Harrison Fugman: Co-Founder & CEO of The Naked Market

Episode 297

Making the switch from Wall Street to starting and running not one but two brands is not common. But for Harrison Fugman, Co-Founder and CEO of The Naked Market, launching and building brands is where it is at. The Naked Market currently has two brands under its roof – Rob’s Backstage Popcorn and Flock Chicken Skins. Harrison has been able to see what growing a brand from its infancy and with different business models is really like. What it takes to “start”, what did he learn that he didn’t expect and the value of celebrity partnerships are all just a few of the topics that we discuss. I love Harrison’s journey and appreciate how he authentically shares about his experiences. This episode is for anyone thinking about switching industries and becoming an entrepreneur, but also who wants to learn what’s working for him and what bumps and discoveries he’s encountered along the way. You don’t want to miss this incredible episode. Today on #TheKaraGoldinShow.

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Transcript

Kara Goldin 0:00
I am unwilling to give up that I will start over from scratch as many times as it takes to get where I want to be I want to be, you just want to make sure you will get knocked down. But just make sure you don’t get knocked down knocked out. So your only choice should be go focus on what you can control control control. Hi, everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone. It’s the Kara Goldin show. And I am Kara Goldin. And I’m thrilled to have my next guest. Here we have Harrison Fugman. With us here today, who is the co founder and CEO of the naked market, you may not know the naked market, but my guess is you may have seen some of his extra cool brands on the shelf that he has fairly recently launched over the last couple of years. One of them is called Rob’s backstage popcorn, and the other one is called flock chicken skins. So the naked market is kind of like an incubator. And we’ll talk a little bit more about that. But more than anything, I want to hear about Harrison’s journey of creating these incredible, incredible opportunities with some amazing different strategies. But also, I love the idea that he came from another industry, and came to become an entrepreneur. And we’re going to learn a lot about how that’s going. So, Harrison spent just shy of a decade with Credit Suisse, where he was vice president and head of venture capital coverage. And after meeting with many leading CPG, companies, investors and founders, and this capacity, he decided that they were having way more fun than he was. So he decided, why not go and become an entrepreneur himself. So I love his journey. And as I said, this company has evolved. He’s got two brands underneath it currently. So we’re going to hear a lot more about it. So without further ado, welcome, Harrison.

Harrison Fugman 2:19
Thank you very much. Great. Great to be here and really appreciate you. you having me on.

Kara Goldin 2:24
Yeah, absolutely. So let’s start at the beginning. I’d love for you to share a little bit more about what is the naked market when people say, hey, Harrison, what is the naked market?

Harrison Fugman 2:35
For sure. So we at the naked market owns a portfolio of snack brands. So the two that you alluded to, one is Rob’s backstage popcorn, which he co founded with the Jonas Brothers based off of a seasoning that they’ve been eating behind closed doors for over a decade. And then the second is a brand called flock chicken skins, which is a product that was created out of a convenience store experience just outside of Chicago. And while we own these two brands, the important part of our strategy is we launch multiple brands. And so we launched the business at the end of 2019. We’ve since then launched six different brands. And what our strategy is, is we have high conviction on every brand we bring to market. But once we bring a brand into market, we really listen to customers look at the data and then decide, hey, what brand should we be putting resources into and scaling? And what brands should we be shutting down? So while there’s to live in market today, there’s four that have been launched before that and shut down and are not at the focus of the company right now.

Kara Goldin 3:41
So let’s back up a little bit prior to actually becoming co founder of the naked market. You were at Credit Suisse. So what do you think that taught you about brands? So obviously, a little later stage brands you were dealing with and what you’re doing today, but what was kind of the big aha moment when you look back at that time what you learned? Well,

Harrison Fugman 4:04
Credit Suisse was a great experience. I’m from Canada originally knew I wanted to see the world. CES was an amazing platform to do. So I worked in there, Hong Kong, New York and San Francisco opposite is what it taught me a lot about and I think I’m going to both directly and indirectly answer this question. I kind of took a step back looked at 10 years ahead and knew that wasn’t the path I wanted to be on. And so that shape the push into what do I want to do. And I was fortunate enough to meet a lot of amazing founders, such as yourselves who were making an outsize impact in the day to day lives of both consumers but also a larger ecosystem around them. And I knew that was it and entrepreneurship had always been in my blood and I touched on it in a few different ways. And then in terms of the day to day of what that role taught me was I think most of it just About process process organization, and the ability to take best practices from industry a and create your own set of best practices in the industry be and go out and execute on them and and hopefully be be successful.

Kara Goldin 5:14
So what did your role not teach you knowing what you know today about? I mean, I guess the one thing that I would say, or I’m super curious about is the really early stage company journey that you’re going through and building these brands. Was it what you expected? Were there a lot of things that you just had no idea that you were going to have to do along the way?

Harrison Fugman 5:41
Yeah, I’d say the biggest thing out of the gates is just getting comfortable being uncomfortable. I think when you come from, you know, a truly corporate background, like an investment bank, things are very structured, you’re focused on perfection and getting things 100%. Right or close, they’re up. And, and running a startup is just the complete opposite you nothing is ever 100%, right. And that can be your packaging and typos on it or being comfortable that 90 Getting 90% of the way there is going to be good enough in many instances, and the never ending rakes that you stop at every time you grow the business, there’s a new set of challenges that really occur. And until you’re going through them day to day, it’s really, really hard to prep for them. But that’s why you hopefully put yourself in an environment with great advisors who can give you a heads up along the way. Those are a few of the things that that come to mind.

Kara Goldin 6:36
So what was the moment that you decided to actually make this leap.

Harrison Fugman 6:42
So I took the job as head of venture capital coverage. And I did that for about a year, I was with Credit Suisse for about seven. Throughout the whole time, I was at Credit Suisse, I knew that I wanted to start a business, there was just, I’d say three things that needed to line up. And that was number one. I knew I was going to eat, sleep and breathe what I did. So I needed to be incredibly passionate about the vertical I was going after number two was it needed to be favorable dynamic for New Age entrants or New Age companies in that industry. And number three, I needed great people to do it with. And so there was about, you know, seven years is at the back of my mind, that last year in the seat I had it really, you know, put me in an incredibly unique situation just to see so many different types of companies meet so many different investors and, and find an area where those three things really aligned. And that was love food and beverage love health and wellness. So knew the passion was there to be put into having 65 days a year into something that the second bet, got to see a lot of the success stories for, for brands like like what you built it at hint and a no, hey, you have this amazing dynamic where consumer preferences around healthy eating have changed at a time when incumbents have been under investing in r&d. And so if you can bring a great product to market and tell a really unique, authentic story behind it, you can garner significant scale in a pretty quick period of time. And then the third was very fortunate where two of my good friends both felt the same way about the industry saw the same dynamics and from a competitive perspective and boom, we’re off to the races. So to fully answer that seven years, I always knew. But it was the last year that I really got to just see so much that it made me know that food and beverage is the perfect place to be for me.

Kara Goldin 8:38
So you have one or two co founders. So

Harrison Fugman 8:41
there’s there’s two co founders, I’ll be it in very different roles coming into this as a first time founder. And two of us were we knew that that we wanted to have a group of folks at the table that were very complimentary to ourselves. So one of the third co founder day one was our president continues to be so he’s a very successful entrepreneur has started and sold various businesses and so he was the the experience at the table that really was really really helpful especially in the early days of going from zero to your first one getting product into market and then once product and market making the right decisions around it and getting your first million plus dollars of revenue.

Kara Goldin 9:25
Got it. So the first brand that you launched, do you remember back then? So what was the first one and how did you decide to pick that as your your stake in the ground?

Harrison Fugman 9:36
Yeah, so all the brands we launch follow a pretty similar framework around disruption so big category owned by stale incumbents, where there’s a clear disruptive market leader that through bringing a new brand to market and having it new innovative brand to market should be able to have that be our edge. The first brand was a brand called beachhouse bowls. It was ready to eat us a smoothie bowl, tremendous growth around, around I say Bill consumptions where the consumption, you haven’t really seen it done in the grocery store in a ready to go format. And so we’re really excited about the concept. Love the way the product tasted love the brand, love the design, love everything about it. And then we launched it and it just drastically underwhelmed. And so we probably knew in the first 60 to 90 days that that wasn’t going to be at and a large part of why we knew that is because that in that 60 to 90 day period, we’d also launched our second branch shortly after, which was flock and we just looked at the data between VHS balls, and we looked at Da data beside flock. And it was it proved out, at least at an early stage, that thesis of our model at the naked market, which is very early on, you can delineate between a brand that has large scale potential and a brand that’s going to be stuck on a path of mediocrity. So it made the decision really, really easy for us to shut down and reach hospitals and put our energy and resources into into flock.

Kara Goldin 11:10
Do you have any specific time period that you give a brand in order to make those kinds of decisions?

Harrison Fugman 11:16
We generally say 60 to 90 days. And I think most of the time, that’s how it plays out. But there’s always exceptions to the rules. But generally speaking, we know pretty early on

Kara Goldin 11:26
whether or not it’s going to make it or not. So you mentioned that you’ve had six brands, what are some of the other brands that you’ve done as well.

Harrison Fugman 11:34
So the two that are live in market and sold nationally across various retailers are rubs backstage popcorn and hot chicken skins the four that have been shut down one of them is B truffles the Ready tdsi smoothie bowl. One of them is of a crazy, which was a avocado puff. And one of them was project breakfast, which was a ready to eat high protein, low carb breakfast beverage. And that was our first idea ever. So Norbeck first brand that we launched. But the first idea was was around project breakfasts, which also failed a lot of our high conviction ideas. Funny enough, what are currently making an impact in the market right now.

Kara Goldin 12:14
So interesting. So let’s talk about Rob’s you feel like you’ve really hit it with Rob’s and obviously co founded or the Jonas Brothers, their co founders in this project as well. Yep. And so talk a little bit about what the learnings are there. It is such a tasty product. And it’s really, really good. So share a little bit more about that.

Harrison Fugman 12:37
Thank you. That’s been a really, really fun brand to take it on. And you know, with the the business model, we have the makeup market, we’d always seen a bunch of different inbounds from celebrities that wanted to create brands, what we’ve been largely reluctant was we thought you really need quite a few factors to line up for, for celebrity brands to have the impact that I think everyone looks for when they when when they create create a business. And the first is you need to have a really authentic story like consumers see right through a name slap. The second is you need to have a tasty product. The third is hopefully there’s a favorable competitive dynamics around the industry of that product. And then the fourth is about does your partner and it does the seller do they want to actually like do the work and put the effort in. And with Rob’s all four of those are just really lined up out of the gates. So we were introduced to the brothers in 2021. They shared that the backs were the brand which is their guitarists father as a gentleman named Rob. He’d been making this popcorn since the late 80s. They just they tried it for the first time in 2011. And for the better part of a decade had just been their their go to favorite snack. And they’d always talked about turning it into a brand it just never lined up and and so last year we came together to do it. We partnered with Live Nation and actually launched the brand on there remember this tour across Live Nation venues. And the driver that are the focus there was, you know, they they’d love this product. And they have an amazing fan base and they wanted to introduce the popcorn to their their fans and their community in a really unique and brand enhancing way. And so dropping it at the tours and having that as the discovery process was really really impactful way to introduce the brand to market. Then we launched it DTC a couple months after and then in q2 of this year 2022. We launched the brand nationwide at around 3000. Walmart’s where data relative to peers in the category has been has been really, really exciting. And we’ve got some big both retail and and SKU plans for 2023? Which will, we’ll be talking about at some point. And in the future,

Kara Goldin 15:13
what is the big thing that you’ve seen with celebrity partners? Like, obviously, the Jonas Brothers are excited to get this out and help you with the partnership? Have you just seen it opening doors? The poll? Obviously, you have different types of distribution with concert venues and and some of the other things that you’re doing as well. But what is your thinking? I mean, now that you’ve seen this kind of work like it it, it definitely does work if you can find the right celebrity. And obviously, you have to have a great product as well.

Harrison Fugman 15:46
Yeah. And it’s with any brand. And I think any brand, these are the things you want to figure out is like one, how can we gain distribution, and how can we get the product on shelf, and then to once you’re on shelf, how to drive trial in the product, and how consumers buy it, because if it’s a great product, customers will rebuy it. And I think broadly speaking it across all celebrity brands that are successful, that’s what they nail is, is that their partner can help open doors. And then once you’re on shelf, they can leverage their follower account and their influence to actually get folks in store and try the brand that they’re that they’re really excited about. And that’s where we’ve been pretty fortunate out of the gates where, you know, this is a brand that that the brothers love, because it’s so close to home for them to call it a family brand all the time. And so as such, when you combine that passion with the influence they have, and then the outright taste of the product, and a lot of the competitive dynamics around the specific subcategory we’re going after and popcorn. It’s it’s been a special, you know, first year plus out of the gates,

Kara Goldin 16:55
what has been the biggest thing that you’ve learned about the food industry in general, you’ve worked in snacks, and I guess you’ve covered other categories as well. But what in general about the food industry has been really great, what has been kind of a learning experience that you didn’t see working in finance? I think

Harrison Fugman 17:16
what’s what’s great about it, is, first and foremost, the people and the passion people are doing are in this industry, its passion first. And so I came from an industry in finance of just generally speaking, outright complaining, and people who their motives for being there were very different than them in food where it feels like everyone wants to be there. And that’s across the board, whether, you know, it’s the agencies that are in the industry, it’s the, it’s the companies that actual brands that are that are moving things, whether it’s the retailers, it’s just it’s a very engaged positive industry. And, and I love that trade shows, as you know, like the energy in them is, is like nothing else I’ve ever felt in my professional career. Just the general networking across different roles in, in the industry at people, it’s it’s great people, and to end an ecosystem, I think what’s what’s really cool from a just a dynamic perspective, you’ll need to get a few things really right, for a brand to reach significant scale. And I mean that from a distribution perspective, you know, there’s, there’s a few key partners that can really move the needle for the brand. And when you can open up distribution in those and do well. It can put you on a pretty quick path to to build a healthy business as a startup, we move in a million miles a minute, the deadline for everything for us is yesterday. And they’re in many cases is a slower pace to the industry, which can make getting certain things done, take a lot longer than you would like and that can be on the production manufacturing side, it can be on the retail distribution side. And so having a little patience, yeah, can can be something that we probably work on.

Kara Goldin 19:13
I’ve said that many times that patience is my downfall. It’s it’s really, really tough to have it. Especially when when you’re really passionate and really excited about getting going. And things do take a lot longer than I think often they need to, but they just do. And I definitely am. I’m with you on on that. So how do you think your company has changed since the beginning? Obviously, you know, you’ve launched a number of different brands, but has the focus changed? Have you changed? Have you? What do you think when you look back on those early days versus how you think about business today?

Harrison Fugman 19:57
What’s changed? It’s a great question. The Core Strategy has not changed. If you look at the day one business plan to where we are today, the core pillars is still in mind. And it’s really been the kind of some of those more details that have changed. So for example, category focus, we’re very big into snack right now. And that will be the core focus moving forward. First, we were much more category agnostic when we launched the company, how we think about success has drastically changed. You know, if you told me in 2019, that we would have, you know, two, eight figure brands that we built in from a revenue perspective, and, you know, two and a half years, I would have told you like that, that you were, like, it’s just that was the blue sky scenario to one level on to Sure. And now how we district kind of like moving kind of move that goalposts from from Alright, well, we’ve made this level of impact, how do we take it from, you know, an eight figure top line brand to a nine figure top line brand. And so there’s definitely been a change in in how we think about success. I don’t love that, because it’s very important that we don’t want to just keep moving that goalposts and we want to enjoy the day to day is and and both the small wins and the big wins. But I mean, it definitely has. And just the the learning process and the experience that we’ve garnered it’s, I do feel like a very different person today, then day one.

Kara Goldin 21:32
Yeah, the journey it’s been, it’s been an emotional

Harrison Fugman 21:35
journey, the highest of highs and the lowest of lows.

Kara Goldin 21:39
It’s interesting on an episode that we just launched, actually, Megan Raymer, from Jackson’s as was on and she talked a lot about how, within 24 hours, you can have extreme highs and extreme lows. And when she was a reporter for The Wall Street Journal, and did you know a lot of other really, really amazing things, she said that she had never really realized, you know, what founders and creators really go through because it truly is, there isn’t a wave as much as like, the spikes are there that she described, and you’ve got to be in it. And you’ve got to be okay with that. And there are many people who just decide this isn’t for me, because they don’t like that. But I think nobody really talks about that, like the spikes of that. And I think to some extent, being around other founders and sort of hearing their stories, that that is just what this industry is, is about is it’s comforting. I guess in some ways, it’s not just you having these, you know, failures along the way, or, you know, of course, celebrating the successes is really important, too. But it’s it’s definitely interesting. Would you say that that’s the same

Harrison Fugman 22:57
experience. And what I’d add to it is just what’s changed a lot back to the initial question is the comfort level you have with handling those lows, and, and highs. And so you know, the first time that you know, you have a retailer, either reject you, or, or push or cancel something, the way in which you deal with it, the second, third or fourth time it happens, you’re just you’ve seen it before. And so you’ve garnered a much higher level of comfort with it. Same way on the other side, like the first time you get a big national rollout you’re overwhelmed with, with excitement and responsibility coming your way. And then once you’ve done it once doing it the second, third, fourth and fifth time, and it just becomes a lot, you get a lot more comfortable. Yeah, things can swing so wildly quickly. I’ve had the best days become the worst days. And the worst days also become the best days. And I’m not really sure what type of day today will be but obviously a great start getting it going with with with you on the pod right now

Kara Goldin 24:06
you’re in. So I’d love to just hear one of the stories where you had a huge challenge in building the business. And then you’re like, Okay, I can do this something that you didn’t expect along the way that maybe just kind of hit you hard.

Harrison Fugman 24:21
I would say inventory planning has been the hardest one of the harder parts of the business because you get these big retail rollouts. And there’s a lot of forecasting that goes into them. And there’s certain assumptions you can be very comfortable with and other ones that you can be surprised with. And so there’s been a few situations in our company where we’ve been on the wrong side of how much inventory we’re we are sitting on and there’s been some very dark days around that and get a feel for how are we actually going to Get this inventory off our hands and into different Retail TouchPoints. And eventually customers hands. And that’s definitely been one area of the highest kind of downside, Felton and sleepless nights that over time has has worked itself out.

Kara Goldin 25:18
And so what have you learned about you during those periods of time,

Harrison Fugman 25:22
there was a time and there was four of us in the room, and we’re cranking through the numbers on exactly what we’re sitting on and where it needs to go. And I just kind of stopped everyone. I was like, hey, you know, regardless of how this comes out, it’s crazy that there’s four of us sitting on this massive problem. And if it works out, it’ll be the four of us that, you know, get to really relish the execution of the victory. And if it doesn’t, you know, it’ll be a big black eye, but we’ll learn what it feels like to really be punched in the face. And we managed to figure it out and come out in a great side. And so what I learned about myself in that was, I’m really in this for the day to day, and I’m in this for the good and the bad. And I’m going to enjoy the entire end to end process, even if, you know, that means some of those days are going to be complete, hectic, hecticness with with massive risk on the line, I think coming into the company, the way I would have thought about that day would have been a lot more like we need to get this done. If we don’t, then these are the real, you know, this is where it’s going to put us. And I think putting that positivity or a positivity in the room, I think ultimately led to why a lot of the outcomes we’ve dealt with whether it’s in that scenario, or many others have proven to be pretty positive so far.

Kara Goldin 26:58
Yeah. And you just figure it out. I mean, I think that that’s the key thing, you just have to figure out a way to make it happen. So you’re a founder, you’re a creator, what would you say? is kind of the the biggest thing that keeps you motivated? I would I would say, me as a creator, I’ve learned a ton about consumers, I am absolutely obsessed with consumers. I sit there and I dream about consumers. I mean, I I really am watching how they react to things. And and obviously, you’re, you’ve got a number of different brands that you’re doing the same, but I’m so curious, what keeps you motivated?

Harrison Fugman 27:40
Yeah, you’ve nailed that. It’s all about the consumer. And it’s both the impact that we can have on the consumer, but also looking at the other ways consumers are being impacted by other brands, and whether that’s competitive brands, or whether that’s brands and other industries? And and how can we have that, that same level of impact. So one is just just having an incredible proudness and conviction and all of the brands in our portfolios and in our portfolio and the general mindset of like, I want everyone in America to try Rob’s backstage. But then, you know, beyond that obsessing over, you know, how are they going to try the product and and how are we going to build the brand so that way we can have you know, such an outsized impact on the industry, and do it in a really short period of time. So it’s consumer consumer consumer, and was so much feedback around that. It’s endless motivation. And that feedback can come from people buying it online and giving you you know, writing into customer service, it can come from your social media presence, it can come from walking into a retail and seeing the brand and seeing a consumer either buy it or pick it up and put it back and asking them why they did that. But the consumer and and they do it in in so many different ways.

Kara Goldin 29:01
Yeah, definitely. It’s it is so motivating. I remember the first email that I got from a consumer, I had never written a brand ever, it not even to complain. And I remember when I got that first email from a consumer, it was probably two days after we had been on the shelf at Whole Foods. And I thought, it brings a lot to the founder and the creators journey. And even if it’s feedback that they don’t want to hear it’s important feedback to talk to people about the brand because I think it’s how they learn and it’s how they grow the brand in a lot of ways, and it’s an important piece.

Harrison Fugman 29:40
Totally and for us being launching everything EECOM first, it’s provided an unbelievable forum to get that feedback. And as you touched on both good and bad. I’ll never forget like when flock started going, we started to get some negative comments around you know when you sell chicken skin in a bag How many love it but some don’t. And I remember our email last time, you probably had like 15 20,000 customers. So it was just in the earlier days of in the first few months of the brand. And we sent an email to every customer and the subject was just like honest feedback. And it’s like, Hey, my name’s Harrison, I’m, I’m founder and CEO of flock by the naked market. And I’d really appreciate if you let me know what you saw my of our brand. And if you could just like fill out this brief survey, and we spent that weekend and respond to truly the team to 1000s of responses. And seeing the excitement that we were bringing to customers is something I’ll never forget. And yes, there was the bad. And we could bucket the bad into into pockets that that we want to go on and fix but that the mass majority of positivity was like something I’d never felt in, in my professional life.

Kara Goldin 31:01
Yeah. And being that close to the consumer is, is a very, it’s a powerful thing. And I think it’s what drives most entrepreneurs, certainly in the food and beverage industry. But I think in any industry, the closer you can get to that consumer, the better. So well. Thank you so much. Harrison appreciated all the great insights and the conversation and you making time and good luck with everything with all of your brands. So everybody needs to grab Rob’s backstage popcorn, and definitely try floc chicken skins as well. And we’ll have all of the information for both in the show notes, too. So thanks again, Harrison.

Harrison Fugman 31:42
Thank you so much care.

Kara Goldin 31:43
Thanks all for listening to this episode. We hope you enjoyed it. And I want to thank all of our guests and our sponsors. And finally our listeners keep the great comments coming in. And one final plug if you have not read or listened to my book undaunted, please do so you will hear all about my journey, including founding, scaling and building the company that I founded. Hint we are here every Monday, Wednesday and Friday. Thanks everyone for listening and goodbye for now. Before we sign off, I want to talk to you about fear. People like to talk about fearless leaders. But achieving big goals isn’t about fearlessness. Successful leaders recognize their fears and decide to deal with them head on in order to move forward. This is where my new book undaunted comes in. This book is designed for anyone who wants to succeed in the face of fear, overcome doubts and live a little undaunted. Order your copy today at undaunted, the book.com and learn how to look your doubts and doubters in the eye and achieve your dreams. For a limited time. You’ll also receive a free case of hint water. Do you have a question for me or want to nominate an innovator to spotlight send me a tweet at Kara Goldin and let me know. And if you liked what you heard, please leave me a review on Apple podcasts. You can also follow along with me on Facebook, Instagram, Twitter and LinkedIn at Kara Goldin. Thanks for listening

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