Scaling Natural Brands From Startups to Global Giants with Michael Bush of GrowthWays

Episode Overview

Episode Topic: In this episode of NutraPreneur, Michael Bush, the Managing Partner at GrowthWays Partners, discusses the cutting-edge insights of the natural products industry. The conversation navigates through Michael’s extensive three-decade journey, exploring the evolution of the natural products sector and unveiling unique strategies employed at GrowthWays Partners to optimize exit values in the pre/pro/postbiotics and functional ingredients spaces.

Lessons You’ll Learn: Listeners are in for a wealth of knowledge as Michael shares key factors crucial for success in the natural products market. His insights touch upon the dynamic challenges faced by companies and how GrowthWays successfully navigates them to achieve tangible success. Whether you are involved in a startup or an established global corporation, Michael discusses tailored approaches for strategic advisory, shedding light on the intricacies of each scenario.

About Our Guest: Michael Bush, the featured guest, emerges as a seasoned professional with over three decades of experience in the natural products industry. As the Managing Partner at GrowthWays Partners, Michael’s journey unfolds, offering unique insights into his career trajectory. Michael’s role as a certified meditation instructor and his involvement with not-for-profits add a personal touch to the discussion, showcasing the multifaceted nature of his contributions.

Topics Covered: This episode covers a broad spectrum, from Michael’s journey and the evolution of the natural products sector to GrowthWays Partners’ unique strategies and tailored approaches for startups and global corporations. Michael provides a glimpse into the future trends shaping the industry, touching on his involvement in not-for-profits and how he balances professional and philanthropic endeavors. The episode concludes with a peek into upcoming projects and collaborations at GrowthWays Partners, promising an engaging exploration of the fascinating world of nutraceuticals.

Our Guest: Michael Bush- A Philanthropic Leader, holds Passion Beyond Profit

Episode Transcript:

Michael Bush: You’re also starting to see some novel ingredients in the probiotic world. Postbiotics are becoming very important. Postbiotics are cool because they’re basically what a probiotic will do in the gut, you do in the fermenter, and you have a postbiotic, and so you have no stability issues. And so you can get that benefit that the probiotic produces in the gut or some of the benefits. But you’re going to get that through the product that’s already you’ve basically killed the cells and you’re using the metabolites. So there’s just lots of neat things happening. I see like I said over the next couple of years, it’ll be interesting. In addition to these condition-specific, to see where is consumer acceptance of genetically modified things. We accepted plant-based meats and grown meats and things like that. And so it’s just becoming more and more where we’re starting to understand that GMO does not mean bad necessarily.

Bethany Jolley: Welcome to Nutra-Preneur, the Neutral Industry podcast. I’m your host, food scientist, and nutraceuticals consultant, Bethany Jolley. Each episode will be exploring what it takes to thrive in the nutraceutical industry. From conversations with successful nutraceutical entrepreneurs to venture capitalists to tech executives whose innovations are reshaping the nutraceuticals industry, we explore the innovations and trends that are shaping the next generation of nutraceutical businesses. Welcome back to Nutra-Preneur, the podcast that brings you cutting-edge insights from the world of nutraceuticals. I’m Bethany, your host, and today we’re excited to have Michael Bush, managing partner at GrowthWays Partners. Michael brings over three decades of expertise in the natural products industry, from startups to global corporations. Michael, it’s great to have you on the show today.

Michael Bush: Thanks for having me.

Bethany Jolley: First off, could you share with us how your journey in the natural products industry began and what really inspired you to become Managing Partner at GrowthWays?

Michael Bush: I started out my career in healthcare as a biomedical engineer working in hospitals, and was pretty bad at that job, and repairing medical equipment is not something you want to necessarily be bad at, and so got into the management side of healthcare and healthcare services. And in I guess it was around 2000, I made the transition into the world of bioinformatics and more biotech and things like that, and did some advisory work, but did some turnarounds at some companies. And then in 2006, I was consulting and wound up consulting and being brought on by a company called Ganeden Biotech, who had a line of probiotic supplements marketed under the Digestive Advantage brand. And they wanted to really look at what was going on in the market, what else they could do with their ingredient, and we decided to start an ingredients business at Ganeden. And so we ran that from 2006 till 2017. We sold that business to the Kerry Group, and at that point I decided to go off on my own and start GrowthWays, really to support other natural products companies, ingredient companies, primarily venture capital, and private equity-backed firms that were the objective is to ultimately sell the business. And so because that’s my area of expertise, and that is making decisions to build value and ultimately increase exit value for companies as they grow.

Bethany Jolley: So with your broad experience, how do you see the evolution of the natural products sector over the last few decades?

Michael Bush: Well, over the last. It’s funny, I’ve got a book that I just finished writing and will be published in the first quarter of this year, and I tell the story about how when I first started in the natural products industry, my first introduction was at Natural Products Expo West, and I believe that year there were around 50,000 people there, but it felt like a small gathering. It was intimate. Everybody knew each other and I literally knew I found my home. It was an interesting group of people, to say the least. Most products that were in the market had little if any, clinical data behind them when it came to supplements and things along those lines. And I saw an opportunity to take what are ordinary ingredients that can be used in food or supplements and do the science and do it the right way, and saw an industry that was ripe for being able to help more people than you could with a traditional pharmaceutical or biotech approach, which involves hundreds of millions, if not billions of dollars, and a small population of people that ultimately receive the benefit. And so I fell in love with the fact that you could take, for example, a probiotic and put it in food that people ate every day and provide them with full clinical benefits by being able to eat a bar every day or drink a kombucha, rather than having to take supplements or rely on pharmaceuticals. And so when I see the evolution of natural products, industry really is becoming more there’s a convergence where the functional ingredient side of things and the natural products. There’s a merger of those two technologies, which is a nice clean label, technically natural product coupled with a clinically backed functional ingredient. And so I love the space. I think it’s going to continue to evolve. I think we’re going to continue to see enhanced science, bigger studies, and more relevant science. Up till now, the only approach was really pharmaceutical or OTC. And so we’re going to be able to use food as medicine the way we’ve been trying to forever.

Bethany Jolley: Yeah, absolutely. And I think consumers are also just becoming more educated. And they want to see the science behind the ingredients that they’re putting into their bodies.

Michael Bush: Absolutely. It’s funny to see when we were at Günaydin, we had a website for our B2B website. We were a B2B company, but we also had a consumer website where consumers could go and they could read the clinical science and they could pull things. And it was one of those things that we thought, oh, let’s just put it up, and then we can share the data. And we really surprised at the number of consumers that went to that website every day and were downloading white papers on clinical trials and things like that. We’re really pleasantly surprised to see how involved the consumers were at vetting the ingredients that they were consuming.

Bethany Jolley: Yeah, that’s really interesting. And what other unique strategies do you employ at GrowthWays Partners to optimize the exit value for companies in the pre-, pro, and Postbiotics and the functional ingredient spaces?

Michael Bush: Well, so the whole premise behind what we do is to start with the destination in mind. With the upcoming book, it’s really about there. It’s about using what I call a guard railing and using the guard railing to really start with the destination first. And so, “Okay, I’m going to start an ingredient company, or I’m a venture capital firm and I’m investing in a company.” I think it’s a fun exercise if the company was designed to be sold. So if you have a venture capital investor, you’re going to sell the company or you’re going to take a public or something. There’s going to be next. And so one of the exercises I like to do as early as possible is to actually name the company that will buy your company, whether it’s a private equity firm or a strategic, it’s literally “sit down.” The founders of the company or the management team need to sit down and say, “Okay, if we’re going to sell this business to X, we want to sell it, We would love to sell it for a certain return. And that return will require us to generate a certain amount of revenue and profits.” But if we’re going to sell to X company or a company like them, what do we need to do? In every decision that you make, forever, the entire life cycle of that business has to be in alignment with that ultimate destination. And it’s really a capital D, destination where we’re really focusing on where are we going as a company, and does this decision get us closer to our destination or not? And it’s one of those things where by really keeping your eye on the destination, it allows you to make decisions as far as things that you don’t really think of as value generators, but are you going to build a manufacturing facility? Are you going to use a contract manufacturer? Are you going to work with universities to run clinical studies, or can you do it with a contract research organization? Then what are the advantages of doing so? It really helps you outline your IP strategy around whether you’re focusing on patents or trademarks or trade secrets or whatever the case may be, and also even lets you guide decisions like hiring. One of the things I’ve always done in practice forever is whenever I interview somebody, I tell them that this company will be sold someday. That is the goal of this organization. You’ll either be working for a bigger, better company someday that ultimately buys us, or a private equity firm or somebody, or we may lose our jobs. They may decide that they’re going to buy this business, and there’s a bunch of redundancy. And so one of the things I think that a management team really is responsible for doing is really thinking long and hard, as when you’re bringing people on, especially as a company evolves, and think, “Is this person going to be replaced or not needed when the company is sold?” And if that’s the case, think long and hard about whether or not you hire this person, because do you really want to hire somebody as a stepping stone, knowing that they’re going to lose their job in a couple of years? And so it’s just all those little things, how long of a lease do you take out on an office? And all of those decisions are guided by the guardrails that ultimately shape the value generation of a business.

Bethany Jolley: Yeah, and that’s a really unique approach that I think a lot of companies probably don’t even think about, but it really helps them strategize throughout their whole path basically.

Michael Bush: It guides everything. It guides from your fundraising strategy. It informs the way you make decisions. But as you said, not a lot of companies think that way because, for example, they’ll think, well, we’re going to be raising money next year. So we need to do these things now so that we can raise money next year. Rather than thinking, if we continue to build value, then obviously the valuation at the next round will be higher. And so it’s by making all these value-generating decisions and using the guardrails as the guiding principle. I put two things into consideration when any decisions are being made and the two factors are, “Does it get you towards closer to the destination and is it a good decision?” And one of the reasons I enjoy working in the natural products industry is you don’t have to really explain to people what good and doing good is. There are some industries where if doing good is one of the two most important things in your decision-making process. But probably there are industries where goodness is not taken into consideration. But the natural products industry really is driven by doing good and doing well. And it’s what I love about the industry.

Bethany Jolley: I think I can agree with that. The natural products industry is just a little bit different in that aspect. So given the diverse range of companies that you’ve worked with, what key factors do you believe are crucial for success in the natural products market?

Michael Bush: It’s really doing something unique and being willing to really be different. There’s a different approach that you can take to building a business and growing a business, and one of the unique challenges that we see is one of the big issues that everybody has is “how do we grow revenue? How do we put together a commercial team?” There are a lot of people that have expertise in taking consumer brands to market. But when it comes to, for example, functional ingredients or a product that has a unique value proposition because everybody’s fighting for space, especially when it comes to the ingredient side of things, on the B2B side of the natural products industry, if you’ve got a kind bar, everybody wants to get their functional ingredient in that kind bar. And so the kind folks have to say be fortified or protein. Do we want to put an immune-enhancing ingredient? Do we just want it to taste good? Do we want to add fiber, whatever the case may be? And so by doing that, by putting yourself in a position where you’re the company of choice because one, you’re the best one to work with and you’ve done everything right, you’ve gone through the right regulatory paths, you’ve done the right clinical work, you’ve done clinical work that you needed to do to support claims so that your end consumers and your business customers are receiving the benefit that they think that they’re going to be receiving, and you’ve got the data to support that. And so there’s just so many things that go into making sure that the business is growing the right way, and the natural products industry just lends itself towards doing things the right way. But right now, there are challenges in building commercial teams, as I mentioned, building go-to-market programs because there’s been so much consolidation in the space. A lot of the industry veterans are going elsewhere. They’re selling their companies, they’re at the end of their careers, or maybe they’re switching industries. And so it’s the time of inflection in the space. That’ll be interesting to see what happens over the next couple of years.

Bethany Jolley: This episode is brought to you by neutralpayments.com. If your business needs credit card processing that fully integrates with most major neutral software platforms, offers the lowest industry prices, and has built-in features like recurring billing, zero-dollar trials, and chargeback prevention. And visit us at Neutralpayments.com For a free online quote. We’ve already noted a few of the challenges that you face, but are there any that you’d like to talk about, particularly in any projects at GrowthWays, and how have you navigated those challenges to success?

Michael Bush: I would say the common denominator right now in a bunch of clients that I’m working with, is really leadership development and helping establish that kind of, How do we make decisions as a leader? How do we make decisions? How to go to market? How do we build a team? And so it’s funny, everybody’s unique, but sometimes you feel like telling your five clients or your ten clients or whoever it is and say, “We’re going to just have one call on this because we’re all dealing with the same issues right now.” And here it is. It’s January, it’s the beginning of the first quarter. Everybody’s concerned about Q1 revenue and what’s going to happen in 2024 and putting goals together. So one of the things that we worked on at the end of the year last year that’s being implemented now is novel approaches to compensation plans for teams to incentivize them to grow the business the right way. We’ve been doing a lot of compensation plan development and putting together individual plans for whether it’s a management team or a sales team or individual contributors. And so it’s an area that it’s fun because if we tweak the comp plan a little bit this way, does it move the needle when it comes to revenue and recurring revenue and having the right kind of revenue and the right kind of profit and margin that builds value in a business. And so there are things that you can do with incentive plans that allow you to align the investors’ goals or the company’s goals very much with the employees’ goals. And like I said, with consolidation, some of the ways that the bigger companies handle compensation are very different than the way an entrepreneurial company that’s trying to grow should be handling it. And so it’s interesting, but it’s also a very common problem that I’m seeing, especially this time of year.

Bethany Jolley: Yeah. And you’ve worked with a lot of different types of companies. It sounds like. And so how does GrowthWays tailor its approach when advising startups versus the established global corporations?

Michael Bush: We sit down and we do an assessment. They usually come to us with a problem. An investor will come to us and say, “We need commercial help with a company XYZ.” They’re very early, they’re pre-revenue, or they’re hitting a plateau, or they’re launching new ingredients. And one of the common things I’m seeing right now is companies that are hybrid direct to consumer, or B2C companies that are now wanting to become more B2B. So when they come to us, they’ll say, “We’ve got a D2C team, we’ve got this really good team, we’re really good at Facebook ads, or we’re really good at getting consumer engagement in stores.” We realized that the direction that we’ll build the most value for the business ultimately will be a B2B business that produces more margin and has less spend when it comes to marketing and advertising. So that’s one of the areas where it typically is brought in from an investor or somebody on an advisory side of things where they’re coming and help the management team, put this plan together. This time of year is fun for me because we do a lot of get-togethers with companies and do strategy. We did that later in the year, last year too. I typically recommend that people do really detailed forecasts, and so we do literally account-by-account forecasts in some cases. In some cases there are five accounts on that forecast. Sometimes there are five hundred. But it allows companies to have more exposure to the way the business is going to run in the subsequent years. And you make sure that you’re hitting your goals and doing things like that. But usually, it’s they’re coming in and asking for help formalizing a commercial plan or refining strategy or building a strategy right from the get-go.

Bethany Jolley: You’re very obviously tuned in with the industry. And so what emerging trends do you predict will shape the natural products industry in the near future?

Michael Bush: I really think that over the next, let’s call it five years, we’re going to see more acceptance in genetically modified organisms and things in the probiotic world, for example, there’s just so much that can be done with gene editing or even directed evolution, which is not necessarily you’re not doing Crispr on an organism, but you’re pushing it in a genetic direction or in an evolutionary direction. So I think you’re going to start seeing in the natural products industry, in particular, when it comes to the ingredient side and when it comes to even the product side, you’re going to see more specific, condition-specific, or more market-specific people. You’re seeing energy. There’s just a ton going on with energy, stress, mood, sleep. And we’re starting to find that there’s a variety of things that happen that affect stress and mood that are happening, for example, in the gut where neurotransmitters are being produced. Years ago, we predicted that the probiotic world would shift to much more condition-specific probiotics. So a probiotic for protein metabolism or a probiotic for stress and mood, probiotic for heart health and things. And you’re starting to see that come true now. You’re also starting to see some novel ingredients in the probiotic world. Postbiotics are becoming very important.

Postbiotics are cool because they’re basically what a probiotic will do in the gut, you do in the fermenter and you have a postbiotic, and so you have no stability issues. And so you can get that benefit that the probiotic produces in the gut or some of the benefits. But you’re going to get that through the product that’s already you’ve basically killed the cells and you’re using the metabolites. So there’s just lots of neat things happening. I see like I said over the next couple of years, it’ll be interesting, in addition to these condition-specific, to see where is consumer acceptance of genetically modified things. We accepted plant-based meats and grown meats and things like that. And so it’s just becoming more and more where we’re starting to understand that GMO does not mean bad necessarily.

Bethany Jolley: Exactly. I think it’s always had a negative connotation, but there can actually really be some great ingredients that emerge from that technology.

Michael Bush: Oh yeah. You say there’s an organism out there, hypothetically, that could create some incredible benefit or produce some compound in the gut, but that particular organism may have a characteristic that you don’t want it to have. Let’s say that it is a spore-forming organism and you don’t want it to go into spore form. Well, using GMO, you could stop that or if there’s something where there’s a potential pathogen, for example, you could just remove that from the organism. And it’s not nearly as complicated as people think it is, especially using some of the new technologies out there. And I’m on the board of one of the Ginkgo Bioworks companies, Verb Biotics. And it’s just amazing to see some of the things that can be done using GM technology. And so I think that there’ll be some advancements over the next couple of years, and it’ll be interesting to see how it’s accepted in the industry.

Bethany Jolley: Yeah. And you’re also deeply involved with volunteering for not-for-profits. So how do you balance all of these endeavors?

Michael Bush: You block time, right? I’ve got a calendar. And so I’ve also had three daughters. How do I have time for them? It’s just one of those things you just allocate time. My wife and I love giving back and we love working with not-for-profits. And where we just recently helped set up the board of a not-for-profit that actually does improv and teaches. It does outreach to schools and things, using improv as a way to teach team building and things like that. So it’s fun. You never know what you’re going to stumble upon when you’re open to helping. But we just balance our time and we do what we do and wherever we are. And so it’s one of the good things that came out of the pandemic was, is it gave people the ability to things technologies like Zoom and things like that, where we now can work with companies that are on the other side of the world or the other side of the country without having to jump on a plane every time.

Bethany Jolley: Absolutely. That was such a horrible time, obviously, but then it opened up a lot of new opportunities as well and adjusted. And I know for me, it’s been great to do a lot of the things virtually. What upcoming projects or collaborations at GrowthWays are you most excited about this year and why?

Michael Bush: One of the companies that we helped co-found is a company called Step Change Innovations. So I’m doing more and more work with the folks over at Step Change. They were some of the folks from Günaydin got together and it basically a lot helped. It’s an organization that helps people take functional ingredients to market. There are some neat things going on over there. Like I said, I’ve got this book coming out this quarter, so there’s a lot of activity going on around that. And so just tons of advisory work going on, while at the same time trying to keep space to stay sane and do other things. I just recently became a certified meditation instructor, and so it’s always been a part of my lifestyle. So it’s interesting how I’m now starting to incorporate that into some of my advisory work. And so so that’s a lot is going on for GrowthWays book coming out, some new client announcements, and some just good stuff. It’s a fun time to be in this industry.

Bethany Jolley: Yes, it sounds like you have a lot of exciting things ahead.

Michael Bush: We do.

Bethany Jolley: So Michael, thank you once again for sharing your profound insights and experiences with us today. For our listeners who want to learn more about GrowthWays Partners, and their impactful work in the natural products industry, be sure to check out the links in our podcast description. Remember to subscribe to get more engaging discussions. And join us next time on Nutra-Preneur as we continue to explore the fascinating world of nutraceuticals. Until then, keep innovating and inspiring. Thanks for tuning in to this episode of Nutra-Preneur. If you enjoy the show, please subscribe and better yet, leave us a review as it really helps us grow the show.