Building IQ Bar to $55 Million+ with Will Nitze

Jordan Buckner: [00:00:00] Hey everyone, I am excited for today's conversation and I get a chance to talk with Will, who's the founder of IQ Bar. All of you know him from LinkedIn and beyond. And for those of you who don't, he created a line of protein bars to increase mental health and cognition and now runs a multi million dollar brand selling bars, hydration sticks, and mushroom coffees.

Will, welcome to the program, man. 

Will Nitze: Thanks for having me.

Jordan Buckner: I am excited to chat. We. It originally met, I gotta say like back in 2017 or 18, I think in Chicago when you were first launching. IQ bar, and it was cool to see like how things have grown and evolved since then. So it's great to be able , to chat and catch up and hear about what's all new.

Will Nitze: Yeah, man, that was a while ago. That was yeah, like 2018 ish. Very different era, which I'm sure we can, we'll get into the ways that the space has evolved since then. But yeah, valuations were different. How you raised money was different, whether or not it was worth it to start a brand in the [00:01:00] first place.

What's the different calculus, et cetera, et cetera. 

Jordan Buckner: Yeah, let's get into that because right. You've been doing this , for seven years, right? Like you're not running 30 companies, so you can't see everything, but from your vantage point, you get to see a lot just from your own experience. So after seven years now, Yeah, you're.

Having some success, I think a lot would argue and you would argue too, whereas most businesses end up failing in less than five. I'm really curious, like, what do you attribute to how you've been running the company or even just like the market that's been leading to the success that you're having so far?

Will Nitze: I think we thought of them, I slash we thought of things in a old, old school way, maybe is one way of putting it even during the go go years. So for whatever reason, and I think part of it was maybe I , couldn't raise a lot of money slash I didn't want to dilute myself a ton slash I don't know. I just, the goal was always to get to profitability.

I took a little bit of a different tack during the, you know, the ZERP era wild [00:02:00] free money environment. So rather than go out and even when maybe I could raise 10 million bucks or something like that, I never did. Our goal was always raise as little money as possible, not as much money as possible, such that we could get to the next step change of revenue.

And so when the tides changed and when the environment changed, actually nothing changed about the way we operated. And I think maybe we looked silly for a few years, and then we didn't. Because you know, for example, we only have six people desk, you know, employees. We run our own warehouse as well, but we only have six people, like, jamming on a computer all day.

Which is insanely small. Like we're, , our goal this year is somewhere between 55 and 60 million, in top line. So it's like, you could feasibly do be doing 10 million an office employee, which is insane. Right. That is not in some ways, not advisable. Right. But maybe, I don't know. Everyone has different styles, 

but in our mind, it was always about like, how do we get to profitability? There aren't that [00:03:00] many inputs. One of them is SG and a team size. And so we were from day one, like, all right, we're going to have a small team. We're not going to raise the 10 million. We're not going to. Go on a hiring spree, we're going to have like two people, three people.

So we just, I don't know, I think we just had more of a traditional, like you have to be profitable lens, even when that was not in vogue. 

Jordan Buckner: You know, it's funny. I always remember, even though it's a couple of years ago, I'm making the joke of like, Wait, a business is actually supposed to make money, not just raise a bunch of money from investors and spend it and maybe hit it big and go out of business.

Right. And it's ironic because a lot of people raise and have grown businesses, I think influenced by a lot of the tech companies were like, we'll build a product, we'll try to sell it. And then we'll figure out how to make money later. Right. And for like a few of those, it worked, but for the vast majority, it didn't.

Will Nitze: Well, I think a lot of it is the V, like when VC money started pouring into consumer goods, which was not always the case, right? There [00:04:00] was an era where there just wasn't VC money in consumer goods. Then there was when, again, it was free money. Everyone had so much money that funds were being built around sectors that were not traditionally venture sectors.

And so what happens when that happens? Well, you need to apply the VC model. What is the VC model? Fast growth. Like it's. It's always starts with growth. And so if you have to grow really, really fast, that is not compatible with profitability in most cases, especially when you're sub scale, like when you're at pretty big scale, you can grow fast and run a self sustaining business.

But I mean, for year one, two, three, four, like five, those two things are not compatible. And I think what the unfortunate thing that happened. It's. In our industry or folks who are on either side of that, you know, they started in the free money era and then lived through the, let's say, January of 2022, they were then told, Oh, like that [00:05:00] DNA, you're going to have to invert that DNA.

Yeah. No, it doesn't matter. It's all about profitability. Well, which is true, but worse than that. Worse than that. No, no, growth still matters, but you also have to be super proud, but that's the worst part, right? They're expecting you to be a like flawless business model, which is just very, very tough. 

Jordan Buckner: Well, I know you also talked about, right?

Like just starting a consumer brand, it takes a lot of money to do so. So how do you kind of balance those sides of needing money at the beginning to even just like get in the game? With not over diluting yourself and you're on this easy growth path. 

Will Nitze: Yeah. I would say two things. Cause we didn't, I mean, the first money I raised was from either from friends and family.

It was a guy I got connected to through a friend of mine who was an entrepreneur and we did a Kickstarter. Like that's how we started. Cause I had money to, to start the brand. And the Kickstarter went well, as you know, like you [00:06:00] can't even generate enough money from a Kickstarter to finance your business from cash flows, but we use that as a proof point.

And then we went back , to, I went back to this guy who I had gotten connected to and said, Hey, look, we sold X amount of product and we have a couple thousand customers. And then he wrote a big check and brought in another big check. And so, you know, we raised, I think it was like 625 K. Okay.

But that's like, not even, that's like nothing. And, but we said, okay, how do we stretch this as long as we possibly can? And , it's, I think two variables. One is, which I already talked about was low SG& A. So just don't hire a bunch of people. And if you can afford it, you know, pay yourself enough to buy, pay rent and groceries and like, don't suck anything out of, out of the business, which can only last for a couple of years.

And I was a young guy, no kids, no, no wife, et cetera. Right. So I could do that. But you can control your burn. I, the second variable outside of SGNA, I would say is channel selection. So the traditional CPG model is going to your [00:07:00] corner store and then go into other corner stores and kind of grow your concentric brick and mortar presence to be bigger and bigger and bigger and bigger.

And we did the opposite of that. We started online and we picked. A form factor and even our second and third expansion form factors are the same way that can work online. And then we just obsessed over how do we make this work online. And that's not to say that digital is the most profitable channel.

Actually now it's, I think, our least profitable. But it allowed us to get to a lot of scale very quickly. And not lose a lot of money, you know, we lost, I think maybe, I don't know, a million bucks that first year, but, but we got to a place where we were tracking diving to 2. 1 million in our first full calendar year, which is 2019.

And that was enough traction quickly enough to where we could raise a second tranche, raise a million bucks. And so we were very, I mean, I say we [00:08:00] were. You know, we were super frugal and I say we had an old school model, a low SGNL, all that. Even with all that, you still need money, right? So it's, it's just a measure of proportion, not whether you need it.

Jordan Buckner: And then well, I'm curious how your financing strategy has then changed then. Right. Cause like you need that initial amount, like get started, get the engine going. And now you're talking a lot about like running the business a little bit leaner after that. How do you kind of have, well, one, have you made that transition where you're like, we're not actively looking for investor money or are you still bringing investor money?

Are you running off the cash flows? What's that financial strategy look like now? 

Will Nitze: We would know. So we are profitable. It was really, really exciting quarter Q1. We hit basically 10 percent EBITDA, which for the first time ever. It was a wild feeling because for the first time you're like, Oh, like exhale, I don't need to go begging for money.

Cause I mean, I, every entrepreneur hates begging for money other than if you're like, there's some weird ones who enjoy [00:09:00] fundraising, like 99 percent hate it because it's taking away from actually building your business, which is why we got into it. But no, I mean, so again, I took the path that raised less money more often versus more money less often.

And so we. So we raised that 625 K and then we raised a million and then a couple of years after that we raised 2. 775 million, I think, which is our first institutional money we took in. And a couple of years after that, we raised 5 million, but it was each point, it was the least amount possible. And yeah, we, we made it last week.

I think we played with fire a bit, like there were points where we're like a couple months away from running out of money. But we thread the needle and. It is interesting to think about, though, what if we had started in 2020, you know, and we had hit those key moments, let's say when shit hit the fan, it was like, now 2023, and it's like, oh, well, that person who gave me money in 2019, like, they wouldn't have done that in 2023, so, I don't think I would do it the same way [00:10:00] today, to be honest with you.

And that's coming from someone who didn't raise, relative to the size of the business, didn't, didn't raise much money. 

Jordan Buckner: I think that's, that's, that's key because of the timing and what the market and what the environment looks like determines your path, right? And I think that's why I would say people say like, Oh, look at what so and so did from, from five, 10 years ago, because like, yes, you can learn how they did it and what they thought, but it's not always directly applicable to, you know, Businesses to today because so much has changed.

Will Nitze: I think it's not only not helpful, it's harmful. Like if I were to be like, go do this thing that I did that's harmful 'cause it's necessarily not the exact right way they should do it right now. Like dude, right now, first of all, I don't know how anyone's getting seed. There appears, there appears to be no seed money in the entire ecosystem.

Like it's gone. There's money for if you're doing 20 million bucks and like 3 million in EBITDA, like, yeah, someone will give you money. If you're doing 1, 2 million bucks, I don't know [00:11:00] anyone who's cutting checks into those businesses, which is sad, right? Cause it's like, what's going to happen to the ecosystem?

But man, I would have to think through how I honestly, do I start the business in the first place? I think a lot of people straight up should not be starting said business until. The cycle has come back around or maybe never, you know, you could argue a lot of brands that were out there in whatever 2018, 2019, 2020 should never have been out there and they were a function of , that free money era.

I don't know. I can't speak to that, but I don't envy seed 2024. 

Jordan Buckner: Well, one thing that was always curious and I was loving your, your funding history. I remember. When I forget which round it probably was, but we shared an early investor kind of within our company. And it was always interesting because I was a terrible fundraiser and, I think because right, like never having done it before, I went about it in a very [00:12:00] cautious way, I think, because I wasn't quite sure what we were actually building at the time when I was running T Squares.

And, you know, shared the vision, but I was like, well, we're going to try this. We're going to try that. And it was interesting, the response from investors because of it. And I remember one of the investors that we share that actually came to me at one point, they're like, Hey, we're going to invest in IQ bar.

I just want to let you know. Cause you're like kind of in the same space a little bit. And it was interesting because I remember them. It's coming and saying, like, the round was actually full and they were trying to, not like beg, you were almost like trying to, like, get into your round early on because of how exciting they were from the opportunity.

I think it was like right before you were launching with CVS at the time. And it was interesting because I learned from that, I was like, wait a second, one thing, I know you say you don't love fundraising, but one thing I thought, at least at the time that you figure out is how to present. The business and what you are doing in a way that generates such excitement from [00:13:00] investors where they're like really excited to jump on board and become part of the company.

And I think that was like really powerful in the skill that you have. 

Will Nitze: Investors, I don't mean this in a pejorative way, but investors are sheep like in many ways. They just are like, they are, it is FOMO driven, whether any of them admit it or not, it is a thing. And so. And there aren't that many great deals in consumer goods right there, especially now when you need to get to a hundred million in sales to even exit.

How many brands, you're the investor, you put your investor hat on. You need to think, can this brand get there? And there just aren't that many brands that can get there. And so I think if they perceive, Ooh, this is a deal where it's like hot and this, a lot of other people think this brand could get there.

They'll do anything to get, to get in. Which is not to say that's what we were at that point, but I think maybe I manufactured some artificial FOMO and I actually did it A couple [00:14:00] other additional times over to where one of which was like outright bluffing, not that round, but, but, but if for future round, I was like, look, we have it all lined up with angels.

Like, these are the terms. If you want it, you want it. Like, if not, that's all good. Which of course is always a risk, but I mean, of course we didn't have it lined up. I needed that money. And it, and it worked out at that point, but. No, I mean, because it is, man, it's like, what, what's the difference between getting a 3x or a 6x on your first fundraiser or second fundraise?

It's stuff like that. It's stuff like FOMO and hey, take it or leave it. I don't need you. That's what's giving you those incremental X's which of course can have like massive implications down the road that, that investor you talked about said no to us first when I was like most desperate, I needed someone and I said, here's a value.

I think it's really fair. And they're like, we don't think that's fair. We think that's too much. And I was [00:15:00] like, okay, see ya. And then we found it elsewhere. And then the next time I didn't even, I don't even think I hit them up. I think they were like, Oh, I heard about what XYZ. I was like, Oh yeah, yeah, no, , we're covered.

Yeah. You're like, we're good. Well, can we get, can we get in? Oh, let me see if I can make some room for it. You know, it's like you need to be putting up the results to justify that, but it is 

Jordan Buckner: a dog and pony show. Well, honestly, and I, I credit you for this because whenever I talk to founders now, that's when the number one invite pieces of advice I give them about their fundraiser is like, you have to.

I'm going to be very confident about your, your business, right? Like be open to ideas and suggestions, but create that sense of FOMO because that's going to be the difference, especially in this market to getting the funding and not right. They have to know that you're not reliant on them because if they sense weakness from the stance of like, Oh, this business like might go under in a year, right?

Reasonably, they're not going to give you money. But if you're confident and build that sense of FOMO, then they're much more likely to actually invest in your company. 

Will Nitze: The other sort of non [00:16:00] intuitive. Thing that I learned was everyone's like, focus on, Oh, who are, you know, food and Bev investors, or let's say I have a bar.

Oh, who's a bar investor. So when you had a bar company before or whatever, they try to get specific and drill down because they think their strategic value to the investor. And we took the exact opposite approach. I'm like, if you own like 10 car dealerships, like I'll, I'll take your money. Like I don't.

And in fact, I don't want strategic money. Cause I think I'm the most strategic cause I'm living it. I'm seeing the data daily. Your strategic value quote unquote is coming from what five years ago, like not relevant, not going to help me. What's relevant is what I see on a daily basis. I just need money.

So like, On the angel side, you know, we look at where we got all our money from. It was like, no one was a CPG investor. It was like these guys who own the second biggest parking lot company. Like it was like stuff like that. [00:17:00] And here's the other thing. And again, not to be pejorative to them, but like the sharkiest people are the CPG investors.

If you look, if you seek those people out, well, guess what? You're going to get the sharkiest terms. Cause they know it the best. Whereas the guy who owns a bunch of dealerships, like. You might be his first CBG investment and so he's just more willing to give you more and you can even justify that he doesn't have the experience.

Look, frankly, like you, you don't, you're not bringing a strategic experience like this is the price and, and you can almost like use that against them. But no, I don't see that many people doing that. I still see people being like, Ooh, who's like the angel investor 

Jordan Buckner: in my space. That happens all the time.

You know, one thing that I've also seen you do, well, I know you're still learning through it, but you've evolved the product packaging and positioning over the years. And I remember early on where you were going heavy into like the mental cognition angle. And then I think you talked about it at that time as well, but kind of switching to thinking about like protein [00:18:00] and protein first kind of plus mental cognition.

You know, tell me about some of those key learnings of what drove , those changes. 

Will Nitze: Yeah. So this is the beauty of e comm, by the way, you get so much feedback so quickly and you can AB test stuff and understand, Oh, that's why people bought it. You know, we, I, we, over the course of the first couple of years did post and we still do post purchase surveys.

And so we would ask people, why do you buy our product? And so we get a ton of data on why people buy our product. And this is the classic thing of. Don't ever conflate why you want them to buy your product versus why they actually buy it. Just try to remove your biases, figure out why they're buying it.

And time and time and time and time again, it wasn't like the brain angle. Yeah, you would get a bunch of people who were like, Oh, and it's cool that it's good for my brain, too. But it was always, too. It was always a plus. And they're really, they're buying it for dietary reasons, which is very form factor specific.

For whatever reason, people buy bars for, you know, [00:19:00] They nerd out on the label. They want X amount of grams of protein. When you bite chips, you're not like, Oh, how many, how much protein? No, you just want chips. But with bars it's like that. And so we learned very quickly, it goes something like protein one slash source of protein.

And because we were playing a protein sugar slash carbs slash net carbs. And that was really the last one being most relevant to the keto craze, which we benefited from. And then like, you know, clean label Ness. And then like brain, let's say. And so we kept seeing that and we're like, alright guys, like we have to be honest with ourselves.

We need to highlight why people are buying our products. And during Keto, that was like, wow. Because it was so crazy, like everyone was doing it and we're like, guys, so many Keto dieters are buying it, like that, we'd be silly not to put that front and center. 

Jordan Buckner: Did you change your formula to lean heavily into the Keto diet at the time?

Will Nitze: We, our very first iteration of the product was not keto, but it was always a goal to get it to [00:20:00] low sugar, low net carb. We just got a little lucky because we were interested in that from the cognitive side. Less crashing, better for your brain, blah, blah, blah. But it ended up aligning fortuitously , with keto.

And then we're like, Whoa, all these keto people are buying it. Like, let's lean into that. And then now keto's off it. Right? So things come and go, you have to, you have to understand what is evergreen and generally speaking in our category. Protein is evergreen, like it's never not going to be cool. Low sugar is evergreen, never not going to be cool.

And and then the branding side is just sort of aesthetics. How do you keep leveling up your aesthetics over time? 

Jordan Buckner: No, I think that was key because I remember seeing That formulation change happened around that same time of kilo and going heavy and, and that, and seeing the significant like boost that, that, that drove, I think one thing, as you mentioned, kind of talking about customers, I ran the survey for TeaSquare at That similar time and found that only about [00:21:00] like 45 percent of our customers were buying us for the energy component, whereas 55 or so were buying it for the taste and kind of the crunch and texture of it.

And it created this, dissonance within the brand. We're like, wait, we want to talk about. The like mental energy part of things and talk about why we use tea. But so many people are like, I mean, it just tastes really good. I enjoy eating it and Oh, if it gives me energy, I can't really tell her not, but like, that would be cool.

And, you know, it's kind of like that form factor where consumers don't see bars or kind of bites as. Energy first, right? They're thinking of beverages, shots, energy, drinks, coffees. It's usually in a liquid form or something that can be turned into a liquid versus being like a coffee replacement in a bar, there's some products out there and a lot of them have struggled over the years or like have a niche niche market because that's not the primary way consumers think in their mind of getting that kind of like caffeine based [00:22:00] energy.

And so it's really interesting kind of how you've learned that as well. 

Will Nitze: Yeah, you're swimming against the tide if you try and jam a use case that's not lodged in the consumer's mind of that use case being tethered to that form factor. So yeah, like generally speaking, people want to drink energy.

Generally speaking, people want to eat protein. I mean actually some span form factors, right? So protein can span bars all the way to shakes. And then other Mars, it's like mostly protein. Yeah. Yeah. And others, others can't, which I would say caffeine is one of them where it's like, does it really span?

It's like. Kind of just beverage for the most part. So you have to understand, that's, that's another thing I tell like you entrepreneurs in the space. Obsess over how people think about your form factor. Like, and it's really hard to swim against the tide of how people think about your form factor. Bar is almost synonymous with protein bar.

[00:23:00] So you're like, Oh, I don't know. What, what do you have a, what, what kind of company you have? Oh, I have a protein bar company. That's what I say. I don't say bar company. Cause then they're like, what? Like you have a bar, you own a bar? And it's just cause people had lodged that association. 

Jordan Buckner: Last thing I want to ask you learned a ton over the past seven years and more.

What's still the most fun for you? Like, what are you having fun doing running this company right now? 

Will Nitze: I would say learning about So a couple of things, number one, we'd be learning about new channels. So like, for example, the club channel, we knew nothing about two years ago, and now we know quite a bit about, there's still so much more to learn about it.

And , it's such a different game than other brick and mortar, but also than e com and it's does, if you're starting a new company, each time you break into a big new channel, eventually you run out of channels, but that's been really fun. And then new product development. Didn't used to do limited time offers and we, you know, five years in, which was too late, I think, but realize they're insanely powerful and [00:24:00] we started doing them and we're like, Whoa, this ignites like your customer base to such a degree.

And we've even made some into evergreen products and , that's good financially, but it's also fun. You're, you're thinking about, Oh, like what new R and D project can I take on? And so for an ADD. entrepreneur, like you kind of need that new innovation to keep you chasing the dragon a little bit. 

Jordan Buckner: Yeah.

So that's been fun. I love that. Give yourself a little bit of guardrails, right? And then in case the innovation within there, which I love. Well, thanks so much for, for being on and chatting today. For those who don't know, check out Will on LinkedIn and check out their product at IQ bar and on Amazon.

And we'll keep up with what's new in any updated Changes comes up here. 

Will Nitze: Yeah, man. Thanks for having me on.