How we scaled to $100M in under a year (ft. IM8 co-founder Danny Yeung)
We hit $100 million annual revenue run rate at 11 months. GrooveDigital in 22 months, right? And they were acquired for $1.2 billion. AG1 took them 10 years to hit $100 million. We hit $200 million run rate in 18 months.
I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never look back.
All right, Danny, welcome to the show, man. Why don't we start off? Why don't you give a little, little intro to yourself? So, Who are you? What do you do?
Hey, Sean, thanks for having me. Quick background, myself, always been an entrepreneur. Started working at a very young age, at 15. I was a telemarketer, so that's how I got started working. Age 24, had my first business, was a restaurant. Did that for 3, 4 years, then ventured in hotel furniture business, import-export from China into the US, eventually working on some big projects like the MGM CityCenter in Vegas. Did that also for the three four years. Then in 2010, I took a leap of faith and moved to Hong Kong to launch an e-commerce company that was doing group buying. And then when group buying went international, they acquired 51% of my company. Yeah, we became the largest e-commerce company in the region. I left in 2014. We're doing about 200 million annual revenues. I had a good exit. That's where you know I made my first million. Yeah, that's it. per se, more than a million. But, and then after e-commerce, I was like, hey, you know, what do I do next? Had a lot of options at my disposal. And I didn't just want to go back into e-commerce, even though that was the easy route for me. I ventured, then I actually, you know, got started in diagnostics and DNA testing. So founded Prenetics, which was a life sciences DNA testing company. Yeah, again, this was 2014, right? So very early. No one was really talking about this stuff. And then you'll see that in my entrepreneurial career, it wasn't the obvious choice, but everyone's like, now looking back, it's the obvious choice, right? I mean, think about in 2010, no one was using e-commerce in Hong Kong. Yeah, everyone in fact told me to go back to the US. They're like, Danny, just go back to the US. This model is not going to work in Hong Kong. We made it the number one e-commerce company at the time. But going back to Prenetics, you know, started off as a life sciences company. When COVID hit, You know, we were prime positioned to take advantage of it. We worked very fast. In 2 weeks, we got our COVID testing kit. We then became Hong Kong's number one COVID PCR provider, as well as in the UK. So those 3 years, we, yeah, I would say we were like printing money, I would say, right?
It exploded.
At one point, we were doing 40,000 PCR tests a day. Right, we totaled at $28 million. This is laboratory PCR tests. Those 3 years, we did $700 million plus revenue in 3 years' time. We listed on the NASDAQ in 2022. We're a household name. Everyone that arrived in Hong Kong at one point had a mandatory Prenetics PCR test. And then of course that led, goes into, you know, IM8, which is kind of, you know, what happened after COVID, you know, we had a billion-dollar valuation during COVID in 2022 because COVID was still going on. 18 months later, our market cap hit, I think it was like $50 million, right? Went from billion plus to $50 million. We all like, shit, right? You really know who your friends are at that point, right? Because at a billion—
You got a lot of friends at a billion.
You got a lot of friends at a billion.
When you're down 95%, okay, the stock's down 95%. Were the friends also down 95% or it wasn't so bad?
No, I mean, the friends wasn't down 95%, but when you're growing up, everyone wants to be involved, which is natural to be fair, right? Everyone wants to be surrounded by winners, but very few want to be surrounded and associated when you're going down, right? Because I think the path to recover is significantly much harder. I mean, we had a few options, like, you know what, why don't we just close the business? Because you think about the background, right? We, I think in 2022, yeah, we did, you know, $272 million revenue, right? And basically 40,000 tests turned to nothing, right? So basically, you know, our revenue dropped by 95%. And to be fair, I think the market you know, realized that and it was rightfully valued. So we thought, okay, what do we do? You know, do we close up shop, just return capital to our shareholders? You know, do I do something else? I mean, of course, I've been successful as an operator as well as investor, right? So I love options still, but, you know, I knew that, you know, I still wanted to create something out of this. And also wanted to be very responsible to the shareholders from before. Coincidentally, at the same time as we were thinking what to do, you know, I had the opportunity to meet with David Beckham. And this was right at the same time where I was thinking about getting into the supplement category. And when I met David, you know, it wasn't to like pitch him on, hey, let's get to the supplement category. We're just having a conversation about his background, what he's doing. And he was very intrigued about my consumer background, as well as my life sciences background. And he was telling me, you know, about his problem, him and Victoria's problem, about how even for where they are as individuals, and of course, you know, they have all these resources available to them, right? They even found the supplement category very overwhelming, especially that when they're traveling, You know, they just can't maintain that routine of taking 12, 13, 14, 15 pills in these capsules and etc. They just, yeah, don't do it. Right. And then— Yeah. Me as an entrepreneur, I was like, hey, I'm sure there's a better way for that. And, you know, after, you know, 3 to 4 months, countless conversations, as I'm sure you can imagine, and someone with David's pedigree and background, If something went wrong, it's not— no one cares about Danny. It's always going to be, hey, David, something blew up, right? So he had to take significant precaution. And I told David from day one, hey, David, I know, you know, for the last 30 years there's been so many people wanting to do this category and you rejected. And I told David something that was surprising to him. I was like, David, if we do this together, you know, I don't want you just as ambassador. I want you as a co-founder. But this brand has to live beyond you. I don't want this to be another celebrity brand.
Yeah. So let's explain what I Am 8 is, right? Because that's the current business. So I Am 8, if I go to the website, I see Beckham and I see Giannis, I see Lily Collins, I see a bunch of famous people and they're drinking a little red drink. And, you know, so if you've seen—
I have it here.
Most of the supplement category is green. You guys are red. And it's a, it's some sort of supplement drink, longevity drink. You got the Beckham stack on on here. And can you explain just in short, like, you know, just real quick, like what actually is the product that you sell?
Yeah, so we've made the business model very simple. We came out with our Daily Ultimate Essentials and it's very simple, right? It has 90 ingredients, replaces 16 different supplements in a powder sachet. You mix it with 12 ounces of water, you just drink it every single morning and it takes care of your foundational nutritional needs. So what does that mean? All of your multivitamins, your CoQ10, MSM, probiotics, prebiotics, postbiotics. And because normally you would have to take the equivalent of 16 different supplements, that will easily cost you $250 to $300 on a monthly basis. Yeah. And for us, we're selling at $90 a monthly basis, this combination, which also tastes great and you can carry around with you everywhere.
Right. And you guys have been— I mean, you're a public company, so you're public about your numbers, but you've talked about your numbers before.
Yes.
This— you're only about a year into this, to this product line, right?
We're only 20 months in. We only launched December of '24. Right. And, you know, now we've been the fastest growing supplement brand ever recorded.
What does that mean? How fast are you growing?
So you're at $200 million a year. So there's 2 angles to this, right? I have my e-com nerd hat because I've been in e-commerce and I can ask you about the funnel and the CAC and all that. Then there's just like high-level, you know, product-market fit. When you hit a pro— when a product hits a nerve and you've, you've nailed the positioning, the branding, you've nailed something in category and positioning. Can you talk to me about category and positioning? Because I think those are highly underrated and most people are terrible at that. And it's very hard to recover if you have category and positioning wrong. You can be the best at just trying to crank the grind, the funnel, but it just doesn't matter if you haven't gotten those, that the first, first key decision right. Can you talk to me about category and positioning?
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Even before, you know, we got into this category, everyone told me not to do this. They're like, hey, supplement category, highly competitive, so many bad eggs. And to be fair, I mean, I can tell this story now is that, you know, my whole board disagreed with me, right? They're like, you don't know anything about supplements, Danny. I'm like, it's true too, right? I haven't got to— I didn't do anything in this category before, right? Yeah, it was e-commerce selling coupons, DNA testing, running the lab, all that stuff. Yeah. But also to be fair, yeah, before any of that, I never had a background as well too, right? Yeah. So of course still, yeah, the board was like, you know what? And then we have to make, of course, a commitment with David Beckham. There was, yeah, it was not a small commitment, correct? Yeah. And then so they disagreed with me, but, you know, I knew that if we made a great product and we've nailed the positioning and the brand right, and with the support of DeeDee, you know, this would be a home run. So I had to really fight and educate my board. And again, it's like, hey, you know what? If I'm wrong, I'm gonna resign. I'm gonna quit, right? Right. That was my position because it really, I needed to be convinced myself. that was— this was the right move.
But what made you think that this would be the right move? Because it is true, subcategory is crowded, right? Like a lot of people have a celebrity. Who cares, right? Correct.
And a lot of celebrity brands fail, right? They're like, there's so many— there's actually more failures of celebrity brands if you think about than actually success cases.
Right. So what was your take?
So my take was, number one, everything starts with the product, right? Everything starts with a better product than what's available in the market. And it can Yeah, honestly say, yeah, we have the best product in the market. But like you fairly pointed out, consumers may not recognize that, right? And then so this is where, you know, from day one, we spend more time also on the taste profile. Because a lot of times people have the great product, blah, blah, blah, etc. But if it doesn't taste good, no one's going to drink it. Right? Right. So I spent a week at the factory just every single day testing like, you know, 20, 30 different flavors until we got that taste like, ah, You know what? This tastes good. Right. And that's who wants to drink again. But those two things, those two also doesn't relate to success. Right. So you mentioned the color, the brand. We wanted this to stand out. We didn't want to just create another greens powder. Right. No one created a red powder. Right. And then so I think by default, that was interesting to people.
Is it red because it's like made of beets or it's red because you made it red? Like, you know what I mean? Like, did it need to be red or you chose to be red?
It was a natural coincidence that when we created the formulation, there was like beets inside, you know, the formulation. And it was a natural red color. And then I'm like, shit, let's just, let's just go hard on this color.
Right.
Which then made sense. And then our packaging, if you look at it, is a very big red box. Right. It's very premium, the positioning. So I didn't want just to be another supplement brand. I wanted to have a really great unboxing experience. It's bold, the name, you know, easy to remember, the fonts, the colors.
How'd you come up with the name? Because, you know, whenever I brainstorm company names, you get 500 names. Each one you look at, you're like, that could be it. And then, you know, so like if I had written down on my list of supplement names, I Am and then the number 8, I might have— maybe it would be like, oh, that kind of flows. But I would have— the courage it takes to pick such a weird name. Where does that come from? Why that name?
How'd you know? I'm very good at names, right? I would say I'm like really good at names. I mean, my e-commerce company is called YouBuyIBuy, right? Group buying, right? With just the number U. Then Prenetics was half prevention and genetics. So you have Prenetics, right? And then of course, IM8, it came out, I wanted something simple and easy to remember. And then I am means I am. And then 8, if you flip it around, means infinity, infinite possibilities. All right. And I knew that one day we'll enter China and the number 8 will also work in China. Right. So there's definitely a meaning.
Lucky number of China, right?
Number 8. And it's like, I am— it's like, I am healthy, I am strong, I am powerful.
Right.
So there's a great meaning behind it.
Okay. And so you go into this category now, you get your formulation done. What's the 0 to 1? So what did that look like? You just fire up Facebook ads, Shopify store? Did you do anything else? Like, what did 0 to 1 look like?
0 to 1, again, the formulation part, you know, I would say was a result of also getting an amazing scientific advisory board. Yeah. On, again, when I looked into this, it was like, okay, what are all the different challenges someone can, you know, go at us? And it's like, hey, just because we have David Beckham, it's not enough. And everyone knows David's not a scientist, right? I'm not a scientist, right? So we then, the next step was recruiting a world-class scientific advisory board, the likes of Dr. Don Mussalem from Mayo Clinic, you know, James Green, the former chief scientist of NASA, Suzanne Devkota, you know, the director of microbiome at Cedars-Sinai. So these individuals we brought along, they all took part in creating this formulation. And that wasn't enough.
And how did you do that, by the way? That's what, you're cold emailing? Is there a— I actually know there's like a, there's like an agency, there's like a brokerage service. I don't know if you know this one. There's a brokerage service between doctors and supplement brands that literally is like, get a doctor on your brand. I don't know if you've seen this.
I haven't seen it.
It's like a very niche agency some guy has. Okay. But what did you do? You cold called these people, you go fly out, meet them.
Yeah.
You sell them equity. What's happening?
I knew the former chief scientist of NASA prior. Yeah. Yeah. Basically he was at NASA for 2 years. So that was easy because he knew me. Right. And again, a lot of this relationships is built on trust. And, you know, for Dr. Dawn Moosalem, you know, I contacted her on LinkedIn. We got on a call and again, the first time we chatted, she was very skeptical because so many supplement brands, you know, reach out to them. And again, especially as if you're a practicing physician. Yeah. Yeah, it's also quite rare to work with a supplement brand, especially if you're, let's say, with Mayo Clinic. Really, really rare. Right. Because they have a lot of restrictions, etc., etc. Right. So, but I think from day one, you know, even I told Don, again, we're still working today very closely, is that we need to prove the science and evidence. Yeah. So that's why we embarked on a clinical trial before we launched the brand. We embarked on third-party testing by not just one organization, but by 2, by Eurofins and NSF certification for sport. So that means if you're a professional athlete, you know, it's free from 280 banned substances.
So I have a lot of friends who are in the supplement game. And in, in general, when you're in e-commerce, it's easy to become very skeptical and very jaded.
course, not because anybody means poorly, but just because it's very easy to get something up and running and put all your effort into the packaging, maybe even some into the taste. But ultimately, you're not in the factory. And also, it's very easy to have something that might help, but it's not scientifically proven. Right. Scientifically proven is a very high bar. And so I would say there's almost 2 parts of the ledger. There's the first part, which is like, Are these clean ingredients and is it made in a clean factory? That's kind of like trust test number 1. Trust test number 2 is, what the hell is a postbiotic? What's a prebiotic? Does any of this stuff actually matter? If I drink this, does anything really change in my body? And I know obviously I'm asking the priest if religion is real, but I guess if I'm a highly logical, rational person, what would be your most convincing thing you could tell me that would make me actually believe in supplements?
A lot of supplements out there don't work. And that's the reality, right? And I think the best validation of our product is that it doesn't matter who we have, Beckham, blah, blah, blah, etc. Our business won't be in 20 months, can't be a $20 million, $200 million plus business without recurring subscriptions. And that means the product works as advertised. All right. And I think the best—
How does someone know that the product works? How does a customer feel the product works?
Oh, you feel it. I mean, you'll feel it. And the best way to—
energy. What are you feeling?
Better energy, recovery. Yeah. You sleep better, your gut. Yeah. Everything is working better. Yeah. And of course, a lot of these individuals, these are CEOs, athletes. I think the best case I can show you, I mean, I was surprised by this email, right? Around last April or May of 2025. Right. I got an email from Aryna Sabalenka's team. Right. Cold email into me, right? They're like, hey, you know, Aryna's been on your product for about 3 months now via a recommendation from her nutrition coach. When you're the world number 1 tennis player, every single thing they're measuring your recovery, how you're feeling 3 to 4 times on a daily basis. And they don't need the bullshit, right? I mean, she has so many options and resources and she's like, hey, she's been feeling amazing from her recovery. perspective and she hasn't gotten sick while on the product, given that they're traveling, you know, different time zones every single week, can we partner together? Right. And so that was a great validation of the product working at the highest level of sports. And the reality is also every single ambassador that came after that was inbound to me.
Hey, let me ask you a question. Is the market in China or India for that matter, like 2 big population places. Is the supplement market the same? Is it just the same but 10 years ago? Is it different? What's going on over there?
India, to be honest with you, I don't know. I do know it's a much lower price point category. In China, they do have AG1, but it's not like, you know, from what I understand, it's not doing well.
Why do you think that is? Is it all just price point or is there another factor?
I mean, again, it goes back to price point, education, branding, positioning. You know, there's like so much, right? And to be fair, 99% of American companies go into China and think they can just succeed with the same business model. And for China to operate it successfully, you need a completely different business model, completely different team. Like, for example, my team can't do China. 100%. There's like no hell they can, no way they can do China, right? So for me to enter China, I would need to get a completely new team of every single individual.
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Tell me about some of the operational excellence. So I want to know what are some things that you're doing that I could look at that I could be inspired by? Oh, that, you know, the way they do that, that's really good. So now I'll give you a couple examples. So we had Chad from Groove on the podcast and he was showing us their funnels and their Facebook ads. We're looking at his ad library together. And they were showing like, he's got like, you know, there's 8 different sort of reasons to buy, right? Maybe you're on Ozempic and you want Ozempic support. Maybe you're looking for mood and here's a mood thing. Maybe you're a woman and your hair and your hair's falling out postpartum or whatever. I don't know what they're— I don't remember the exact angles. He's like, I've got like the ad that goes to the landing page for that persona, for that problem, for that sales pitch. And I'm running all 8 simultaneously. Whereas most entrepreneurs are, you know, usually just get fixated on one and they don't get, they don't get as much of the market. He would tell us that. Or Eric Ryan from Method Soap and Ollie Gummies came on, and he's a master of packaging and positioning. And he said, I was looking in the vitamin aisle, and first thing I knew was that every container was round, and so we would be a rectangle. And he's like, it's as simple as that. I look for a sea of sameness, and everywhere in the aisle that I see a sea of sameness, I know there's an opportunity to come in and do something different. That's what they did in Band-Aids and soap and vitamins.
Yeah, I would say even right now, you know, to be fair-wise, you know, the ads and landing pages, personas, that's quite standard operating procedure right now, right? If you're a DTC brand doing $100 to $200 million, I mean, you have to be doing that, correct? Yep. I think for us-wise, I mean, one thing that we've done really well with scaling on Meta ads, you know, right now we have anywhere from, you know, 2,000 to 3,000 ads live at any given time. We're testing out, you know, 500 to 800 creators on a weekly basis. So it's that constant testing that is really, really important, right? And you have, and right now the reality is even with ad buying, I mean, you know, ad buying is like a commodity right now. Yeah. Before a few years ago, you have to be really, really good at ad buying, but now Meta does all of that for you already, right? You don't need to do the targeting. You don't need to do all this stuff, right? All you need to really figure out is how do you get really good creatives? and really good creative diversity on the different personas because now you need the creative to do the targeting.
And so tell me about that creative machine. So you said 2 things. You said you have a couple thousand ads running at a time. So are those like statics or those videos?
Statics and videos. I would say it's about, you know, 55, 60% statics and then the rest videos.
And you're doing that with what, a studio? You're doing that with AI? What is the machine that's building all that?
A combination of everything. So we have our own ambassadors. Yeah. Again, we have, of course we have like top 10 very famous ambassadors. Then we have another 1,000 or more so ambassadors, affiliates that are creating lots of content for us on a daily basis. Right. And that feeds the engine depending on whichever personas that we're going to. And a lot of times you have your proven winners and then it's like, how do we recreate all these proven winners? Because You know, there's also creative fatigue that happens, right? So we have our own creative fatigue score that we identify. So we know, okay, when an ad is potentially going to get into fatigue, which then ultimately will drop that ROAS, right? Again, $300,000 above on a daily basis on Meta, you know, which is quite high given that we're only 20 months in, right? And we've been able to—
Yeah.
Scale that, and I think one key thing again, public information given we're public companies that if you look at what happened in Q2 versus Q1, Q1 our CAC was 305, right? Our average order value is about $230, right? So, and we doubled our marketing spend in Q2, right? We doubled it from about 17 to 33 million dollars in a quarter, right? Our CAC. actually went down by $4. All right. From $305 to $301. Because you would imagine if you're doubling spend, your CAC is always going to go up. Yeah. Right. And then so I think we reached a point where, again, we got the engine running. The brand is also doing very well from a brand position. And we've ran now 200+ offline events. I think this is something that I haven't seen any other supplement brand do.
Why are you doing that? Because that creates content or because that creates loyalty or both? What's the, what's the main reason to do 200 offline events?
I mean, it's very important for us from day one. Yeah, it's about a business, is about an authentic product science. And, you know, when we have these events, we have our scientific advisory board members there. They're talking about the product, right? And again, this is not just a marketing aspect. It's, you know, we have real science behind the brand. They get to meet our formulators and our scientists and doctors. Last week in New York, we did like 7 events in 7 days, right? As part of US Open. I always say these, the events are very difficult to scale, right?
Right.
But I think that's very, very important, especially in the age of AI. You don't know what's real. We don't know what's fake or whatever, right? And so I think having that offline presence is really important for us.
Yeah. And I think that's pretty counter to where most brands are right now. I think it's so easy to sit, sit at your laptop, fire up ads, let the, you know, tweak your landing page. And it's clearly you get the scale, you get to measure it, you get every, you get the feedback loop right away. You don't have to like go get face rejection out in the real world. And it almost means that like offline has this disproportionate premium because it's simply like less contested. And once you've had an in-person touchpoint and then you go see an ad, right, it's going to be a completely different experience than if you've never— it's just a brand new experience.
100%. And I attribute that CAC lowering when we double our spend. We're not talking about like a lot of spend doubling, right? And even July, our CAC fell to $239, right?
Yeah.
You know, which is, you know, we're spending more than $10 million a month on marketing, right? And then so It was continue lowering. But I do believe, again, I don't have quantifiable data to say these are all offline, but I'm going to continue to double down on offline events because that's really important to the brand side of things.
Tell me about some of the kind of early days of entrepreneurship where maybe your entrepreneurial philosophy got, got formed or the core skills that are helping you today. But where were they first kind of originated? Where'd you cut your teeth doing it?
I mean, so I dropped out of high school, right? So I was, you know, basically a bad kid, got kicked out of high school for fighting. So I had to really learn everything, you know, on the streets, I would say, right? As an entrepreneur, you're always faced with making decisions with very limited information. And I think, you know, for everyone that knows me, they know me, I'm like very street smart, right? I can figure things out by myself with very little information.
Where were you going to high school?
In San Francisco.
Oh, you were in San Francisco. So you get kicked out. So why telemarketing? How did you stumble into telemarketing?
I mean, I think I didn't stumble. I think it was like, what do I do? You know, I'm not going to school, right? So, and then as a telemarketer, you know, I was 15, I was good at it. I was good in, you know, kind of like cold calling people.
What were you selling?
I was selling timeshares.
Timeshares.
Yeah. And remember, timeshares is like, again, this is about 30 years ago, right? So those few years where I would say I was a very bad kid actually formed a lot of my thinking as an entrepreneur because I always had to reinvent myself, always had to go to a new school, make new friends, and get very comfortable. And yeah, I believe I can survive anywhere. You put me into Nigeria, Africa, whatever it is, I'll figure it out.
Yeah, the, yeah, the sort of more adversity you face, the more confidence you get when you survive. You know, there's another guy, Craig, Craig Clemens, who came on the podcast. Good friend, great guy. He's also an e-commerce monster. So his company, Golden Hippo, does hundreds of millions a year in sales, bootstrapped him and his brothers. He also was in telemarketing. He was selling dating products when he was younger. Wow. And, you know, he was sharing, for him, one of the ways he got better at sales was he was going to these seminars and he was reading books and he was just looking for like any he could pull out, one line, one copywriting thing, one psychological sort of hook that he could pull onto. Did you do any of that or were you just brute force numbers game?
I mean, you have to like communicate properly, right? I think you always have to be direct and I think I've always kept that, right? So very transparent in terms of, hey, especially with me, let's say trying to meet someone for the first time, always telling my team, don't talk about BS, right? I think you just have to be direct and transparent. What's in it for them? What's in it for us? And again, for me, I've always, for each of my businesses, I'm always trying to deliver greater value first. I think that's very important. I never try to look at what's in it for me. I was like, what can I help this person with? How can I help my partner? How can I help their business? And that's been my philosophy from day one. I think if you have that type of philosophy going in, it doesn't matter if the other partner doesn't reciprocate, you move and you learn and move on.
So you're telemarketing, you learn about the numbers game, you learn that you got to sort of figure it out. So you get street smart to figure out things to survive.
And you learn it doesn't matter who you talk to, right? You can— I can go up to anyone and just basically, you know, the worst thing that happens is they reject me, right?
How many people would you call in a day?
It was like night shift at the time when I was working. So it was like, you know, 6:30 to 10. I would say 100, 200 people.
And of that, what's the rejection rate?
Still going to be like 90, 95%, right?
And so was that something, did you have to sort of, what'd you tell yourself to be able to like kind of quickly bounce back from that?
No, it's just, I mean, again, it's a numbers game. You just fail, you know, but basically you just tell yourself, hey, you know, the next one is going to be more likely to be positive, right? So you have to just get through it. And I think You know, to be fair, telemarketing taught me a lot. Yeah, you have to have a thick skin. Even when you talk to investors, same thing, right? When you're early on days getting investment, I mean, you talk to 100 investors, you know, only 5 maybe may invest in you. So there's nothing different about that. It's just you're not getting rejected, like hanging up on you, but you're still faced with that, right? I'm gonna give you an example of how that came to use, right? So I was doing my hotel furniture business. I was cold calling basically MGM, then I got a meeting and then was able to get a meeting that I was able to deliver the value I was able to get. But without my cold calling days, I probably wouldn't have done that, right? Even when I did my e-commerce business, You Buy, I Buy, which was group buying, I remember I went to Hong Kong and I had to cold call all the merchants myself, right? Because again, you know, it is not like—
Starts off with nobody.
Yeah, starts with nobody, right? So I remember one time I was calling a big restaurant group and then director of marketing, he hung up on me and I was like, he hung up on me really like, it like was like, it hurt me. I was like, wow, this guy's like, he said some like very bad words and blah, blah, blah to me, right? And then normally it was like, oh shit, you probably like, you know, then I was thinking, wow, who's this guy's boss? I was thinking, right? And then I like found who this guy's boss is. He was director of marketing and I cold called the office. And it was Sandeep and he owned like 30+ restaurants, this Indian entrepreneur. And I asked for Sandeep, called the front desk, he picked up the phone. And then I'm like, hey, this is Danny. I just moved to Hong Kong. I moved here from the US. Yeah, I have 5 minutes of your time because I have this interesting e-commerce idea and would love to see if I can partner with you. Right. And then he met with me the next day for 20 minutes and he told me, Danny, hey, Danny, I don't think your business is gonna work in Hong Kong because why would I give 50% off to customers and I only get 25% of the check? All right. Right. But you know what? Because, you know, you called me after my director of marketing hung up on you and we're still here, I'm gonna work with you and give you all of my 30 restaurants and sign you up. And he did that because he knew, you know, I didn't give up. And just was persistent, resilience. And that changed the trajectory of the business because he gave me 30 restaurants and I needed one deal a day, right? So he gave me basically my whole next 30 days was filled by one guy saying yes. And then of course then I can continue, but he was a big restaurant group, right? It was a very— and then I would then go to other restaurant groups because I got him because he was so famous. Hey, you know, Sandeep, the Ani Concepts was working with us. Yeah, can you partner too? Then yeah. And once you get some traction, et cetera, then more and more people will work with you, right? But that's just reality. Someone has to give you a chance and you just always have to be on the hunt.
My Uncle Vinny was door-to-door when he came to the country. He came to this country, he was a door-to-door salesman of like the Bible or I don't know what he was selling. And I asked him the same thing. I'm like, man, you were walking around in the heat in Georgia in the summers, You're walking house to house, knocking on the door, like getting rejected even more than on the phone, like to your face, door slam. And same thing, 90% to 95% of people door slam us. He was the top sales guy and he had a thick Indian accent. I was like, how did you do that? And he goes, oh, I took rejection better than anyone else. I said, well, how did you take rejection better? He goes, I put a price on the word no. So he said, if a yes is worth $100 to me and it's going to take me for every 20 nos, I get 1 yes. Mm-hmm. Then he is like, then every no is worth $5 to me. Yes. Right. Yeah. He's like, I just, so when they would say no, I would hear in my head, all right, that's 5 bucks in the bank. Let's keep going. And so he is like, I was adding up the nos. I was putting a price on it. 'Cause I knew really like it's a numbers game. I have to keep knocking. And so I have to like sort of see each knock as a success, even though what I, my ears hear is, is a rejection. I have to change what I'm hearing. And that led him to be the number one sales guy in the country. And he ended up training all the other sales guys. And I think there's a, I think there's something everybody should take from, from that, whether you're fundraising or whatever, whatever you're doing that, like, you know, e-commerce, I think a good, like, I think if I looked at our conversion rate right now, I think it's like 2-point-something percent, 2%, 2%, 2.5% maybe. And, you know, 97.5% of people come to our site and say, hell no. Now you don't feel it as much when it's e-commerce, right? But you, but if you feel it when it's over there, you know, so, so it's all a numbers game. Mm-hmm.
Yes.
What else? You mentioned MGM. What's the story there? I didn't understand that one.
When I started first working in the hotel furniture business, I was doing hotels that were like 50 rooms, 100 rooms, small hotels, right? Small hotels, chains, just doing all of their custom furniture.
Sorry, can you go back? Why, why do— why does Danny start selling hotel furniture? How does that happen?
No, because I was doing my restaurant business at the time. I had a good friend that was an interior designer and she was just telling me, hey, you know, she's a designer for these hotels and she was having difficulty sourcing furniture. And I was like, why don't you look in China? And she's like, she doesn't know how to. And then I'm like, why don't I help you? And she's like, okay, why don't you help me? Right. And I just did it for her. And then, but after a few of the hotels, I figured out, you know, It's the same process if I make 50 chairs or 50 tables as if I make 2,000 to 3,000 chairs, right? So I was like, who is making 2,000 hotel rooms right now? And at the time was like Vegas, right? Then I started cold calling the Vegas hotels and eventually I cold called MGM and she gave me a meeting. And then I went into the meeting and, you know, one year later I got a, you know, $4 million contract with MGM.
How did that feel, that first kind of big contract?
I mean, it felt amazing, but of course, ultimately, I wanted to deliver. And that's why a lot of times, even when we do an achievement or milestone, I always tell the team, hey, this is good, but it's not the end, right? We're just getting started, right? And it's like, even last month we had $20 million in monthly revenue, right? But hey, this is good progress, great progress, I would say. But we have so much greater opportunity. So, but, you know, I was of course happy that we were able to get such a big customer.
When you were doing the COVID testing, you were kind of in the right place when COVID hit where you could provide testing. You said a couple of interesting things. One, the ramp was crazy. You said you did like $700 million revenue in a couple of years, which is just a bonkers number.
I'm sure there was a lot of free cash flow in that too, not just revenue.
Yeah, we made over $100 million net.
Yeah, exactly. And you— the second thing was you said, like, in Hong Kong, like, everybody who entered the country had that. Sounds like maybe you had, like, a kind of a really valuable key contract that you won or some sort of, like, you know, pretty defensible position. So can you tell the story of that? And also during that, did you— did you think— did you know, well, this— the music's going to stop on this at some point
and what happens after that? Or did you say, I don't know, we're— Let's just run and we'll figure it out when we, when, when that happens.
Yeah. So I can tell you the backstory on this, right? So, um, I think this is in April. Yeah. April of 2020. So COVID was getting very bad. I had a meeting with the chief executive of Hong Kong. I was like, hey, you know, we have a lab. Yeah. COVID seems to be getting worse and worse by the day. Yeah. Can we somehow provide support and make use of our laboratory? Yeah, to basically to provide COVID testing to the community, right? And then, you know, the Chief Executive said the same at the time, said, you know what, you know, we have our own public health laboratory, we can do it all by ourselves. So that was that, right? And I'm like, okay, no worries. Because at the time-wise, it was very difficult to get a COVID test in Hong Kong. You would have to go to the hospital. And they were charging like $300 to $400 USD for COVID tests. And then I knew the cost of a COVID test is a fraction of that, right? And they were making so much money. And at the time, you don't want to go to a hospital to do a COVID test because it means that you may get infected too, right? I was like, you know what, we'll just create our own at-home PCR tests. And then so we launched that within about a little bit more than 2 weeks. And every day we're just trying to help out the community. We're selling it for $100 US. when everyone was selling it for $400. And even the hospitals would call me like, why are you guys selling it for so cheap? I was like, I just want to help the community, right? That was the core reason for getting into it. So every single day we'll be selling out. And then July, yeah, the government actually then again called me and was like, can we meet again? Because it was getting out of control. Right? You know, 3 months later, and they're like, Daniel, we need your help. Yeah, can you help us service COVID testing to the community? I'm like, yeah, we'd love to help. Like, yeah, what do you want us to do? They're like, we want you to test 300,000 restaurant workers across 18,000 restaurants in Hong Kong. And I'm like, how long of a time? Yeah, do you want this testing? They're like, Yeah, we want you to do this in 3 weeks. So that was a crazy operations, right? I don't know why I even said yes to it. Again, we went from 100,000, 200 tests on a daily basis to now testing, you know, 300,000 people in about a month time, which basically meant that we had to scale up from 200 tests to 10,000 tests on a daily basis. And myself, My executive team, where we're all in the whole— we were done. We— and there were so many people without jobs at that time, right? And then basically we started mass hiring. Yeah, at one point we had like 2,000 to 3,000 people.
What was the bottleneck? Was it the actual tests, the supply chain for the test, or was it the people in the lab to read the test? Because you get the result at home, right?
No, no, no, no, no. You get the result in the lab.
Okay, so you would send it in.
you have to send it in. This was before antigen tests were rolled out, right? Because early on, you had to do a laboratory test, which is the PCR test. And then the antigen test, which is the quick ones, which are less accurate, only came into play, you know, maybe one year after.
I see. I see. Okay, so you said supply chain and hiring people.
People, logistics, data, right? And then We're the first company contracted by the Hong Kong government to do mass community testing. And of course, you know, 6 months later, there was like 14, 15 different laboratories that were also doing COVID testing. However, the thing that stood out from us is I think a lot of it has to do with my technology and e-commerce background and data and all that stuff. Yeah, was we're the only testing provider that never had a fuck up when it came to false positives and false negatives. And then so when all these other laboratories, they messed up and then the government got a lot of crap for it, right? Obviously, because if you get a positive during that time, you have to go to detention for like 7 to 14 days, right? And then so this is why at one point, every single individual that landed at Hong Kong airport was mandated a Prenetics test because they wanted it to be the most secure and most accurate test.
Did you have to do anything crazy to unlock the supply chain there?
On a daily basis, you had to be fighting, you know, with so many different other laboratories around the world, right? You know, to get all this supply chain. So it was like every single day we're fighting. And again, a lot of times you have just to outbid them. And we have volumes, right? So again, but it was a constant battle. Those were some crazy 2, 3 years of craziness.
Yeah. When you— so I want my last question. You know, I had a few friends who were doing this. I had one friend who was doing mobile testing. He had like vans that were testing. I had another friend that was doing PPE when you couldn't get masks and other PPE to hospitals and whatnot. And people were making money hand over fist and doing this because there was so much— I mean, it was the strongest demand I've ever seen for anything ever, right?
Yes.
life or death at global scale. But, you know, some of those people, they kind of stashed away enough cash that it was still a success. And some people had overbuilt and then suddenly the music stopped and now it's like a lot of work for nothing.
So give me an example, right, on that exact thing is that it was right when we knew COVID was over, I let go of 2,000 people very, very fast. And that turned out to be a really good decision. Because again, during that time-wise, you had Q Health, you had Lucera, and these were at the time, they were listed companies. At one point, Q Health was $3 billion market cap. They had $1 billion in revenue in the US, right? Lucera, they had another, like, I think they were $2 billion market cap. Yeah. They went bankrupt, you know, 18 months after COVID because they overbuilt. They built their own manufacturing places. They bought into the at-home testing, which never panned out post-COVID. But I knew that for both sides, for a company to survive after this, we needed to make a drastic cut. And also for the individuals, right? Because what are we going to do? Why am I going to have 2,000 people if there's no testing? I'm just going to like, you know, stand around, which is not good for them. Everyone has to move on, you know, with their life and livelihood. And yeah. That was a very difficult decision, of course, but ultimately it was the right decision for both sides.
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If you were—
I don't know if you meet a lot of entrepreneurs or, you know, there's a lot of people that will come up to you that are excited about what you've done and they're trying to do something and they pitch you an idea. What do you think most entrepreneurs just don't get? What's the one thing if you feel like you could just shake them and say, look, man, you just really don't get it. It's the gap between where you are and where you want to be. is this? What do you think that gap looks like for most people?
I think, I mean, again, about going back to number one, right? You know, I always believe that if you build the best product in the market, it just makes everything so much easier. Right. And I think if you look at, again, even, you know, when the COVID testing, we had the best product in the market. So we had the best product in the market. It's much easier to build foundation, branding, positioning, premium pricing over any of your competitors, right? And I also believe, you know, as entrepreneurs, etc., you have to get into the weeds of everything. I think some entrepreneurs, they don't like to, you know, get involved in every part of the business. But at least from my perspective, you know, what's worked very well for me is I'm involved in every part of the business. Doesn't matter if we're a $100 million company, $200 million, we'll be at a billion dollars, whatever. I guarantee I'll be involved in a lot of the key, all of the key decisions because I think that's what separates a founder from a hired CEO, right? I think the founder, and that's why a lot of times these founders, blah, blah, blah, et cetera, they grow their business to $400 million, they hire a CEO. Oftentimes the founder always comes back, right? Because the CEO perspective, they're always much more conservative. And they're looking at this from a paycheck where the founders were able to take risks that a CEO wouldn't be able to take. So for example, even when I started IM8, if it was a CEO, there was no way he would've been able to take that risk, right? But because I'm the founder, you know, I have so much at stake here, there's no one in the organization that can take a risk as much as me, right? To be able to make that move. Let's get into the supplement category, right?
Yeah, it's, I don't know if you've read, have you read Founder Mode? The sort of Paul Graham blog post.
Yeah, I mean, I've read that. Yeah, that's correct. I think founder mode is very different, correct? It's like, yeah, we see things very, very uniquely different. And entrepreneurs really have to dive into that.
Yeah. And the first thing you said about product, build the best product in the market. I mean, on one hand that sounds obvious of like, oh, well, okay, yeah. And I would say most people, everyone thinks they have a good product.
What does it say? Let's try it. Yeah. It says, if I had to choose one today, I'd buy IM8 over AG1. So there you go. It says it's not just 90 ingredients versus 75 because that ingredient count is mostly marketing.
Okay.
I think that it's currently doing a better job putting useful ingredients at disclosed non-trivial doses in the same daily drink. And then it goes through the formula. And it gives, gives a little bit of an answer. So at least according to ChatGPT right now, that
is, that is correct. Which I think is a good little conversation.
I'm gonna cut that segment out and use it as an ad. Okay. That's perfect.
Yeah. Give me my kickback. I mean, you can do whatever you want.
I'll give you 10% back.
Exactly. Affiliates. Yeah.
You know, I sold my company to this guy, Mike, Mike Whitmire, and he was telling— he had built the number one ranked result for buying or selling gold online. So anybody wants to buy gold, His company was, was the premier leader. And I was excited when we sold because I was like, oh, you know so much about SEO. What are all the SEO hacks that we were not doing? I'm terrible at SEO. I never even tried that as a growth strategy. So I was like, tell me, tell me, like, you know, what should we start doing? And after a few meetings, I was like, dude, when are you going to tell me, like, the hacks? And he's like, well, there's some best practices. He's like, there's not really hacks. He's like, so I was like, what'd you do with the gold company? And he goes, I printed out like the page, the webpage for all of us. And I asked myself honestly, is there a reason that you should use us? Why should Google put us number one? Are we better? Are we actually better? Is it easier to use? Is it, is it easier to understand? Is it more friendly? Is it faster? Like, do we have, are we better in any way? And he's like, we had a cold, honest conversation with ourselves that no, we were not better. And then we decided, well, we actually have to be better if Google's going to rank us higher. And slowly but surely we did, you know, one brick by brick. We just made the actual experience better until we felt we actually deserved to be number one. And guess what? Like at that point we didn't need any of the hacks. We actually were number one. And I just remember thinking like, oh, I feel like you just taught me like a very valuable, um, like, you know, a very valuable, obvious lesson that I needed to hear from someone like you. I needed to hear from the guy who could shatter this myth in my head that the guys who rank number 1 are always just doing these clever tricks. And it's like, there's no trick. The trick was be the best. And if you're not willing to be the best, like, if you, you know, there's no way around, you just gotta go through this. And I needed to hear that at the time.
Again, that's, that it starts with the product. And I think entrepreneurs just have to be realistic, right?
Well, isn't it right that as a founder, you basically have to alternate between delusion and realism in a way that doesn't make any sense?
One, in one moment you're gonna have to be delusional. You're gonna have no, evidence, but you're going to have to have the faith.
Yes.
And you're going to have to believe, even though you have no experience in this. The market tells you one thing, smart people tell you one thing, but you believe another. That's delusion. And you got to be a little delulu. But then—
Exactly.
It's the person who's able to shift gears between the two And know when you're— when you need to be in each mode. That's sort of the art of the whole thing.
Yeah. And then like, again, I had to be very— like you said, I had to be very delusional because I knew in my head if we put all these pieces together, we will have a big success. Right. But again, going back, I didn't have any experience in this. So you had to build this with the limited information I knew at the time.
Yeah. Well, Danny, I appreciate you coming on, man. This is a— you have a fun story from telemarketing. To now running one of the fastest growing supplement brands in the world, and thanks for coming on.
Thank you.
I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off on a road less traveled, never looking back.
All right, let's take a quick break. I want to tell you about Marketing School. It is a podcast that is part of the HubSpot Podcast Network, and it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it. This is the podcast for you. Check it out wherever you get your podcasts.