Reflecting on Success and Growth

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And then he venmowed me for it. And I think he venmowed me like seven do ninety nine cents or eight dollars ninety nine cents what looks like a grocery store price. And that's when it kind of struck me Oh, you could actually make food and sell it to people Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements built I'm Guy Ros and on the show today, how Krishna Kallanon created a high protein, low carb breakfast cereal in his New York City apartment into a one hundred million dollars brand Catalinea Crunch A few years ago, I tried the ketogenic diet and for about a year I ate no bread, no pasta, almost no sugar at all. and I will tell you It is brutally hard, because once you start paying attention, you realize that carbs and sugar are in nearly everything. A bagel with cream cheese can blow the whole day. So can a plate of pasta or for that matter, a bowl of cereal Americans spend somewhere around twenty billion dollars a year on cereal alone There's sixty feet of it in almost any grocery store. Dozens and dozens of brands. But for decades, it was basically the same stuff corn or rice, a lot of sugar, a little bit of color, and a different name on the box Today's guest, Krishna Kalianen wanted to make something different a high protein, low sugar, low carb breakfast cereal That actually tasted good To do that, he had to work with ingredients that were barely known or were just starting to enter the CPG marketplace at the time Things like pea protein and monk fruit Early experiments eventually became Catalina Crunch, a keto friendly brand of cereals and snacks that's now doing around two hundred million dollars in annual sales. Now, one of the reasons Krishna became an early adopter of the keto diet was because he had to He had type one diabetes and epilepsy And he needed to cut sugar and carbs from his diet Krishna grew up in Orange County California in the nineties and two thousands As a kid, he played tennis and also became a competitive chess player His dad, who's an immigrant from rural India, was a veterinarian, and his mom was a nurse parents were big on education, but they were also big on you deciding what you want to do with your life as opposed to us telling you what you should do with your life. So My mom, I think hoped for a while that I'd become a veterinarian because it'd be easy to take over my dad's practice and then run that practice myself. But both of them were very hands off and didn't really say, Oh, become a doctor or become a lawyer or anything like that. you know, your dad was an entrepreneur. He ran his own business. but I wonder if you ever thought of it that way. I mean, did you ever You know, some kids are selling candy bars at school and running lemonade stands and car wasash businesses and like, did you do any of that stuff growing up I did not know. I did not do any of that stuff. I don't think I really contemplated starting a business, nor do I think I thought of my dad as an entrepreneur to your point, even though he is a very sort of life changing thing happens to you in the senior year of high school. And I think it happens during a visit to Penn. tellell me the story. You got you're a senior in high school It's two thousand nine and you are You're in Philadelphia visiting Penn. Why are you there? Why are you you're visiting because you're presumably because you want Go there, tell me the story Yeah. so I was actually to step back, right? So a couple months before visiting Penn I was starting to feel thirsty a lot. And so I got to the point where I couldn't go through a whole hour long class without having to leave, go get some water from the water fountain and come back And then it got to the point that I couldn't drive from school back home without stopping at a convenience store to buy a gallon of water and drink it on the way back And so I'm getting more and more thirsty. I don't know why I'm getting thirsty. And to me, drinking water is a good thing. So I wasn't too concerned about it And then I got accepted into Penn. and so I went to Penn for this kind of new student day And I got there with my family. We're staying in a hotel the night before this whole thing scheduled to start We walk around campus U And I pass out as we're as we're walking around campus. You just pass out on O campus. Yes. Yep goo to the emergency room and One of the first things they do is test my blood sugar. find that it's over a thousand, and that's when they diagnose me with type one diabetes see you were seventeen Yeah, probably seventeen at the time. Yep They don't have or we don't have a full complete understanding of type one diabetes, but what we know is that something happens in the body. It triggers your white blood cells to attack the insulin producing cells in your pancreas, leaving you without the ability to produce insulin It's wild. And so now you are diagnosed with this condition that you have to manage and you're about to start college and your parents are going to go back to California. That's a lot. That's heavy. That's like You are now going to have to completely change your diet and do all these and you're on your own Yeah, I mean, luckily, you know, UPN's got a great health system. So I got an endocrinologist there. You get a dietician that specializes in diabetes care as well. But yeah, it was a lot. My parents were always calling and checking in, what's your blood sugar? What's your A one C? how you feeling, that sort of thing fromrom what I understand Not that long after you were diagnosed of diabetes you had anotherother somethingomething else happened. What Tell me a story Yeah, I was diagnosed with epilepsy as well. I had woken up in the morning. I was taking a shower And then I had a seizure. My mom heard me And then she called the ambulance and I went to the hospital and was diagnosed. Wow, I mean, there's a lot. It's lot there's a lot of obstacles you're dealing with like from a young age. That's tough I think that that diagnosis of epilepsy actually was a hidden blessing for you, right? in many ways Yeah, yeah. I mean, there's different types of epilepsy, but to your point, the ketogenic diet was first invented, quote unquote in the early nineteen hundreds and it was for the purpose of treating epileptic patients. And it's basically it's low sugar, high fat, high protein fiber, low carbohydrates Yeah, the idea is that your brain is using sugar or glucose to power itself. And so the idea is can you starve the brain of sugar and kind of reduce the I'd say the electrical signaling inside the brain so that you don't have a seizure or reduce the chances of having a seizure Basically you're trying to change your body from burning carbs as an energy source to burning fat That's right. Yep It's an amazing to I've done it. I did it for about a year and it's amazing. It's really hard because you have to really be careful about keepeping your carbohydrates under like thirty grams a day or forty grams a day. And this diet,'s, as you say, was like introduced in the twenties to help people treat epilepsy and was found to be really successful you were not I mean, even though you were diagnosed with diabetes you were still eating a lot of carbohydrates, which no one told you was not a good idea Yeah, yeah first I was still eating a lot of Pilly cheese steaks and things like that and all the bread that comes along with it. One of the reasons I actually went to Penn was when I was visiting a friend there, I noticed all the great food trucks in Philadelphia And so I was very excited about all the different options for eating on campus Yeah, with diabetes, it's challenging, right? And then you start to learn, you know, as a diabetic type one diabetic, you're taught to take insulin in ratio to how many carbs you eat. And so if you eat more carbs, you take more insulin. If you eat fewer carbs, you take less insulin the challenge or I think the opportunity is is If you eat more carbs and therefore have to take more insulin If you get it wrong in terms of the number of amount of insulin you're supposed to take you can end up easily taking too much or too little And then obviously insulin is or was relatively expensive. So less insulin is less money, which was also very helpful for me as a college student So how are you eating? I mean, you know, were you focused on meat and and healthy fats and you know fiber I mean, how were you just using the dining hall at college? Yeah. so once I learned kind of how my body responded to different types of foods. I started eating basically eggs every day for breakfast. and snacking on nothing but nuts. And so I started eating a lot of that and it reduced how much insulin I had to take by a lot All right, so you completely transformed your diet in like around two thousand nine and Keto was still very weird. that it was not like I'm sure your friends are like, wait, you're doing what what kind of diet is this? It was weird, right? People probably thought that your diet was strange Yeah, D definitely. Yep A It was strange and it could be a bit expensive as well. But it worked for me and so I stuck with it. All right, so you graduate from Penn in twenty thirteen and I know you worked for like a hedge fund in New York for a little while? Yep But I guess you stayed there for roughly a year. and from what I read, you really wanted to become an entrepreneur. You wanted to start your own thing And you tried, you had I guess sort of an online recruiting tool that you tried to launch and then a an online car insurance company and I guess neither of those worked out, but it sounds like you really wanted to Do your own thing. You didn't want to work for somebody else Yeah, yeep. you know, I think there there's just kind of this night and day difference in my mind at least as it relates to owning your own destiny. And so I was all in on making something happen So I spent some time You know, I was working on a number of different projects. I can't tell you or even remember twenty plus different apps, websites, services products that I'd probably launched in the course of this And I had I had tried certain things that I was very familiar with and I felt more strongly about and I't found other things where it's like, huh, it seems like there's a group of people that have this challenge. Let me just go try to solve it And so I quickly realiz if you're going to have the motivation to succeed You're going to have to really believe deeply in what it is that you're doing. I think that was a good lesson that I learned early on, because otherwise when the going gets tough, you just want to throw in the towel and move on to the next idea rather than double down and really figure out how to overcome the challenge And you had, I mean, you had two businesses, basically tech startups, right?. Yeah, one was reccruiting platform one was an insurance platform, but they were tech startups. And so Naturally you would think that you would try another one, another sort of tech startup Yeah, I mean, I knew how to write software and build fully functioning apps and websites and you can do that without spending any money other than your time. And so I was very interested in that path. I actually to be frank probably didn't spend as much time as I should have or could have thinking about, hey, well, what industry might I want to go into, what I might want to do? I just knew I wanted to help people and I thought that if I could come forward with a product or service that helps people and made their lives better that they would pay me for it. and I could worry, you know the rest of it would fall into line after that So what were some ideas that you were muling over. Well, so one of the more quote successful projects that I worked on was Trump had been elected president in twenty sixteen And one of the things that came out of it was this kind of increasing polarization in the country and the idea that in social media you were being fed information that that confirmed your preree existing beliefs. Yeah. And so I had started and built this Chrome extension. It was called Escape My buubble, very straightforward. And it would insert into your Facebook news feed articles that challenged your beliefs Um That got widely covered in the media at the time I think it was written about or mentioned in the New York Times and that drove cllose to a hundred thousand sign upps for the And it was free. mean How how are you going to make money? It was free. Yeah, ye. I didn't know how I was going to make money. You were just getting sign upps. Yeah. Yeah, I was just trying to I was trying to get a lot of people using it and then think about that afterwards, right? So I got a lot of press Um and A lot of people signed up for it Then the news media moves on and there's no more there's not as much talk around bubble and the social media algorithm problem. And I kind of went into this valley where the number of new people that were signing up every day had dropped way down And I was trying to figure out, kind of what's the future of this thing It turns out people really don't want to read news about the other side Yeah, yeah, I think it's challenging. I got the increasing sense that I was fighting in innate psychological bias or psychological hard wired into our brains, and it's so much easier to read things that confirm our existing views than to challenge them I mean, it sounds like such a great idea. I mean, right And now in twenty twenty six, I mean, it' just that concept just just seems so unlikely. are so much farther away from wanting to exxchange ideas in a rational way. Yeah, ye I should mention that from what I understand in the sort of in the background or as part of your life, you got We're getting into cooking and baking, right because of your diet and what you had to eat. and You would experiment in the kitchen just for you, I guess Yeah, so you know me, I think, along with a lot of other type one diabetics, start eating the same thing every day because it's very predictable. And so it kind of takes the mental load off of managing diabetes. So I think I had mentioned that I had started eating eggs every day for breakfast Snacking on nothing but nuts and then eat chicken breasts every day for lunch. and then I get some spinach and some other things like that as well. But it was largely the same food over and over and over again U Living in New York, you know, New York's like the food capital of the world, maybe, or one of the food capitals of the world. All the new fun, exciting stuff tends to come to New York first and it's very exciting, right? So I'm looking at all this stuff and you know I can't eat any of it. it's your point, I got really interested in the opposite, which was just meal prepping. and it was just the same thing every day But along with the grilling of chicken breasts, I actually got interested in baking as well. And so you know, the whole concept here is if you have typical cookie recipe for as an example. The idea is take that recipe go out to GNC and buy some protein powder and put that in place of the wheat flour go out to Amazon and get you know, kind of some alternative sweetener usese that instead of sugar addd some cocoa powder and try to make cookies that taste halfway decent It's difficult. There's actually a whole science behind baking. And so you know how the protein powder hydrates when you mix it with water. You know, if you're trying to make a dough, you need something that's sticky. So when you add water to protein powder, it doesn't necessarily get sticky. Now you need to replace that with something else, which is going to get sticky so you can form a dough in the first place So it was very intellectually challenging to try to figure that out and try to make these things taste from awful to decent to pretty good to really good And I guess at a certain point you decide that you want to try to make the cereial Like a keto jenet, like something that you could eat Which I mean, I don't even know where you would start. Tell me what what you were thinking like how did that even that idea even come to you So I had eaten a lot of cereals growing up Cinnamon tooast crrunch, cocoa puffs, you know, golden Grahams. It was one of the high, you know, it's one of the classic American staples, so to speak that I think a lot of kids in the nineties ate a lot of. I also had really fond memories of going to the grocery store with my mom when I was a kid and kind of picking out the new stuff, right? I mean's like sixty feet worth of cereal in the grocery store. so you can eat and try a lot of different things. And so I had craved that variety in my life I had just gotten sick of eating eggs for breakfast. I had been eating it for such a long time. I'd eaten it with over a hundred different hot sauces and other sorts of sauces to try to make it taste different every morning. But ultimately it's that same eggy taste with that same eggy texture, right? It's not crispy, it's not crunchy, and I've just gotten really really bored of it. So you decide that you want to see if you could in your kitchen recreate akfast here. Yes, ye I was thinking in particular about Ccoa puffs. that was my favorite cereal growing up And I realize that the chocolatiness from Cocoa puffs is coming from a combination of cocoa powder and sugar And if you can take the sugar and replace it with something like monk frruit The cocoa powder, you now have this zero sugar or low sugar chocolate taste. And Mk frruit is an extract that doesn't spike blood sugar. It's like it's a sweet it's like a miracle sweetener. It's super sweet. But it doesn't have the same impact on your on your glucose levels Exactly suugar or honey or maple syrup Yeah, everything that you just mentioned is all you know, if you break it down, Scientifically, it's all glucose, fructose sucrose, which are three of the most common sugars in food So a lot of people, I think think that sugar and sweetness are the same thing, but they're actually not. and there are actually other things beyond sugar which give your brain the sweet sensation, right? I mean, what we perceive as sweetness is really kind of nearurochemical changes in the brain. And so yeah, Mk frruit has seeds. the seeds are extremely sweet They are not sugar and so they do not spike your blood sugar. It's the same with stevia, which comes from a leaf Yes Right. and I just became enthralled with the the whole subject. You know, it's kind of like opening a door to a whole new world when you think of cooking as just Follow the recipe and you get your food. and then all of a sudden you open this door to this whole new world of oh wait a minute There are all these ingredients that You know, I would even go so far as to say humanity itself is not a spent a lot of time thinking about are trying out And so it almost felt like exploring something totally new I mean, Ccoa puffs are puffed corn, basically. I think rice and corn, maybe some wheat in there, but Um what were you going to use to make your keto version of that? So I was trying to make something, you know, first of all, I was rolling the ingredients into a dough I was cutting the dough into squares. And again, this is what protein pe protein powder. Yes.. cocoa powder and. Stevia or monk fruit Yeah, yeah. at the simplest form, exactly, it was those three ingredients. But if you mix these three things together with water You're not going to get a dough that sticks together very well. And it's also going to be very hard and very flat and it's not going to have a lot of crispiness to it. So you're also adding I was also adding at the time baking powder Baking powder, as you know, helps things rise, right? And then when they rise And so there's kind of air pockets inside and then set with the air pockets inside them. That's where you then have that structure that enables the crispiness or the crunchiness, right? Yeah. And then yeah, you take those ingredients, you mix them together, you form it into a dough. Just like you're making crackers, right? Roll the dough out into a thin sheet on a baking pan into squares and then bake it in the oven Okay, and how was it? again, it was an evolution. It went from really bad to better over time. I think the first one I made was as hard as a rock, you could not eat it. And that's when I started to realize the importance of baking powder to get it to rise a little bit I also started to realize that Ccoa powder is extremely bitter. Yeah. It only tastes like chocolate when you add the sweetness to it and those two things come together So I think the first iterations I made were hard rocks that tasted like soil. Well, we come back in just a moment, Krsna finally makes an edible version of a cereal. and then names it with a nod to Will Ferrell Stay with us, I'm Gay Raj and you're listening to how I built this. This message is brought to you by Apple Card. Aple card is designed with your iPhone and mind making it easy to get started and even easier to use. Apple Card is a no fee credit card you can apply for right from the wallet app on your iPhone. Aaple card has no annual fee, no late fees, and no foreign transaction fees. No fees, period. Every credit card should be this easy. Get started in the wallet app today subject to credit approval. 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Visit mobilefuels. com for details. Hey, welcome back to how I Built this. I'm Gay Raaz. So it's twenty seventeen, and Krishna is playing around in his kitchen and he's trying to make something that tastes like cocoa puffs, but without all the carbs and sugar I got it to the point after meticulous trial and error to where it tasted pretty good. I was eating it with almond milk in the morning for breakfast. It didn't send my blood sugar through the roof like Ccoa puffps would, but it still tasted good. I happened to meet a friend in Central Park and he was not diabetic But he had gotten interested in getting more protein for breakfast, and he was sick of eating eggs. And we were just we just happened to be talking about this. I don't think we had really planned to talk about it And I had told them that I'd been trying out the cereal I was making and and he could try some if he wanted. So the next time I saw him I gave him a bag of it And then he then mowed me for it. and I hadn't asked him to pay me for it. So I wasn't expecting it, but it wasice it was a nice gesture of goodwill on his part. And I think he then mowed me like seven do ninety nine cents or eight dollars ninety nine c, but he then mowed me a price that it wasn't like, oh, here's ten bucks or here's five bucks for this stuff. Here's like what looks like a grocery store price. And that's when it kind of struck me Oh, you could actually make food and sell it to people Now it's obvious to people that there are big companies that do this. I'd not really considered that. I had just been thinking about, hey, I know how to make Apps I know how to make websites, I'm going to do something with that And I reflected back and realized, oh, I've been actually working on making a quote product or a serial product, but that was not the intention of it. going forward All right, so so walk me through like how you place where you like, okay I'm going to try and make a business out of this. I think I want to all of my energy into this serial idea Yeah, well when I saw that my friend was not diabetic, yet he was also trying to eat a lot of protein for breakfast I kind of put two and two together and realized Oh, there's not really many options in the grocery store that are a good fit. people that are trying to achieve this And so That's when I realized, oh, there's actually a big need here that No one really seems to be meeting. And so I walked through The grocery store Sereial aisle, which I hadn't been to in probably a decade. And it was exactly the same as I think I had found it when I was a teenager and had last been there and It struck me that there's a lot of different cereals in the grocery store but they're all sort of the same cereal with different branding Yeah. And so that's when I realized, oh, you know That could be exciting And I think finally, Ive come to realize the obesity rate in the country and the rate of diabetes in America were both through the roof. Yeah. And when you start to think about all the money we're spending on health carere and the negative repercussions that can have for our country I got really excited about it is like, hey, there's a big challenge here, but a big opportunity to help a lot of people. All right, so you decide that you're going to go pursue this, but What was the first step that you did? I mean,, you're making it for friends right and in your apartment This is a complex product. It's got to be crispy in milk or almond milk or soy milk. It's going to stay crispy. and it's going to taste good and it has to be healthy and it has to have low carbs and high fiber and high protein. That's a lot. I mean, there's a you know, you've been doing some of these experiments in your kitchen, but Did you feel like I've got a I gott to get more training. I get a better understanding of how to do this Yeah, so it was an evolution. So there were a lot of mistakes I made along the way that anyone who was in the food industry wouldn't have made. But they were all learning for me. You know, I think the first one was I do the math, right? I looked at my oven in my apartment and it has like five layers on it to racks. you really only ever use one rack And so I thought to myself, oh man, I could just make a bunch of cereal right in this oven Once you do the math, you realize that a sheet of dough doesn't really weigh that much. And so you're taking up maybe three racks of your oven just to make like one you know, kind of stand up pouch worth of cereal. And then you're baking it for a long time. youough for a long time. you can really only make in an eight hour day out of your oven maybe like five or six pouches of cereal And I guess I should describe your serial for people who are not familiar with it It looks like Golden Grahams, right? for lack of a better description. It's sort of a little square that's sort of curvy U You were making it in sheets on baking sheets and scoring it and then breaking it apart. So I imagine the first cple year so it wasn't perfect. I'm sure some of the squares were not Squares name the deadl likea bottom or something. Yeah ye and You had a name for this cereal. Yes, Yep I called it Catalina Crunch. From the beginning. Okay. Catalina's Island Southernalornia, I'm assuming that's the Catalina you're talking about Yeah, I'd grown up in California and so I was aware of Catalina Island off the coast One thing I did realize was that this cereal was going to be priced at a premium to other cereals on the market. And the reason for that was When I started to look at different ingredients, you look at the corn flour and the rice flour and the wheat flour That's down at like ten to twenty cents a pound you go to GNC and you get one of those tubs of protein powder for like thirty bucks. You know, that stuff's like can be way, way, way more expensive. Yeah. And so I realized, hey, I need to come up with a name it kind of has this premium feel to it, right I wanted the name Crunch because I thought like my snacks And everything I was eating was more mushy like eggs and I was Craving the pretzels, chips, crackers cereal, the crispy crunchy bite. So I wanted crunch in the name and then I was trying to think of something that started with C that would kind of go with crunch. so it would be like alliteration Mmm. Choanni is a good example of like, you know, it sounds premium, it sounds nice. It starts with the C. But I think that's like Italian or European of some sort. Cereal is a very American invention. And so I was thinking of something that was American and I knew the Catalina wine mixer from the movie Step Brothers. I really loved the movie Step Brothers. I think enough people had been introduced to Catalinea Island through the movie Step Brothers. So I went with Catalina Crunch. It sounded good. It had a ring to it. easasy to say. I liked it. curious, I mean, Clearly you were you liked cooking, you liked baking, but this was not People identified you probably. Pro P peopleople thought of you as a guy who was going to start a tech budy when you started to talk to people, who knew you, maybe your family and others that you were like, I'm going to make a go at this thing. I want to see if I can turn this into a brand Did you get any pushback from anybody? Was everybody super supportive? U I'm very lucky. I have a very supportive family, but it's definitely challenging being an entrepreneur because an entrepreneur is like adjacency to being unemployed. When you go from working at a hedge fund, right where you're making a ton of money and you're kind of in one of the most difficult, demanding and respected jobs in New York to all of a sudden playing around in these various ideas pressure, quote unquote from society. but No, my my My parents, my girlfriend, who's now my wife U family, they were kind of, I would say rocks in my life that helped me pursue these things with confidence And and you are initially going to see you set up a website. and you were going to sell bags of this cereal. And what the flavor was chocolate Chocolate. Yep. And how did you Met it. Did you call it a keto cereal? Because still a lot of people don't know what that means. Did you call it a low carb cereal, a high protein cereal When I started out, I was very focused on low sugar becausecause sugar in particular is what makes your blood sugar spike and go up and down and up and down. Yeah. So I was very focused on the low sugar nature of it It happened to be protein and high fiber at the same time. And so people were eating it for a variety of reasons And that goes back to something very important when selling something is like you might put something out into the world for a reason and then people might buy it for a different reason. and you need to go talk to people to understand that, right? But yeah, I was very focused on the fact that it was low sugar How did you get people to be aware of it? I can't imagine put the website up and all of a sudden the order start flooding in. I'm assuming it just What kind of friends and friends of friends No, actually, it kind of was more put the website up and the orders start coming in You know, one thing that happened was someone found out about it and then posted it on a like diabetes, type one diabetes group inside of Facebook And then like a hundred people from that group came and bought the cereal So we had a lot of what you would call guerilla marketing It was a ton of really word of mouth, offline word of mouth. People posting about it on Instagram, Facebook, that sort of thing Okay, so you've got this and how are you making? I mean How are you actually fulfilling orders Let's just say you're getting ten orders a day. Is that is that about right U We quickly got up to hundreds of orders a day I'm assuming you had to start hiring people to help you quickly Well, so we went so I went from The kitchen in my apartment to a commercial kitchen And in the commercial kitchen, I could make dough Bigger sizes, right? They have these hobart mixers. So I think with like an eighty quart hobart mixer, you can make like I don't know thirty, fifty pounds a dough at a time And if you were doing this, Yes, Yep. and fulfilling orders. Yes. yeep. Okay, so but you had to hire people to help you I did not I just had my trusty wife on the weekends. That was it at the time And so yeah, once again you know, you have these like sheeting belts in the commercial kitchen. You got rack ovens now, right? So you can put whole racks of crackers, you know, cereal into the oven. It's complicated because I' imagining you're cooking this at low temperatures for a long time, right? O you It's not because you have to kind of dry it. It's not just like putting it in the oven at four hundred degrees. you'll burn it Yeah, yeah, yeah. yeah. I can't remember exactly, but I think I had it in for like T seventy five at eighteen minutes or you know, two hundred fifty at eighteen minutes, something like that. Yep and then put them in bags and seal them Yes So this commercial kitchen was an industry city. It was very busy. so I had the last shift, which I believe was ten PM to five AM or something like that So I was working overnight in there And making the cereal, packaging it and so I would go to to the post office by my apartment tons of boxes, drop them all off. and then kind of start that again sleep for what? How many hours a night? Yeah, yeah, I wasn't getting a lot of sleep. It was just a lot of it was a lot of work Tell me what that felt like. I mean, you know, you're obviously a smart guy. You go to this elite college. you get this sort of elite job out of college on Wall Street. A lot of your friends are probably already, you know, making a lot of cash in these different businesses. you're now four years out of college and I don't know. Do any part of you questioning what you were doing. I was intellectually enthralled by the adventure and I was I was very busy. So there were challenging times when I questioned what I was doing, but at this point like When you're getting orders coming in and you're seeing the orders come in every day and then you're getting emails from people and they're loving what you're making, it's like it's thrilling. It's really exciting. I don't know how else to describe it, but you've just put something new into the world and people are telling you that they love it. And so And that was foremost on my mind at this time. I want to go back the ingredients for a second because in that first year of making it yourself and going, you know, selling it I mean, were you were literally going to GNC and buying protein powder and ordering you know other ingredients p through Amazon and just That was it Yeah, I started ordering everything off Amazon. Yep. Because the ingredients today are quite complex. I mean, they's still pe protein other ingredients that are not so obvious, right? like corn fiber or pea fiber or chicory root fiber that it's a corn, but it's it's a part of the corn that doesn't as much carbohydrates. And so to get what you have today, you've mixed all these things. but I imagine in that first year, It wasn't sophisticated Yeah, yeah. So one of the things with the ingredients is I had also wanted to have a lot of fiber in the in the cereal, if I could And I had been using Almond flour and then coconut flour to put a lot of fiber into the cereal. And one of the challenges with fiber is if you put too much fiber into a food, it becomes hard to digest. And that's when I started to realize, oh, there's actually different types of fiber And each of these fibers can act differently in the digestive system so I've spent many years trying to understand combinations of fiber. One, do I think are do I want to eat and do I want my kids to eat? And I think that that are best quote unquote, for my health? And then also so that you can eat a significant amount of it, but without having an upset stomach afterwards. And the amazing thing about this to me is You couldn't do this in the year two thousand Even in the year twenty ten it would have been hard. But in twenty eighteen, you could get prettyretty much chickory root fiber and Yeah, you get powdered spinach, like whatever you need, you could just get online Yeah. yeah. I mean, it's fascinating and you're absolutely right. and an interesting kind of side bit. But the, you know, we talk about whole grains, right? So a whole grain has the bran, the germ, the endosperm, the entire grain Right? Like a wheat berry before it's ground up is That's what you're talking about. Yes, exactly.. And so it has all the protein, all the fiber and all the starch all in one. We started the food industry started removing the protein and removing the fiber. as a way to make products taste better And so that was the first iteration of this was going from whole wheat flour. to bleached white flour and going from brown rice to white rice, et cetera And so when you start taking out the protein and fiber so that you can get this isolated starch source Hey, it's a lot less healthy for you. and there' been a lot of people writing about the problems with with that B. Well where does the protein and fiber go It's just being thrown away. Thrown away. Yeah. Yeah. So to your point a lot of these new ingredients are actually by productducts of other ingredients and, you know, we talk a lot about food waste. is this is a way to avoid food waste by by reusing some of the most nutritious parts of the legumes, the lintils, and whatever else Yeah. I mean, it's like Way, for a long time, Way was just thrown away when ye people would make yogurt. and then somebody was like, Wait, why don't well take it and? tryry it powderizeed and turn into a protein powder. So okay, so you' let's go back to so it's twenty eighteen. You're working at the commercial kitchen and trying to learn about what's going to make this better because I imagine version one point zero that you're selling in twenty eighteen. Probably okay, but but but probably not really what you wanted to be in. Yeah. so what I was making out of the commercial kitchen, again, you know, trying to make it quickly. You're making larger batches now. and you know,s there's variability in the baking process and I'm basically only able to make so much each day. And so we're kind of going through this in stock out of stock pattern on our website, right where we'd sell And then I'd have more orders than I could ship. So I'd turn it off and say out of stock then make all the cereal, ship it, and then turn it back on again. And I realized that it was very physically demanding on me, and even still we weren't making that much cereal And so that's when I went to Texas A and M. they have a basically like a execed short course on how General mills and Kellogs and posts make cereal. Wait Texas and M. that's Amazing go to Texas and M, and how long is the course It was I think it was a week That's so interesting because I'm sure you know the story, mayaybe you don't Ben and Jerry's right? Ben and Jerry, they took a correspondence course in ice cream making it. I think Penn state Now r it seies And that's how they learned how to make ice cream. So Texas AM is a serial making course. which makes sense, Texas AM huge ag school. And so you fly there to college station for a week and take this course Yeah, I mean, you know, so I think the course to your point, Texas A and M has an A school. It's a lot of companies that maybe are thinking about getting into making cereal and so they want to send someone from their company to understand how to make cereal Do you in a kitchen in this class No, no. So in this class, they have what they call pilot sized versions of the equipment that the bigger companies use to make ser. Okay So like one of the first things you learn, for example is in the commercial kitchen or in your own kitchen You're baking in batches in this like standing oven, right But in bigger food manufacturing, they actually have continontuous ovens, right? So you have like a conveyor belt and it' just be it's like a Papa John's pizza You know, they put in a conveyor belt and it just cooks the pizza comes out they put it in the box. Yeah, yeah. yeep So you learn about that, you learn about equipment to package food products as well you know, you go into any modern food facility. they don't have a bunch of people just sitting there scooping cereal and putting it into bags. They have scales and better ways of doing it, right So I learned a lot about that. The other thing that happened in this world was Bars, you know, right? so protein bars became more popular. and an ingredient into protein bars is protein crisps Which is way puffs, right? Puff. They have way puffs. they have pe prrotein puffs. They have many different ingredients. But those are also made on cereal making equipment And you can think of way puffs if you added cocoa powder to them you could think of them as mininiature cocoa puffs made high protein Um And so as the as the bar market was growing, demand for this same manufacturing process was growing and hence investment in it was growing Interesting. I mean, did people when the people you met in that course were like, you're doing what? your weight, your cal with what? likeike I imagine the people running that program may have been skeptical of what you were doing because If you are teaching people about cereal, well, cereal is wheat corn and rice Yeah, so hey, so cereal, you know, it stands for cereal grains which to your point, you know, like corn is a cereal grain So What I was doing with the protein powders was highly unconventional And so What was challenging about it was everyone I talked to No one said I was going to be able to make the cereal that I was making in large volumes. you know, they're saying that it wasn't going to work for one reason or another But what you're doing again, I would think, how I mean, if you're at this serial course and they're saying, Yeah, what you're trying to do can't be done at scale. I mean, game over Those guys are the experts Yeah. I mean, u you know, they're the experts. they're not geniuses. And experts every so often find themselves in the experts dilemma where they have all this knowledge that knowledge becomes outdated over time. And so The world's moving forward. there are new ingredients, right? So you talk about it being hard, but you know a lot of these folks haven't tried some of these new ingredients we're talking about, like chickory root fiber and pehole fiber and things like that, right? Yeah. So yes and no on, you whenever someone tells me something's not possible My first question is why is it not possible? And if I can't get down to first principles reason as to why it's not possible, and then I walk away believing it's possible and that We just need to do more work When we come back in just a moment, Krishna puts in the work and learns why Indianapolis is a really smart place to make cereal Stay with us, I'm Guy Ros and you're listening to how I built this Maybeher you're starting a website from the ground up or thinking about a complete overhaul, Framer is a complete website platform that can help launch and keep on improving your site in one place. 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So it's twenty eighteen, and Kristna is selling Catalina Crunch entirely online and making it in a commercial kitchen in Brooklyn But after finishing a course in cereal making, he now has connections that can help him make cereal att scale I then met a partner, a company that specialized in do this sort of thing. Again, they were already making crisps for the protein bar industry and working on some like baby cereals and some other more organic products. And so once I was working with them I could then make you know, rather than making fifty pouches a day or whatever it was in the commercial kitchen, you know they could make ten thousand pouches in a day, right? far larger quantities of it but, you know, the thing is when you have this big equipment all of a sudden it costs a lot of money to do the work on it because you need to buy bigigger quantities of ingredients and the whole nine yards So did you raise money. Yeah, so so I had raised over the course of two rounds, first one hundred thousand dollars and then eight hundred thousand dollars afterwards Okay, and this is in twenty eighteen Who were your investors Yeah, so first investor was a good friend of mine from college And yeah, he wrote me the first check that enabled me to do a lot of this work that I talked about in making the cereal and this co manufacturer, and you're back in New York Yes. And so that's it. You're going to work with this co manufacturer on making unscaling this. Yes, I went back and forth. This company is based in the Midwest. I was in New York Um, There were two things that were going on. One I wanted to make sure that tasted great and that everything went according to plan. So every time they would make Catalina Crunch cereal, I'd go there and watch them make it. Number two was They could make the cereal squares, but they could not package the cereal itself. They could only put the cereal into the bag and box model if I wanted to do that They couldn't put the cereal into stand up pouches. Which is what you had. You weren't using a box, cereal box, It was a pouch. Yeah. Y And I was, you know, for better or worse, I was insistent on the stand upp pouch from day one The reason was I had spent a lot of time as a kid trying to get bag of cereal back in the box after I had taken it out of the box and it got grown very frustrated with the bag in box Also, if you open that bag up You then have no way to reseal it. So you now need to go find a paper clip or something else before you put it back in the box. I thought the pouch is easier to carry around. It reseals itself because it's has its own zipper. to me, it's just better So they were making the cereal, and then I had a second company, which was putting it into pouches for me And then from there, I was able to take it and ship it out to customers as they ordered it All right, this is all happening in twenty eighteen, your first year in business. Yep. So this is a busy year. It was, It was a very busy year. Yes Okay. late in twenty eighteen you decide to leave New York City and moveved to the Midwest. What happened? Wh What was the catalyst for that decision Yeah. so We had this company that was packaging the cereal into the stand up pouches the owner of that company was a type one diabetic like I was. And so he was very passionate about kind of helping me with this. The challenge was is they are a very large company. They do probably tens of millions of packages of food every day. And we were a very small company. So we weren't really a good fit from the go ahead Yeah. And so eventually they kind of came to me and said, hey We're just not going to do this anymore You're not your volume's not big enough. Our equipment's having problems putting the cereal into the pouches We're done so that was probably the first time that I was really trying to figure out what to do. So I basically moved out to Indiana and started doing it myself But there was no one else who could do it for you There was no one else I could find that was a good fit. And just to go into a little bit more detail, there's three steps here, right? There's the making of the cereial squares. There's then the tossing of them in things like cinnamon. toss them in cocoa to give a chocolate flavor. thenen there's the packaging And so I needed a company that could toss it in the seasoning and then put it in the packaging. and many of the companies that could do that also had some other sort of manufacturing process before it which I didn't need and they wanted to use So You had to build your own production facility Or was it a turnkey operation? Like what did you to buy a bunch of equipment? And Why in Indianapolis Yeah, yeah. I took I took a big risk honestly. att least it seemed like a big risk in my mind. because at this point when I couldn't find anyone else to coat and package the cereal That was the first time that I kind of ask myself Man, should I keep doing this or should I shut this thing down becausecause I had I had emailed a million in one food companies A lot of people are like, you're too small. A lot of other people are like, we don't do that or we can do this, but we can't do that. and So I was kind of thinking, all right, am I going to stop doing this or am I going do it myself? And can I do it myself And I thought kind of like the hell with it, let's give it a try. I chose Indianapolis because It is somewhat close to the center of the country. And so from Indianapolis, you can ship both to California and to New York in one week So gotten I've gotten a little smarter at this point from back when I was making things in my kitchen. And I started to realize from buying ingredients, if you have your thing located in New York, you're paying a lot more to ship those ingredients, say from Chicago to New York, right where a lot of the ingredients come out of the heartland. than to just have your place right where the ingredients are coming from. And then if you're in New York and you're shipping your finished pouches of cereal, say out to California You know, that can be two weeks for them to get over there on trucks So I ed at different places. I ended up renting about a three thousand square foot space in an office building in Indianapolis And I basically moved into that building bought like a cot off Amazon, set it up in the office, and then I would Do the cereal in the back And what does it be? I mean Did you have to buy like huge mixing bowls to like to mix the Cinnamon and cocoa, is that It doesn't sound that complicated, but if you're talking about large volumes of cereal I imagine you need you know, like, I don't know, what do you need? Yeah, yeah. So so Theres There's a few different ways of doing it When I started, I was thinking about it and' like, hey, I just need something that's going to turn around and that I can put the cereal into and it'll kind of spin around And then I can put the cinnamon into it and then mix it all together. right? And so I actually started by buying a washing machine and just not turning the machine on and just having it spin and then having the cereal inside of the machine. And so that was the first way that I was getting the cinnamon and the chocolate onto the cereal Okay, so you are in Indianapolis just grinding away, sleeping in the facility Give me a sense of like what your sales were like overall in twenty eighteen It was probably a million dollars or something like that. In your first full year Yes, Yep That's a lot I mean, I think it's crazy to say it, but you know, social media connects a lot of people together. Also it hired a marketer. And this guy was also obviously instrumental to helping rununning ads on Instagram, running ads on Facebook, basically getting the word out Okay, I imagine that you are A. You've got a D theC business And was that sort of the direction you wanted to head towards? like, did you think that D toC was the way to go or Obviously you would eventually get into retail, but was that even on your radaral So D to C was the way that I wanted to go. It was another thing that got me interested in starting the business in the first place because I was starting to see Lots of stuff was being sold online. There was Dollar Shave Club as an example of a company which had kind of gone outside of the usual retail channel and had grown really quickly. I realized after some time We weren't going to sell the entire nation online. When you're selling sunglasses as an example, if it's like one hundred dollarars pair of sunglasses and it costs like seven dollars to ship them So the consumer, you that works, right? But when you're selling a bag of cereal for seven dollars and then you're spending seven dollars to ship it to the consumer, that doesn't work. so That's when I realized, okay, if we're going to get really big, we got to be in the grocery stores as well we went into Whole Foods first Whole Foods had actually just moved from region by region buying to what they call global buying, which was basically one person that buys cereal for the whole country and puts it into every store. And so in twenty twenty in January, I believe, We got the cereal on shelf at all whole foods across the country What are some of the things you did? awareness at Whole Foods So I think within six months we became one of the top selling cereals at Whole Foods. Well, if not the top selling cereal at Whole Foods. And the reason that happened is I think a couplefld in twenty nineteen or so Keto became very popular great buyer there at Whole Foods. She was very excited about what we were doing And she said Hey We want to take your cereal, but we want you to change the packaging so that rather than saying low sugar in big letters, it's going to say keto friendly in big letters