thing of all, because it's full of sodium and preservatives and food coloring. And that's how our journey started. So we started to then think about how do we make a healthier version of instant ramen?
And what we really care about is low carb because our families, they're, pre-diabetic. I think just over being overweight, being diabetic, those are two of the most prevalent issues across just most of America and the rest of the world. And so we knew low-carb had to be a core value prop.
And then we slowly started thinking about ancillary benefits, like high protein, higher fiber being a hundred percent plant-based. We aren't vegetarians. We do eat quite a bit of vegetables in our diet. But we realized that by making it a hundred percent plant-based we can make it more accessible to more people and hit different eater groups.
And so that's how the journey began.
Nikunj: [00:21:44] But both of you were like PMs, you've looked at it from an analytical perspective. Did you guys even ever make noodles yourself before starting this?
Kevin Lee: [00:21:53] No, we did not. That's the funniest thing is people they always ask us like, Hey, are you chefs? Did you cook a lot on the weekends? And not at all is the truth, like we, we like cooking. We enjoy it. We enjoy eating I would say we have good taste. I was reading the new David Chang memoir the Momofuku guy and he talks about Anthony Bordain rest in peace. And he says, Anthony Bordain never became a famous chef per se. I think, he started out as a line cook, but he always had great taste and I think he was able to convey that to other people.
And that's why chefs loved him and loved hanging out with him. And I think me and kchen, we hope that we have great taste. And I think the parallel in the tech industry might be like vision almost. You have a vision of what the product and the company can be, but it's going to take time to get there.
But at least you have that vision because if you don't, then you're always going to hit the ceiling. And I think for me and Kchen, we have a vision of what great instant ramen or great ramen should taste like. And we know that our skillsets are not quite there yet, but we were willing to give it a shot and give it a try to iterate until we get there.
We're very honest with people. We said in the early days it was us too watching YouTube videos. We would just watch people making noodles. You had, we would look at videos of factories and watch how they made noodles. We read research reports. My co-founder really is the product genius here because he would download these Japanese and Chinese research reports translate them and then literally try to recreate the recipes in our own kitchen with a pasta rolling machine. And when we made our first a hundred versions ourselves in our own kitchens, we hit this local maximum of food science knowledge because we're not food scientists. And fortunately, a good friend of mine. He was working at this food and beverage brand and they had a chief product officer and a chef on their staff who he introduced us to. And we ended up working with those two as advisors. And what I will say is that much like the tech industry in the food industry, you can't just find a general food scientist who will help you make the specific food you're trying to make.
For us, these two advisors didn't know how to make noodles, but what they did know was helping us with two specific things.
One is they helped us with throughput. And the second thing is they expanded our knowledge of ingredients and I'll break this down a little bit. As PMs, our natural instinct when we were making formulas was to whip up a Google sheets and start laying out ingredients, a formulation number, and then test that formulation and then start iterating like down that spreadsheet where we would swap in ingredients, changed the proportions, change the weighting, change the grams we throw in the recipe.
And I think the first thing the food scientist did was. He looked at our method and he was like, hold up, you guys are swapping like two to three ingredients with every single formulation change. How are you able to isolate which variable is affecting like the formula? And this is like basic science, right?
It's you don't want to have multi-variate affecting the results. It used to take us an hour to create one formula and test it and that advisor was able to shorten that timeframe so that within an hour we could do three to four formulas.
And when you have that fast throughput, your feedback loop is much faster. So you're able to iterate much more quickly. And then the second thing was what the chef did was he said, look, your formula is always going to be capped based on the quality of your ingredients. And this is no different than like most chefs they always tell you, your dish can look beautiful.
It can have the best technique ever, but is always going to be kept by the quality of ingredients. And that's why a lot of chefs end up growing their own ingredients.
And those two were huge realizations. And I think they, they really propelled our formula forward and it took us another a hundred iterations, but we ended up making 200 formulations in our own kitchen before we even got to a comfortable V1 to bring to a manufacturer.
Nikunj: [00:25:49] That makes sense, but did you have any early moments of existential crisis or things you're like, you know what, you've done hundreds of iterations, but nothing really tastes good, moments that you felt we should try something else.
Kevin Lee: [00:26:01] In the early days, when we were trying to create this noodle, we actually took a specific path. There is a popular type of Keto noodle on the market called the Shirataki noodle. It's actually a very popular Japanese noodle. Some American brought over to the US and turned into a whole thing here, but it's very popular in Japan.
It has been for centuries. And it's basically a zero calories, zero carb noodle because it's made from something called konjac yam root. So it's just 99% fiber. And it's very jellyfish like in texture. So it's extremely polarizing. You have a portion of people who are like, look, I'm on keto, I'll take it.
And there's a portion that's Oh my God, this is disgusting. I hate it. And the original route was actually to try to improve on the shirataki noodle. So we thought we could add protein to the shirataki noodle and make a better version of it. And we hit a lot of food science barriers to a point where we were sitting in our kitchen.
To make a shirataki noodle it requires like a little bit of a chemical reaction in a way. And you're like creates a really nasty smell. It's pretty disgusting. It clogs up your sinks. So you have to dig your hand in and dump it out. It looks like flubber like that from that movie a long time ago.
It's pretty gross. So I do remember we were sitting in my living room. We both looked at each other. We had just made like a couple batches. We had them in a refrigerator and we looked at each other and I was like, Kchen. Do you like the taste of shirataki noodles? And cause I was like, cause I have some in my fridge, we could eat some for lunch and he looked at me and he was like, no, man, I honestly prefer not to.
And I was like, if we can't enjoy our own product, how are we going to evangelize this to other people? And that was the moment we were like, okay, we're scrapping this completely. And we went back to a gluten based noodle, which is how every noodle is these days. It's like wheat flour, gluten.
And we just want it to bring back that familiar chew that you have in the noodle. Now for listeners, I will admit our current noodle is very different from a traditional ramen noodle right now. It's much more akin to that of a buckwheat soba noodle. It's coarser. It does have a grainier texture because it's mostly plant proteins.
If you've ever had Bonzo which is the chickpea based pasta. I would liken it to very similar to that right now. And I think we're also at a juncture now where we're thinking about version 2.0, which is going to be like a 10X improvement where it's almost indistinguishable from a regular ramen noodle.
And we're super excited about that.
Nikunj: [00:28:29] How was it navigating the company through 2020 and COVID? You guys started in June, 2019, which gave you a few months, but then the pandemic hit. Did it have a big impact on collaboration? Thinking about what's next, working with a lot of third-party services.
Kevin Lee: [00:28:46] I would say it was extremely painful. So COVID hit, I think we were about to get onboarded with a manufacturer and what ended up happening was normally you have to still go through an R and D phase with your manufacturer. I talk about this pretty openly, but you can't just take your kitchen formulation and expect a manufacturer to replicate it a hundred percent. This is never going to happen. They have commercial equipment, they have a production line. They cannot tweak everything for your small adjustments that you make in your formula. So you make a lot of trade offs along the way.
And because of those trade offs, you have to go through this R and D process to ensure that your formulation is still up to par with the final product they produce. So normally what you would do is you would fly to your manufacturer's location. You would live next to the plant. This is if you really want to get hardcore about this, and then you just go in every day and you work with their team on R and D and the process is pretty smooth.
Everyone's in the same room. So you can taste. And feel the texture and you can agree whether it's good or not. And it hits the benchmarks. When COVID happened, everything went remote and the plant went pretty much full shut down where all of a sudden they had to cut a few food scientists.
There was only like one person working at a time, which meant the throughput slowed down. It meant that ingredient suppliers, all of a sudden were having a hard time shipping product across state country, state lines. So everything got delayed. And so our manufacturer couldn't even get the ingredients we needed in time.
And I think the hardest part was whenever we had a new version of the product to send to people or sorry to send internally for us to test, they had to mail it to us. And so every week we would wait for UPS to ship a product. God forbid it got lost in the mail. We would have to wait another week and just imagine the painful process of waiting weeks on end for each version to arrive.
Once the version arrives, we scramble to taste it. We created a spreadsheet where we had to somehow mimic Organoleptic profile. That's all the variables of like taste texture, slurpability, all the things that go into a noodle and you have to rate them quantitatively.
And that's just, imagine doing that because taste and texture, taste is subjective, right? It's really hard. So we had all these, me and my co-founder a few we work with some outsource agencies. We all were trying to triangulate whether or not the version was good based on our subjective taste profiles off of a spreadsheet.
And it was just like, it was hard. I will admit . It delayed us by months. This process should have been way faster. We could have even had way more revisions of the product, but instead we were, we had to launch to market. So we had to cut down the revisions that we had. And that's why I tell people, look, it's an iterative process, and reid Hoffman says, if you're not embarrassed by the first version of your product, you've launched too late. And that's exactly how we feel. We are in many ways, we're embarrassed in many ways we're proud of the fact that we got to this point, but we're excited to iterate and keep improving this product over time.
And we're very transparent with everyone about that.
Nikunj: [00:31:51] I'm excited. My delivery is coming today, so I'm excited to try some of it and share some feedback as well. I see a huge rise in DTC coming up, especially with Shopify, with remote with like wanting to own their own kind of audience? Do you think, it's never been easier to start your own DTC kind of company, but also never been harder given COVID?
Kevin Lee: [00:32:15] That's a great question. I think there was a wave of. 1.0 DTC companies, which was, Hey, you don't really need to do any product innovation. You can just take a product that has existed in the market and sell a D to C. And you don't need brick and mortar. You own the direct relationship.
You use Facebook ads. That's very cheap for customer acquisition and you will have a very high LTV to CAC. And there were many businesses that scaled that way. And I don't need to explain to the audience. I know everyone knows that, online CACs have just been rising across every single channel, Facebook and Instagram, especially.
And I think now to break out as a D to C brand you really have to innovate on the core product. You have to bring a certain feature set to market that hasn't existed before. Just because I think this wave 1.0, has already captured the lowest hanging fruit that's available in the marketplace.
For example, there are a lot of, there's actually a lot of better for you instant ramen brands that have existed before us, but a lot of them haven't really changed any of the value props. Usually it's just Oh, we're organic. Or we use like a higher quality broth. But for us, we knew we had to completely innovate in many different ways.
Like the entire nutritional profile is different. All the ingredients are different. So for anyone who's thinking of starting a DTC brand, I would just urge you, make sure you do actually innovate and create something that's useful to the public. And you're not just rehashing an existing idea and bringing it online because it is going to be expensive, like DTC buying users, through paid ads doesn't scale that well. We've seen CPAs skyrocket over the past, even just two years, like double or triple. And if you don't have strong word of mouth, you don't have a strong community who are referring people to your product and your attention, your repeat purchases are not there. You just won't last as a new brand.
Nikunj: [00:34:05] you spent a lot of time researching the food and beverage industry at Pear. So you must know a lot, but what were some surprising things when you decided to jump into it headfirst?
Kevin Lee: [00:34:16] There were so many, I wish I kept a notebook of all the things. The first thing I naively thought was, Hey, we're two PMs from tech. We know how to run in sprints. We know how to, create roadmaps. If we ship a product, it's going to take us three months because we're going to move so much faster than everyone else.
We're super organized and the food and beverage industry, and actually just general physical products just doesn't move that way. You can't blame it on other people too, right? It's not just the fault of your suppliers or your manufacturers. You're dealing with people's lives here.
This is something they're ingesting into their body, right? It's not like software where if it doesn't work, it does, it's not gonna kill them or it's not going to make them sick. And so we had to be very regimented for one about making sure that our product was actually better for consumers. If that's the value prop we want to give, and we have gone to such extreme lengths even to think earlier we were talking about levels, which is a continuous glucose monitor.
I wore levels for almost two months, eating Immi, continuously. I was isolating variables, fasting for 12 to 18 hours. And then checking to make sure I didn't have a blood sugar spike. And we're very proud of the fact that, of course I'm not like insulin resistant, whenever I eat a serving of Immi that's I have a plus six mg per DL.
It's very minimal. It's almost no post-meal spike. And when we gave, when we tested this with members of our community who gave this to even like diabetic family members who are very insulin resistant, they saw like a plus 13 post-meal spike, which I know without context as listeners, it's not going to mean anything, that's very low.
I think if you eat like a traditional instant ramen, you could spike as much as 60 to 80. It's pretty nuts.
Nikunj: [00:35:55] Plus six is flat, essentially. I would even eat like almond flour and I would still get like a plus 10.
Kevin Lee: [00:36:01] Totally. And I think we, we want it to take care to do this because we started this company because we saw our families really suffered through these chronic health conditions. So that's really important to us. The second thing is, yeah, unfortunately there just is a lot of lag time because manufacturers suppliers. Again, I don't want to blame them at all, it's not that they move slow.
It's just that physical products, like you have to ship them back and forth. It's just not going to be ever as fast as software. So our time period did stretch quite a bit in terms of getting a product to market. And then I would say the second surprising thing was it's actually a very positive thing.
I thought that the tech industry paid it forward. Like tech industry is amazing. There's people will help each other all the time. It's a very amazing community, but the food and beverage committee, my God, these people are so friendly. There is. I don't know how to explain it because I, I've actually seen both worlds end to end now and food and beverage, founders operators.
They are so generous with their time with like introductions. They will even volunteer to come help you like move stuff. There'll be like, Hey, we're going to showcase at expo West, which is this huge trade conference. They're like does anybody need an extra lift to we have extra space in our, like in our you hall or something.
It's just very friendly. And I'm, I love that about this community.
Nikunj: [00:37:15] What should we expect from Immi in 2021? I know you said you're already working on version two of your launch product.
Kevin Lee: [00:37:22] The biggest priority right now. One for us is just product. We have to improve the product. Right now our product is around nine grams of net carbs, 31 grams of protein, nine grams of fiber. It's got great macro nutritionals. But we know that from a taste and texture perspective, there's many improvements we can make.
I think I mentioned this earlier, the texture can have more stability. The taste. Some people can taste like a slight tartness because we use this natural ingredient to make the noodle shelf stable. And it imparts this undesirable like tartness. So what we're doing right now is with version two, we're already iterating to try to improve on both of those dimensions considerably.
The other thing is bringing down the cost. So we want to bring down the price of the product over time. It's premium price now because that's just all we can afford. Our margins are very tight in food and beverage, and we use very expensive ingredients to hit that nutritional profile.
And then lastly is new flavor development. We've gotten a lot of requests for additional flavors. We're really excited to put out new SKUs. I think those are the three buckets we're working on.
Nikunj: [00:38:25] that's awesome. I look forward to trying more of these this year.
Kevin Lee: [00:38:28] Definitely.
Nikunj: [00:38:28] We always end the show by asking our guests to share a time that felt like a roller coaster. And what did you learn from it?
Kevin Lee: [00:38:35] So one major rollercoaster, there was actually two I can share. And one is a little grosser than the other one, but the first rollercoaster was we originally tried to do our manufacturing internationally. And there is a specific country we were targeting that had manufacturers and
we spent something like five months interfacing with them. We made great progress with them. They said they were willing to work with us. And when we shipped like $5,000 worth of ingredient, this by the time I think also we were bootstrapping at this time. So this was just like our own personal money.
We bought these ingredients. We're like, okay, let's take this risk, let's ship it over. Let's see if they can produce the product. And we get this note that the customs of the country was holding our product because they couldn't identify one of our ingredients. And what that cascaded into was every country's FDA is different, but they're specifically did not approve of this ingredient.
That was a core part of our formulation. It was the number one ingredient in our formulation. And I remember sitting at my desk that day and feeling like the world was about to end because we spent all this time, all this money. And we couldn't even get the ingredients into the country. And we spent like another month actually basically pulling it, like every card possible.
We reach out to politicians and people like, like I went there on LinkedIn, found friends of people in the FDA and we just couldn't get it in. And that was my biggest roller coaster, because we were like, wow, we can't even produce a product we're screwed.
What it ended up forcing us to do is to just reevaluate our manufacturing and we ended up bringing it back to the US and I think that's allowed us to move a lot more quickly. There's no guarantee going forward, like what we'll end up doing with manufacturing, but I think it forced us into a current path that we're really happy with.
The second roller coaster was. And this actually might've happened earlier was in the early days of formula. So maybe this should have been the first one I mentioned is a little gross because in the early days of our formulation, we had too much fiber in our product, like way too much. And what was happening was.
I noticed that every time I ate two servings of Immi, I just really had to poop and I would go to the bathroom and I with poop a lot. And that's not a bad thing per se, cause Americans, frankly, don't get enough fiber in their diets. But I think for anyone who's unfamiliar who doesn't eat enough fiber, they would be alarmed.
They'd be like, Oh my God, I really have to use the bathroom. So I remember there was one week where me and Kchen like we would basically mix all of our ingredients in this flour blend. We would pour water into it and make a shake. And we would stand in the kitchen shake, make these shakes. We look at each other and we like cheers each other.
And we would just drink these shakes throughout the day. And we were just like bracing ourselves for the bathroom impact. And we had to do this as we like iterated through a formula every single time. Cause that was the fastest way to get the feedback loop. Versus like making a full noodle from it.
And that was just like a horrible few weeks of Oh my God, this is not going to work. We're going to make people like go to the bathroom nonstop. So thank God we're out of that. But those are two huge roller coasters.
Nikunj: [00:41:34] Those are great. Thanks Kevin, for taking the time today and sharing your incredible journey with us. If people want to follow along or get in touch with you, what would be the best way for them to do that?
Kevin Lee: [00:41:45] for personal, you can always follow me on Twitter, @ kevinleeme and then for company you can go to immieats.com. That's I M M I E A T S dot com. And you can learn more about the product there. Thanks so much for having me
Nikunj: [00:41:57] Thanks, Kevin.