#229 - The Rise of Ketone IQ: Creating a New Energy Category with Michael Brandt

In this episode of the Startup CPG Podcast, host Daniel Scharff sits down with Michael Brandt, founder and CEO of Ketone IQ, to explore one of the most ambitious category creation stories in modern CPG. Ketone IQ has raised significant capital, secured military research partnerships with the Department of Defense, landed major retail distribution including Target and Sprouts, and achieved mid-eight figures in revenue with a $110 million valuation—all while educating consumers on an entirely new-to-them ingredient.

Michael breaks down what ketones actually are in refreshingly simple terms: a form of energy your body naturally makes that your brain loves to use. When you're fasting, exercising hard, or following a ketogenic diet, your body produces more ketones—and that's when people report feeling sharp, focused, and energized. Ketone IQ bottles that feeling, making it accessible without the restrictive diets or intense workouts. Michael traces his journey from competitive marathon runner (5:57 mile pace) experimenting with biohacks and intermittent fasting to recognizing ketones as the common thread behind peak mental performance.

Throughout the episode, Michael shares the unglamorous realities of creating an entirely new category: early product development when ketones cost $30 per shot, convincing co-manufacturers to produce something they'd never made before, securing Department of Defense contracts to fund R&D, and building initial traction with special operators and elite athletes for whom cognitive performance is life or death. He discusses the strategic decision to start D2C-first to provide rich educational context that brick-and-mortar couldn't offer, how the brand's "nuclear furnace" of DTC business now fuels retail expansion, and why he wishes he'd started building his founder brand on social media earlier.

Whether you're creating a new category, scaling from D2C to retail, or building a brand that requires significant consumer education, this conversation offers honest lessons on stewarding new ingredients to market, maintaining IP moats while developing ecosystems, leveraging partnerships for education at scale, and why the "job's not finished" mentality keeps founders grinding even at eight-figure revenue.

Listen in as they discuss:

• What ketones actually are: your body's natural energy source that your brain prefers
• How ketones differ from caffeine: actual cellular energy vs. blocking sleep hormones
• Michael's origin story: competitive marathon running and biohacking led to Ketone IQ
• The keto diet connection: why low-carb eating produces ketones naturally
• Creating a new category vs. entering existing ones: the Gatorade playbook for electrolytes
• Early product development: when shots cost $30 and no suppliers existed
• Securing Department of Defense contracts to fund R&D with special operators
• Building traction with elite athletes, UFC fighters, and Ironman competitors first
• The strategic decision to start D2C-first for educational context and rich consumer information
• Why 90%+ of future volume will be retail, but D2C is the "nuclear furnace" driving awareness
• Landing Target, Sprouts, and Vitamin Shoppe: the "as seen on Instagram" shelf strategy
• NSF Certified for Sport: building trust and compliance when stewarding new ingredients to market
• The QR code strategy: always-on demos with first shot free via Venmo/PayPal reimbursement
• Preparing for competition: maintaining IP moats while developing category ecosystems
• Why Michael wishes he'd started founder content creation earlier
• The importance of personal brand before launching: building community pre-idea
• Hiring smartly: bringing in Monster Energy leadership for convenience channel expansion
• Reaching $110M valuation at mid-eight figures revenue
• What it feels like to scale: running faster, but never easier—more zeros, same obsession
  
  

Episode Links:

Ketone IQ Website: https://www.ketone.com Instagram: @ketone Founder Instagram: @michaeldbrant

Michael Brandt - Founder & CEO, Ketone IQ LinkedIn: https://www.linkedin.com/in/michaeldbrant/ Instagram: @michaeldbrant

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• Episode music by Super Fantastics
  
  
  

Creators and Guests

Host

Daniel Scharff

Founder/CEO, Startup CPG

What is The Startup CPG Podcast?

The top CPG podcast in the world, highlighting stories from founders, buyer spotlights, highly practical industry insights - all to give you a better chance at success.

Michael Brandt
I'm a big runner and so I think of a running analogy here, which is that as you get better at running, it doesn't ever actually get easier, you just get faster. The track this morning doing eight hundreds and two hundreds and it was terrible. It was a world of pain chewing on glass the whole time. And it was really hard to do eight hundreds and two hundreds. Three, four or five years ago when I was getting into the sport. I'm just a lot faster at it now. And so when I think about the business now, I'm as ambitious as ever and is working as hard as ever. I don't feel like I've made it. I think that there's so much more room to build.

00:45
Daniel Scharff
Welcome everyone to the startup CPG podcast. I am bringing you some very special energy today because we are talking about a category that barely existed just a few years ago that is really ready to drink Ketones. Ketone IQ has raised a ton of capital. They've secured military research partnerships and landed huge retail distribution. They have hit mid eight figures in revenue already. They've achieved $110 million valuation, all while having to educate consumers on a new to them ingredient. It's a super impressive story. I can't wait for you to hear all about it. And I promise we are going to start with a real basic 8th grader level intro into what? What are ketones? Because I needed that badly. All right, you're gonna love it. Here we go. All right. Michael, my friend, it is so good to have you here.

01:37
Daniel Scharff
So for somebody who has never heard of ketone iq, how do you explain what is it? Who is it for? What is a ketone?

01:45
Michael Brandt
Daniel, that's a great question and thanks for having me on. Thanks everyone for listening in. That question really gets at the belly of the beast of what we're doing here, which is that we're creating a new category that's not for everyone. It's not for the faint of heart. Let me also say there are a lot of ways to make great CPGs. There's a lot of way to create value in the world and you don't have to create a new category. I always think about Gatorade created electrolytes back in the 1960s with the Florida gators creating electrolytes as a new entrant into the pantheon of CPG and nutrition. And now here we are all these years later, Electrolytes is at tens of billions dollars category. You don't have to do that.

02:22
Michael Brandt
You can also have a celebrity backed peanut butter company that exits for a couple hundred mil in like three years, and you're laughing all the way to the bank in your own way. There's a lot of ways to create value in this space. So I always like to be really clear on what we are doing, which is very inventive. We are creating a new category. Ketones are an inventive new category. And my hypothesis is that it is going to be as large as electrolytes and collagen and these other nutritional primitives. Now to answer the question, like, what the heck actually is a ketone? Your body makes ketones. Everyone, all 8 billion people on planet Earth have ketones swimming around in their system right now.

02:56
Michael Brandt
It's a form of energy that your body already makes, your brain uses a ton of it, and you can actually make your body make more of it. A lot of us have heard of a ketogenic or low carbohydrate diet. When you eat really low carbohydrate, you induce your body to make a lot of ketones. You make a lot of ketones when you're fasting. You make a lot of ketones when you're exercising. I came in from this angle. I'm a marathon runner, competitive Marathon runner, run 557amile for the marathon. So I came into this space as a competitive athlete, curious about body's energy systems and what's something that we could invent in this space. What's a new lever that we could pull that would make a meaningful shift in the access to energy that we have.

03:37
Michael Brandt
And seeing all this literature, I've done a bunch of intermittent fasting as well, done a bunch of different biohacks, experimenting with shifting my blood biomarkers in different ways. Ketones kept coming up as this really efficient energy source and energy source that people feel really good on. The keto diet's really hard, but when you talk to people who are really into it, they feel really sharp. Same thing with intermittent fasting. It's not easy, but a lot of people, once they get into a groove with intermittent fasting, they feel really sharp. Likewise with running. Not everyone likes to run, but the people who run 10 miles a day, or 5 miles a day, a couple miles a day, like they get into runners high. And what is in the Venn diagram of everything I just said is your body's making a lot of ketones.

04:15
Michael Brandt
And for me, that was a light bulb moment that went off six, seven years ago of, okay, what if you could take that feeling? What if you could take a ketone put into A bottle and sell that to people. No one knows what the heck a ketone is, but I think this could be a big multi billion dollar category if we follow through on this vision.

04:34
Daniel Scharff
Okay, wait, so here's a dumb question because you said keto diet. Are ketones and the keto diet related?

04:40
Michael Brandt
They are. When you do the keto diet, which is also known as a very low carb diet, your body starts making a lot of ketones. When you're carbohydrate deprived, your body makes a lot of ketones because your brain can use carbohydrates sugar to run, and in the absence of sugar, it needs some other fuel. Fat stores cannot go to the brain. Your brain cannot use fat. Fat doesn't cross the blood brain barrier. And so our bodies have evolved this mechanism for converting fat into ketones to give our brain energy. And then within that, a lot of people like the way that ketones feel. So they like the way that when they're carb restricted from their diet or when they're exercising, when they're fasting, they like the way that it feels when their brain is running off of ketones.

05:27
Daniel Scharff
Okay, so I and I have a bunch more questions on this because I really am curious about this and I don't know a lot about it. So let's say a lot of energy products out there are going to rely on caffeine heavily and maybe there's some other sources of energy that they would claim in there as well. That could be things like sugar, it could be things like guadana or like L theanine or taurine or whatever. So okay, caffeine as I understand it, basically it's like preventing the reuptake of things that make you tired in the brain. Do ketones work in the same way? And would the experience be different from things like caffeine and some of these other functional ingredients?

06:05
Michael Brandt
It's pretty different from caffeine. You hit the nail on the head with caffeine. It's an adenosine blocker. Adenosine is your sleep hormone. And so you drink caffeine, you feel less tired. Caffeine itself isn't giving you energy in the sense that it's not giving you actual energy. There's no calories inside of it. Your body operates off of calories unit of measurement of energy. So to do things, to lift weights, to think thoughts, your body needs to turn calories into etp, which is the cellular currency for energy. If people remember their high school biology class, you need energy, your neurons need energy. Your cardiovascular cells need energy, your muscular cells need energy. Everything needs energy. Caffeine is a hormonal trick, you could say, or it's more along the lines of what you'd expect from a drug where it's interfering with a hormonal system.

06:56
Michael Brandt
So it's blocking this signal that's telling you that you should be tired. And so it's giving you more adrenaline, it's making you more sharp, but it's not actually giving you energy. Ketones have a small amount of calories in them and that's a type of calorie that your brain really prefers. When ketones are present, your brain soaks them up and uses them. And so there's actual energy inside of them that you're putting to use and you feel this brain power from it. And without going into the. When I think about brand building, it's like, does everyone need to listen to a 90 minute podcast about what a ketone is? Ideally, no. Ideally, what I think draws people to the product is at the end of the day, it's a feeling.

07:35
Michael Brandt
The same way that people get into coffee caffeine, the same way that people get into booze or nicotine or thc, that like we have these different levers that we can pull. You mentioned a number of other ones as well that feel different ways to different people. And that what we've done with ketones open up a new category, a new territory on the map where it's similar to a caffeine. If I had to put it somewhere on the map, it's like towards a caffeine, you feel more energized. It's not as, you know, jittery as caffeine. It doesn't hit you like a sledgehammer as much. You more so feel refreshed, like you got up from a nice nap and you're sharp, but it's over there with like, it's not magic mushrooms or something.

08:14
Michael Brandt
It's over more with like caffeine and nicotine is more of like a go do stuff and be sharp type of feeling.

08:20
Daniel Scharff
Okay, I got it. So caffeine, I think you're saying, makes tai go bye bye. But actually ketones are this like special energy source and maybe can make you feel more like when you get that runner's high or you're just like feeling really good and things are going well and you're on a roll. Like, I can see the appeal of that and I really do appreciate you explaining this to me because I think it should be clear to Everyone that I don't really know what this stuff is. I was never good in science class and now I feel like I have pretty decent base level understanding of it.

08:47
Daniel Scharff
And so I guess then a real question that I have for you is who's buying ketone iq because you're creating this category is this people who they know what a ketone in and they've been waiting for you to come along and give it to them in this format or you actually have to go around educating all of them as well.

09:05
Michael Brandt
The first million dollars we made was people wanted a keto. The next tens of millions of dollars that we made, the next lot of Runway out in front of us is very much creating a new market. 99,9% of people outside of like the very fringe biohackers who know everything that we've been talking about already, most people are not there. Most people. What I would say is most people do want more energy. Most people want to get more done in their day. Energy is fundamentally the raw material behind every human accomplishment. Whether it's having a good career, writing a book, building a building being a good mother, father, family member, that it's energy behind all of that. And so if you can tap into that market and it's a big market, we've seen in the CPG world, it's energy's an 85 billion market.

09:52
Michael Brandt
You've seen Alani Nuke C4 goes all in the last couple of years have exited for 10 figures in the energy category. And so it's a active market and there's a lot of customer demand for it. So we straddle this, it's a new ingredient, but it's in a very well trod existing market.

10:14
Daniel Scharff
Okay, so thank you. This really makes sense. And I know you guys have been in my mind wildly successful and almost kind of like came out of nowhere. I can't believe, like I know you're already mid eight figures on revenue. And I mean so obviously a lot of people are in line with this. And I remember talking to, I was at Founderland a couple weeks ago and somebody there was like, yeah, I have that on subscription. Like it's great energy. I love it. Like really clean type stuff. So with all of these customers that you're acquiring and keeping, how are they actually learning about it?

10:46
Daniel Scharff
Is it because you reach them through some education through an ad that explains what this is or are you they hearing about it from those early adopters who are swearing by it or are they, you know, walking into some Kind of a store where the people working the store are just really into it and they're explaining it to them for the customers coming. What is the biggest source for that?

11:05
Michael Brandt
It's a mix of everything that you just said. The one of those areas that we feel like we can really gas the hardest is the education on podcasts. On our website we have a site science page. We have different types of landing pages. We have a lot of podcast partners. We can't force our community members to like talk about it to their friends faster than they already are. Like they, that happens a lot. But in terms of what I think about, for what's the lever that we can pull to say, hey, in 2026 we want to grow X percent. Like where do we need to put money into to make that happen? I think a lot about partnerships. Partnerships is a really big part of our overall growth engine because when you're creating something so new, you need to download some knowledge to people.

11:53
Michael Brandt
They need to at least hear half minute from their favorite podcaster. Maybe that's a runner. Maybe it's Diary of a CEO podcast. Even Bartlett, he recently invested in the brand and we developed a media deal together. So he uses it before interviews. Top tier, some of the most famous people on the planet. Like helped drink a ketone IQ shot. And then that type of endorsement, that type of explanation of how it feels, describing the use case, really helpful that it's not just as simple as hey, here's a better tasting protein powder or here's a new flavor of popcorn. Those businesses have their own set of challenges in that, like I don't necessarily want to compete about with every other protein powder. It's a very mature, developed category, whereas ketones very nascent category.

12:38
Michael Brandt
But the challenge that we have then is like, well, what even is your category? How do I use a ketone? And so to solve that from a business point of view, I think a.

12:46
Daniel Scharff
Lot about partnerships that's really smart. Obviously it's working well for you. And I mean again, congrats on growing a business like this in a way where actually so much education was required because usually that takes a ton of money, right, to actually educate people in that way. But obviously you found a way to do it really effectively. And I know you're a scrappy guy too. I've seen your content on Instagram where you dress up in the Ketone IQ costume and get out there. I mean it really is very attention getting in the best possible way. And I know you like, you will get out there and draw attention to the brand. So good job, all of that.

13:20
Daniel Scharff
So speaking of working with ketones, what is it like to actually develop a product then in that environment, are they just commercially available the same way that you could go and source caffeine and then start formulating a product with it? So how did you actually do that product development and even decide what format this should be in?

13:38
Michael Brandt
The short answer is none of that existed. There's not a book of suppliers of ingredients that we bring to market. And that's been part of the adventure along the way that yeah, if you want caffeine, you can get caffeine powder from 300 different vendors and you can sort it by pricing or by purity or by source or different other characteristics. And it's a very robust market and it's the price is established and very easy to source ketones. On the other end of the spectrum, where when we started no one was making and when we first started it's we had the ability to make very small quantities, very manually and then have a lot of conversations, a lot of CPGs that are doing something interesting.

14:24
Michael Brandt
You end up in the conversation with your co man or with like a potential new co man where you're like, what if we did something new together? Like what if I don't want to just do what's in like your book and white label it and wrap my brand around. I want to do something innovative. And were that just to the maximum possible degree. So we had to go to comands that we thought in principle had the capability to make a ketone but like weren't already doing it. And we had to basically convince them, hey, like we will buy it if you do it. And after a few years it scaled up with a very early days. It cost $30 a shot. And we got this early traction. We first got started in 2019.

15:04
Michael Brandt
We got a contract with the Department of Defense to R and D Ketones and it was very expensive. We started working with other elite athletes. So it was very expensive, very low quantity and weren't even making a.

15:15
Daniel Scharff
Lot of margin on it.

15:16
Michael Brandt
It was just literally expensive to make and tasted crazy. We didn't have a full time formulator, it was just very rough around the edges. But it was interesting for a certain population, for special operators where it's a matter of life and death. Ability to be able to have better cognitive performance when they're physically mentally strained. That's meaningful. That was very valuable. Ironman athletes, pro UFC fighters, people for whom it's a game of inches. They were really drawn to it, no matter the price or cost or whatever in the early days. And so you. You asked about pricing and, like, how we got it to where it was. It was a stair step. It was like, get the initial MVP out the door. Get your first thousand true fans, maybe get some investor money.

16:00
Michael Brandt
And then just going around, okay, make the product a little bit better. Okay. Get more customers. Okay. Maybe raise a little bit more. Okay. It's like throwing a party. It's like you got to get the dj, you got to get the venue, you got to get all your friends to show up, and you just kind of like, keep cajoling everyone until, like, hey, it's actually really big party happen.

16:15
Daniel Scharff
Yes. Concentric circles. I like that a lot. And it just was reflecting because people ask all the time, like, oh, where's the white space in the market? And what kind of product should we be launching? And I always advocate more for. I like the approach of looking at your life and your hobbies and whatever it is and finding products that maybe solve your personal need. And when I think about your journey, it's pretty interesting because that is really what you did. You had this very detailed, deep passion. Your hobby, marathon running. Figured out a need that you had about getting this energy that was really different from everything else out there. And then when you're solving that, you're finding a lot of other people have that same exact thing. And a lot of them are very influential people because you're fi.

16:55
Daniel Scharff
Like these ultra runners and high performance athletes, a lot of them just are gonna overlap with being very well educated, powerful, influential people who, once they latch onto this once. When someone like that tells you about a product, if I have marathon runner friend who's like, it's really cool. They're like, I should try that if you're telling me that, because those are very influential people because they've accomplished a lot. Right. So I really like how you approach to the innovation here. So next question. And it is coming back to the education piece a little bit. But you make a shot that is your hero skew. You don't have a lot of room on the packaging to explain this to people. And it needs to.

17:32
Daniel Scharff
So what is the kind of language you need to prioritize on this small ounce bottle where, like, I know you say it's energy, but it's not caffeine? Like, what are the messages that are really gonna sink in with people if you have to prioritize them?

17:46
Michael Brandt
If I have to really prioritize one, it's that it's a feeling I want people to understand that ketone IQ makes you feel this sense of brain power. Within that there's other messages to say, what does this brain power let you go and do? Oh, it's brain power to help you feel more focused, is brain power to help you perform better at a, in a workout or a race. So it's power to help you curb your cravings so you don't feel as hungry. So there's a hierarchy of messaging where if I have 0.5 seconds, if it's an ad on the side of a bus, I want someone to download one message. It's ketone iq, take your shot. Gives you brain power. And then within that, there's more that you can go. And then you can go even further.

18:25
Daniel Scharff
Right.

18:25
Michael Brandt
You can go online, go on our website. You can listen to podcasts that we do. You can hear a lot more about the product. But I think about it as a triangle with that type of messaging hierarchy to it.

18:36
Daniel Scharff
I like that. I know there has been years of thought that has gone into that as well, and I've thought about that a lot as well, about even things like caffeine and why do people drink those products or take those kind of supplements and what is it that they're trying to do, Whether it's shake off the fog or whatever it is, like they just want to feel good, right? Like themselves, Like a good version of themselves, do the stuff that they want to do. So I really like this take on it that you have here. So is there stuff that you have to be pretty careful of on the messaging as well? Cause I know, I mean, what does the research let you do versus what you also just believe about it?

19:09
Michael Brandt
Yeah, you definitely want to be careful about what you're saying on your packaging. You want to be compliant with all the regulations. You want to be true to the science. And that's super important, especially when you're doing something new and you're stewarding a new ingredient, a new category to market. And so we make sure to be super careful on everything.

19:27
Michael Brandt
The work that we do with the Department of Defense, we work with Olympic athletes, we work with pro athletes across NFL, NBA, all the three letter sports orgs, and we make sure to just dot the I's, cross a T. So we do things like we're NSF certified for sport, which is the highest level of certification, where you're saying that everything that you say is in product is in the product, and that makes it compliant with the Highest level of anti doping agencies and every most stringent requirement that a pro athlete might have. Even though we know that 90% plus of our customers are not being tested for anti doping protocols like this. Normal people living their life, bringing a new ingredient to market with that standard I think is helpful.

20:10
Michael Brandt
I think it's good to have to shoot above the bar A because we do work with people for whom that is strictly necessary. You cannot sell to an MLB player if it's not NSF certified for sport. But then more broadly, you want people that are coming into a new category to feel really comfortable. I think these days with caffeine or protein powder or electrolytes is so well worn that there's going to be brands that are NSF certified or have other high levels of quality assurance on them on and the claims that they make. But they don't all have to be that like you get a coffee from your local coffee shop, you kind of know what caffeine is and does and you kind of know what you're gonna get and it's. The stakes aren't as high.

20:46
Michael Brandt
But I think early days when you're doing something new, when you're those first tracks in the snow, I think it's better to err on the side of caution.

20:54
Daniel Scharff
Okay, separate question for you that I was really wondering. Cause you're talking about creating this category and really I don't know if you're the first ever person to launch a product like this using ketones, but with the success that you have, if there aren't already, there will be a lot of competitors. Right. Are you seeing that already? How are they differentiating themselves from your product or what are you expecting to come and how do you prepare for it?

21:16
Michael Brandt
It's a great question. Yeah. That you expect an ecosystem to develop around you. If you're Gatorade, you expect there to be Powerade and everyone else. It's good to an extent to see signs of life in the ecosystem. If you're the only person crazy enough to do what you're doing, you might actually be crazy, right? You might. In the early days it's fine. But at a certain point you expect that if it's a good idea that other people are going to catch on to it. So we think about the whole ecosystem and yeah, there are other folks that are coming in. We do a lot of development on our own to protect our key ip, our key formulations and access to ingredient.

21:54
Michael Brandt
We have a first mover advantage and we're at a scale where we're Able to lock in and continue to compound on things like getting the most efficient supply cost and developing and continuing to expand out our ip, whether that patents or know how trade secrets around what we're doing to make it so that we have a really well carved lane. If you're the first mover, there's a lot of hard things about creating a new category because you have everything we've been talking about. You have to invest into education, you have to create. But the plus is that it's all white space like and if you're the first so you can kind of plant your flag and. And create your lane and ideally hold onto the space around where you're executing because you were just the first one there.

22:37
Michael Brandt
And if you're savvy about, I mean it's every. There's several different ways you can think about moats. It's hard moats on your IP and your formulation and trade secrets there. You can have softer moats on just like brand and community. And for a long time Gatorade was the first one that talked about electrolytes. They had Michael Jordan sweating out electrolyte bee. That was me growing up. Probably guess your age but you probably saw this stuff in the 90s and Gatorade was just through Pure Brand. I think other people could put electrolytes in a bottle, but through pure Brand they were just like the cool kid on the block.

23:07
Daniel Scharff
Yes. It kind of seems like a ludicrous product in retrospect, but it was very compelling. It's like as much sugar as in there.

23:15
Michael Brandt
Yeah. Sweat out neon blue sugar drops or.

23:18
Daniel Scharff
You don't even call it by the flavor name. You're just like the blue one, the orange one, like yeah, you know what that's from. Okay.

23:25
Michael Brandt
So there's a lot to think through about how to shepherd in a new category. But yeah, you're asking the right questions. We think about it a lot. Like how do you develop a category while also maintaining what you've been able to secure with your first mover advantage. How do you make sure that's enduring?

23:41
Daniel Scharff
Well, you gotta run fast, which you know how to do. So tell me a little bit more about what your go to market has been like because I know you're very heavy D2C and then also have moved into retail as well and had success there. Can you take me back? Just talk me through what that whole rollout has been like. Continues to be like, what your goals are.

23:59
Michael Brandt
Yeah, and that's such a good question. I know were riffing about this before hopping on and when were at Founderland a few weeks ago and I feel like that's so key and if I were to run it again, I would run the same playbook and that hopefully is valuable to other people, especially people that are following this similar pattern of brand of really inventing something new. That we started out D2C, were very happy and we made our first eight figure top line business before we even started looking at retail or broadening out into brick and mortar. And the reason I think that's such a good idea is because the Internet gives you more context. People come to your website because hear about you on a podcast.

24:40
Michael Brandt
They can read your website, they can look at pictures, they can look at graphs, they can read blog posts, they can read reviews of your product. There's so much rich context and especially when you're creating something new, you need to do that. People want to see that around something so inventive and new at scale. You know, when we think about how does become a billion dollar business at scale, I expect 90% of our volume is going to be in retail and brick and mortar. And we're nearing, we're getting close to a crossover point. Our retail business has been growing really rapidly. We're in Sprouts, Vitamin Shop, we just launched in Target. We have a bunch of other exciting launches coming up.

25:15
Michael Brandt
But I think our secret weapon for all these retail launches is that we have this nuclear furnace of our DTC business and we have a loyal fan base, loyal subscribers. We have people that just know about the product as we scale. I think about our D2C business as a marketing engine that is itself cash accretive but which allows us to spend eight figures plus over time that then provides this wonderful halo for our retail business. And it's really interesting when you look at our category at Target, we're sitting next to it's like the D2C shelf. Everything there is LMNT, it's armor, colostrum, it's Seek, Protein. It's all these other brands that have gotten to some scale on D2C and then now they're in retail groons. Is there you see this pattern and I think that you almost have to do it.

26:06
Michael Brandt
Like I wouldn't want to be sitting on a shelf at Target without having that keel of a business behind of generating the awareness through D2C. I think if you just plop down on a shelf at Target, you either need a massive D2C engine behind you where millions of people are already aware of you or Like a celebrity founder or something. I just think gone are the days where you can set a really nice packaging on shelf and that's that I, I would love to be wrong on this. Like kind of strong opinion loosely held. Like when I look at our shelf at Target it is all e commerce growers that then transpose that momentum into retail.

26:40
Daniel Scharff
I like it. It's almost like an as seen on Instagram set the way they used to have as seen on tv. But it's like you have been marketed this online and now it's here. It's a thing, check it out. It's really interesting especially also because I wouldn't know as a consumer exactly where to find your product in the store. Probably like is it going to be in the energy set or I don't know you then you have like those Celsius packets, the stick packs that you'll see in a different part of the store. It might be in supplements or like vitamin set, something like that. So if you're not in the as seen on IG set where typically is it going to be merchandise, does it usually make sense to you?

27:12
Michael Brandt
Yeah, we're in the set that's we're next to the electrolytes and the protein powder. Think about it is the active nutrition sports nutrition set. That's where we typically have home base. What's really cool about our product and the shop format is that it can go a lot of other places as well. Oftentimes we're also at check stand. We're often also in the fridge next to the five wellness shots like the everyday dose like that set. So you can go a few different places as you know as probably a lot of people listening know it's really good to be cross merchandise a lot of places you want to interrupt customers in multiple different spots in the store and then you typically have a home base.

27:50
Michael Brandt
You have like your main category buyer who's really rooting for you and they're the ones that's like helping you work to get placed at the checkout or they're helping to work to place you on a shipper, seasonal shipper in the summer next to at the front of the store.

28:04
Daniel Scharff
Okay. So as you have been scaling into retail I'm wondering is there anything that you feel like you've done really well to support the business and all of these retail launches sprouts target any particular investments that you've made that you feel like just really nailed it and helped you guys get all of the new trial awareness, interest, repurchase that you were looking for in the retail setting?

28:27
Michael Brandt
Yeah, that's a great question. There's a couple. The one obvious One is the D2C business. The existence of partnerships, the fact that when we launch in Sprouts on day one, there's already millions of people that have heard about the brand and know about it that we can point to it. So that's been super helpful in retail is never start, never having a cold start. And then we have our partners point people to the new launch. So a of lot, a lot of our media right now is telling people that they can buy it on our website or they can go to Target because we just launched in Target, so using our e commerce engine, definitely a big secret weapon.

28:58
Michael Brandt
And then a couple other things are kind of fun is that we have a QR code on every shot that lets you get your first one for free. So you can get your first shot free and just baked in. It's not a campaign limited time or anything, it's just forever. And we put that on the product itself as well as analytical marketing around it. Because my thinking is, okay, I can explain what a ketone is and someone can listen or not listen. And there's some friction there potentially. But if I can just say, hey, it's free, try it. And if you like it, good. And if you don't like it, you know, no skin off anyone's back because it was free. And so rolling that out at scale and then we provide all the support.

29:33
Daniel Scharff
On it, you scan it.

29:34
Michael Brandt
All that you have to do then is take a photo of your receipt. And then once you've scanned the QR code, it's like two steps. You get reimbursed immediately on Venmo or PayPal. And so we handle all that. And so retailers love that because the retailer's getting the full ring and customers love it because they get to try it. Anyone can try. You can tell your friend to try it. Everyone gets a first shot free for any phone number. And then we love it because it's trial at scale. Like we don't have to have someone sitting at the store doing demos on a Sunday as people are walking by. We think about it as like always on demo that like anywhere our product sits in any store, that we're essentially doing a. A demo and driving trial.

30:09
Michael Brandt
And that's been helpful for retail for sure.

30:12
Daniel Scharff
That's so interesting to me. That's really clever. And I assume you probably have pretty good margins at this point to be able to do that because obviously it is Expensive to give people a free product at the retail price, not just your cost. Right. But at the retail price. So that's pretty interesting. So, Michael, I guess just one question I have for you also, because there's so many founders and brands in our community who their dream is to get to where you are. Like, I think they would all look at you as being incredibly successful and hoping to grow their brands in that way. How does that feel to you to be in the position that you're in now where you have. You're in mid eight figures, your company valuation is 110 million and going up as we speak.

30:51
Daniel Scharff
What does it feel like to you now to be in that position versus rewind it a year? Two years. I saw you at Beverage forum two years ago doing your pitch in the costume, like doing what you should be doing, just hustling. As a founder, how do you feel like, how do you internalize all of this year after year as you grow?

31:08
Michael Brandt
I'm a big runner and so I think of a running analogy here, which is that as you get better at running, it doesn't ever actually get easier. You just get faster. I was at the track this morning doing eight hundreds and two hundreds and it was terrible. It was just a world of pain chewing on glass the whole time. And it was really hard to do eight hundreds and two hundreds. Three, four, five years ago when I was getting into the sport. I'm just a lot faster at it now. And so we. When I think about the business now, I'm as ambitious as ever and is working as hard as ever. I don't feel like I've made it. I think that there's so much more room to build.

31:42
Michael Brandt
I appreciate that I've come a long way, but I'm not like patting myself on the back. It's that the quanta. There's more zeros in the back of the numbers that I'm processing now. But I'm still as obsessive over them as I was in the early days when were like shipping our own packaging out of our apartment and I was customer support, ticket answer guy and that balancing our books every month and like, oh, when I was doing all those things, like that stuff all really mattered.

32:10
Daniel Scharff
It did.

32:11
Michael Brandt
It's true. When you like you and your co founder maybe a very lean team in the early days, like everything really matters. It still feels like everything really matters. It's just that the scale of it is larger. So yes, no rest for the weary. Like we keep working really hard and you gotta kind of At a certain point, just enjoy it. It's like asking someone how they feel at mile 18 of the marathon. It's like, job's not finished. Like, we're still going.

32:35
Daniel Scharff
I like it.

32:36
Michael Brandt
Job's not finished.

32:37
Daniel Scharff
So maybe a little bit less of the existential dread of, like, is this even gonna happen? Am I wasting all my time at least? Hopefully now at this point, you can see like, okay, this is paying off. This is working. This is going great. I still have all of these things that I gotta work my butt off to really get this to where I want it to be.

32:52
Michael Brandt
And that is true. That's actually a very good read. If I'm thinking about the difference between now and the early days, that's actually a really good read, Daniel, because I was working hard in the early days. There was more of a question in the early days of, does this thing have product market fit or am I totally crazy? You're right. Now when I work, it's like, I don't have any doubts there. I know that there's product market fit. I know that we have this playbook. I know how to keep building it. My questions are around, okay, we just launched in Target. How do we make sure that the turn inside Target is really good?

33:19
Daniel Scharff
How do we.

33:19
Michael Brandt
Like, what's the right amount of push to do there? Like, how much do we have merchandisers visiting our stores? How much should we have our partners pushing people? How much should we be really peeling off D2C traffic and pushing it towards Target? Because the margin is better on D2C, but you want to make sure that your new account is really successful and it's more of a how. It's less of an if at this point, I think early days is like, I don't even know if they're very early days. I don't even know if this is going to be a thing. Like, maybe, I don't know, just. I think for a lot of entrepreneurs, you're making your first thousand dollars, first maybe million dollars. Somewhere around there is. You're still like, is this actually a thing?

33:52
Michael Brandt
And then at a certain point, it's a thing, and you have product market fit. And that box is checked and it's about, okay, how do I execute this? How do I go? Like, how big can this thing be? How quickly can I grow this? But yeah, I'm not like, I think it's a very good read, Daniel. Like, I'm not thinking about doing anything else or wondering if this is a thing.

34:10
Daniel Scharff
Sort of like moving up the hierarchy of needs like, okay, I've got the, like shelter and the food safety. Now I can worry about that next tier. Like, I still am just going to sit here working on the business and worrying about things, but it's the next tier of things that I can spend my energy on. So another question that I have for you is, so you are, I'm sure, a total E comm pro after having such success that way as you were scaling into retail, how do you learn the stuff that you don't know when you're figuring out what are the right retailers to start with, the right strategy, the right distributors to go with the right way to support the business? Are you relying on sales hires that you've made or brokers or investors to give you the guidance?

34:50
Daniel Scharff
Or do you just, are you really just figuring it all out yourself and piecing it together? How do you learn all the stuff you don't know?

34:55
Michael Brandt
Definitely learning a lot from people smarter than me all around. And one thing I will say is that I think a good D2C team can learn retail because D2C is pretty technical and I think a high IQ sharp DTC operator can learn the ins and outs of retail, not overnight. And there's still just a lot of hard work involved. Even if you know the strategy, there's still just a lot of ground game involved in pulling it off. So coming from a good base with a team and just, you know, smart people like sharp operators, sharp on the money and underwriting of different spend that we do and trying to attribute things and understand what's working and not. And if it's working, spend 10 times more on it. And if it's not working, stop spending anything on it.

35:39
Michael Brandt
Like taking that ethos into retail has been really helpful and then, yeah, just surrounded by amazing people all around. Some of our investors, like Family Fund, for instance, has been really helpful as an investor. Like, they're real Sharp. Joshua, the GP there, also runs Forest Brands and they've helped us hire some amazing folks and getting talented people. Like our head of Convenience Channel was a senior leadership at Monster Energy. And so when we think about, okay, how do we take over Convenience Channel? I want Ketone IQ Shots to be everywhere where Energy Shots are sold. It's like, I don't want to reinvent the wheel there. I actually want to hire Art, who's just the absolute star from Monster Energy and have him run his playbook and everything that he learned, good, bad and ugly is already baked in. And he knows what he's doing.

36:29
Michael Brandt
And so there's A lot of you hire really smart people who know the ins and the outs of the channel way better than I ever could. So all across the org, like people advising or investing, thinking about big picture strategy people boots on the ground, figuring out the execution with that within accounts. Yeah, a lot of just find the smart people be very. I would say I try to get outta my own way. Like my job is not have all the answers. My job is to hire the people who have the answers and then learn as much as I can. At the end of the day I gotta stitch it together, make sure the whole picture comes together. But lot of trust.

37:01
Daniel Scharff
That's great. It's really interesting to reflect on what about what do you wish you had known that you didn't? What'd you get wrong or get to a little bit later than you wish you had? Obviously it's going really well, but I know there are always learnings, always things that you could wish for other people, for them to understand, to shortcut some things.

37:18
Michael Brandt
I wish that I'd gotten into personal founder content creation earlier. I've gotten into it and it's been really rewarding and it's been a great way to connect with other partners that we work with. It's been a great way just to get my story out there. There's the Ketone IQ story, like the Ketone handle on Instagram and there's the Ichael Dbrandt handle and being able to kind of play between the two and like my team runs at Ketone. I'm involved over there as well. But then I'm just like full on my own personal. It lets me talk about running, let me see me talk about family. I'm a. I'm a dad, I have two kids. It lets me just like round out my own story and like for what we do which is creating a new type of energy. Like.

37:58
Daniel Scharff
Yeah.

37:59
Michael Brandt
And energy is the raw material behind every accomplishment. I think it's very helpful for me to tell my own personal story. What do I use my energy for? What am I getting after in life? What are my ambitions? Going behind the curtain a little bit as an entrepreneur and talking about what.

38:13
Daniel Scharff
Yeah.

38:13
Michael Brandt
What it's like to build a business, what it's like to train hard marathoning, what it's like to build a family. Trying to be helpful back to the community, helpful to other entrepreneurs, helpful to people. Just getting into marathon running, try to kind of give it back and create a community around. I wish I'd started it sooner because my early days philosophy was like put everything into the brand early days it was let the brand speak for itself. I don't actually want to be famous or anything. Like I was just thinking like make a good brand, make the brand famous. Like people should like the brand. Like make the brand really big and really famous and maybe I IPO it or sell it to another company and like make something really cool in the world. Make, use it to generate wealth, make something.

38:51
Michael Brandt
It's just like it's all my initial thoughts, it's all about the brand. And that hasn't changed. The brand is still the most important thing, but making room for like the founder brand as well. And that at the end of the day a lot of people don't necessarily even want to hear from like your brand page. Like they actually want to hear from humans and that there's a realness that I feel on my own account that I don't feel on the brand account and just like a dialogue and like brands, it's like what even is a brand. It's like this amorphous logo thing that posts stuff. It's like it can be harder for people to relate to. I think especially in this era where people don't love being advertised at. They want authenticity, they want vulnerability.

39:26
Michael Brandt
And so getting out there and being real with people as a founder I think is something I would do again, I would do earlier. It's actually something I think about if people are considering even starting a brand, if they're in school or they're at a full time job and they haven't yet taken the jump. I actually really encourage people to get started on your personal brand because you can do that now and you don't have to like there's no moq, there's no minimum order quantity of like bottles that you need to order or cans you need to order.

39:52
Michael Brandt
You can get started on it, you can build a follow you'd rather once it's time to make the jump from your job or from school or whatever, once it's time to actually launch something, you'd rather have ten thousand, twenty thousand, a hundred thousand, you'd rather have some followers and have a community and a niche and all of that develops something new. You have an audience and you can get feedback and you can get your first hundred orders, your first thousand order and then the ball gets rolling. You see, hey, why are these people reordering it? Why aren't these people reordering it? Like and just having that seed crystal of a community around you as a founder can be pre idea like you don't even have to know what you're going to go and do.

40:29
Michael Brandt
But just like, I'm not the content guru here to say exactly. There's plenty of those out there. But that to like, take that advice for people and build out their own personal following, I think just gives a really good launch pad to starting any brand later on. And it's something I wish I did more of at the start. You know, no water under the bridge. You learn as you learn, so no major regrets, but it's something I would potentially do differently.

40:52
Daniel Scharff
Yeah. Especially just on the partnerships track that you talk about. Yeah. If you're going hard in retail or looking for investors or other kinds of partners, the social media aspect of it, I think matters so much because I have learned in this business that people support people much more than brands. And having been the face of brands and all of that, just when you meet buyers, they are like, yeah, I've seen you and I've seen the kind of stuff you do. I'm very active on LinkedIn. Probably a lot of people know that. And it really matters. And you can also do different kinds of content on your personal LinkedIn. I recently saw one of those LinkedIn ad videos that says that you typically get about 10x views on your personal LinkedIn as from a company page.

41:32
Daniel Scharff
So we can all wish that we could post things on the company page and that it would make its way out there and we could have huge company page distributions. But it doesn't really work like that. People don't just love to browse LinkedIn for company posts. They like posts from people. And if we're being honest here, like, why do I do this? And all of the stuff that we do to help brands, it's actually way more about the people than it is about the products, even for me, because there's a funny programming in my body that just. I get really excited when I can help specific people to do things. And that's why I like this early stage part of cpg, because I can talk to you, Michael, like you're very involved in the business at this early stage.

42:11
Daniel Scharff
It's not like when it's a massive scale CPG and you know, the founder's not even there anymore and who knows? And it's just like a lot of different people doing different jobs. So that's the part that's very exciting to me. And I think that is why that kind of content does really well on LinkedIn and people have really different kinds of strategies for their content on LinkedIn. Right. And I think people figure out how to lean into the thing that is really unique about them and what their pillars are and what their energy is and just help people get to know them. And hopefully that's a good them that people want to get to know. And the content is good, but it really helps you, I think, accomplish a lot. And I really also like your point about you can get started doing that.

42:48
Daniel Scharff
And I've seen a lot of founders celebrate that. Like, yeah, thank you to so and so for giving me the push to just get out here and start putting content out there. And I don't think it means put out some just hogwash, some terrible content just to post like here's what I have for breakfast today, like and share. But it is good to practice that stuff and then find what your messaging is all about, whatever that is. And you'll figure out a lot of stuff you want to work, doesn't work, but then you'll figure out a lot of stuff that does. And hopefully it is something that helps you accomplish your goals while also connecting you with people. What do you think? Good assessment?

43:22
Michael Brandt
I think that's an awesome assessment and I think that's one of the things that makes your line of work hard and also really special is the read that you have on people that at early stage it really is a bet on people. And I think people need to hear that again and again that your idea has to be good enough. Like you can't have a bad idea. But a lot of businesses, they win or lose. There's that saying that most businesses die of suicide, not homicide, that it's unlikely that your competitor crushes you or whatever, that your business model like couldn't work. Like if you've thought through those things, you have something good. Like it really comes down to you and your ability to be resilient and your ability to be creative and your ability to be a talent magnet and all those things.

44:02
Michael Brandt
And it makes it really helpful for people to hear that from you in the position that you're in as a investor, as just a general pacemaker, trusted person in the space that the character read is at least as important as the business model and all that, especially.

44:15
Daniel Scharff
In the early stage.

44:16
Michael Brandt
And that it does tie into the content side where if I worked at Pepsi and I was thinking about, hey, in a year or two, I want to make a jump, I would start posting interesting things. Whenever a company gets acquired, whenever a company does a fundraising round, give your take on it. What's your take? Like give your Rundown on it. What's your analysis of whenever a company does a rebrand, you see these folks out there and like, they're smarter or not smart than you. Like, if you're inclined to do something in the space, if you have that kind of itch to be a founder, you probably have a good sense of judgment and good sense of taste. And, like, we all want to hear that. That would be my message to people.

44:50
Michael Brandt
Like, we want to hear what your take is on the Cracker Barrel rebrand or on the Celsius buying Alani New or whatever is going on. Whatever's interesting to you. And then what's your take on that? That's interesting. Like, people want to hear that. And you'll end up attracting the right people around you if it's an actual valuable, interesting, provocative take. And then you've already won half the battle because people, at the end of the day, are investing in you as a person. If you just have it planted in people's mind that you have smart takes and you're thoughtful and all that stuff and okay, when you go and launch whatever it is, you've already won half the battle. Like, you already have community, you already have investors who would back you already have customers who would try out your product.

45:28
Michael Brandt
You have that kind of momentum and it costs time. Right. I think you can get just very low production cost. You and your laptop can, like, go viral on LinkedIn and Instagram and everything. Yeah, yeah.

45:38
Daniel Scharff
And we say following, but really what we're talking about is value, like adding value to people in whatever form it is. Like, the content that you have is valuable to people in some way. And it can be a lot of different ways. It can because it's informative or it can be entertaining. A lot of different things. And you can do any of those on. It can be humorous. I mean, some of the most shared content that I've had has just been a dumb meme that just shows a little bit of our insight about the founder journey. But for whatever that is, it does add value to people's lives. People are human when they show up at work, still, they're still humans. They're not just their professional self. And there are a lot of different things that can work.

46:16
Daniel Scharff
So I really like that angle on it. So hopefully that inspires a lot of people to just get out there and not wait to build. Because build it. Adding value and then finding that, oh, I actually have a little bit of my own distribution here is incredibly powerful. Whatever you decide to do with it which then will be the next task. So as a media company, I really do appreciate that part of it and that is what we do all day is just try to figure out how we can add value and that's the business that we're in. So, Michael, I really want to thank you. These insights have been so great and I'm just really excited that I got to catch up with you and learn about this incredible ride that you're on here, defining this new category, bringing it to everybody's attention.

46:59
Daniel Scharff
So I guess last question for you. What is your hope? So fast forward five years, how will people be talking about ketones? Is it going to be just part of the lexicon and the general awareness and psyche at that point, the zeitgeist, or do you feel like people will still be learning about it in the way that they still are in some ingredients? What's your prediction and what's your hope?

47:24
Michael Brandt
My prediction is that we'll be very far along it just be part of mainstream vocabulary. The same way that people go to the gym and afterwards or I need some protein. People are going to be speaking that way before a big meeting or before a workout or before they're doing something where they want to be completely dialed in. They're going to say I need some ketones. And there's a lot of people who their work really matters and the caliber of energy that they're putting into their body. It's analogous to when you're filling up your car like there's the premium gas, there's the less premium gas and that I think for a lot of people it's a no brainer that they should fuel with the best possible fuel. And I think we'll have done our job in five years. If that's just mainstream.

48:08
Michael Brandt
If you see it in TV shows and movies and it's just like part of the culture that's something you do is you take some ketones. The way that you see, you know, people talk about creatine, people talk about electrolytes, that if we're in the pantheon of discussion in that way, I'll consider it a success. I think that it's a gradient over time. It's not a black and white thing where like we're much bigger than we used to be and there's much room, more room out ahead of us. So do I think we're going to be in like every single American's kitchen in five years? I think that'd be aggressive, like that'd be very ambitious. But I Think we'll be well on our way. Yeah.

48:39
Daniel Scharff
All right. I love it. And if any of you out there feel like you need some ketones then you can head to ketone.com and pick up a pack and try it out. So definitely do that. Maybe check em out at Target or Sprouts, maybe follow Michael on LinkedIn or Instagram as he dropped the handle a little bit before. Any closing words, Michael or any other ways for people to support you and.

49:00
Michael Brandt
Ketone iq, I would encourage people to interact back. If you have questions from anything on the episode I'm around like let me know, shoot me a message and yeah, let's chat. Hopefully I can be helpful to people. And yeah, I appreciate you gave all the great shout outs you can find me. I'm at Michael Dbrant on Instagram and our brand is at Ketone. And yeah, love to hear from people. All right.

49:21
Daniel Scharff
Amazing. Nothing like owning that ketone.com domain to show people that hey, I was here first.

49:27
Michael Brandt
That's one of those good examples of when your first tracks in the snow doing something then like try to land, grab what you can. I'll just say that.

49:34
Daniel Scharff
Yeah. All right. Thank you so much Michael. I hope everybody enjoyed this as much as I do and we will see you all soon. All right, bye. All right everybody, thank you so much for listening to our podcast. If you loved it, I would so appreciate it if you could leave us a review. You could do it right now. If you're an Apple podcast, you can scroll to the bottom of our startup CPG podcast page and click on Write a review. Leave your company name in there. I will try to read it out. If you're in Spotify, you can click on about and then the star rating icon. If you are a service provider that would like to appear on the start up CPG podcast, you can email [e-mail] lastly, if you found yourself grooving along to the music it is my Band.

50:18
Daniel Scharff
You can visit our website and listen to more. It is super fantastics.com thank you everybody. See you next time.