All Xero Gravity episodes
Hosted by Elizabeth Ü
At just 19, Daniel Flynn saw a broadcast that showed four- and five-year old kids collecting water for their family. Behind that image, 4,500 kids were dying everyday due to water-borne illness. That moment changed everything for Daniel.
Today, he leads the company he co-founded, Thankyou, a revered Australian business whose profits solve social issues, most notably funding aid and development for clean water projects. The crazy part — not only has Thankyou captured the hearts and minds of Australians, it’s held its own against some of the planet’s largest beverage companies.
On Xero Gravity #73, Daniel shares his remarkable journey of success and the challenging emotions — loneliness in particular — that illustrate it’s not just “all business.” Tune in to hear about everything this one-of-a-kind entrepreneur has faced and triumphed over after he became a teenage brand manager.
Small Business Resources:
Rich Dad Poor Dad, by Robert T. Kiyosaki
Host: Elizabeth Ü [EÜ]
Guest: Daniel Flynn [DF]
EÜ: Hi everyone. I'm Elizabeth Ü and this is Xero Gravity.
DF: A question I often get is, "Oh, did you ever feel like giving up?" I'm thinking like, “Are you serious?” There are still weeks, like about two weeks ago, I'm thinking I don't even know if I can do this. People put on a façade sometimes, that Facebook life, that everything's all good. But I think we've got to let down those walls and be real with people so that others don't crash and burn on the journey as well.
EÜ: Meet Daniel Flynn. Since the age of 19, he's been on a mission to change the world one product sale at a time. After jumping into business straight out of university, Daniel admits that he was initially afraid to ask questions during business meetings when he didn't understand certain terms or acronyms, but he's learned to get a lot more comfortable in his own skin. Daniel's refreshingly honest about how failures and loneliness are all part of the entrepreneurial experience.
DF: I think this journey's probably a little bit, probably lonelier than I thought. I think the illusion is that you're connected with a lot of people. There's so many meetings. There's so much happening. There's all this excitement, but I think actually the process can be quite lonely, particularly when things aren't working and when you're failing and leading a team of people and so, you're trying to be a leader who's got strength and, "Come on, everyone. We can do this." But you're wondering if you've even got what it takes some days. I think yeah, I probably realized that and I've been lucky enough to have some great mentors and other co-founders to walk this journey out, but yeah, it's probably lonelier some days than I realized.
EÜ: When you call your mentors on a day after you’ve had 24 hours of exhausting travel or those moments of doubt, what is it that you ask them when you call?
DF: It's interesting. Literally probably 24 hours ago I was on the phone to one of my mentors and he's also on our board and I was just saying, "Hey, I feel so much pressure." We've got some external market pressure stuff. I've got some internal challenges and it's really growth pains, but I'm just saying the work load, it's so intense and I feel almost paralyzed even just to make good decisions because of just the weight of everything. I think what I love in those moments is this particular mentor of mine, he just gave me perspective. I think perspective's so important because when you're in something, you don't always see it.
I think that's the curse of that whole entrepreneurship thing. Sometimes you're so focused on the future and the better outcome and when things are tough, you get down, but you don't realize, "Hey, we've actually come a long way and we need to celebrate that." Yeah, I often forget that bit.
EÜ: It's funny, this is very similar to people having these perfectly curated lives on Facebook or Instagram or whatever the latest social media thing is that the kids are doing these days that I'm too old to figure out, but ...
DF: Yeah, yeah.
EÜ: It's this like beautiful perfect world and I think sometimes, we do entrepreneurs a disservice by also only sharing the success stories. Cautionary tales or even just the real life, sometimes it's a super hard lonely slog. I'm so glad that you're sharing this story because there are so many people who are experiencing that and thinking, "Gosh, I'm the only one." If only we all knew that we were all going through that.
DF: Totally, totally. A question I often get is, "Oh, did you ever feel like giving up?" I'm thinking like are you serious? There are still weeks, like about two weeks ago, I'm thinking I don't even know if I can do this. That's obviously a bit of an emotional thing. It's not my deep belief, but it's just crazy how hard some days are, but I think everyone goes through it. People put on a façade sometimes, that Facebook life that everything's all good, but I think we've got to let down those walls and be real with people so that others don't crash and burn on the journey as well.
EÜ: I wonder if this is particularly a challenge for young entrepreneurs. I noticed that you've received a lot of awards related to your age. There's the Young Outstanding Person of the World and Victorian Young Australian of the Year and Young Achiever of the Year.
DF: Yeah, yeah.
EÜ: Is that something that you think we could be doing a better job of setting realistic expectations for young entrepreneurs, or is this really we don't want to squelch this youthful enthusiasm?
DF: Yeah. I think the youthful enthusiasm or that naivety, that's what's built our whole story. We've just pitched for things you probably shouldn't pitch for. We've asked for things we didn't know you weren't really meant to ask for. We've built this consumer brand and consumer movement that is getting recognized now, all these awards and all these kinds of things. One thing I've wanted to do along the journey is let people in as well and so, when we launched a book about five, six months ago on our story and the book was literally called Chapter One, because we're literally only one chapter into our journey. We believe, and in Chapter One, it's really an open account of yeah, the wins, but also the challenges. I think what I’ve seen the last six months is so much good feedback on that because people like usually, you get the highlight reel and one failure, but you guys did like the 50 failures and the two, three wins and that's how it really is.
EÜ: Yeah, a lot more realistic ...
DF: That's how we want to tell it, yeah.
EÜ: Successful entrepreneurs aren't the ones who never fail. It's the ones who fail and learn from it, and then get up and start something else having taken that new information into account. Congratulations for sticking through those 50 failures.
DF: Yeah, yeah. Well, thank you.
EÜ: That's Chapter One. I'm curious about, and maybe this is covered in your book as well, but which came first? Did you know that you wanted to start a business first or did you have this sense that you wanted to make the world a better place first because all of your products are also solving social issues?
DF: I grew up as a kid who just loved business. I didn't really know it was business. I just did stuff at school selling Gobstoppers or cans of Coca-Cola and just random stuff. In fact, I think at one point I was selling pet yabbies that I caught out of the lake, which now is just completely the worst thing ever.
I just loved stuff like that, creating, making, and selling. As I grew up, yeah, I really wanted to get into business, but I was actually heading down this path of property development specifically, and I was actually at university studying project management and construction. I had this really, I thought it was a pretty smart plan where I didn't just want to develop properties. I actually wanted to know the construction process. I'm getting a degree in that.
Then I have this moment that just changes everything where I'm watching stories of kids as young as four and five who are walking to collect water for their family. They're losing brothers and sisters from water-borne disease and the stats are like 4,500 kids dying every day from waterborne disease; 900 million people at the time in 2008 didn't have access to clean water.
I'm sitting there going, "What the heck?" This is so bizarre. It's so wrong. I'd sponsored a child and that was in my head a big tick like I've done something for the world. Now, I'm going to get into business, but in this moment, I'm going, "I feel like I can't walk away from what I'm seeing." The thought was, “What if business could help solve that?” And I suppose that's where the journey began.
EÜ: That was my next question for you was, why start a business and not some sort of a nonprofit organization that's more directly helping resolve those issues that had really sparked your own social conscience?
DF: It's interesting when I feel like there's a lot of people who give to charity and realistically, like in a country of Australia, we've got 23 million people, which is not many people at all. But I reckon there's probably about 1 million, some statistics say 1 to 2 million people who are regularly giving to charity.
What we wanted to do is engage a whole new demographic and essentially, go for the 20-plus million people who aren't actually giving. I think people aren't giving not because they don't care. Deep down I reckon we all think it's wrong people are dying every day because they don't have access to clean water, but it's also extreme poverty is kind of out there somewhere. For a lot of us, it's in a far distant place we've never been to before and it's hard to connect with.
We had this idea instead of starting a charity, chasing an existing dollar, we'll launch consumer good products that appeal to mass market and essentially, we'll pitch to people and we'll say, "We don't want your money," and everyone's like, "You do want our money," but, "No, we don't want your money. We want your choice because if you're going to buy a product anyway, you choose our products so Thank You products and 100% of our profit will go to funding aid and development projects." Yeah, and it began with water and bottled water, which is a funny one because there's a mix of reviews around the world on this, but I think bottled water is a bit of a silly product.
EÜ: I'm totally with you. I was going to ask you about that, but I wasn't sure how to do that without being offensive.
DF: Yeah, no. I literally, like you will not offend me. It’s literally the dumbest product in the entire world in my view because we get what — particularly in Australia, but many parts of the world — tap water is, first of all, free. It's awesome and we find ourselves paying $4, 5, 6, 7. I met someone last night, she's like, "I paid 9 Euros for water." I'm like this is crazy. Globally, we're spending $137 billion on literally the dumbest product ever.
EÜ: Not just the money that we're spending. I think what really gets to me also is that we're using petroleum products to ship bottled water around the world in either glass, which is really heavy or it's plastic that it's ending up in the Pacific bowl.
DF: We started with this simple premise that yeah, bottled water's a silly product, but if you're going to choose it, we wanted to bring something to the market that A, gave all profit to helping fund water projects in developing countries because we're spending billions on it, because you've got nearly a billion people at a time without access to clean water.
EÜ: Right, exactly.
DF: It's this incredibly weird world we're living in. We said, "If water's going to exist, bottled water, it's got to exist to end that problem." And at the same time, we'll do our best to be on the forefront of sustainability which we do some great stuff, but at the end of the day it is still bottled water, but that is where we began our story. Today, we've got 46 products and it's grown a lot, but yeah, began with that, the idea of empowering consumers to change the world with a switch of their purchase.
EÜ: How do you know that you're changing their consciousness or expanding their awareness of some of these issues?
DF: We get mixed feedback. One of the mantras in here within our organization is rule number one, make a great product. We got this from a great book, but rule number one, make a great product. Rule number two, never break rule one. It has a little asterisk above it. The asterisk says never use a good cause to sell a bad product.
We've learned pretty quickly to compete against the biggest multinationals in the world. In the retail environment, your product has to be better to stay on shelf. We've got some products that have done that and they're literally ranked number one or two in their category. I'm not talking bottled water. Water's water, but when I talk about hand wash and body washes and some of our other product lines, what that's also meant is people have bought our product not even knowing about the cause. They bought it just because they thought cool packaging, great, it's good for you, good for the environment, I'll buy that. Then they've learned about the cause. That's actually pretty cool for us because we want to introduce people who are not necessarily thinking everyday about ending extreme poverty.
EÜ: I love your rule number one and rule number two. One of my mentors used to always say, "You can't be an engine for social change if you're not first an engine," which means you actually...
DF: Wow, yeah.
EÜ: Again, it's not only you need to make a great product, but you need to as you're saying get on the shelves and then actually turn a profit, especially if your business model is one where you're giving those profits to support your cause. That was one thing I wanted to ask you as well is when it came time to get your products into the various supermarkets or other retail channels where your products are available, how did they receive the product or the cause? Do you think that having some sort of a cause behind the product actually helped you?
DF: Yeah. Look, this is a funny one. It didn't actually get received well at all. The cause got us essentially the meeting. It got us in the room, which was great, but what shocked me was we're sitting in front of these retailers and they're literally like, "Guys, nice idea. It's a good cause, but you are literally competing against the biggest beverage companies in the world. They are spending $3 to $5 million on every new product launch and you're talking about Facebook is nice, but it just isn't enough."
Our first three years, literally, we do not have any national retailer deal and we are pitching, re-pitching. We had some really good sales data from some cool cafes and outlets that were stocking the brand and we had really good consumer feedback, people saying, "I love it. I love being part of change the world. It's a great product." But major retailers, literally, everyone in the country just stated they wouldn't back this.
EÜ: I know that here in the United States, there's slotting fees and to even get something onto the shelf at a major retailer, you need to pay a lot of money to stake out that space on the shelf. Is that something that's also a factor in Australia?
DF: Yeah, it is. I used to think that was the scary part, but the reality is retailers just won't even let you pay the fees unless you've proven how you're going to invest millions of dollars into essentially these new product launches.
I think we were so passionate about our idea and just due to the consumer feedback that people saying, "No, I would definitely choose this over any other multinational product." We changed the game. We flipped things on their head and actually, we took a risk. I remember we launched this video on a Wednesday afternoon on YouTube and that was it, "Hey, everybody." This is at year three in our journey. "Hey, everybody. At two weeks from today, we're presenting to 7-Eleven Australia. We're asking you to jump onto their Facebook wall and upload a post to say that if they stock the Thank You Water, that you'd buy it." This is a risk because some people are like, "You guys are just ... "
DF: Ambush marketing and...
EÜ: I know you're going to really piss them off.
DF: Yeah, I was like, "Oh, no it's not ambush marketing. It's more like a pre-awareness before the pitch." So this goes viral and people start uploading videos of themselves singing and dancing and rapping.
EÜ: No way!
DF: Yeah, yeah.
EÜ: This was completely unsolicited at this point that people just took it upon themselves? They were so compelled by your brand that they were making their own ads?
DF: Yeah. Exactly, yeah, and that's partly because for three years, we built this consumer following. Even though the retailers laughed at us saying, "You don't really have awareness," we're like, "Cool, next meeting, we're going to prove the awareness before the pitch." And literally, they had this onslaught of videos and posts and media covered it. That led to one of the fastest new product launches that 7-Eleven had ever done and literally when our product hit the shelf from day one, we outsold Evian and all these other brands, the rest is history.
DF: This was what changed it for us.
We did it again two years later on about 100 times bigger scale taking on the two biggest retailers in our country, Coles and Woolworths, which are the two supermarkets that have got literally 70% market share. They said no to us for five years, which was a little discouraging. At year five, we launched a video on YouTube called the Coles and Woolworths Campaign.
EÜ: Very subtle.
DF: Yeah, very subtle. Some people were like, "You can't put the two biggest retailers who hate each other... " but this is like your Costcos, these Walmarts, these huge brands that you can't put them in the same sentence. I was like, "Wesley, our graphic designer, he just did." It wasn't hard, just did it. Our story at Thank You is we just do it. What was amazing was people backed this to a whole other level. We even had these two pilots, Peter and Jeff, and they flew their helicopters above the Coles and Woolworths head office for half an hour with these 10,000-square foot signs.
EÜ: Oh my gosh!
DF: Yeah, yeah, it was epic. One of them said, "Dear Coles, thank you for changing the world (if you say yes)."
Media are saying this will never work. You can't force the hand of big retail like this. To our shock and everyone's shock, we had national range not just for our water, but we were presenting our body care range and our food range so in total 14 products. We had ranging of all products five hours after the meeting with Coles and three hours after Woolworths.
DF: In the history of products in our country, this has never happened before. To me, it speaks to a lot of things, but what we've tapped into is the consumer-led thinking. Our customer has literally built this brand with us. We stand on those supermarket shelves. It's three years on from that point now and we’ve gone from 14 to 46 products. Our hand washes are ranked number one in the entire category so outselling every global competitor. Our profits grew massively. At year five, when we were launched with the supermarkets, we'd raised 500,000 after five years of trading and for anyone listening, it wasn't 100,000 per year. It was like ...
EÜ: 7,500 year one, 7,800 year two, right. Just shocking, but it picked up. Year five, 500,000. Today's year eight, just under 5.2 million has been raised and that grows every single day. It's been a really incredible story of the customer building this idea with us.
I want to hear a little bit more about that moment when they said yes to this, almost the entire product line.
EÜ: Were you ready for that? That is the kind of scenario that can really sink a small manufacturer in the early days. You're like, "Oh, my gosh. How are we suddenly going to create 5 bazillion of these products and have them ready to go?"
DF: Yeah. That was the crazy thing. I remember we did the pitch in the morning, the first meeting. We were so mentally drained from running this two-week campaign. We hadn't slept much and so three co-founders, so my best mate, Jarryd, I'm not sure where he was, but our other co-founder Justine, who's my wife. We're married now. We were boyfriend/girlfriend. Me and her, we left the office at about 4:30 in the afternoon. We just went to the movies, which is completely irresponsible, but we were mentally done. We're sitting there and watching I think the new Wolverine movie and ...
EÜ: Oh, God.
DF: So Hugh Jackman's on screen, his shirt's off, and then my phone's ringing and I'm like I don't know that number, but I feel like I should be responsible and pick it up. I picked it up at the back of the cinema. It's the retailer Coles saying, "Yeah, we're taking it national. We want to announce right now on national TV." I'm like, "I'll call you back." I was like ...
EÜ: There was like explosions in the background.
DF: Yeah, yeah. I'm like, "Babe, we gotta go. I can't even talk right now, but we've got to go." We were not ready. We were not ready. It's funny, one month later, we had product on the shelf. To be honest, that was so impossible, but all of our suppliers, they watched that two-week campaign and I think they probably said, "Heck, if you can pull that off, we're going to pull off... "
EÜ: Yeah, we'll rise to the occasion.
DF: Yeah. That's what happened. Everyone rose to it. It nearly killed us, but we got on shelf and the rest is history.
EÜ: Clearly, the cause is part of what helped you build such an amazing rapport with your customers.
EÜ: What effect do you think that also has in terms of building your relationships with your suppliers?
DF: Yeah, I think what we offer for suppliers is an opportunity to be part of something bigger. I think that taps into just that part of every person that actually wants to make a difference and I think it's there for everyone in the world. We definitely bring that to our suppliers, but there is a very strong commercial foundation. In the early years and in the start of the book, people read this story of a factory manager, John, who just backed it and said, "Yeah, I love it. I'll make your product. No upfront cost." That was cool and that was ...
EÜ: Wow! That's huge.
EÜ: That just does not happen. You're saying it so nonchalantly. I want to make sure that people understand that this is highly unusual.
EÜ: This does not happen.
DF: It doesn't happen. That was our fifth pitch and it was… . There's a few parts to that, but you're right, it doesn't just happen. We have these examples of like, "Oh, cool, the cause really carried it," but even that pitch, we land a deal, and we leave that factory a year later after two product recalls, after a no supplier for five weeks and in five weeks, we lost 90% of our customers one year into our journey. Yeah, and the whole thing came crashing down.
What I learned was good cause, yeah, that gets people excited. But if you're at the bottom of their priority list, you can't build a sustainable business off that. Each of our suppliers now, we've got seven suppliers, I don't know, 9 or 10 factories now, but each of them, the foundation of the relationship is commercial. The fact that they get to be part of helping change the world is a really good add on, but that does wear out and everyone's passionate about different things as well.
DF: Even with the retailers as well, if they don't make the same margin off us as other products, we get deleted just straight away. It's a very cut throat market and we've had to learn to play that game.
EÜ: Right. It's still a business even if it's a business with a social heart.
EÜ: Looking back, is there anything that you would do differently?
DF: At the very beginning, we were really naïve basically. The things we'd pitch and ask for. I think we tried to be professional. We'd wear our parents' suits and we'd in meetings, people would say stuff and we'd just nod and smile pretending we knew what the heck was going on, but we didn't. It's interesting because we were so uncomfortable in our own skin. We were so nervous with our age. I was 19 at the time. We had no experience and we were almost trying to hide that.
The truth is if I could go back in time, I would just be a little bit more comfortable with who we were because the truth is I think even now in meetings, I have these big meetings, someone will say an acronym or some word, and instead of just pretending to know what the heck they're talking about, I'll be like, "Hey, sorry, what's that? I don't understand what that is." Everyone will look at me like, "Oh, you can't. You can't ask that question." I'm thinking, "I bet you you don't even know." Everyone just playing along. I think we should've got a little more comfortable with ourselves quicker.
EÜ: I love hearing all of your insights and it's really great also to hear you giving the shout out to your mentors, and I think that this has been a theme that comes up repeatedly in Xero Gravity is the importance of mentors.
DF: Cool, cool.
EEÜ: It's so fun to hear these stories. Thanks so much for joining us on Xero Gravity.
DF: Thanks for having me.
EÜ: That was Daniel Flynn, co-founder and managing director at Thank You. Thanks for listening to Xero Gravity. Make sure to tune in next episode because we'll be joined by Kelly Slessor, the passionate founder and director of Banter Mob. Get ready for a conversation about how apps are changing and changing the way we do business. Have a great week and we'll catch you then.