Thread by @NeckarValue

The success of Bai is an example of passion-market fit. Founder Ben Weiss had been obsessed with coffee all of his life. In 2009 he finally found the right idea and a powerful consumer trend. He sold to Dr. Pepper Snapple for $1.4bn in 2016.

“So the only way you’re likely to find product-market fit is if you’re almost irrationally obsessed with the market. Then, you’re likely to have unique insights.” @naval

venturehacks.com/passion-market

Weiss graduated in 1992 and his first idea was to open a cafe. He backpacked through Europe and pitched investors in the US on the coffee house experience. Nobody cared.
"I was armed with all this coffee knowledge and could do nothing with it."

So he took a job. First he worked for Godiva where he helped develop coffee products, including this Chocolixir frozen coffee. Then he worked at a coffee roaster and traveled the world to source coffee.

He saw two powerful ideas: the rising popularity of energy drinks and coffee fruit. Coffee fruit was often discarded by growers, despite being rich in antioxidants.

"A harvested superfruit, rich in polyphenol antioxidants — it was literally used as compost"

"Over the past two decades, I have cupped coffee from the hilltops of exotic regions across the globe. When I learned that local farmers have always used the whole fruit to make high energy beverages, I knew that I had stumbled on coffee’s untold secret.”

Weiss saw the opportunity to create a low calorie, healthy alternative functional drink.
“I had been in the coffee industry for many years. Energy drinks were popular, and I thought we could do better and create a health and wellness beverage that tastes great."

For a year he and his wife worked on creating the initial drink. Then Weiss and his father pitched local New Jersey merchants. The product hit the spot and soon he started adding to the line-up.

In 2013 he entered a distribution deal with Dr. Pepper Snapple Group who also made a minority investment.

"The longer you're in the beverage industry, the more you realize you're really in the distribution industry."

prnewswire.com/news-releases/…

Enter Rohan Oza who was on Invest Like the Best yesterday.
He was an early investor and also brought Justin Timberlake into the mix as investor and "Chief Flavor Officer."

"Five calories, naturally sweetened and tastes amazing — what’s not to love?” J. Timberlake

In 2016, DPS acquired Bai for $1.4 billion.

"We stumbled upon the answer to the diet dilemma in 2010. I didn't set out to figure that out."
"You need the right enemy and you need the right strategy. We evolved as a brand by being the answer to big soda companies' dilemmas."

I published my notes on Bai here. Feel free to sign up if you enjoy stories from the worlds of investing and business.

"Passion-market-fit, naturally sweetened, tastes amazing - what's not to love?"
neckar.substack.com/p/bai-the-powe…