From Zero to $2 Billion in Two Years, in a Saturated Market | Coffee with Eyal - Product Builder Podcast episode with Eyal David
00:08:21

From Zero to $2 Billion in Two Years, in a Saturated Market | Coffee with Eyal

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In this episode of "Coffee with Eyal", Eyal David tells how the protein bar brand David reached a valuation of over 2 billion dollars in two years, in the saturated protein bar category. He says the secret rests on uncompromising focus on what the customer wants, influencers with equity as a free marketing channel from day one, and above all spotting the moat: buying Epogee, the maker of the EPG ingredient, which controls supply for the entire category.

In this episode

  • A real moat can be control over a critical ingredient in the supply chain: when David bought Epogee, the maker of EPG, it secured its own supply, blocked competitors and opened up new verticals for itself.
  • Even in a saturated market you can win by focusing without compromise on what the customer actually measures: for protein bars that's the protein-to-calorie ratio, plus good taste.
  • Influencers with equity, recruited before there's even a product, create credibility and also a free marketing channel with an incentive to succeed.
  • In a category where everyone looks the same, is priced the same and targets the same audience, a neglected segment (here, women) and completely different branding are a way in.
  • A "second-timer" founder returning to the same category comes with deep understanding of the market and can crack it again, this time at a bigger scale.

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Episode Description

In the second episode of "Coffee with Eyal", Eyal David breaks down the story of David, a consumer company that jumped to a valuation of over 2 billion dollars in two years, not in SaaS, not in cyber and not in AI. The founder, Peter, is a "second-timer" in the protein bar world: he had already sold a company focused on the CrossFit niche for 600 million dollars, and came back to the same saturated category, where all the bars look the same, target men, taste bad and cost about the same. Even before he had a product, he recruited the three strongest influencers in the space, among them Andrew Huberman, with equity, to build credibility and a free marketing channel. For the product itself he found EPG, an artificial fat that makes a tasty, high-protein, low-sugar and low-fat bar possible, and in marketing he aimed at women with a luxurious gold wrapper and different flavors. The most interesting move came after the success: he bought Epogee, the only company making EPG, for tens of millions of dollars, secured his own supply, blocked competitors and entered new verticals such as high-protein ice cream that sold out within 28 minutes of launch. Thanks to that moat the company raised 250 million dollars at a valuation of two billion and change.

Chapters

  1. 0:09 · A 2 billion dollar consumer company
  2. 1:22 · Peter and the saturated protein bar market
  3. 2:32 · Influencers with equity from day one
  4. 3:24 · EPG: the ingredient that broke the market
  5. 4:09 · Targeting women: a gold wrapper and new flavors
  6. 5:18 · The moat: buying Epogee
  7. 6:32 · Ice cream, Target and more verticals
  8. 7:13 · Raising 250 million dollars
  9. 7:37 · What I loved most about the story
Read the full transcript
Full transcript with speakers and timestamps

Selected quotes

“They didn't go and invent some idea around something cool, they were really focused on what the customer needs.”
— Eyal David
“And basically what he identifies is that there's a very, very big moat here, and if this moat is in his hands, he controls the category.”
— Eyal David
“thinking differently in a very saturated market and building a product that can put up a fight”
— Eyal David

Questions & answers

How did David reach a 2 billion dollar valuation in two years?

According to Eyal David, through a combination of a product that hits exactly what customers want (lots of protein, little sugar and few calories, good taste), influencers with equity as a marketing channel from day one, and above all buying Epogee, the maker of the EPG ingredient, which gave the company control of the category. Following that, the company raised 250 million dollars at a valuation of two billion and change.

What is EPG and why does it matter?

EPG is an artificial fat that gives a creamy texture and good taste with very little sugar and fat. It let David make a tasty, high-protein bar, and after the company bought Epogee, its maker, it controlled its supply to the whole market.

What is David's moat?

Control over the supply of EPG. Epogee sold the ingredient to many companies making low-calorie products, and when David bought it, it secured its own supply, cut off competitors and can enter more and more products or sell the EPG to the highest bidder.

How did David market the bar?

Even before there was a product, the founder recruited the three strongest influencers in the dietary supplements category, among them Andrew Huberman, with equity. He also targeted women, a segment the category had neglected, with a luxurious gold wrapper and unusual flavors.

Who is behind David?

Peter, a founder who had already cracked the protein bar world once: he sold a company focused on the CrossFit niche for 600 million dollars, and came back to the same category for a second time.

People & resources mentioned

People

Companies & orgs

Coffee with Eyal Entrepreneurship Moat Consumer Protein bars Saturated market Influencer marketing Go-to-market

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