Dan McCormick: Founder & CEO of Create

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 Kara Goldin from the Kara Goldin show. And I’m super excited to have my next guest here we have Dan McCormick, who is the founder and CEO of an incredible company that if you do not know about this company, you need to go and pick up a bag, definitely become more and more aware of it, which I know you will as well, but it’s called Create. And I actually discovered it on Twitter. I was hearing people talk about it. And I reached out to Dan and wanted to know a little bit more about it. Not only is it a an awesome new company, but also it’s the first of a kind creatine gummy. And if you’ve not heard of creatine, you must be living under a rock because it’s probably one of the hottest ingredients out there that many people are putting in to a lot of different things, but not gummies. And so definitely, Dan has sort of taken place in the market that is really, really interesting. Obviously, health and wellness supplements are a hard category. But he is taking this on. And taking an idea and a passion for wellness and really driving it to not only direct to consumer right now, but we’ll hear a lot more about his plans for the future. So welcome, Dan.

Dan McCormick 2:08
Kara, thanks so much for having me. And nice to take it from Twitter to podcast. Yeah,

Kara Goldin 2:13
absolutely. Absolutely. And if I could talk this morning, it would be it would be even better, right? So yeah, exactly. So your story in deciding to create create is a great one. I’d love for you to share it kind of what made you decide, first of all, to go and start your own company. But also, what was it about creatine that you really felt was something that you wanted to bring to the masses in a better form than you had ever seen it? Yeah,

Dan McCormick 2:50
so my story is double pronged. It’s both from a business perspective and a personal perspective. And I’ll start with the personal because I think that’s perhaps more compelling. So I’ve been taking creatine for well over a decade, like many men, predominantly, I got into creatine for the first time early in high school. I’m not a bodybuilder, I wasn’t a super serious athlete, and we’re on a podcast, but you can see the video, I don’t exactly look like your stereotypical creatine user, at least in the public perception of what a creatine user looks like. But I always had a really positive experience with the supplement. When I would tell people that I was taking it, I would get kind of the sideways looks, dude, why taking creatine That’s not for you, your kidneys are gonna fail, your hair is gonna fall out, you’re gonna get terrible acne. And I just never really had those negative side effects. And so I do what everyone does, I go and research the compound. And if you’re willing to put in kind of five minutes of research on creatine, you quickly come to realize that it’s the most studied fitness supplement on the market, that people that take their health wellness most seriously. Consider this a table stakes nutrient versus an anabolic steroid, right? It’s actually a relatively youdid supplement relative to the other things that people are putting in their body. And the important thing about creatine is and this is pretty well seen out throughout all the research is that it actually does what it purports to do. It’s a research backed effective supplement. And so that gap between my personal experience and what you know, even just cursory research showed me I always thought that was a weird kind of chasm and was ripe for the to see disruption and pull that to the business side of things pretty routine. I’ve been in ecommerce for just under a decade by the time I started create, and I kind of developed a checklist of these are the characteristics of a business that were I to start kind of the perfect DTC widget factory and want this product for this company to check some of these boxes. So it’s a naturally reoccurring replenishment business. It’s structurally high margin. You can build a really nice add ecommerce DTC business off of it, but there’s natural Transition to omni channel. I think this last point is important that there’s only 2% penetration in the general population of people in the US taking creatine. So only 2% of the general population were taking it. And a core belief I had was that that number is 20 to 40x underpenetrated. Like literally anywhere from 40 to 80% of the population based on our research and based on where we’re seeing trends going could meaningfully benefit from proper creatine supplementation. But for a variety of reasons that I hope we get into. It was just had a terrible shake of it for the last 25 years. And because of that terrible branding, because of that stigma, because that misperception it just left this wide open market opportunity.

Kara Goldin 5:45
So you mentioned that you had been taking it even, you know, prior to, I guess, since high school, so what was like the promise of creating, like, why do people start taking it as it’s to gain body mass? Or what what is it that? Well, you gain weight from it? I mean, what it what is it that sort of people are taking it now as an ingredient? And, and and has it changed over time, too?

Dan McCormick 6:14
Yeah. So I think what creatine first came on the scenes in the late 90s, early 2000s, the promise of creatine is that it’s going to get you quote, unquote, Jack, it’s going to help you get gains. And for that reason, largely men at the time, were taking it to increase strength, building muscle mass, have better workouts, those things are all still true today, creatine all else equal, you take it after two to four weeks, you’re seeing 10 to 15% increase in strength, you’re seeing your muscle volume increase, you’re seeing better recovery in and outside of workouts. What’s most interesting, I think what is partially sparking this kind of new interest in creatine is that there are actually a whole kind of slew of different research coming out around creatine and cognitive benefits, everything from cognitive performance to improve memory to actually potential treatment for anxiety, depression, and a few other mental health sees it. That is not exactly how we’re framing our company. But it is research that we’re really excited about. And I think what a lot of consumers are discovering creatine for the first time around.

Kara Goldin 7:19
So it’s one thing to be interested in ingredient and go and work for direct to consumer companies and have this idea that maybe you should go do something that that puts you in the founder status, but it’s a big step, right? There’s a lot easier ways to make money than actually becoming a founder, right? You’re probably spending more than you’re making, if you’re like most founders. So talk to me about what was the moment when you just said I want to go and start this company?

Dan McCormick 7:55
Yeah, I think to your point, there’s a lot easier ways to get rich than to start a DTC business. In fact, it’s a great way to light money on fire for a lot of founders. That’s not supposed to be discouraging, I think you just have to go into these businesses with a deep understanding of what makes the business model work. And oftentimes it doesn’t for a bunch of different product categories. I think what started for me a guy, I come from an entrepreneurial family, I have two siblings that have started companies, my both my parents started small businesses. So I think, for better or worse, it’s always been hard to me that I’ve wanted to start something and kind of create something and see it out in the world. I think the initial spark for trade had been my last company had a really good experience running kind of the business side of a high growth brand. And for the first time kind of realize, Oh, these people starting these brands, they are very impressive people. In many cases, they’re visionaries, but they’re not that different. They than your eye on a day to day basis, there are normal people that put their their pants on one leg at a time. And that realization that exposure to other founders, I think kind of gave me the confidence to go out and say, Hey, I’m going to take a leap of faith. I’ve been in this kind of industry now for almost a decade. And I think now is kind of the right time to go out and start my own thing. And then from there, it’s kind of a gradual process of building momentum, right? So you, you have that initial idea, that initial spark, you build the deck, you send it to a few people, you get feedback that’s either positive or negative, you take that feedback, you incorporate it in the next version of the deck, you get the introduction to the next person that’s a little bit more credible in the space that is maybe extended or not extended about your idea at what goes from kind of an initial idea into a real business. It just kind of at least from a snowballed over the course of six or so months.

Kara Goldin 9:47
So the development process so it sounds like you wrote a business plan. You knew it was going to be a direct to consumer business, but the actual physical product so how did you go have come up with exactly what we’re going to be the launch products, I guess. And how fast was that process as well?

Dan McCormick 10:10
Yeah, so the idea of the creatine gummy, was born out of my own frustration with kind of creatine powder. And what I imagined a lot of people are also feeling with creatine powder. It’s inconvenient, it doesn’t taste great, it’s hard to travel with. And the thing about preaching to see the full benefits is you really have to be taking it every day or at least five days a week. And the reality is that most people just aren’t making a shake or some kind of supplement drink. On that consistency, that consistent number basis. The idea of the gummy was what if we could make a supplement that was something that people look forward to taking on a daily basis, because they look forward to it that will lead to better adherence, and better adherence leads to better results. On top of kind of the intellectualization of all that people just like gummies, we’ve seen that across a bunch of different compounds. So I thought that was a differentiator as we go to market. I didn’t come from supplements, I certainly didn’t come from gummy manufacturing. That’s not what my background is in. I call basically 2025 gummy Coke manufacturers pitch them on idea. And to a one basically, each gummy manufacturer said, you know, that’s not possible for X, Y, and Z, chemical reason these are the chemical properties of creatine, we can’t fit the amount that you want into a gummy, or we’re not willing to do the r&d to help you get this to market. So after a couple of months of hitting my head against the wall, trying to find the right partner, we brought on essentially an outsource VP of ops to help us commercialize it bring this to market, he connected us with a reputable company manufacturer base it on the West Coast. They come from CBD gummies actually, so gotten really proficient at fitting active compounds into gummy supplements, which led very well to fitting creatine into a gummy. And so for due to their connections, they were willing to take on the project as an r&d project. And after dozens and dozens of samples and r&d batches, we finally got to view one of the product that we’re comfortable commercializing and printing to market since then we probably had 15 to 20 improvements and iterations off that initial commercialized v1. But that’s kind of the name of the game here, listen to customer feedback, and continuously improve on the product, because it is a relatively innovative product in terms of when it came to the market and other existing products on the market at the time.

Kara Goldin 12:45
Did anything surprise you when you launched that was you know that you ended up changing one of the things that we found when we launched it was we had a clear label. And we thought, you know, it’s it’s, it’s a clear product, we want everything to be clear. And what we didn’t take into account was the lighting in stores. And this is clearly different for a direct to consumer business. But I’ve heard this over and over again, for people, for example, who have frozen products. So you don’t want a clear window in a frozen product because you get that ice right inside and no one can actually see or it doesn’t look right. So I’m curious was Is there anything about either the product or the packaging that you were like, Oh, wow, you know, I painstakingly won that and and it just didn’t work. So I love these stories where people, you know, think that they’re doing the right thing and, and maybe spend more money trying to do the right thing. And then you’re like, No one cares. Yeah,

Dan McCormick 13:50
yeah, interesting thing. I learned that selling gummies in the summer is a tough business if you don’t have the formula down pat. And so our first summer in operations was this last summer. And our product uses allulose which is a an amazing alternative to sugar. It’s a great sweetener, but it has a few properties that when exposed to heat, the allulose will actually weep out of the gummy giving up the the almost the resemblance at the gummy is melting. It’s the gummies not actually melting but the allulose is basically getting sucked out of the gummy and accumulating it on the edges of the gummy and at the bottom of the bag. And so that’s exacerbated in heat. And so in the summer what UPS trucks can be up to 140 degrees Fahrenheit hotter the our GM has experienced that in certain parts of the country. And that happened because we weren’t cutting corners and using an expensive sweetener like allulose. We’re using a pectin vegan gummy base that it’s tougher to contain the allulose within the gummy versus gelatin which is low bit harder. But of course is made with animal products. And so that’s kind of the main one. And we definitely had some good learning pains this past summer. Since then we’ve reformulated the product to make it anti melt, we’ve reduced the allulose content such that it doesn’t leap out. The after a month or so there, a lot of our customers were receiving blobs of what looked like melted gummies. And we tried to do right by them and ensure that they had a good experience with us going forward. But definitely something we had to learn the hard way the first time.

Kara Goldin 15:36
So when you first launched, you were direct to consumer and I know that you are moving beyond that, how do you make that decision that you’re going to go into stores? Is that the opportunity comes up? Or are you actually thinking that that’s part of the overall Omni strategy?

Dan McCormick 15:58
Yeah, I think over time, for a treat to kind of be successful in terms of accomplishing our mission, we do need to be omni channel we need to be everywhere and more where customers are buying preaching today. I think right now our goal is to build a really strong profitable high growth, standalone ecommerce business and be opportunistic about the retail partners, the omni channel partners that we take that initial leap of faith with, you know, this 10 times better than me care. But the level of complexity that’s added into one of these DTC businesses, when you are shipping product in the real world to these retail partners that some of which are really easy to work with, some of which are less easy to work with. But it just adds a ton of complexity. And right now, our goal is how can we reduce complexity as much as possible, such that we can, you know, triple down on the thing that we do really well, which is selling direct to consumer on Amazon?

Kara Goldin 16:57
Yeah, definitely, when you go into these retailers, too, it’s not just about dealing with with a distributor that is holding on to your product in a warehouse way in the backroom and has 1000s of other products that they’re dealing with. But in addition to that, you have to get brokers that are watching it merchandisers and it’s, it’s pretty scary for a lot of brands, and they have no idea. You know, once going into it, how much you’ve got to do in terms of, you know, resourcing to be successful. So it’s, it’s, it’s definitely people think, oh, retail, it’s gonna be great. But you really, really have to think long and hard about that.

Dan McCormick 17:41
Yeah, and I’ll be the first to say I have no expertise in retail and wholesale. And I feel like in E commerce and b2c, I have a really strong grasp of what best in class looks like I’m relatively strong case, I know kind of who the good partner I can sniff out like, who’s going to be a good partner and who’s not going to be a good partner pretty quickly. In retail, that’s just not my background. It’s not something that I feel like I have a ton of kind of expertise in and hopefully that comes over time. But I just feel a little bit more I guess, naturally at home operating online.

Kara Goldin 18:17
So you spend time in the direct to consumer world you were in the finance side of things at PNa. But definitely had been around direct to consumer you told me this great story about your sister and how she’s been. So instrumental and and kind of inspiring you I guess, as well as mentoring you along the way which is terrific. What do you think today makes us successful DTC business, I heard you say the word profitability. But it’s what do you see as I guess, what makes a successful DTC business today, but also, how do you get there? And and you’ve got an idea for a product and you’re thinking, Okay, I’m gonna go and launch a website, I’m going to go talk to Shopify and go launch this. Like, it doesn’t stop there. What do you have to do at this point in order to kind of really make sure that it’s going to be successful beyond having a great product?

Dan McCormick 19:19
Yeah, and I think you’re right, and making that copy out, because I do think it does come back to a product that consumers want to buy. But yeah, I mean, I think for us, I’m not one of these people that it’s like, you know, profitability at all cost, and you got to bootstrap everything. And I actually believe there’s, it’s more about just knowing what you’re getting into knowing the business that you’re getting into, and capitalize in and structure in the business to hit certain goal. So if my goal was to build, you know, a massive platform of different supplements and take on someone like momentous or firstborn, or optimum nutrition, I wouldn’t want to grow. So quickly I would raise more money, I would be making a bigger swing at, hey, I’m going to own the supplements category, not I’m going to own a single supplement within the supplements category. So yeah, I think it’s mostly just about going into this with a strong understanding of the physics of your business, my business is right now, not a business that can justify burning a million dollars a month. But I think the opportunity is large enough that we can justify burning, call it $100,000 A month, because the size of the prize is large enough for that to ultimately be a risk adjusted a good bet to make in two to three years. And so I don’t really have like a, you need to raise money to start one of these things, or you need to bootstrap it the first six months, I think it’s just kind of right sizing your power strategy to the size of the opportunity and the type of business you want to run. What I will say is a few things make this a little bit easier just having been in this for a decade or so now, that one high margin makes this game a lot easier, hitting you know, 50 to 60%, gross margins all in make, you know, collecting more money when yourself each dollar each penny that you collect more on each dollar that you sell makes everything a lot easier. Having a business where you’re selling consumable products for the customers coming back to you naturally, either through subscription or just natural consumer. Consumer behavior makes this a lot easier. Having a product that does really well online, but will also do really well offline eventually, I think makes the size of the opportunity better. For example, mattresses do really well online, a little bit harder to sell those mattresses offline if you’re someone like Casper today. And then I think having a core kind of community, I’d actually don’t love that term. I think it’s kind of marketing the s a little bit at this point. But having a group of customers that really identify with your product and will go out and evangelize on your behalf without you compensating them to do so. But because they really believe in what you’re doing, or really love the product makes everything else a lot easier. So yeah, see, I think, I don’t know if I answered your question directly. But those are maybe some things to look for.

Kara Goldin 22:32
No, definitely. And I think that’s true. We met on on Twitter, when somebody a few people were actually talking about creates and in a very positive way. And as you mentioned, they’re not investors, they’re fans not that an investor can’t be a fan. But it’s, they were definitely very authentically chatting about create. So great job. And I think the more you can get people talking about it, the better. I think the other thing that that you’ve just nailed to is that your product is lightweight. So it’s a little harder, even if you’ve got great margins if you’ve got a heavier product because or something like a mattress that is bulky and and the shipping or the delivery is going to be part of the equation. So you always have to look out for that as well. But things like search, there’s so many different opportunities today around Instagram and and not just putting an ad up but actually being able to transact right there. So two is is pretty interesting. Have you been doing some of that through Tik Tok and some of the social or how have you been using social today? Yeah, so

Dan McCormick 23:52
our main channel is actually meta. And I know that’s commonplace. I think if you put every DTC founder or most DTC founders on truth serum and ask them where they’re deploying their ad dollars, I think they’d say somewhere between 80 to 90%. On meta, I think out of the last couple of years, it became out of fashion to admit that, you know, most of your marketing dollars were going towards meta because it’s become clear that not that it’s a bad thing, but meta does have a lot of control over these companies. My perspective there is that that is true. And you should know that going and you shouldn’t be surprised. When you no matter stops working. Your business also stops working like that something you need to be aware of. But I don’t think that means you should totally shun metta as a marketing channel. I think for many products, maybe perhaps not water, do the weight dynamics you’re mentioned in earlier before a lot of DTC Products. It’s the greatest customer discovery tool ever rolled out. Google Search I always say is like, Google Search helps you kind of mind the demand that you’ve already created. But there’s no one else that no other platform is going to help you generate demand. Like meta, it’s. Yeah, so meta is our number one marketing platform.

Kara Goldin 25:17
I totally agree. So yeah, yeah, I totally agree. So it for him, it’s always been such a key thing to for betta. And I always found it fascinating because the demographic, the core demographics for hand is, is younger than what is on meta, what people think is on meta, but it definitely does transact. And I think it’s, it’s, I think that’s true for so many. So I’m a little surprised that that’s where your transactions are happening, too. But it’s, it’s not that surprising. Yeah,

Dan McCormick 25:58
I think it’s just a relatively, I mean, it’s the most scalable marketing channel. Right now for our brand. Over time, I think we have to focus a little bit more on top of funnel and some of these macro level influencers. But right now, you know, having a machine that’s basically dollar in dollar out, that you can scale incrementally month over month is super important. So

Kara Goldin 26:20
investors, you and I talked a little bit about this. So definitely bringing on investors in the journey, you’re still pretty early. But what do you I’m sure you’ve heard horror stories of investors, you know, over the years, and and when you’re looking for investors, you’ve got this idea you’ve got, you know, this company that you really think is going to help people. What do you think you you look for in an investor? That? What’s sort of your words of wisdom, and looking for the best investors?

Dan McCormick 26:57
Yeah, I mean, I’m still relatively early in, in the capital raising story here, we’ve raised in just under $2 million. And so the types of investors that are interested in this type of opportunity, that want to invest in these relative to the early stage companies is perhaps a little bit different than the growth equity investors that like to call attended five to $10 million checks in more established brands. So for me, what I’m really looking for, honestly, are other founders and operators that have done it before and perhaps have had a successful exit, because they not only bring capital to the table, but bring on the ground boots on the ground know how of here’s what to look out for at GNC, for example, because we’ve sold $10 million of product A quarter of GNC or don’t use this marketing agency, we’ve tried them, they are not great. Instead, use this agency, I can get you a sweetheart deal. Because, you know, I’ve done hundreds of millions of dollars of business with them. And so at this stage, I really like working with other operators and founders, whether they’re still active or have already had their exit.

Kara Goldin 28:09
I think that’s a great answer. And I think just networking around even if those people aren’t going to become investors, you’re doing a great job of just connecting with people and reaching out, I think that if you have a fear of doing that, then entrepreneurship may not be for you. Because you really do need to just, you know, be bold and and reach out to people, whether that’s, you know, through social or or, you know, picking up the phone. So I think it’s such a such a key thing. Yeah,

Dan McCormick 28:41
I was gonna say oppositely I think kind of like one thing, the whole CPG DTC community has learned over the last couple of years is that going back to understanding kind of the physics of your business, I think, in the 2010s, or early 2020s, investors were funneling 10s, hundreds of millions of dollars into businesses that fundamentally couldn’t hold that type of capital, the size of the opportunity that they were attacking, didn’t need that much capital, and it led to undisciplined operating, because that’s what their investors were telling them to do. Right? If I put $100 million, check into your business, I expect you to allocate that capital and get a return on it, not just sit on it. So I think a lot of operators and founders because this was the direction they’ve been given by their investors, we get into why the investors are doing that in the first place. It’s because they want to deploy more capital to raise the next fund to take their fees out. That’s the name. That’s the business they’re in. And also because it’s not all that well, but I think I think that’s what we’ve seen in DTC and CPG is that for the last five years, and maybe not in the last year, so But prior to that All these companies were just given too much capital and their businesses couldn’t hold it like there was nowhere to do there was nowhere to allocate that capital in a efficient manner. Like Barbara, a very few, very few have actually taken that 100 million, and then we’re going to allocate it efficiently and turn it into 500 million. And so yeah, I think just kind of looking out for that, especially as you get later stage making sure you’re taking a check or taking investor that has the same goals as you and it’s not forcing you to get over your skis, because that’s how these businesses frankly, go to zero.

Kara Goldin 30:38
Yeah, and also figuring out how to build that board to I don’t know if you have a board yet, but definitely I’ve I’ve heard horror stories of when, you know, people are investing early on and then taking board seats and are not, you know, later on, not necessarily the people that you want on the board, but you’ve got shareholder rights agreements that allow them to seats, and they ended up, you know, being very difficult. So I think it’s, there’s so many different components, not just about what percentage of the company they’re taking, or how much money they’re putting in. But I think being very, very careful and creative about your board is super, super important. Totally. For sure. So if you could go back in time, and maybe this is a piece of advice that you would give another founder, maybe you’ve done something wrong along the way that you feel like now, you know, or maybe it’s a story around something that you’ve seen and some of the other companies that you work for to what what is it that you’re most careful about today that until you were actually in the work world, starting your own company that you just no one told you?

Dan McCormick 32:02
I think it goes back to, to what I was just talking about is that there aren’t any actual goalposts that these businesses need to hit to be successful, and being alive is the most important thing. And so, no matter how exciting an opportunity is, no matter how, frankly, exhilarating it is to put up massive growth numbers. Sometimes you need to restrain that in order to ensure that you’re properly balanced as a business and you’re not getting over your skis and you can live to fight another day. So it’s almost like finding that right balance between risk and reward. And sometimes you gotta be put on the gas to take as much advantage of the opportunity in front of you as possible. And other times you have to make the board’s decision to not hire that person or not put up that billboard or not take on that growth ground where the investors often knew so much money at high valuation and all seems great. Yeah, I think it’s just it’s kind of saying no to things is sometimes more beneficial than then taking every opportunity ahead of you. Yeah,

Kara Goldin 33:16
absolutely. The shiny objects, right? syndrome, when you get these opportunities, and you know, they sound great, and you’ve got a celebrity super interested, they want to take half the company or you know, whatever it is where I’ve heard it all. Yeah. So you just you definitely need to kind of take a step back and think about things. I think it’s it’s wise words for sure. So Dan McCormack founder and CEO of create good luck with everything everybody needs to try, create. And we’ll definitely be following you and very excited for everything that you’re doing in the future.

Dan McCormick 33:55
Kara, thank you so much for having me on.

Kara Goldin 33:58
Thanks again for listening to the Kara Goldin show. If you would, please give us a review. And feel free to share this podcast with others who would benefit and of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin. I would love to hear from you too, so feel free to DM me. And if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal, best selling book undaunted, where I share more about my journey including founding and building hint. We are here every Monday, Wednesday and Friday. Thanks for listening and good bye 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 Pentwater 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