Subscribe
Share
Share
Embed
Build a Business Worth Buying brings you candid conversations with industry leaders, M&A experts, and successful founders. Learn advanced strategies to scale, optimize, and prepare your business for an acquisition—because building a business worth buying starts with smart decisions today.
John Huljak (00:00)
I used to have suppliers send me texts with pictures of Native at the store. And part of me was kind of like, great, you saw Native at the store, but you could see the pride they had. They were like, we helped you do this. We built that.
Aaron Alpeter (00:48)
When large companies acquire fast growing brands, the conversation usually centers around the deal itself, the valuation, the multiple, the strategic rationale. But the harder question comes after the acquisition closes. How do you integrate a breakout brand without destroying the thing that made it valuable in the first place? Today's guest is John Huljak. He spent years operating inside that exact tension. Through his leadership role at Native, one of the most recognizable digitally-faced personal care brands last decade,
John has had a front row seat to the realities of scaling an insurgent brand inside a much larger organization. Not just preserving the growth, but preserving the culture, the speed, the decision making, and the customer trust while operational complexity increases dramatically.
If you're an acquirer, operator, investor, or founder thinking about what happens after an exit, this episode offers a rare look into one of the hardest and most problematic parts in modern M&A, how to scale what makes a brand special without suffocating it in the process. You're gonna love this episode, and with that, let's welcome John to the program.
Aaron Alpeter (01:43)
John, welcome to Build a Business Worth Buying, how are you doing?
John Huljak (01:46)
I'm doing great. The honor to be here. Thank you.
Aaron Alpeter (01:49)
Well, thank you so much. think we met like a month or a month and a half ago and just you, your story, what you've done. Obviously it's a brand that I know very well, one I've looked up to a long time. Why don't you just give our listeners a background on who John is and what experience do you have building a business worth buying?
John Huljak (02:07)
Great, well, part of who I am, I think, is who I am not. I started with an amazing opportunity at Procter & Gamble 27 and a years ago. And what I realized early on was that I wasn't corporate. And I had a unique set of capabilities. And it's taken me a long time to really kind of figure out how to use those. And P&G was a great source of helping me with that. And one of the things that finally
hit for me was when I had the opportunity to work on native and native, how we, approach native and how we looked at native, but Moiz so just the people at native. finally kind of found my tribe and that was, in some, in some cases you could say, too bad it took 19 years to find your tribe. But in other cases, I would say it was 19 years of learning from one of the best companies in the world to find what I'm uniquely skilled at, which is that entrepreneurial mindset.
asking questions why. one of my biggest fuel items is anytime someone says just because, or it's the way we've always done it, that just gets me going. And it makes me want to ask Moiz questions. And when I started working on Native with people like Moiz Ali, the founder, I realized that they did that same thing. You never accepted that. It's because of the way it's always been done.
So I think I finally just found the group of people that I love working with. And that's why I think I enjoyed Native so much and we had a lot of success and it's been a great run.
Aaron Alpeter (03:33)
When you say you found your people, did you inherit the team that Moiz had built or were these mainly P&G folks that came in and staffed it after the acquisition?
John Huljak (03:41)
No, great question. was initially it was all native. ⁓ It was native OG we call it different things, ⁓ but native OG is probably what we call it the most, native SFers. And what Procter & Gamble decided to do early on was to really try to keep that unique identity. And so what they did is not only left them in San Francisco, but then they slowly integrated and they were very careful and very cautious with who they brought in.
So at the time I came in, I was one of a couple P&G people that were asked and there was no playbook. It was not go in and supervise. It was not go in and change things. It was just go learn and just go see where you can help. And I think that approach made all the difference because I would argue that we did not integrate native early on. I would argue that native integrated us, a native integrated me. One of my proudest moments ever was sitting in a room.
maybe one of the most awkward moments ever too, where we were just one giant office, didn't have a ton of meeting rooms. And there was a large meeting going on with everyone in the office except me. I was out there on business travel, but I was P&G. So I kind of sat off to the side and was just doing other work. And somewhere in the course of that, someone, there was an event, an off-site they were planning. And they said, I heard them say, you know, should John Huljak go on this? And Moiz said, yeah, he's native. He goes. And so.
It truly was a matter of how do I become accepted into that brand and other fellow P&G'ers that I work with had that same approach is our goal was how do we get them to accept us, not the other way around.
Aaron Alpeter (05:20)
Yeah, I love this and we're gonna go so deep into.
what it looks like to actually integrate something successfully because by all accounts, Native is a great success for Procter and Gamble. I gotta tell the story before we go any further. I actually have a slight connection to the acquisition. At the time, I was working with someone who had put in some, just $25,000 angel check into the business and it was like, did it, 10 months ago and I was sitting with him and he got a call from Moiz and said, hey, we just sold to Procter for this amount and
The look on his face is like, my gosh, I just 5X my money in a year. This is amazing. And so it's like, whoa. And then you start hearing Moiz about how they built Native and how it had positive unit economics. It was profitable from day one and how there was very little equity on the table that they had sold. And it's just a classic. More people should build a company like this. And so I'm glad to be talking about this company. And maybe we'll have Moiz in a future episode.
John Huljak (05:56)
Yeah.
Aaron Alpeter (06:19)
But I really want to dig into the strategic perspective and why they go out and do this. So let's just start broadly speaking. ⁓ Large companies like Procter & Gamble acquire these emerging brands. they're doing it for, are they doing this for growth or are they doing it for something else? Like, why are they doing this?
John Huljak (06:37)
Yeah, I can't
decision makers at P&G as they acquired it, but I think a lot of times when they acquire brands, and I was part of some other acquisition work, and I think you acquire for lots of different reasons. I think the brand name is often very powerful. Sometimes these brand names can do things that our brand names couldn't do.
they're talking about natural or they're talking about something else and maybe that doesn't work with another brand. So I think sometimes you buy for the brand name. I think other times you buy for the technology. think other times you buy for the but I think what really you should be buying for is kind of the strengths that you want. Like what are the strengths? And I think, they are buying it for that reason, but I don't always think that's top of mind.
I don't think they think about we're investing into 20 people that know something about startup and DTC or, guerrilla marketing or whatever that maybe that's not our, our, in our wheelhouse. So I think sometimes we, we, you don't think about the people, but what I learned very early on at native where these individuals all had an incredibly unique skillset that I didn't see, you know, commonly.
in my current company. didn't look around the corner and see these people because they were so unique. I think buying it for that, I think there's other reasons. I think similar mindset, but like the culture. one of the things that I probably learned the quickest and most from native was this whole culture that failure is okay. in a corporate world,
The reason you have so many, check steps and layers is a lot because you can't afford to go out in the market and fail. You just can't because of the scale and the size that you're doing that. But with native, they very much had that approach of we're going to we're going to put some ideas out there. We think they're good. But if they fail, that's OK. And we can pivot. And that's the other thing that at a scale company, pivoting is hard. It costs a lot of money. You could you have a lot of throw away and it takes time.
A small company, they've perfected how to pivot. I've seen things at Native that I didn't imagine were possible. When we put something in market and within a couple of weeks, we realized that, hey, this size canister wasn't right. At a scale company, that could take a year to work through all the inventory, get the new molds, new packages, and make that change. In a company like Native, you can do that in weeks and months. And when we started up, we did a lot of changes. We changed our formula.
I want to say two months after going into retail. And I still remember the conference call I was on when they decided to do it. And I think my first gut feeling was this is impossible. And then my second was, or maybe it's not. And so I think really there is so much that large companies that acquire can learn. I think they just need to be open. And I think Procter and Gamble was very open to learning from native. And I think that's why it was such a success.
Aaron Alpeter (09:44)
That's great. And you mentioned the 20 people who are there and the customers. mean, Procter & Gamble has got a lot of resources. They can go out and hire 20 people. They can probably find the pedigree. There's no reason why they couldn't, on paper, create something that would have beat native deodorant and call it something else. So why do you think that...
that it was necessary for Procter & Gamble to go out and acquire a company like this as opposed to just saying, you know what, here's $10 million, we'll build something and we will do it our way. We'll own 100 % of it.
John Huljak (10:17)
Yeah, that's a great question that I'm not sure if I have all the answers for that. We've tried to build brands and we've built brands internal to Procter and Gamble with great success. We've also tried to build brands internally that did not work out with the same success. I think when you build a brand within a structure, then you're limited to that structure a bit.
and it has to work within that structure. I think one of the reasons that you acquire a company is you're buying a company that works outside that structure, that has their own structure, that has their own work processes, their own culture, their own approach. And again, I think more than anything, that is what you're buying. Because when you think about it, anytime you do anything internal, you're going to use your resources, you're going to use your scale, you're going to use what you know how to do. You're not going to start a company internal and say,
Let's do this completely different than we've ever done anything in the last hundred years. So part of, think the beauty of buying a company is you're buying one and saying they have some uniqueness to them that we don't completely understand. Let's bring this in. Let's learn from that. I think the other thing too is the network. is, know, meeting you has been a great experience. And what I've learned is there's this entire ecosystem outside of the corporate world that I want to learn about and I want to get into. And I'm so excited about.
That network, when you work for a multi-billion dollar company, you assume that you know all of the best suppliers and all of the three PLs and everything that's out there. Why wouldn't you? And then what you quickly learn is, actually have blinders on because of how we do work and how we scale up so fast. We have a limited set of individuals that we may work with. When you acquire a brand like Native, you...
you acquire all of their network and all of their suppliers and all of their knowledge that might be outside our peripheral vision because of how we work. So I think that is one of the main things that you would not get building a brand internal. You're always going to use those same processes and you're going to have those same blinders and you blinders can be a negative, but honestly to do scale and go at the size that you need to go for large brands.
you need to have that focus and you need to have those blinders. So I think companies like Native that are started up outside of a corporation, they allow you to kind of see outside of what you normally are used to looking at.
Aaron Alpeter (12:51)
I think you're onto something here, and I would say that I think every company has blinders on, and it's just a question of what those blinders are focused on. And so I think that the startup founders, the folks that I know really well, they will live and breathe their company. think part of maybe why it's difficult for large incumbents to innovate the way they can is
some extent, this is still a 9-5.
You may be the nominal founder of that brand, unless this is something you're motivated by, you're willing to go through that valley of pain to bring something into existence, many founders I know have burned their boats, so to speak, and they say, I've quit my job.
my life savings are in this, I'm turning to other offers, this has to work. Failure is not an option. And so I think that they have blinders of they're just going to run into that brick wall and keep trying it until they find an opening and they keep going. And those are the blinders they have. And so from a corporate perspective, you may say, that's dumb, right? That's a bad ROI. You're not really doing what you do. But then again, with a big company, when you've got...
large shareholders, when you have a dividend to protect, when you've got all this growth and these things that you're protecting, there's so much that you need to do to have blinders to focus on that. And so I think it's not necessarily about maybe corporate companies having blinders and startups not, it's just the blinders are on different goals.
John Huljak (14:09)
Absolutely.
Yep, absolutely.
Aaron Alpeter (14:12)
Yeah. So, you know, we don't have to go far to look at deals that have not gone well. I Procter & Gamble has had their share. I know lots of other ones have had their shares where it looks good on paper. It's a great exit for those founders. But then that basically just kind of peters out. It doesn't really work the way it should have been done. In your experience, what separates an acquisition that is successfully accelerated by the acquirer versus something that's slowly absorbed and then flattened away?
John Huljak (14:42)
Yeah, I would say giving them autonomy, letting them keep cooking, letting them
Knowing when is the right time. Scale is a great thing, what scale is all about driving simplicity and uniformity. And I think what I learned early on is that startups are very unique and they are very
they're different in that aspect. And so when a startup is young, now as native grew larger, there were many areas to drive scale. But when it was in its infancy, scale could be a negative thing. So I think a lot of it is you really just have to kind of, let them breathe, let them do their thing, let them do it their way. And then even when you suggest things like learn, share tools.
maybe even Reco some tools or some processes or some different ways to do it, but leave it to leave it, leave their identity as much as possible. And then, there is this whole pull and push thing. I think the more we were able to let native pull things, see what's out there, see what's available, see what tools we might have at P&G that could help them versus pushing them on. I think we saw.
that
hey, these are things that could make us stronger. Don't ever scale for the sake of change. I think that's what a lot of large companies do. They scale because they know it works. But what may work for a large brand may not work for a brand and it's infancy. So being able to kind of look at all of those tools. And then I would say like also just being adaptable with those tools.
I think a lot of, a lot of times when you do something, you know, one way to do it and you know, you know how to do it really, really well, but are you open to adapting those? So even from the proctor and gamble side, Hey, here's a tool that might work for you. Here's a new ERP. Here's a planning system. Here's a different way to approach it. A different way to look at the schedule. But if you give it to them and say it's not adjustable,
then oftentimes I think you have this kind of yin and yang where it just doesn't work. I think what you have to do is say, here's a concept. And is there anything we can do with our concept and our tool that might actually make it really work for native? So I think there's something around that approach. And then last thing I would say on that, and this might be where you think I'm a little crazy, but what I came to believe early on on native is that the brands...
Actually are almost like a living being they have a life of its own and one of the things I used to talk to Moiz a lot about in the team is Let the brand tell us let the brand tell us when it's time to Go to a new CM because we've outgrown our current Co-man. Let the brand tell us when it's time to go into a flanker Category that maybe we didn't know we should be in the more you can listen to that brand the more you can let it tell you when to grow people
What is the right scale of people? Do you have enough people? Do you not have enough? I think too many times we as individuals use our experiences and we use what we think works versus actually listening. And then the last thing is just kind of events too. Like there were events throughout native that told us this is the time to make a change. This is a time to integrate a little bit more. And I think those are the tools and you're never gonna be perfect. There are things that native that we should have integrated much sooner.
There's things that native that maybe we should have waited and integrated later. So I don't think it's a perfect science, but the more you listen and learn and grow through it, I think that's what built our success.
Aaron Alpeter (18:25)
You know, John, as you're describing that, the word that comes to mind is humility. And it sounds like the founder, the brand needs to be humble to say, ⁓ OK, we need to be open to changing things. But then the acquirer also needs to be humble and not just kind of say, hey, we owe all this money. We own your butt. You're going to do things the way that we did.
I'd love to learn a little bit more about kind of how that humility plays out in practicality. You mentioned there were some things that probably should have happened sooner rather than later. mean, what do do if you're the acquirer and you're like, guys, I know you're not doing it right. Like, I know you're wrong here. And perhaps the brand is not listening or, you have this us versus them mentality that's starting to build. Like, how do you strike that balance between letting them breathe and dictate the pace versus saying, hey, actually, don't put your hand on the stove?
John Huljak (19:15)
You know, I would say prove it to them. I think it's an art that's gone away. think metrics and testing and showing people works. I mean, there were definitely things that I will say coming in with 19 years at the time of experience with P&G. There were things that in my brain, I was like, this is not right. Like, I know I can do it better. I know I can help them. But for me, also meant humility on my end.
It meant coming in. mean, I'll tell you a quick story. won't, I won't give the individual's name, but early on, I mean, we're probably talking two or three months on my native. I'm on a call and it was all native OG, San Francisco, and they were working through some stuff. And I believe we were talking UPC codes at the time because we needed to do that for, to go into retail. And I, and I commented, I came off mute, I made a comment and I'm very new to the brand. Keep in mind at the time. And afterwards I got a call from an individual.
And it wasn't the best call I've ever had in my life, but it was an awesome call because it helped me realize why humility was so important. And the call was basically to say, we'll let you know when to speak. Like this is our brand. We'll let you know when it's time. And while I think it could have been approached differently, what I learned from that was don't push, like be there ready, have your toolkit ready, keep showing them. what happened then was then a couple of weeks later,
I got the, we don't know how to do this. Can you help us with this? And then I would do that and they'd say, hey, you're actually really good at this. Can you also do it over there? So part of it was gaining that trust from them because the more they trusted me, I think then the more they trusted that I wasn't bringing a tool or a process or if I told them they couldn't do it, it wasn't meant negatively.
we were talking to a 3PL for retail a long time ago. And granted the 3PL didn't handle the conversation correctly, but during the call, my counterpart, amazing VP of Ops, the original VP of Ops for native, she basically fired the 3PL and she was upset with the way they handled things. And she basically said, I don't think we need to talk anymore. Came off the call.
She immediately calls me, I'm driving to the airport in Milwaukee, and she said, we can't fire them, can we? I go, no, we need them. And she goes, okay, I understand, thank you. She goes, can you fix this? I go, I can fix this, but I think your point was valid and it actually put us in a better situation. So I think a lot of it for me was being there for when they were ready and open to my ideas, but then also bringing the data, showing the data.
not just saying, hey, instead of doing your schedule this way, do it my way, More of saying, what if we try it this way? And what are metrics that will tell us whether it's better or worse? And then if I could show them data that this was better, they were always on board. Because again, I think what a lot of emerging brands are used to is people telling them this is better. I think they get that a lot from suppliers. think, and without the data to back it up. So I think the more you can share, test it out.
show them, come in and say, hey, if this doesn't work a couple of weeks from now, we'll just go ahead and redo it. No problem.
And always being able to go back. I think that's the other thing. We were always able to pivot back if we needed to. And there's sometimes that we would put in a, what I would say a process I know well, that didn't work. And I was willing to go back to the old way because I found it didn't work. So I think a lot of it is just building that trust with them.
Aaron Alpeter (22:46)
What were some examples where you came in thinking, all right, I got 19 years of experience, we're gonna be making these changes, do these sorts of things, and you actually realized that that's not gonna work here. We can't do it, they're actually right.
John Huljak (23:03)
Supplier relationships, I'll tell you, I I thought working for ⁓ an amazing company that all suppliers would want to work with us, all suppliers would open the door and cheer as you walked in, not always the case. And part of it was because we were working with different suppliers, smaller suppliers, suppliers that had different business models, business models that worked very well for a company like Native, but maybe didn't work so well for a large brand.
And so that was one that early on I was actually a little bit surprised with and, true story, I used to go to manufacturers and I would bring people along or suppliers, pack, pack suppliers, whoever. And a lot of times I would sign in as native and every so often I would sign in at P&G and a couple of times I would have people with me and they'd say, well, I, noticed you signed in as P&G this time. Last couple of times you signed in a native. go.
Every supplier is a little bit different. Some suppliers love, you know, hey, you're a small company that has the chance to be huge. We're looking for that. We're looking for someone that's going to grow our business and grow our building. And we have CMs that have grown into technologies that they never did before native that have grown multiple buildings that they never probably would have without native. And then there's other suppliers that very much want to work.
with the large ones, very much want to drive that scale. So I think for me, it was realizing that it wasn't a one or the other approach that you had to have that right balance and you had to understand the supplier and what might work better for them and what might not. And then I think another one I would say is knowing where, we aren't strong. I had not had a lot of DTC experience, ecom experience.
And with any large company, you think, well, I understand distribution. I understand how to sell to customers. You know this very well. DTC is very different than retail. DTC is, selling on a website is different than Amazon. So I think one of the things that we learned early on is that DTC is what the native OG people knew very well, not what we knew well. So that was an area that we came in and said, well, we have some three PLs.
but they wouldn't have been the right three PLs. And I'm very happy to look back and say, we listened to the native OG people, we listened to how they did it, and we stuck with their plan. I mean, even something like Shopify, Shopify was not a tool that we used inside of Procter and Gamble, but we were open to Shopify. And in the end, Shopify was a difference maker for native. I don't think that we moved to some other platform where we able to do what we were able to do on the DTC side.
Aaron Alpeter (25:53)
Yeah, I think with your supplier comments, sometimes there are clients that suppliers want to work with and clients they have to work with. And I think that could be the difference between native or P&G sometimes.
John Huljak (26:05)
Yes, absolutely.
Aaron Alpeter (26:07)
as you're talking, I kind of had this idea that came to mind that every brand that a company acquires wants to do well. The people who sold that company, they bought into the mission and yeah, some of them may cash out and leave, but they basically want what's best for brand, they're bought into it. And the acquirers really want to maximize that investment as well. No acquirer spends hundreds of millions of dollars on something to write it off to zero.
right, at least intentionally. And so I'm curious, like from your perspective, what are some of the first signs that acquirers unintentionally damaging the thing that they bought?
John Huljak (26:41)
I think a lot is listening to the people, listening to the customer. Our consumer communicates a lot, consumers notice change.
I drink hip water constantly. drink probably five to 10 bottles of hip water day. And I've been doing that for probably 10 years. Recently, they made a label change. I didn't know why. Like, why are they making a label change? Did they get bought by somebody? So my feeling is I naturally go to this reaction of like, well, why would they do this? Are they going to charge me more? Like, what's the positive for me not seeing that? So I think there's a lot you can just listen to the consumer. And when we first, acquired Native,
Our consumer is very vocal. So a lot of it was listening to our consumer. we were making a formula change on their deodorant and it was a positive change. And we had so much data to support this. But as that change went out, we would even see consumers saying, hey, I think this is a bad change and it's only because, it was acquired. Now, some of those, you've got to stick to your guns and you got to say, no, I know this is the right change.
but really listening to them because I think consumers are incredibly intelligent and I think they don't take the BS. And I think they can really identify very quickly that this is a change that was done because of the acquisition and it's not a change that was done to benefit me. So I think one was really listening to the consumer. I think the other one is you got to listen to the employees. No one knows this better than the native OG employees for us.
And I think there's a natural reaction of when you step across that line of my peers, the people I know, the people that feel like me are the people that sit back in Cincinnati that I work with every day for the last 19 years. The people that may not feel like me, that may not react like me, that may email differently than me, that may react differently than me, you're not naturally kind of like pulled to that group.
but they're the ones that can tell you and they're the ones if you listen, they're the ones that can say, you know, hey, it used to be. And that was one of the trigger words for me. Every time I would hear it used to be, it used to be a little more fun. It used to be, I could do this. It used to be. Now again, you have to filter through that. Cause there are times that you have to say, I know that this is the right direction and we believe that. But there's a lot of times that that used to be you go, why did this change?
If you heard somebody on native say we used to be okay to fail. Now it feels like we have to mitigate all risks. That was something that we could talk as a lead team to say why did that change and what do we need to do with the culture to make sure that goes back? So I think a lot of it is that humility to listen and be open and ask questions. I think the worst thing you can do as the strategic acquire is be so confident in your solutions that you're not open.
to take it, you I would argue Aaron, like even if your solution is correct, there's still something to learn and how people react to it. And maybe it's small tweaks you need to make. Maybe you didn't prove it out correctly. There's times that we might've done something that it was 90 % right, but 10 % wrong, but that 10 % is what our native OG people kind of said, this doesn't feel right. So then being open to say, can we fix that 10 %? And then all of a sudden people are like,
Now it feels like we're the same. We have our same equity, we have our same identity, but we're just a little more streamlined or we're a little bit more efficient. So I think it's that balance between the two. The growing brand listening and being open to the acquiring brand, but also the acquiring brand being open and listening to the.
Aaron Alpeter (30:24)
I think that's so so helpful and I want to go a little bit deeper on something you mentioned, which was sometimes you just have to. Live with something you have to decide this is what we're doing because we have that conviction. How how should an acquire decide what processes should be standardized immediately versus protected at all costs? I feel like you there's probably a lot that you're doing on either side where you were keeping P&G at Bay while also trying to.
John Huljak (30:45)
Bye.
Aaron Alpeter (30:51)
push some other changes in native that they weren't quite ready for.
John Huljak (30:55)
I think it's asking a lot of questions and it's learning a lot. mean, I know I've been saying that, but I think there's some power in asking questions. I think even just asking questions shows some humility and it shows some openness. when you approach people and you have those blinders on, whether it's a supplier or whether it's an acquisition or whether it's your friend on a golf course, it doesn't matter to me. I think when you ask questions,
you are automatically showing that you're open-minded. And so I think the first thing you just need to do is show that you're willing to learn and listen. I think the other thing is the more you can get them to pull, you know, there's an old saying, I always used to say, if I could get my CM, my co-man to come up with the idea, even though it's my idea, if I can make it their idea, it'll be a success. If it's my idea, they're not invested in
If I come up with a savings idea and I know we can lower the amount of people on the line and then we can split the savings, they make more money, I make more money, that's the first thing you have to do, by the way, because then that gets them, now they're interested, because they're like, well, you're going to split the savings, okay, now this sounds cool. But the more you could approach them with questions.
Hey, why do we have two people at the end of line kind of doing the same thing? Have you ever thought about this? You know, I don't know what I'm talking about, but just the thought it's just something a point of view, a different set of eyes. All of a sudden, a couple of weeks later, that co-man comes to you and said, Hey, we were thinking about it. We actually only need one person at the end of line, not two. And it's working great. We tested it out and by the way, we're saving a nickel and you can have two and a half cents and we'll take two and a half cents. And it was a win. So I think it's no different than with the emerging brand. I think.
showing them the tools, but making them want it, helping them want it, not making them want it, but showing it in a way that they say, this actually seems like an idea that I want. I think that will make all the difference in the world of getting them. SOPs, I started this thing, this was a long time ago in my career, where an SOP is meant to be rewritten.
it's able to be rewritten. You're the person that wrote the SOP. But sometimes large corporations, these SOPs are almost like written in concrete. They're not. But there's this mindset of this SOP is not meant to be changed. Showing that you're willing to do that for the right reason. Showing that there is that balance. That hey, if the acquiring brand, if you all are interested in this process.
maybe I could adjust the process a little bit towards you and maybe you could come a little bit towards my process. Whether it could be something as simple as lock coding or it could be as simple as what suppliers we use. native would not be native without a great company that we used down in Austin, Texas where they hand poured deodorant.
Aaron Alpeter (33:48)
in that facility,
I know it well.
John Huljak (33:50)
It's an amazing place. The founder of that facility is an incredible human being. Moiz I know, is still friends with her and it was an incredible place and it was great for us at the time. We grew, obviously, and we grew faster than that company was able
And then we found another co-man that had a little bit of automation, but not too much automation, but they had enough automation. For the longest time, for months, I would meet with Moiz my boss, and he would say, tell me...
why we need to leave, you know, where we started. And I don't know how many times I answered them, but I always answered them wrong. I answered them in probably ways that came across more like, cause this is the P&G way, or this is how I know how to do it, or this is John Huljak's way. And I was never getting the right answer. And the reason I knew that he wouldn't argue back, but then a couple of weeks later, he would ask me the same question. So I realized that I was never answering the question correctly.
And it took me, I don't know, 10 times over a few months to finally nail it. And one time I saw him in person, I was out in San Francisco and he asked me a question. And I said, because this brand is too big and too important to be hand-poured deodorant in Austin, Texas. You've grown, you've grown from the infancy to this adult. You're a powerhouse. You are changing the market. People out there are all taking notice of native.
you can't be hand pouring deodorant anymore. You gotta be making it like an adult would make it, like a mature brand would make it. And it just clicked and he just looked at me and says, I got it, okay. And that was the end of it. But it was a cool story for me because it taught me that humility to say, I wasn't answering him correctly. All of these other times, it felt like P&G or John Huljak pushing his agenda. And I finally got the answer the right way. And once I did,
We took off and running and we were at the new co-man and everything went great.
Aaron Alpeter (35:48)
I love it. I I remember being in that facility and seeing them hand pouring and I'm like, wait a minute, every stick that you're getting someone's like, yep, yep. I'm like, wow, okay. That's what small MOQs will allow you to do and you can get by with that. I mean, it's really interesting because operationally we're trained to look for inefficiencies. And you could come at that with your P&G lens and just say, hey, hand pouring, not a great thing. ⁓
And yet from a ⁓ brand relationship perspective, I'm curious beyond the hand pouring stuff, what operational systems or behaviors might look inefficient to an acquirer that really actually are critical to their overall success?
John Huljak (36:32)
Yeah, I would say schedules, number one. And this is one now, it'll be interesting if you ever have Moiz on to see if he counters all my stuff. Hopefully not. But you know, rigor schedules. That is, there is something. Rigor schedules, that's something around scale. That's something around a big acquiring brand. We are good at that. Procter & Gamble has the best scheduling. They have the best knowledge, I think, in initial scheduling than I've ever seen in my life. The processes they use are incredible.
What I saw with native, it wasn't that, right? They didn't have all of that. A lot of it was kind of you build as you go. And that works for a while until you get very big. So I would say scheduling for sure. In theory, it could slow you down the more rigor you bring. But what we found is we could do it in a way we could take a lot of the tools from P&G and really help native see that having more rigor in their schedule at the end of the day is actually gonna be faster.
You're not going to have mistakes. You're not going to have to redo things. You're not going to get to the ready to launch and oops, we forgot these five things. So scheduling was one hands down that I think P&G scale and what they were able to bring and their knowledge of that was absolutely a gap at native. And it was absolutely something that Procter & Gamble was able to help them very quickly with. think understanding the supply chain, one of the things that was
Surprising to me, but I also think in fairness surprising to my my native og I was surprised how little they were involved in their supply chain And I think they would be they I know if my old VP of ops was here She would say I was surprised how involved John Huljak was in this supply chain and there was some kind of balance Most of the commands I go to one of things they'll say is we never even see our brands We never even see people you guys are here every week. We never see most of them They just write us an email and say
Hey, can you make this bar so and ship me 100,000 of them on this date and we do it. And so I think there's a balance in that. And so early on, that was something that we were able to bring to native to say, you want to know your suppliers, you want to go visit them because it gives you leverage. gives you knowledge. Knowledge is leverage, right? And so the more you know about how they do things, the more you can negotiate, the more you can make this partnership work even better.
And so that was something early on and I was proud to say my old VP of ops, she was like, let's go, let's get on a plane, let's start going. We went to our pack suppliers in Asia, we went to all of our co-mans and we started being a lot more actively involved, very similar to Procter & Gamble, but very new. a lot of requiring brands, don't do that. And that would be one of my biggest coaching to emerging brands is
Be more involved in your contract manufacturers. Go meet them on some occasion. See how stuff is made because it's going to give you power and leverage. And then the last one I would bring up is things just around planning and inventory management. And I think this is less about the emerging brand doesn't have those capabilities, but when you're very small and you only have five variants and it's not so much an issue. But as you grow quickly, holding 12 months of inventory,
on 30 SKUs can create a lot of scrap. can create a lot of cost and lot of inefficiencies. Procter and Gamble, they're experts at supply chain management when it comes to planning, when it comes to knowing how much safety you need, when it comes to knowing when to make, not make. And so I think that was another area where early on we were able to see that gap. And early on we were able to say,
What are some of the tools that we can bring in our experiences that are going to help you out?
Aaron Alpeter (40:20)
That's super interesting. I kind of think back on my experience and some people that I've met. One story came to mind as we were talking about inefficiencies. You did a good job highlighting inefficiencies that a acquired brand likely has. I wonder if there's any inefficiencies that are actually good. They're the secret sauce, so to speak. I kind of remember this story about Zappos, which was acquired by Amazon.
And one of the inefficiencies that Amazon chose to keep was they actually have a KPI with their customer service team to see who can keep a customer on the phone the longest. Which is completely backwards of how we look at it, but their rationale is that, we want people to feel connected. We want to know about what's going on. We want to understand what's going This is really a selling moment for us for why they're going to come back to Zappos as opposed to any other store that's out there. And so I'm curious if there were any inefficiencies that
that on the outside you thought, hey, you know what? We gotta get rid of all this stuff. But you're like, actually, no. This is the secret sauce that made Native Native.
John Huljak (41:23)
Yeah, I can think of some and not to steal yours. I have one that would be different as well, but I definitely our customer experience team. I think early on you could say we had individuals that would sit there and email responses to everyone that bought on DTC that everyone that had a question or complaint. I think as Procter & Gamble that was very new to us and very surprising like holy cow, like you email everyone but
I even went, know, even as I was coming on board, I would order native stuff and I loved it. I would get this email from Julia and I would say, my God, Julia wants to talk to me. And I would talk to her back. And think that's one that a large scale company could say, you could probably automate this. Nowadays you could probably use AI. I hope people don't. Cause there's something about that personal experience that is incredible. And I think it really.
allowed
interact with our customers and learn from our customers. And it was this great tool. I think another thing is we used to have this all hands hands meeting. And as we got very, very large, we stopped doing that. And I'll go even further than the old hands hands meeting. You know, I grew up in a large company where I had very laser focused tasks, whether I was starting up plants or working on new technologies, I wouldn't
go sit down with Target. Well, one of the beauties of being on a small brand, I went to Minneapolis and Fayetteville a lot, and I sat with Target and Walmart a lot. And there were times that I'm like, I don't know why I'm in this meeting or should I be in this meeting? But the value of seeing how it works end to end is mind blowing. And it was one of the things that I loved and one of the things that native taught me the most over the years, they taught me so much because they allowed me to be present.
in places I may not normally be present. you know, we continued with that. So we would have these all hands on meeting and, know, at the time we'd have 20 people and then it was 30, then it was 40, but we would still have everyone together. Now at a company like Fracture and Gamble, that's just not possible. We have a hundred thousand employees and even in different functions, you could have, you know, thousands and it's not possible to get everyone to sit in a room and it's not efficient. So I think there were people that could probably look at this all hands on meeting and say,
it's pretty inefficient because you're talking about things that this person may not care about. And then you're talking about something over here that they won't care about. But there was something magical about not only learning things that may not be in your core, but understanding why those decisions were made. So I could sit there as the VP of ops and say, I don't want to have colored pumps because it's inefficient from a supply chain. listening to the marketing people talk about it,
And understanding why they want colored pumps was a game changer for me. So I think the more a small brand can keep everyone as much as possible, again, eventually those inefficiencies are going to drive it. You're going to have people do nothing but be in meetings. But the more you can overlap the different functions, even if it looks inefficient, I think you're going to drive a lot of power in the people and a lot of capability in them and what they can do with that information.
Aaron Alpeter (44:40)
Yeah, that's helpful. And I'm kind of curious because we've talked a lot about culture and talked about humility and trying to keep everything together. And I'm just, curious about how do you preserve that entrepreneurial spirit that makes the acquired company special? Because it feels like if you leave them completely on their own for too long, they are left to their own devices. They don't grow, they don't learn.
and get the benefits of the acquired company. But if you come in too quickly, too heavy-handed, you may put out that spirit, right? You may squash that ember that's there, and then you have another brand that fits inside the portfolio, and it does kind what's there. And so what advice do you have for an acquirer who's trying to think, ⁓ how do you run that balance between putting in your process and kind of getting the most out of that acquisition, while at the same time not killing the spirit of what made it interesting?
John Huljak (45:36)
Yeah, and I think to answer that, think you almost have to look at what are some of the negative to scale in large corporations. And I think, you know, I think this was common and most corporations would say the same. mean, number of layers as an example. One of the things that I think Moiz did brilliantly, and I think there's a lot of people that could criticize and come back to him and say, you grew your infrastructure too slow. I would argue that was one of the most brilliant things he did because his philosophy was,
Every individual that comes on needs to have a unique skill set and needs to have unique tasks. You will never bring on people just to create a layer, just to create a manager that, you know, if you want to bring on an individual so that you don't have to do this process, then is it because you're doing a different process or is it just because you want to be able to delegate and manage? So I think you did a very good job of keeping those layers. So I think even as you bring in P&G people, they had to be unique. If you were bringing in individuals,
to just give oversight, that's automatically gonna dampen that spirit and dampen that culture. So I think how you use that, I think how we use external suppliers, think using them as partners, leveraging external suppliers. One of the things that I think goes away is you drive too much scale in oversight is you start making those suppliers an extension of yourself. One of the things that I was blown away with as I started on Native,
was just how capable our suppliers are. there's a mindset of when you're working from a large corporation, we must be better at ordering raw materials. We must be better at identifying this or working with regulatory or whatever. If you find the right suppliers, the right co-mans they're actually incredibly talented at what they do. And I think one of the things that kept our entrepreneurial spirit is we didn't try to go manage our co-mans
we tried to learn what they were good at and leverage them wherever we could. And I think that was another positive. And then I think there is some uniqueness of how you keep that identity. an example I'll give you, I'll never forget it, because at the time we thought, here we are Aquinas brand, it's a small group of individuals and the lead team in San Francisco was a small group of people.
Let's fly them everywhere and show them everything. Let's fly them to Cincinnati. Let's fly. We'll meet them in Target. We'll meet them at Walmart. We'll meet them in Cincinnati. We'll show them the rest of the world out there. what we saw was they were a little bit more we'll sit over here. We'll let you drive the meeting. We'll contribute, but you're at the forefront. And then one time, and I would say it was when, within probably the first year, maybe a year and a half, we had our lead team meeting. We had a...
I believe it was quarterly, maybe it was monthly at the time. And we had it out in San Francisco and we had it at their new office and it was great. And we were walking back to the hotel and I was walking with someone, a pyramid, actually a leader from Procter & Gamble. And they said, that was the greatest meeting we've ever had with Moiz and that team. That was by far the best it's ever been. What's different? And I looked at them and I wing it a little bit and I just looked at them and go,
because we're in San Francisco, we came to their home, we came to their office, we brought ourselves to them and let them drive it and that's where they were comfortable. So I think the office is an analogy. I think there's probably plenty other things you could use in an insert instead of office, but it's letting them be them. And it's showing that I think the acquiring company is willing to come to you, whether that's physically.
Or even if it's just culturally or mentally or work process wise or whatever. Hey, that schedule you're using, that's fantastic. Can we reapply that? I actually could think of an area inside of P&G where I might want to use that. I think the Moiz you can do that, the Moiz you keep their identity and you show them that you're not trying to change them. And I also think then the Moiz open they're going to be to the places that you do want to change.
Aaron Alpeter (49:38)
That makes so much sense because I feel like sometimes, you know, these acquired companies may feel like they have to act a different way, they have to reapply for their job, so to speak, ⁓ and just say like, okay, I've got to figure this out. you know, if there's a situation where, well, really, the most important thing here is the due diligence part when someone is considering an acquisition, because I think we look at the numbers, we look at the deals, you know, they talk about what they can do to the market, but that culture element is probably the single most important element.
that determines if this brand is gonna continue on its trajectory or it's gonna fizzle out. Because if you try to put two incompatible cultures together, two incompatible leadership styles together, then eventually the people who start to bristle are gonna leave. And so those are typically your best and brightest, your most capable. And so you start hollowing out that business because it's not a good fit. And you make something really interesting here about how ⁓ there were things that Procter & Gamble
could have learned from native. How does a large company with 100,000 employees think about actually incorporating some of the knowledge and in just practices from a 20 person startup that they acquired?
John Huljak (50:49)
Well, mean, all large companies ⁓ like P&G, they live on metrics and they're fantastic at metrics and they have great metrics. So it came back to the metrics, speed. Speed would be one. We were able to do things on native after the acquisition that I'd never seen. In 19 years, I never could go that fast. I've never seen the speed. I've never seen the ability to pivot. I've never seen, you know, ⁓
the leverage we had with our retailers, the ability to change things on the fly, the ability to find what things weren't working and were working. ⁓ So I think the metrics talk a lot. When you're able to change an entire 3D in three months versus a year, well, of course you're gonna get interest. And then you're gonna get interest to say, what enabled that?
Was it something internal? Was it our decision space? Were you able to go faster? Or was it external? A lot of it is external. We found suppliers that were able to pivot. I think a lot of times the suppliers take on a bit of the identity of the brand. And so when you think about ⁓ suppliers, comans, or PAC suppliers, or whoever, that large corporations work with, they're gonna transition some of that identity that they have.
on the rigor and which sometimes drives slowness into that process. And I think what we did, one of the things we did, I want to say smartly, but Aaron, a lot of what we did was just kind of like, we just did things on the fly. When it worked, we kind of said, holy cow, that worked. Okay, let's keep doing it that way. But we found a lot of unique suppliers. And one of the things we would do is find ones that had their own work processes, that had their own identity.
So then they didn't necessarily take us on. They would be willing. One of the things I always say to co-mans when I first meet them is, you have to be willing to push back. If I do something dumb, you have to tell me. And if you're not willing to do that, if you're a yes one, and you're just going to say yes to everything, it's not going to work. And I do still find those. I find ones that they'll do what I ask them to do. And when I say, why is it so expensive? They might say, well, because you asked for XYZ.
Why didn't you tell me that? Why at that time did you not tell me that if I did it a different way, it could be cheaper? So I think a lot of it is, setting up, finding the right partners, but then even internal, just identifying those places. But metrics speak to everything. Speed, what Native was able to do, the speed that Native was able to go was something that...
I would say, would argue that P&G has never seen and we've been able to learn so much from it and we've been able to reapply so many things that we've learned from that.
Aaron Alpeter (53:42)
You know, it's interesting because throughout this conversation, communication has come up quite a few times and it almost sounds like there is a translation layer. Like there's a different language, there's a vernacular that you have to get used to. you the example where you were talking to Moiz about, maybe we should change suppliers, you weren't speaking his language, right? If you were thinking about this from a metric perspective, you're probably talking about cost and capacity and those sorts of, that's P&G speak. That's the language that responds to them. And so,
you know, perhaps the lesson here is that the acquirers need to appeal and understand like, hey, what's the mission? What's the motivation? What's the goal, you know, about the startup? And like, let's talk about how what we think we want to do plays into that narrative. And then when the acquired company is trying to talk to the acquirer, it's all back to those metrics and dollars and that language that matters. And so that's kind like one of things I'm taking away from our conversation. And I'm curious from your perspective, if you had to give
John Huljak (54:19)
I never said.
Aaron Alpeter (54:38)
just some parting advice with a strategic acquirer who has just purchased a high growth company, what would be the biggest integration mistake you would warn them not to make?
John Huljak (54:47)
would say for sure I always go back to listen, but you know, change for the sake of change. and I think people can hear that negatively because like who changes for the, for the sake of change, but a lot of people do. And it's not for the sake of change is because they really believe that there is something underlying here that, will get you to where you want long-term. But
The journey of a brand, would say, is a continuum. And I think sometimes maybe the world views it as a startup brand or an emerging brand or an acquired brand or an emerging brand or a large brand, a small brand, large brand, all of those things. I think the reality is it's one giant continuum. And I think you need to figure out where you're at on that continuum. And I'll go back to listen to the brand. The brand will tell you when it's time to stop hand pouring. The brand will tell you when it's time to have
two CMs, one that might have shorter bowls and high throughput and super low cost and one that doesn't. I remember an example I'll give you when I first started inventory management, I was like blown away. But what Moiz brilliantly taught me early on was as a small startup brand, we can never not be where the consumer, we can never run out. We can never be out of stock. And I never really thought about it that way. Like what's the worst case scenario, but
At that moment in time to grow to how we wanted to at that point in the continuum in stocks was Moiz important than throwing things away because they never sold. And now we have to, we have to scrap those cost savings growing up in P&G cost savings is my life. That is everything I do. Learning that cost wasn't the number one driver here. It might be trial or it might be repeat, or it might be just getting our consumers to know we exist. So
I think being open-minded that it doesn't mean that cost savings isn't wrong. It doesn't mean that scale is wrong. It doesn't mean that doing a schedule a certain way or sortables or any of that is wrong, but where on this continuum is the right place to institute those? At some point, if you grow to be this giant organization and giant brand, then all of those things are gonna be needed, but you have to be choiceful where you're at on this continuum, when to do it. So I would tell people,
Like start and just listen and learn and then think about their journey. Think about what's next for them. Are they going into retail? What could you do that would help them in retail? Are they going to go international? What could you bring that would help them international? Don't bring all of that day one because maybe they're not going international for five years, but maybe, and I've seen this, you institute practices that will enable them to be international someday. But that day isn't today, so don't bring that today.
So I think it's really just being very choiceful about where to bring the scale and the experience and the skill that you bring with an experience acquired brand, when to bring those in and just listen. And I go back to it, listen to the brand. The brand will tell you if you listen to it when it's time to bring those things in. I'll leave you with this and maybe it's too much, like one of the things that I always learned growing up in the system is you always,
plan for the what if scenario. What if we go 5x? What if we go 10x? You know how many co-mans in my life I've walked away from because there was no 10x plan. But what I learned on native is you don't need a 10x plan today. You need a 10x plan in two years or three years. You need a 10x plan maybe two months after you launch and you realize you could be going 10x, you got to scramble. Sure.
But don't overlook a coman or a supplier because you're trying to plan for 10 years from now because you can grow. And I would tell you most of the comans and suppliers we used over the years, we've grown out of. That's not a bad thing with those suppliers. It just meant that at the time they were perfect for us. At this point in our journey, they weren't perfect for us. So we continue to evolve. And I think that's the biggest thing people can do is evolve. Don't put in the end point. And I think that's what
of people that acquire can do. They know what that endpoint is. And if they try to instill that system and that set of processes and that culture, day one, and not when it's needed, I think that's when you destroy that brand and that equity and that identity that they have.
Aaron Alpeter (59:17)
Yeah, so much of what you shared resonates with me. mean, I remember when I went from Unilever into startups, there were a lot of habits I had to relearn or unlearn, right? Because you're so incentivized to kind of protect your KPIs and to say no to certain things. And it's this idea of what if, right? And I feel like in supply chain, our responsibility is to give them the trade-offs, right? I always tell people, you know, if a founder comes to me and says, hey, I'd like to wrap my packages in $20 bills, can we do that? The answer is not.
that's stupid, no we can't. The answer is yes, technically we can, but here's why that might not be good idea. And just like that framing is so important to look at it, what you share just really resonates with me there. John, I know we're coming up on time here. We've got one question we always like to ask our guests on Build a Business Worth Buying, and that is what is the best example of a moat you've seen another business build?
John Huljak (1:00:12)
of course I'll use native. I got the native shirt, I gotta use native. I think it was thinking about everything we did end to end and not thinking about it task by task or function by function. So everything from owning the price point, one of the scariest things we ever did was came out with a higher price point at a time that we didn't know if we could do this.
And we had plans that we had to change that price point. But that price point became a moat for us because that price point allowed us to do something in the market that other people weren't doing. Because you could easily say things like, we came out with aluminum-free, but some other people were doing it. But we came out with a good formula. We focused on the formula. We weren't just selling aluminum-free. We came out at a time that we felt like deodorant didn't have to be.
You know, a commodity, it was a commodity. I love thinking about how we've changed that market to the point that whoever had two sticks of deodorant on their counter at once, I don't know anyone. Cause deodorant wasn't a way to get a scent or a way to get an experience or the deodorant was, it was a commodity. It's a way to make sure you don't smell all of a sudden a year into native.
We're having customers saying, I got three deodorants on my shelf, depending on my mood of the day and which scent I want to use that day. We transformed deodorant. And now so many people are doing that same thing. And I'm proud to say that I feel like we did it. So I think there's something around just being uniquely you and be who you stand for. let's see. But I think when I talk about end to end, even when we talk to suppliers, making them a partner.
bringing them on board, letting them feel like they're part of Native. I used to have suppliers send me texts with pictures of Native at the store. And part of me was kind of like, great, you saw Native at the store, but you could see the pride they had. They were like, we helped you do this. We built that. And finding that, you you mentioned it early on, getting everyone to feel like they're invested in Native, whether they work on Native, maybe they work at P&G, but they're not on Native, but they helped me out.
Maybe they're a supplier, maybe they're just a mentor, a network that could mentor and give me advice on what to do. Making people feel like they're part of that growth and that brand, I think that's the power. And I think that's the moat we built, was we built a system where everyone felt all in on Native and everyone felt like the success, whether it was directly tied to them or indirectly, they were part of that. And I think that was the magic of what we built.
And I don't know if that's exactly a moat, but I would say that's part of what made us who we were, is having that all-in, invested feeling across the board. End to end, everyone we worked with, everyone that worked on Native, if you weren't all in, you weren't going to fit. And we created that culture that I think was our moat to keep us protected from other things that could hurt or diminish the success of a brand.
Aaron Alpeter (1:03:22)
I love it. John, thank you so much for coming on this episode. This has been fantastic. Certainly learned a lot. think this has been such a great episode for our listeners to hear what it looks like on the other side. So much of what we talk about is getting the brand to the exit, the exit experience, and then very rarely do we get a look into what happens afterward. So thank you for being on it. If people want to get in touch with you, what's the best way to do that?
John Huljak (1:03:44)
LinkedIn. I'm still learning this whole thing. LinkedIn. And by the way, honors all mine. Thank you so much. Insane opportunity. You are so good at so many things, this included. You're a great podcast host. the honor is all mine. I enjoyed this conversation. So thank you from the bottom of my heart. Thank you.
Aaron Alpeter (1:04:01)
No, my pleasure. Thank you for our listeners for joining and good luck building.
John Huljak (1:04:06)
Thank you.