The Mexican immigrant and son of a Holocaust survivor is on a mission to do the KIND thing.
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00:00So I literally would receive boxes from each factory
00:03and I would try a product from every single batch.
00:05So like I would take all of these 20, 30, 40 bars a day,
00:09cut them into pieces and I would try from every product,
00:12every day, that was like for many years.
00:14If you looked at my face, I looked like a Kind bar
00:17because that was like how many Kind bars
00:18I was eating at the time.
00:19Hello, this is Daniel Lubezki.
00:21I'm the founder of Kind
00:23and this is how I made my first million.
00:25I grew up in Mexico City.
00:27We came to the United States
00:28when I turned 16 to San Antonio, Texas.
00:31My mom was a homemaker.
00:33She took very good care of us
00:34and my dad was an entrepreneur.
00:37My dad was an extraordinary figure.
00:39He arrived to Mexico with a third grade education.
00:42He had been a Holocaust survivor
00:44that had robbed from an education at the age of nine
00:47and was liberated by American soldiers
00:49when he was 15 and a half.
00:51Then was in a refugee camp
00:53and arrived in Mexico when he was 17
00:57and he didn't speak Spanish or English,
00:58only had a third grade education.
01:00So he educated himself by reading used books
01:03and using encyclopedias cover to cover.
01:05Volume A, Volume B, Volume C.
01:07He spoke nine languages by the time he passed away.
01:10Had read thousands of books.
01:12He was one of the most educated, self-made people
01:15and he started working in factories
01:17two or three shifts in a row
01:19till eventually he and his father had a little bit of money
01:22and they started a small jewelry shop
01:23which grew till they owned ultimately
01:26a chain of duty-free stores on the border
01:29between Mexico and the United States.
01:31I first went to a Jewish Mexican immigrant school
01:35in Mexico City where they taught us Yiddish
01:38and Hebrew and Spanish as kids.
01:40Then I went to a public high school,
01:42Robert Lee High School in San Antonio, Texas.
01:44Well, when I moved to the United States,
01:46I didn't have, I had a permit to live here.
01:48We moved here legally, but I didn't have a permit to work.
01:51So I had to be an entrepreneur
01:53because I was allowed to do that.
01:54So I would start my own businesses.
01:55I had a lawn mowing business, but I didn't have a lawn mower
01:58so I had to borrow the one from the people
02:00whose lawns I tried to mow.
02:02And I had a car washing business with my cousin.
02:05I also had little businesses here and there
02:08culminating before law school with business selling watches.
02:13I sold them in flea markets.
02:14Eventually we had different booths
02:16in different shopping malls selling watches
02:19and I had a network of students selling watches
02:23to all the administrators and the teachers
02:24and the professors and to each other.
02:26And it was a lot of fun.
02:27Then I went to Trinity University in San Antonio
02:30and Stanford Law School.
02:32I worked at a couple law firms
02:35for little stints during the summers,
02:36but these were all stints right after law school
02:39or right in between law school.
02:40But what happened is I was very passionate
02:42about the Arab-Israeli conflict,
02:44about trying to resolve or contribute
02:46towards resolving the Arab-Israeli conflict.
02:49And I got a fellowship to go to the Middle East
02:51to research, to turn my college thesis into practice.
02:54And I actually ended up taking a leave of absence
02:57from the law firm that I was gonna join
02:59and starting PeaceWorks.
03:01The partner thought that I was gonna give up
03:02after six months.
03:03I thought that it was gonna become an incredible success,
03:05but it ended up being my vocation
03:07and my passion for 10 years.
03:10But it's at PeaceWorks where I learned
03:12so much of the food space
03:13and it's all those mistakes at PeaceWorks
03:17that with the benefit of self-reflection and improvement,
03:20benefited me when we launched KIND.
03:22When I was doing PeaceWorks, just so you get an idea,
03:24I was literally knocking on doors,
03:27walking the streets of Manhattan,
03:29going from 122nd and Broadway down,
03:33all the way to Financial District where we're filming,
03:35then going, crossing and going all the way up Broadway.
03:38I would start East and then go West
03:40or West and then go East.
03:40And along the way, when I was like spending the long day
03:44skipping lunch or dinner and I wanted a healthy snack,
03:46I couldn't find something that I could feel good
03:48about eating and I'm like, wow,
03:49if I don't find it, I'm sure others also have that need.
03:52So I was on the lookout for a healthy snack
03:55for something that was wholesome but also convenient,
03:58that was healthy but also tasty
03:59and that's how we came up with the idea
04:01for what became KIND.
04:03When we started making KIND bars, it was all done by hand.
04:06All of the industry relies
04:07on what's called extruded products.
04:09Every one of our leading competitors
04:11takes a bunch of ingredients,
04:12macerates them beyond recognition
04:14and then plops them, what's called slab bars
04:16because it's a slab of this homogeneous stuff
04:21but it's unrecognizable, you don't know what you're eating.
04:23With KIND, we wanted to celebrate nature
04:26and use whole nuts, whole fruits, whole grains
04:29and really, really preserve their identity
04:32so they don't oxidize and so that they're
04:34as nature intended and that's actually much harder to do
04:37because it doesn't flow as easily through the line.
04:39So initially, everything was made by hand
04:41and we had to cut the product in the lines
04:44and over the course of years,
04:46we developed ways to automate the process
04:48and today, we make tens of millions of bars a day.
04:52The center of the tasting for KIND bars was me.
04:55For many, many, many years, that was my lunch and dinner
04:59because I was so obsessive that I would not,
05:01even once we were making the product
05:03and particularly as we were scaling
05:04and then we have one factory, then two factories
05:06and three factories and four factories,
05:07I was very worried about quality control
05:09because in my early years at Peace Rocks,
05:11I had made the mistake of not being obsessive
05:13about quality and disappointed my consumers
05:15and they had punished me for it
05:16by stopping to buy our Peace Rocks products
05:18so I was determined not to make that mistake with KIND
05:21so I literally would receive boxes from each factory
05:24and I would try a product from every single batch
05:26so I would take all of these 20, 30, 40 bars a day,
05:30cut them into pieces and I would try from every product
05:33every day, that was like for many years.
05:35If you looked at my face, I looked like a KIND bar
05:38because that was like how many KIND bars
05:39I was eating at the time.
05:40When I started KIND, it was an offshoot of Peace Works
05:43and I had not delivered an investment
05:46for my investors at Peace Works
05:48so I rolled them over into KIND
05:50so that they would have a chance
05:51of getting their money back
05:52and what would have turned out to be
05:54probably the worst investment in history
05:55probably became one of the best investments in history.
05:57They got anywhere from 1,000x to 5,000x which is crazy
06:02but that's how KIND exploded
06:05once we started doing things right
06:06but honestly, other than my initial investment
06:08of $100,000 from my closest friends,
06:11nobody wanted to invest in me
06:12so I held on to most of the company,
06:14not out of choice or wisdom
06:16but just because nobody wanted to invest.
06:18It was not until late 2008, early 2009
06:21that I finally brought in a private equity investment
06:24of $5.1 million and that was the only time
06:27that we brought in money for primary shares
06:30into the company to supposedly grow the company.
06:32We actually didn't need the money
06:33because the company was profitable
06:35and that was 2009 and that was the last time
06:38we ever received primary shares.
06:40We never needed more.
06:41One of the mistakes I made
06:42that I encourage entrepreneurs not to make
06:44is that I left my fate in the hands of my investors
06:48or my private equity investors
06:49and their interest ended up not being aligned with me.
06:52You really need to be careful
06:53when you get an investment
06:54to get it with someone that's aligned with you
06:56and that really wants to have the vision
06:58and also recognize that your vision might change
07:00because when I did this thing,
07:01I said five years later, I want to sell KIND, that's fine
07:03but then I realized I had reached that zenith
07:05and realized that it was a much higher one
07:07and I was just getting started
07:08and I wanted to continue doing it
07:10and the private equity investor pushed really hard
07:12for us to sell the company.
07:13I said, no, I don't want to sell it.
07:14So it was a very tough negotiation
07:17where I ended up buying them back
07:19at a very crazy valuation.
07:21They put in, I think, between the primary shares
07:25and the money that I brought in in secondary for myself
07:28and for all of our investors,
07:29I would think we had brought in $16 million.
07:32They got like, I think, $227 million back
07:35plus distributions in the course of four and a half years
07:39but I got over 80% of the company at the time.
07:41The period when the private equity investors
07:45were pushing me to sell the company
07:48was very painful and difficult.
07:50I didn't sleep well for many years.
07:52There's just so much intensity in the journey
07:55and so very often time, I couldn't put myself to bed
07:58and that period was one of the many
08:00when I was really, really, really worried
08:02and I just worked through it
08:04but right now it can be a little bit nostalgic and proud
08:09but back then, I was frankly just scared.
08:11Best business advice I got was from Martin Wendler
08:15when I was a freshman in college
08:17and I asked him to come speak to my class
08:19and he said, whatever you do,
08:22do it to the best of your ability.
08:24Give it the very, very best you got.
08:26Give everything you got to whatever you choose
08:28because every morning, someone's waking up and doing that
08:32and if you really wanna stand out and win,
08:34you need to, wherever you're focusing,
08:36really deliver your very, very best.
08:40We did a transaction where we sold
08:41a controlling stake of kind.
08:43I still own a minority, a significant portion of kind
08:46but not a controlling stake
08:48but when we did the closing dinner with my partners,
08:51I ended up doing a magic show
08:52and it was a mentalist performance
08:54when my colleagues, my bankers,
08:57actually thought that I had read their minds
08:59and they were actually really upset for a while
09:01that I had used that in the negotiations
09:04and like, you know, it's magic.
09:06It's not, I can't really read your mind but maybe I can.