7 Questions with Kara Goldin
Kara Goldin is the founder and CEO of San Francisco-based hint Inc., which produces the leading flavored water with no sweeteners and nothing artificial.
Previously, Kara was vice president of shopping and e-commerce partnerships at AOL, where she helped lead growth of its startup shopping business to a $1 billion enterprise. Kara is an active speaker and writer, a member of C200 as well as a member of YPO, the world’s premier chief executive leadership organization. Kara has been named among Fortune’s Most Powerful Women Entrepreneurs and Forbes’ 40 Women to Watch Over 40.
- What is your favorite book that you’ve read recently?
The Originals is one that I really, really liked primarily because Adam Grant has really nailed down the ways the world of entrepreneurship is changing. People aren’t quitting their day jobs and incurring all this risk; they’re taking off time night and weekends to launch passion projects.
2. Speaking of entrepreneurship, can you tell us about how you became an entrepreneur and the history of Hint?
Prior to starting Hint, I had joined AOL when it was a little over 70 people. I grew its e-commerce and shopping business to about a billion dollars in revenue, then I took a couple of years off to be a mom to my three toddlers and figure out what I really wanted to do with my life. I started looking at nonprofits that I was passionate about and also interviewing for jobs at tech companies, which in my mind, just wanted to hire me to do AOL 2.0. While I loved what I had built at AOL, it ultimately made me realize that what I really enjoy is building, and if I went back to a tech company, it would feel like taking a few steps back in order to build something again, versus actually moving forward.
While I was evaluating opportunities, I looked at my own health. I’d had 3 kids and after losing the baby weight, I still had fifty pounds that I wanted to lose. I was working out every single day but I still wasn’t losing the weight. So I went to a couple of doctors and asked them what was wrong with me. The response I got from three different doctors was, “You’re hormonal. As you age, these things happen. You gain weight and your energy levels go down.” That was awful to hear. A doctor that I trusted a lot, said in order to fix the problem, he would give me some medication, and I would start to lose weight as my hormones “reset”. I went home and filled the prescription, then I looked at everything I was eating and drinking, thinking to myself I may actually take this prescription, but first, I want to make sure that I really know what I’m doing.
I decided to make sure that I understood everything I was putting into my body. At the time, I called Diet Coke my “best friend”, but realized that I didn’t really know what was in it. I googled all the ingredients but I couldn’t get a definitive answer on what I was consuming, so I decided to put the it aside until I figured it out. I threw the Diet Coke into the trash and replaced it with plain water, which I hated. Although I was bored, after just replacing Diet Coke with water for two and a half weeks I noticed that my jeans were fitting better and people told me that I looked like I had lost weight. I got on the scale and I had lost twenty-four pounds. It was crazy. I did a bunch of research into how the body reacts to sugars, especially diet sweeteners, and realized that my body had actually been gaining weight to protect me from everything I was putting into it. It was fascinating. I’d never taken the medication the doctor had prescribed me yet I was rapidly losing weight just giving up diet soda.
I started looking at everything else in my kitchen. I was giving my kids fresh-squeezed orange juice every morning, and I asked myself, why am I giving my kids fresh-squeezed orange juice when it’s just sugar? Well, because it was “fresh-squeezed.” Then I started playing this game — I was drinking Diet Coke, because it said “diet,” and Iow-fat milk because it said “low-fat.” But were “diet” and “low-fat” necessarily better? No one was actually telling me that they were except for the industry. Here I was, a tech executive brand marketer, who had been fooled by buzzwords for so long.
I continued researching for a year, kindling this fascination that I had for everything that I was putting into my body. In the end, I was still bored with plain water. I never liked the taste of it. I started slicing up fruit and putting it in the water, and thought to myself, I wish I could buy something like this. I went to my local Whole Foods and asked the guy stocking the shelves if they sold a product with real fruit in it and no sweeteners. He pointed me to Vitamin Water. I told him that it had sweeteners in it and we looked at the label together. I found myself educating him.
I wondered why there wasn’t any sweetener-free flavored water on the market. I went to New York for a trip and looked all over city, thinking it had to exist somewhere. I found nothing, and I learned that most flavored waters don’t even use actual fruit; they’re using things like cockroach wings, anus glands, and bone marrow. They’re not even vegan. I kept stumbling upon all these findings about the beverage industry that really fascinated me. I felt like I was in this enormous discovery mode, that I was almost gifted with this knowledge about an industry that felt so ripe for disruption. Working in tech taught me to look at things differently — to look at an existing business and ask, how can this be better?
“Working in tech taught me to look at things differently — to look at an existing business and ask, how can this be better?”
I went back to the Whole Foods in San Francisco and told the guy stocking the shelves that I was going to develop this product. He asked if I had worked at one of the big beverage companies. I hadn’t. He asked if I knew the name of my product. I didn’t. He asked if I had a shelf life, and had I done any testing? Nope. “How would I do that?” I asked him. “I have no idea”, he responded.
There was a lot of learning to be done and that was exciting. I never wanted to be the smartest person in the room; I wanted to be the one who was least educated, and this was the opportunity that I’d stumbled into. I went home and did lots of research, learning all this new lingo around the beverage industry. I knew a woman who had founded a bottling plant in Chicago, and reached out to her to say that I’d been taking fruit, boiling it down on my stove, and dropping two or three drops into water to help me drink more water. I told her that I wanted to do a small run of this product with her plant. It’s not easy to find someone willing to do small runs of a product, especially if you don’t have experience in the industry, but I got lucky.
I eventually told my husband, Theo, that I knew what I was going to do next. “I’m going to start a beverage company,” I told him. He was confused. I told him that I was interested in how all of these beverages are healthy perception versus healthy reality. I believed there needed to be some disruption in that industry, and I was the one to do it. He thought I was crazy.
“I’m going to Chicago tomorrow and I’ve already secured childcare — will you come with me?” I asked him, “Because by the way, I just found out that I’m pregnant with our fourth child.”
“That is crazy.” he replied, “You’re telling me you’re launching a beverage company, and you’re pregnant with our fourth child in the same sentence.”
So we decided to launch this company. Since he’s an intellectual property attorney, he said that we first needed to get trademarks. He asked me what the name of the product would be. I thought, well it’s just a hint of flavor, we’re giving people hints…” I went on until finally it hit me. Hint. That’s it, we would call it. He told me that trademarking a four-letter word would never happen. I told him, “I’m the business person, and you’re the lawyer so go apply for trademarks.”
We got the worldwide trademarks, went to Chicago, and when he finally saw the bottles rolling off the line, Theo told me, “I get it now. You’ve been in tech for so many years and now you get to have a physical product in your hand.” But that wasn’t what I was interested in. My interest was in giving people a less than $2 bottle, having them try it, and ultimately getting them to realize that they’re exchanging it for other things, like I had.
I was due to have our baby in May, so I realistically had about 6 months to get this product finished. I had told the guy at Whole Foods that I was going to come back with my product developed, and I wanted to follow through. I was set to deliver Justin at 2 o’clock on May 27th, and we got the cases from the bottling plant the night before. At 9:30 AM, the morning of the day that I would go into labor, I told Theo we were going to drop the cases off at Whole Foods. As we were entering the store, Theo asked if they were expecting me to show up with the cases, and if they’d explicitly agreed to put the product on their shelves. I told him that they sort of had, it had been a while since I’d spoken to them, but it would be fine. So I walk in and find the guy and ask, “Do you remember me?”
“Oh my god. You’re so pregnant.” he said. In the moment, I actually think it was a benefit that I was so pregnant. I told him that I was delivering the baby that afternoon and it would make me feel really good if he would just put them on the shelf. My husband was dying of embarrassment in the corner as I tried to convince the guy. Finally, he agreed to put the cases on the shelf and we left.
We got to the hospital for my planned c-section and the baby was born super healthy. The next day, the phone rang. I was still a bit out of it so my husband answered and told me that it was the guy from Whole Foods. “He says that the cases are gone”, my husband said. I was confused, so I took the phone and asked, “Where’d they go? Who took the cases?!” and he told me, “They were sold.” We had sold 10 cases overnight. There we were in the hospital, my friends didn’t even know that I’d launched this company. I had kept it really quiet because if it didn’t work, I didn’t want anyone to know that I’d launched a beverage company and failed.
We got out of the hospital a day early, went home, and got more product produced. My husband delivered it to Whole Foods and the guy told him, “This is crazy. There are a lot of people who are really aware of ingredients and starting to understand sweeteners and the role that they play in diet and health overall.” So we first launched it at that one Whole Foods in San Francisco and then it grew throughout the city.
Soon after, a friend of ours was working at Google, which at the time had about 40 people. He called to tell us that he was talking to the Food Services person and they had told him that they planned to hire a chef and have healthy food and beverages in the office. He told us that we should submit our drinks to the chef, so we did. The next day, the Food Services team called and told us, “People loved it, can we get more?” From there they ordered more, and more. They were going through more product than Whole Foods per store! I really credit Google for growing our beverage throughout Silicon Valley, because people would leave Google and move on to other things and they would call us from their new companies, so that business continued to grow. From there, we went throughout the country, into grocery stores, and soon we were all over the place!
For me, I never really believed that I was launching a beverage company. I believed that if I could figure out a way to get people away from so-called “flavored waters” and diet sodas, and wake people up to reading labels, then health would follow. And while we surely can’t cure all diseases with this product, I do think we can actually help people to get healthier. They may or may not need medication if they just clean up what they’re putting into their bodies.
3. Can you tell us about one of your favorite accomplishments?
A few years ago we did something at Hint that was really interesting and truly disruptive in this industry. It started when we launched our product through Amazon. They had reached out to with interest in putting Hint into their grocery business. They told us, “We’re getting some really interesting data back, for example 90% of your sales on Amazon are subscribing to receive it monthly, we think that’s because people are drinking more than one a day.” The average consumer that is drinking it at some of these tech firms is between 5–8 bottles a day, so while there are a lot of people who don’t drink it, the people who do, drink a lot of it. The other piece of data that Amazon shared was that many people who were ordering Hint were also ordering medical-related things, like Type II diabetes monitors and FitBit bands, so this was telling us that there was data behind this product and my dream of helping people get healthier just by buying a $2 bottle.
So we launch it with Amazon and everything was going great. We were in tons of stores across the US, but we quickly realized that a lot of these grocery stores sell much of their shelf real estate to the highest bidder, which ends up being a lot of these large CPG public companies. I either had to write large checks to the tune of around $70M per year, or I had to think of an alternative solution.
At that point, I realized that I had actually built a business around e-commerce many years ago. So, I said to my husband, “Let’s just do what we did at Netscape and AOL. Let’s start our own ecommerce initiative and go direct-to-consumer.” That business today is almost 40% of our overall business in two years. People ask all the time, “Has it affected your retailers?” All those businesses have more than doubled since we launched our ecommerce initiative.
4. What do you see as the next step for your company?
Three years ago, I had a tiny issue on my nose with pre-cancer. My brother had had some pre-cancer stuff removed and I was really freaked out by it. The dermatologist told me that I needed to wear sunscreen, so I went to CVS and bought Neutrogena, then I went downtown to one of the department stores and bought the best foundation that I could find with SPF in it. After that, my pre-cancer spot started to aggressively grow. I went back to the dermatologist and asked, “What happened? It wasn’t growing this aggressively before.” She said she didn’t know, so I had no answers.
The next month, the same thing happened and I thought, I’m not going to have a nose left if they continue to take this stuff off. Finally I went back, just as I did when we started Hint, and thought, “Okay, what is in this stuff?” I wanted to really dissect the ingredients again. I found that my foundation and my sunscreen both contained a chemical called oxybenzone, so I started to do research on oxybenzone. Oxybenzone was approved in the 1970s, but it was cautiously approved, they didn’t actually know whether or not it was an ingredient that was that great, but they let it go and that was the last time they’d taken a look at it. According to the Center for Disease Control, oxybenzone may actually aggravate pre-cancer cells into growing skin cancer, and so because I started wearing more and more of it, all of a sudden I had aggravated the pre-cancer.
I went back to my dermatologist and asked her if she knew about this. She didn’t, but she did find a sunscreen that doesn’t have oxybenzone in it called Elta, which is available in dermatologist offices everywhere. It’s expensive and it doesn’t have a scent, but it’s a great product. I started asking, why doesn’t it have a scent? Scent is something that helps people to enjoy things, just like taste does for beverages. Here was this great product that was too expensive and not available to most consumers, since most consumers don’t go to the dermatologist unless they have a problem. So one day I was playing around with flavors and I thought, I wonder if you can use the flavors to scent the sunscreen? It turned out that you could, and we created our own Hint brand sunscreen, free of oxybenzone. It’s basically the same quality as Elta, it smells amazing, and it’s scented with real fruit.
We’re now selling the sunscreen in dermatology offices, and Allure and Marie Claire just named it one of the best sunscreens on the market. The whole industry is probably wondering — how did these guys go from beverages to sunscreen? For me, we’ve sort of pivoted our company unconsciously from not just thinking about what goes inside on your body but what goes on your body as well. Our goal is to work with consumers to help them get more aware of what they are putting into and on their bodies. It’s an exciting vision and a pivotal time here at the company.
5. Can you tell me about a time you faced a challenge?
I think the biggest challenge that I’ve faced was really trusting myself. I had this theory (and many people around me pushed this as well) that I didn’t have any industry experience, therefore, I needed to hire the experience. The challenge that I kept running into was that I would talk to all these experienced people and they would basically treat me and speak to me like I was ignorant. I knew I wasn’t, but I also believed while I was talking to them that they knew so much more than I did. I had to develop the mindset of really trusting my gut to say, I’ve figured out a lot of other shit in my life, so I can go do this.
The difference between walking into an established industry like food and beverage is that you’ve got a lot of naysayers saying, “You’re never going to be able to do this.” I come from tech, at AOL, where we fully admitted that we had no idea what we were doing. It was one of the first closed networks that was out there and we were building the plane as we were flying it, which was so fun. There weren’t people saying “I have lots of experience in this area and you have no idea what you’re talking about”.
One day I just woke up and said, “I can do this. I’ve done a lot of crazy stuff before and I can go and do this.” I think getting to that point was the hardest thing. Trusting that, while you may not have the same years of experience, you’re smart and can figure it out. Believing in yourself, having confidence in yourself, is the biggest thing. Not letting the wall, which is really fear, stop you from actually creating your company or being the best that you can be and maximizing your potential. That’s the key.
“Not letting the wall, which is really fear, stop you from actually creating your company or being the best that you can be and maximizing your potential. That’s the key.”
I think about this a lot. I’ve got 4 kids and I started this company when they were really little. While I had a lot of help along the way, people ask, “How did you do this with 4 kids?” To me, it’s a mindset. If you think to yourself, I can’t start a tech company because I live in Iowa, you’ll never be able to start a tech company, because you’ve put up a wall in front of you. If you tell yourself, I’m never going to be able to raise money because I’m a woman, you might not be able to raise money. If you tell yourself, I can’t be a working mother because of this reason and that reason, you won’t be able to do it. Telling yourself out of the gate that you’re not going to be able to do something becomes your reality. Our biggest enemy is ourselves.
I find that the smarter you are, and typically the more educated you are, the more we put these walls up around ourselves. We have to second guess everything, look at theories, have the right business plan, but you have to stop for a minute and break down these walls. I’m a big believer in the theory that people get in their own way and you have to look at yourself first and figure out why you’re doing things. You can do this through journaling, or however you prefer, but try to understand — what did you tell yourself? People don’t really realize that they’re telling themselves these things that can be really dangerous. Especially when there are friends and trusted people around you that are saying, “This product will never work”, “Who’s going to watch your kids?”, “How are you going to get the money to do this?” When you hear these things, you start to internalize them and think, I kind of thought that first and now you’re just confirming it. You’ve got to make a conscious effort to break those walls down.
6. If you could give your 18-year-old self any piece of advice, what would it be?
As you get older, you get more cautious about things and you start to ask, “What are the rules?”
When I graduated from college, no jobs that were interesting to me came to recruit at my campus. I decided that I wanted to work in New York and at the time, nobody told me that you shouldn’t just buy a plane ticket to New York and go and try to get a job at Time magazine, so that’s what I did. Given that, I would say to my 18 year old self — dream big and figure out how you’re going to follow through on those things. Don’t let rules or processes get in the way of achieving those goals, because if you really want to do something, then I think you should do it and you should figure out a way to do it. Take the risk, take chances.
“Nobody told me that you shouldn’t just buy a plane ticket to New York and go and try to get a job at Time magazine, so that’s what I did.”
When I first moved to New York, I started to get cold feet right before. I didn’t know anyone there and my parents were living in Arizona. I remember saying to my dad, “I don’t know what I’m doing, I’m not sure that I should be going to New York”, and my dad said, “Well, what’s the risk?” and I said, “What do you mean, what’s the risk?” and he said, “You just graduated from college, you have no furniture, you have no money to buy new furniture, you have a lease for a year, and a credit card. The worst that’s going to happen is that you’re going to have rent due for a year and you go to JFK and you buy a one-way ticket to come back home. And you leave. You leave all your furniture, and you’re out. That’s it. That’s a few thousand dollar lesson, and that’s not that big of a risk.” When he laid it out to me in those terms, I realized, “You’re right. Okay, I’m going.”
I still, to this day, look at things that way. I quickly lay out the risk, but I don’t overthink it. I think, let’s just go do this and as long as it’s not going to cost too much, it’s okay. It’s also the theory that drives us here at Hint. There’s lots of crazy stuff and tests that go on. I ask, “What is the worst that could happen? What is the cost of the potential mistake?” Even if things don’t work out, you realize that you’ve learned something. I think that process is how you get better. I don’t believe you can innovate and be a disruptive company unless you make some mistakes along the way, and of course there’s a cost to learning sometimes, right? It’s an education.
7. What advice would you give to other aspiring entrepreneurs?
I have an interesting story to share. Years ago, a friend introduced me to an executive at Coca-Cola. I called him to get his thoughts and advice on producing this product and trying to get a longer shelf life. As I listened to him, I started to think, I have no idea what I’m doing. I’m in so far over my head in producing this product. I didn’t understand the lingo, much of what he was talking about, or how to actually get this done. We were self-financing the company at the time and I was putting a ton of our own money into this product. So, in a weak moment, I told him, “You should just take this company. I don’t even need any money, you should just take it over and I’ll be happy because something that I’ve created is going to be in the market.”
His response back to me was, “Sweetie, Americans love sweet.” I stopped and thought, did he just call me “sweetie”? For the next three minutes, I don’t even know what happened because I was so shocked. Then I found myself actually making excuses for him, thinking, well, he’s from the South, he’s from Atlanta, and then I zoned back into reality.
A lot of people would hear that from someone who is sitting in a senior level position in a large public company and say “Oh my god, I should just throw in the towel.” However, I knew that I didn’t believe what he was saying. I didn’t believe that Americans love sweet. I thought that they were drinking sweet, but they were drinking it because it was an addiction. So instead of hanging up, I became interested in staying on the phone with him for as long as I could to understand his strategy. He went on and on and I thought, I am so lucky that he is telling me exactly how the large soda companies think. I wanted to see how far he thought about it and how he had been trained to think about it. So anyway, he laughed at me, that I was offering him the company. He just had no interest in it and then I hung up the phone with him and thought, I better hurry before he thinks the same way as I do.
After that experience, I always tell entrepreneurs — if you can get these so-called “experts” to give you their thinking, it’s a gift. It’s a gift, because they don’t view you as competition. You’re a crazy entrepreneur who’s just starting a company.
Try Hint Water with a special discount for Women of Silicon Valley readers here.