One exercise that we
still do today, we ask the question, what is
the dumbest possible idea we could do for this?
Because our brains are wired to just repeat
things that we've seen be successful in the past. You kind of have to
trick your brain to come up with a bad idea to
truly be thinking in sort of like innovative
territory. This is 40-year-old
entrepreneur Mike Cessario, and when he
devised the brand name for his product, he came
up with something unconventional. What's the dumbest
possible name for a super healthy, safest beverage
possible? Liquid Death. Probably
the dumbest name. Yeah. Liquid Death. Water in a
can. Dumb name. Skulls on the packaging. But according to Mike,
the co-founder and CEO of Liquid Death, that's
part of the reason why his company has brought
in nearly $130 million in sales this year alone. If I saw that in a store. Or if someone I knew saw
that in the store, I'm pretty sure they're
going to have to pick that up and be like,
What is this? And once someone picks
something up, you've basically won. There's three numbers to
watch out for in Mike's story. 3 million. The number of views that
Liquid Death's first commercial got on
Facebook. 100,000, the amount of
sales that Liquid Death made in its first month
and 195 million, the total amount of funding
that Liquid Death has raised. Here's how Mike
Cessario took a funny idea he once had for a
commercial and turned it into a $700 million
brand. For CNBC, Make It. I'm Zach Green. This is Founder Effect. As a kid, Mike remembers
an older cousin gifting him his collection of
MAD magazines. It turned out to be a
formative moment for him. I just completely ate
that stuff up and it was kind of crass and
vulgar, but it was art and it was really funny
and it was spoofy. Mike started playing
guitar in punk bands and says one of them had
several offers from recording labels to put
out a record, but he also felt creatively drawn
elsewhere. I was doing the show
fliers, designing the album covers. All the business creative
stuff. Instead of pursuing a
music career, Mike opted to attend the Art Center
College of Design in Pasadena, California,
studying graphic design and eventually
advertising. I just wanted to make
people laugh, which is what really attracted me
to advertising, because it seemed like it was
more of a place for humor and comedy than graphic
design was. In 2009, a friend of
Mike's put him on the backstage list for the
Warped Tour in Denver, Colorado. Many of the
bands were sponsored by Monster Energy. I was just hanging out
with them and we saw these stacks of what
looked like Monster. These guys are drinking
it, and it turns out like, oh, it's actually
not Monster, it's water because these guys don't
actually want to drink these energy drinks. I remember thinking that
that was kind of messed up. I'm like, man,
that's so sort of sneaky. Like at that time it was
really only energy drinks who were throwing money
at these guys. So they kind of had to
take it. But at the same time it
started making me think about why aren't there
more healthy products that still have funny,
cool, irreverent branding? Because most
of the funniest, memorable, irreverent
branding marketing is all for junk food. Bud
Light, Dos Equis, Snickers, Doritos, Red
Bull. And that was, I think,
planted the early seed of probably what ultimately
ended up becoming Liquid Death. Early in his career, Mike
started working at ad agencies around the
country. While the work wasn't always creatively
fulfilling, his clients helped hone his own
marketing philosophy. We were working on Virgin
America, the airline, and I started getting into
Richard Branson. I love Virgin's sort of
business strategy, which was find a really stale
category of products and be the one really cool,
exciting product in it. And they were able to
get all this market share really easily because
they were just so disruptive and sticking
out like a sore thumb in whatever kind of
category that was. Mike put his theory about
funny advertising to the test while working at a
firm in Nashville, Tennessee. The health
food brand Organic Valley, wanted them to
come up with an ad campaign for their
protein shake. They were talking to,
like bros in the gym who were looking to put on
muscle like that's a big part of the protein
market. And they knew they had
to market differently to those guys than they did
like organic moms that they did most of their
other products do. So venturing outside
their comfort zone, we pitched them this idea
of Save the Bro's. Every day, millions of
bros drink protein shakes in order to get jacked,
yoked, totally swole. But most bros are
unaware of the scary chemicals and artificial
ingredients inside these shakes. And they almost killed
the idea right before it went live. And then we
launch it and it goes completely viral. But despite success in
advertising, Mike still struggled creatively, so
he decided to create his own brand where he could
control the marketing. After an unsuccessful
try at craft brandy, he remembered a pitch he
had once made for a canned water ad poking
fun at energy drinks that the bands at the Warped
Tour definitely weren't drinking. I always knew that there
was something in that idea, and it kind of
just stuck with me and just on the side, over
the next few years of working at random
agencies, I was always just sort of continuing
to develop this concept of canned water and
like, what can it really be? But how could a new
product break into the crowded bottled water
market, which is valued between $146 and $350
billion, according to Pitchbook? The only way the brand
would have a chance at survival is the actual
product itself has to be so insanely interesting
where so much of the marketing is baked into
the product where if someone sees this on the
shelf, am I willing to bet they have to pick it
up because it's so weird or interesting and then
they're probably going to take their phone out,
take a photo of it and post it on their social
channels for free to their hundreds of
followers. To prove that the idea
was viable, Mike decided to produce a commercial
for it. Despite having zero cans
in production. We designed a 3D render
of a can that looked real. I came up with a
commercial idea for this brand that we shot for
like 1500 bucks. We put a few thousand
dollars in paid media to push the video out and
to push the post out over the course of maybe like
three or four months. Don't fall for the
marketing bu******. Water is not yoga. Water is liquid death. Four months in, the video
had 3 million views. The page had almost
80,000 followers, which was more than Aquafina
on Facebook at the time. And we had hundreds of
messages and comments from people being like,
this is the greatest thing ever. Where do I
get this? Is this real? A 7-Eleven franchisee in
Michigan reach out. How do I get this in my
store? So then I use all of that sort of social
traction to then actually go get people to take me
seriously. And we raised the small
round of funding to actually produce a
minimum run of, like, actual product. Mike was able to raise
$150,000 in initial funding and after
finding a water supplier in Austria, sold the
first cans of Liquid dDath online as a direct
to consumer business. Our first month we made
$100,000 in sales and we spent about $2,000 on
marketing. We sold out a product. We didn't order near
enough what the demand was. We were sold out
for like over a month. The first big retailer to
take an interest in Liquid Death was Whole
Foods. They're really big on
sustainability. They loved our death to
plastic message to kind of bring death to
plastic bottles cans infinitely recyclable
and they liked that we were talking about these
things in a way that no other brand in their
store was really doing. They said, hey, we want
to launch you full national out of the gate
in March of 2020. So we literally loaded
into Whole Foods March 15, 2020, the week the
pandemic lockdown started. So that came
with its own host of problems. But we still
started seeing like real growth in Whole Foods
throughout the pandemic year. While still far below
brands like Dasani and Aquafina, Liquid Death
sales have grown from $2.8 million in its
first year to $45 million in 2021. Mike says
they're on track to hit $130 million by the end
of this year. One of the most
surprising things to everybody with this was
how wide the audience really was for something
like this. Hundreds of parents who
message us on social saying thank you Liquid
Death. You finally got my nine year old excited to
drink water instead of soda because he thinks
he has something he's not supposed to have. The construction worker
guy who goes to a 7-Eleven and typically
buys two energy drinks now might be buying one
energy drink and actually going and buying a
Liquid Death. Liquid Death for me is
how do you get all these people who don't
typically make healthy decisions and now all of
a sudden want to participate in a healthy
brand purely from the brand standpoint at
first, and they just start incorporating it
into their day. Liquid Death has raised
$195 million in funding and is valued at $700
million. A big part of that
growth has been fueled by Liquid Death's
appearance on the shelves of over 60,000 retail
locations throughout the U.S., including
7-Eleven, Wal-Mart and Target, where it sells
for about 1.89 a can. But more than anything,
Mike says that it's creating an emotional
connection to a brand that drives consumers. People think that taste
is why things are successful or
unsuccessful, or why one brand is better than
another. All the data shows that is not even
close to the case. Monster didn't become a
$50 billion company because it tastes so
much better than Red Bull. Most people
probably couldn't pick out an energy drink in a
blind taste test if their life depended on. Our
brand is all about comedy and making people laugh. We're not tying our
brand to some specific niche like action
sports. So I think as long as
we're constantly just riffing on culture, just
can go basically for as long as something like
Saturday Night Live is relevant because you're
literally just a part of culture and making
people laugh. At the end of the day,
we're really creating an entertainment company
and a water company like we don't want to create
marketing, we want to actually entertain
people, make them laugh in service of a brand. And if you can do that,
they're going to love your brand because
you're giving them something of value.
