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.