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October 18, 2024 • 1hr 1min
The $600M Protein Bar Founder is Back Again | Peter Rahal Interview
My First Million
In this episode of My First Million, Sam Parr and Shaan Puri interview Peter Rahal, the founder of RxBar who sold his company to Kellogg's for $600 million in 2017. Rahal discusses the story behind RxBar, his new protein bar venture called David, and shares his thoughts on business opportunities, entrepreneurship, and life after a major exit.
The conversation covers Rahal's journey with RxBar, his approach to identifying business opportunities, his personal struggles and growth after selling his company, and his motivations for starting a new venture. Rahal provides insights into his decision-making process, his views on work and purpose, and his ambitious goals for his new company.
The $600M Protein Bar Founder is Back Again | Peter Rahal Interview
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Key Takeaways
- Peter Rahal started RxBar in his mom's basement with $5,000 and sold it 5 years later for $600 million
- He's now back with a new protein bar brand called David, aiming to convert non-protein bar consumers
- Rahal believes in studying history and looking for patterns when evaluating business opportunities
- He advises entrepreneurs to focus on differentiation and finding uncompetitive markets within seemingly competitive spaces
- Rahal sees opportunities in vasodilators, sleep products, continuous testosterone monitoring, and new forms of religion/community
- After exiting RxBar, Rahal felt unfulfilled as an investor and needed to build something again to feel purpose
- He believes working and taking on responsibility is crucial for his happiness and being a good role model for his son
- Rahal aims to grow David to $1 billion in sales and is unapologetic about his ambitious goals
- He advocates for in-person work to build high-performing companies and culture
Introduction
In this episode of My First Million, Sam Parr and Shaan Puri interview Peter Rahal, the founder of RxBar who sold his company to Kellogg's for $600 million in 2017. Rahal discusses the story behind RxBar, his new protein bar venture called David, and shares his thoughts on business opportunities, entrepreneurship, and life after a major exit.
The conversation covers Rahal's journey with RxBar, his approach to identifying business opportunities, his personal struggles and growth after selling his company, and his motivations for starting a new venture. Rahal provides insights into his decision-making process, his views on work and purpose, and his ambitious goals for his new company.
Topics Discussed
The RxBar Story (00:39)
Rahal shares the origins of RxBar, which he started with his childhood friend Jared Smith:
- They each invested $5,000 to start the company in 2012
- Initially made bars in Rahal's mom's basement
- Used CrossFit gyms as their initial distribution channel
- Focused on the paleo market, which was uncompetitive at the time
Rahal emphasizes the importance of finding an uncompetitive market:
"CrossFit emerged, these gyms are popping up. 2012 to 13. No competition. You were not allowed on the shelf if you weren't paleo. That was, like, the perfect example of an uncompetitive market, a small market that was growing like crazy that we could go build distribution in."RxBar's Growth and Rebranding (08:47)
Rahal discusses the company's growth trajectory and the impact of rebranding:
- Revenue grew from $2 million to $7 million, then exploded to $160 million
- A strategic rebranding coincided with retail expansion, driving significant growth
- The rebranding focused on simplifying the message and emphasizing key ingredients
On the rebranding process, Rahal states:
"The responsibility and accountability goes on the brand owner to articulate the problem to solve, and to communicate it in a brief for the assignment, for the creative to figure out how to solve the problem."Identifying Business Opportunities (16:46)
Rahal shares his approach to identifying business opportunities:
- Study history and look for patterns in consumer trends
- Focus on differentiation and finding uncompetitive markets within seemingly competitive spaces
- Look for opportunities to bring new consumers into existing categories
He discusses several potential business ideas:
- Vasodilators: A more sophisticated, health-focused approach to pre-workout supplements
- Sleep products: Creating a "coffee of sleep" - a dominant brand for nighttime routines
- Continuous testosterone monitor: Catering to the American male's interest in hormone optimization
- New religion/community: Developing a modern system for morality, ethics, and belonging
Post-Exit Experience and Personal Growth (46:00)
Rahal reflects on his experience after selling RxBar:
- It took about a year to fully comprehend the financial implications
- Struggled with feeling unfulfilled as an investor
- Realized the importance of having purpose and responsibility
On the challenges of sudden wealth, Rahal notes:
"I didn't realize, like, you just get treated differently."Starting David Protein (54:47)
Rahal discusses his new venture, David Protein:
- Aims to convert non-protein bar consumers to the category
- Has a clear vision to reach $1 billion in sales
- Focuses on creating a high-protein, low-calorie bar
On his goals for David, Rahal states:
"I see a clear path to a billion in sales top line."Work Philosophy and Company Culture (57:57)
Rahal shares his thoughts on work and building company culture:
- Strongly advocates for in-person work to build high-performing companies
- Believes work should be fun and fulfilling
- Views colleagues as an important part of his social circle
On the importance of in-person work, Rahal asserts:
"If you want a high performing company, if you want to win, it's, you obviously have to do it [in-person]."Conclusion
Peter Rahal's journey from starting RxBar in his mom's basement to selling it for $600 million, and then launching a new venture, offers valuable insights for entrepreneurs. His approach to identifying business opportunities by studying history, looking for patterns, and finding uncompetitive markets within seemingly saturated spaces provides a framework for aspiring business owners.
Rahal's candid discussion about his post-exit experience highlights the importance of purpose and responsibility in maintaining personal fulfillment, even after achieving significant financial success. His decision to start a new company despite having the means to retire comfortably underscores the drive that many successful entrepreneurs possess.
The interview also sheds light on Rahal's unapologetic approach to setting ambitious goals and his belief in the importance of in-person work for building high-performing companies and strong cultures. His insights offer a compelling perspective on entrepreneurship, personal growth, and the pursuit of success in today's business landscape.