‘Grit, wit and fit:’ Kind founder Daniel Lubetzky shares what he looks for in founders as he heads to Shark Tank

Lubetzky is permanently joining the cast of Shark Tank this fall amid the departure of Mark Cuban. In addition to becoming the newest Shark in over a decade, he’s the first Hispanic person to hold the chair full-time.

He’s somewhat primed for the role, as he has sat in as a guest Shark across the last five seasons. But more critically, he brings decades of experience in founding, leading and investing in companies. Kind, launched in 2004, was acquired by Mars Inc. in 2020 in a deal worth $5 billion. Beyond Kind, Lubetzky and his investment firm Camino Partners have backed startups like frozen breakfast brand Belgian Boys and haircare line Prose. He’s also co-founded the Mexican CPG brand Somos alongside Miguel Leal and Rodrigo Zuloaga.

Modern Retail spoke to Lubetzky ahead of the show’s premiere to get his take on what he looks for in startups and how they should navigate the challenging macroeconomic environment

This conversation has been edited for length and clarity.

What do you look for when you’re investing in a new company?
In terms of business, I look for what I call the “three its.” Grit, wit, and fit. Grit, what I always had and I always knew I wanted in an entrepreneur, which means just be committed. Wake up in the morning and go to sleep at night, fighting, fighting, fighting. Because you have to have that stamina and that staying power.

But it’s not enough. I used to have to go pounding through walls when there was a door right next door I could’ve opened. So you need wit too. You need to be creative and you need to — particularly when you’re at a scale like that of the entrepreneurs that show on Shark Tank — you need to be able to level the playing field through creativity by thinking outside the box and coming up with creative things that will help you stand out.

And then fit. There needs to be a need for your product or service, and consumers need to appreciate your unique value proposition. And so if you have those “three its,” then I’m very inclined to go ahead.

What are some of the most common challenges that you see among startup entrepreneurs?
The disruption is accelerating so fast. I remember when there was no e-commerce, and then I remember when we [at Kind] were one of the first people to really, in the grocery space, breakthrough on Amazon and decode and decipher how to thrive on Amazon. Obviously, it’s so much more developed and sophisticated, but it is just evolving every single day in so many different ways. The game between online and offline and how do you do pricing and how do you stand out, how do you make money because some of these channels become very expensive.

You really do need to use that brain power to try to listen, and you want to do things differently. Because if you’re just copying the guy before you, you’re never going to get there. You need to think outside the box and be a pioneer in certain areas and come up with hacks that others have not come up with if you really want to stand out. Otherwise, you’re gonna be priced out. All of these channels have become very expensive, and it’s very hard to break through. But if you are creative and you can for free get awareness, I think you have a chance.

Given how many consumers are struggling with inflation and their household budgets, what should brands think about as they are growing their business?
There are definitely cycles where people are looking for more value, and there are cycles when they’re more price elastic, and they’ll buy whatever. But in general, what I found is that you need to know what your product is and who your consumer is and stick to it. We launched Kind in 2003 and 2004, and for the next 10 years we are growing triple digits, cash flow positive and profitable. That’s through the financial crisis. My lesson was: if you have a good product and a good culture, a good team — and you’re thinking with grit and wit — the financial crisis is not going to slow you down.

Not everybody can afford everything, of course, and some people are struggling a lot. But your core consumer can afford your product. So I don’t think entrepreneurs should be overly worried about this stuff.

What advice do you have for startups that are looking to scale their company and grow revenue?
Before running Kind, I was running a company called PeaceWorks and I was barely surviving. I could barely make payroll. I was sometimes having nightmares, worrying that I won’t be able to pay my team, who had to be responsible for their families. And I developed a really good skill set of stretching every dollar. But with that also became a very bad habit of not investing when it was worth investing. An entrepreneur needs to learn to not spend and live a gluttonous life and not be wasteful, but also to know when it’s advisable to invest. Because sometimes you’re developing a scarcity mentality and not investing in the right things. 

You want to study what is working. It’s not very easy because it’s very difficult to isolate which programs are working. Nowadays with [online tools], you actually can isolate it a little bit better. But in general, you want to try to do research on which efforts work, the things that are giving you the best ROI, and then just pour water on those. 

Theoretically, this sounds very easy, but practically you just need to do a ton of work to figure it out.

How should companies think about how to scale their businesses while not causing harm to the planet and environment?
For me, it’s a huge issue. I always hate when I find a Kind wrapper in the streets and I think about what harm all of us in the CPG business are causing with microplastics. I think it’s a very big issue.

I think of the waste that we’re creating every single day. And I do think with modern capitalistic society, we want to enjoy all those benefits that that gives us, but every one of us needs to be thinking about how do we reduce our footprint of plastic. Climate change is real. Microplastics are real. All the animals that you find at the beach that have plastic in them, it’s very painful.

[At Kind] We’ve been for many years trying to find wrappers that are not plastic-based, and we’ve done a couple of tests. I’m a little hopeful that in the coming years, solutions from the industry will allow people to replace plastic with authentically biodegradable products. The problem today is that those that claim — as far as I’ve seen from the research I’ve done, and I’ve spent hundreds of hours on this — the products that claim to be biodegradable today, the conditions for them to biodegrade are nuts. You can’t just throw it into a landfill, and it’ll biodegrade. You need to put it through a special process. We as an industry really need to do a lot of work to solve this.