Matthias Metternich — CEO of Art of Sport on Being a 5x Founder, Skincare for Athletes, and Pitching Kobe Bryant

June 3, 2021 by  Chris Erwin

Today we publish our 12th podcast episode.

This interview features Matthias Metternich, co-founder and CEO of Art of Sport, which is redefining body and skincare products for athletes.

We discuss growing up as the son of a German ambassador, starting his first company at 14, when Brexit devalued his investment capital, selling women’s smimwear, pitching Kobe Bryant, his 500 mile trek in the Alps, the fastest growing skincare line in the US, and the future of direct-to-consumer brands.

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Interview Transcript

The interview was lightly edited for clarity.

Chris Erwin:

Let’s rewind a bit. You had told me that you originally grew up in Germany. Tell me about that and your household.

Matthias Metternich:

I grew up in Germany until about the age of eight months. So it wasn’t my whole life. It was a very short moment. I was born there and then my dad was in the foreign service. So every three years we would get posted somewhere else. And so, from the age of eight months onward until really, I mean, even to this point, I’ve been moving around the world every two to three years. So we moved to the Soviet Union and I lived in Leningrad, then we moved to Los Angeles, then we moved to Mongolia, then we moved to the Middle East. And so there’s been a lot of transition in my life. So that was a very interesting experience, that was quite formative for me.

Matthias Metternich:

But went back to Germany for high school for about two or three years for boarding school. And then I continue to… I went back for college for a very brief period, and then always go back whenever I have time to see friends and family, but I’m a bit of a nomad.

Chris Erwin:

What was your father doing in the foreign service?

Matthias Metternich:

My dad was an ambassador. He represented the German government in different countries. So that meant that he would often be the man in charge to present German interests, build relationships politically, economically, drive through cultural agendas. And it was an interesting time because that was really… His formative years in the service were deep within the cold war era. So there was a lot of really exciting espionage, nuclear proliferation, all kinds of stuff like that is what I grew up with. And I do remember it was even a period where if your listeners remember their history, there was an east and west Germany for about 40 years.

Matthias Metternich:

And so east Germany had embassies in countries that west Germany didn’t. But when the wall fell and east and west Germany came back together, my dad was responsible for actually going to these places in these countries that west Germany didn’t have a political presence and taking over those embassies. So I remember a lot of the places I lived was right next to the “access of evil” types of Eastern Soviet bloc embassies, like North Korea and whatnot. And if I kicked the ball over the fence in the wrong way, there would be a military procession where they’d pass the soccer ball back to us.

Chris Erwin:

What a unique childhood. Now, did that peak your interest, and did you think about going into government or the foreign service?

Matthias Metternich:

So my family has been in the political arena for several hundred years, and there’s a lot of tradition there that I think my father espoused. But I think he was actually quite remarkably aware of how the role was changing in a more and more connected world. And what does a public servant, government figure head do in a foreign country where now you have video conferencing, you’re on a jet, you’re there in a couple hours. So there’s diminishing opportunities over time as we become more and more connected. And because of his role, he was also always interfacing with and exposing me to really remarkable walks of life, business people who are sometimes coming to China for the first time, like large industrialists, well-known household names who would be coming and stopping through the house and having dinner with us.

Matthias Metternich:

And you’d hear their stories about this global world that was changing and forming. And in that context of the diplomats role diminishing over time or sunsetting a little bit on golden era of what that diplomat would do. And I don’t want to take anything away from those folks doing that. It’s still a very important part of the civil society and political arena. But with that sunsetting and this coming online of this connected industrial world, for me as a kid, I saw very clearly the writing on the wall that committing my time to something that was sunsetting versus something I was actually passionate about, which was shaping the planet or trying to shape the planet in some way, that’s where my future was.

Chris Erwin:

And so speaking to that theme, which I think also relates to the compression and changing of information cycles and dynamics, you mentioned that at a pretty early age you had bought your first computer or connected to the internet and you were coding very young?

Matthias Metternich:

Yes.

Chris Erwin:

When did that first happen? Did that start in Mongolia or another country?

Matthias Metternich:

It started in Los Angeles. My parents bought it, and I was about seven but really I appropriated it fully when I was nine. And we moved to Mongolia, and Mongolia as a really pretty horrible…. Really beautiful country, but it has a very harsh winter, which can last upwards of six months. And so when you’re in a place like that, there’s only so much your parents are willing to entertain you. I found a lot of entertainment from the computer, and folks in the embassy who knew their way around this. And there was one guy in particular who was a bit of a hacker gadgets guy. And so, he gave me a running start at it, but I taught myself how to code because I wanted to make games for myself. I had exhausted the two games that I had.

Matthias Metternich:

And that took me on a journey into figuring out how to connect to the internet, talking to people all over the world at a time when very few adults knew how to do this. I felt incredibly empowered. And then I had the tools to come up with ideas and articulate those using code and using design. And I realized very quickly that my video games were pretty shitty because I was actually not a very good storyteller, but I was good at some of the code. And that’s where I started to lose myself in the world of storytelling, and design, and empathy, and understanding what connects with people and why people get inspired or sad or happy or excited. And I tried to weave that into my games.

Matthias Metternich:

So in a way it was a little bit of a workshop for me. I was a craftsman honing my own craft at my own pace with the world’s information, gradually coming online and being available online for me to learn from other people. It was a really powerful period for me.

Chris Erwin:

This reminds me of another interview that we did on the show with Christian Baesler, who is the president of Complex Networks. He was born, I think, in the late ’80s in Germany. So there must be something in the water there, because he also began coding at a very young age himself, or his uncle had bought him a computer. I think he was born within a month of the Berlin Wall coming down. And he was in a small town, and he felt the need that through his computer he can express himself through coding, developing games, and also through the internet, connecting with people that were outside of his community, craving that need for connection and new information and exposure.

Matthias Metternich:

Yeah. Very similar stories.

Chris Erwin:

After this, you then go and you do your undergrad, and that’s at… Did you say UCLA?

Matthias Metternich:

Yes, that’s right.

Chris Erwin:

You do your undergrad at UCLA. And what’s going through your mind while you’re there in terms of fast forward, you clearly have a very impressive entrepreneurial career, which leads to founding Art of Sport a few years back. Was this in your mindset when you were going through undergrad as well?

Matthias Metternich:

Yeah. So I started my first company when I was about 14 years old, and it was out of necessity. It was really not necessarily… I mean, I always had an entrepreneurial bent. I was intrigued by money, but it wasn’t a means to an end for me. But the idea of having something that someone wanted and being able to charge for it, was an interesting idea to me. And I remember, I mean, my first businesses were trying to sell my video games, and then it was actually building out a bigger video game library, where back in the day, it was fairly easy to just copy CD ROMs and sell those. And that was illegal obviously. But buying a video game for $35 and then selling a piecemeal for $5 a pop to a 100 kids was pretty lucrative.

Matthias Metternich:

It then snowballed into my first formal business, where I refurbished and sold computers in bulk to schools and to small businesses. And I would have ongoing service contracts where I would keep them updated, and fix those computers. And it was a really, actually pretty easy job for a kid in high school. And the pocket money was really good.

Chris Erwin:

Wait, so I have to pause there. So did you have a team that was helping you to do this or was it all by yourself?

Matthias Metternich:

It was all by myself. I didn’t have a driver’s license. So I would have to ask older friend in high school if they could drive the computers around in bands and stuff like that to get places. But I never employed anybody. It was just myself. And then I was part of the Computer Lab Society and whatnot. And there were folks there that were just excited to help. And I also was on the basketball team. So I sold these computers to the schools I was playing against. And so, sometimes I’ll try to put the computers on the team basketball bus and transport them that way. But no, it was a great to work. It was a great way to learn. And then that’s snowballed into one day walking down to my local staples and I needed business cards.

Matthias Metternich:

I realized I needed to have some way for people to call me. And so my parents were kind enough to have set up a dedicated line in my room. And so I went down to staples and had these business cards printed, and I didn’t have that much money. And there was this offer, I think, for small businesses for 10,000 business cards or whatever for $100. It was a special or something like that. But you had to let them put the staples logo on the back of the card. And it was essentially their version of us know co-marketing that day. And I took it because it was the cheaper route. But then when I started putting those through mailboxes and small businesses to help them build websites and stuff, people thought I worked for staples and they actually called me back. They called me back probably at a higher rate than if I didn’t have the staples logo on the card.

Chris Erwin:

That logo gave you legitimacy.

Matthias Metternich:

Gave me a legitimacy. And because I was doing so much of this remotely, they very rarely… Fortunately puberty hit me when I was about 14. So I had a voice that occasionally cracked, but sounded a little older, and they had no idea who they were working with. So I then started building websites. And by the time I got to college long way of telling you… Long story here, but by the time I got to college, I had a few businesses under my belt that I was running. I felt it was the most empowering and exhilarating experience. I had done lots of mixed media things, where I tried to make music, and produce music, and made websites, and build computers, and tried build apps.

Matthias Metternich:

And so, for me, it was very strange to think of studying something to go within into a function, into a single domain, or expertise, or functional expertise, or focus, when I was already relatively fluent. I’ll be amateurish across all these different buckets that I felt were… When you paired my experience back to how that manifested within academia, those were all separate degrees and people were studying those things separately. So, I fell out of water. I felt weird about what I was doing in college. I felt like a complete fish out of water also just culturally. It was tough for me to connect with kids who had probably mostly grown up in the same town or same city, and were going to college in their same city. And I started another company while I was in college. So to answer your question, yeah, the intention was always to build businesses, but never just to build businesses. It was because I loved the process of making things and seeing opportunities, and asking myself questions about where the world was going, and then try and articulate those.

Chris Erwin:

Wow! So when you say that you had fluency in a lot of different, call it the capacities and how you build a business and how you run a business, and that you felt that those were modularized when you were in undergrad and that’s not how you looked at it. What did you perceive as those core competencies that you had already figured out by your undergrad years?

Matthias Metternich:

I don’t want to overstate it. I mean, I still knew nothing about very much of anything, and probably still don’t know anything about anything.

Chris Erwin:

Beginner’s mind is a good place to be.

Matthias Metternich:

Yeah, absolutely. But look, this was still a time in an era where somebody who could use Photoshop fluently and design something leaks ahead of entire digital agencies that were just starting to become proficient in digital stuff. I mean, this was 2004. And so, I don’t want to overstate my skills, but by that point I was fluent in Excel, and basic financial modeling, building up PnL, and managing that, and forecasting and that sort of stuff, pretty rudimentary arithmetic. I was fluent in designing things, both physical and not structural design, but physical media billboards, or postcards, or whatever else. I was packaging and so on.

Matthias Metternich:

I was pretty fluent in designing digital products, whether those were app style products or just informational websites. I’ve had experience copywriting and telling stories that I thought could lead to consumers clicking on things, and seeing things. So I had some proximity to search and search optimization. I was fluent a little bit in having talked to people who were open to putting some money into my projects, which at the time I wasn’t really familiar with institutional capital, institutional investors, or even angel investors, but I understood what that-

Chris Erwin:

You had bootstrapped everything yourself to dig, right?

Matthias Metternich:

… totally. Yeah. Bootstrapped, but also with the luxury of safety net for my parents. I wasn’t paying rent. So, it was the best time to be trying things, because I still was fed at the end of the day. And so, when I looked at college, it was a case of saying, okay. Well, there’s, there’s an accounting degree, there’s an economics degree, there’s a bit poly-psy, which I felt like I had from home. There’s the design school. Okay. That seems pretty limited. And where does that lead from a career perspective? And then none of those things had really tentacles that led out of the institution into the real world.

Matthias Metternich:

So all these kids were studying this thing within this echo chamber and then going to a job fair. And I just thought that seems so backwards. You’d want to accelerate your craft and accelerate your learning into something actually relevant in the real world. Those things shouldn’t be distinct, where there’s a learning center and then there’s the real world. Those things are probably the same space. And there’s no reason why you can’t learn on the job.

Chris Erwin:

And speaking of reaching your tentacles out into the real world, is this around the same time when you sneak into, I think a speaking event of the founder of MySpace, Brett Brewer?

Matthias Metternich:

Yeah, it was. It was actually my… I want to say it was my sophomore year. And UCLA business school, these are young executives or corporate leaders coming back to get their MBAs. And here is this 19 year old kid who’s loitering around their departments and walking into the buildings, and just walking into different classes. And there was a business plan competition for its students. I think the best business plan was going to get $10,000 or something like that. And I went around asking different MBA students if they’d be willing to let me join their team, because I personally couldn’t really apply myself to this. I wasn’t a bit in the business school. So I could be part of a team, but I couldn’t be leading it. And two guys were kind enough to take me on.

Matthias Metternich:

And basically then I worked with them to come up with a business plan and design the deck, and do the financials, and do it all with them. And during one of the mentor classes, Brett Brewer was speaking. I’d snuck in to attend this. Again, I’m never really allowed to be present in these spaces as an undergrad. And Brett Brewer was standing on stage and he was being interviewed, and he went to UCLA as an undergrad. And the moderator said, “Tell us about your college experience.” And he said, “I snuck into the business school as an undergrad. I met somebody who was talking on stage and that person was able to help me enter into the internet space as I was running a company from my dorm room.” And of course that spoke to me perfectly, because that was me.

Matthias Metternich:

And I felt almost like he was talking to me and inviting me to come talk to him, which I did afterwards. And I walked up to him and I told him this, and he was incredibly gracious. And I bumped into him since a few times and I never let him forget it. But he was my first real person that had built internet companies, built successful internet companies, embodied in a person, and was willing to talk about the inner workings of the tech industry. And at a time when very few people were trying to be tech entrepreneurs. Now every day there’s a new startup. But then it was really hard to get an understanding of, how do I enter this space? Who are the players? What are the rules of the game? How does it actually work?

Matthias Metternich:

And at least what he did was, he looked at my business plan and I showed him the products, and he saw talent and he made introductions. And he made some introductions to some very interesting people who have become tech Titans and were tech Titans then, and have continued to be tech Titans now. But that was one of the most formative moments for me, where it was really a validation of, okay, someone great things that I can play ball. And I felt like I had been basically recruited onto a team. I wasn’t a starter, but I had at least made it into the NBA. And the question was like, what do I do with this?

Chris Erwin:

My next question is, so you graduate from UCLA. And in terms of your next step, was it directly inspired or related to your relationship with Brett or something else?

Matthias Metternich:

I wouldn’t say it was directly inspired. What I was doing in college, my company was essentially a creative digital agency. But I only did that so that it could cash flow into my real passion, which was to incubate our own products. And I did that because I didn’t really want to be dependent on outside capital and raising capital. And I wanted to actually have good bread and butter work coming in, people getting paid, and then use whatever leftover cash to come up with our own products that we owned entirely and can scale maybe into an internet company. And that was the real business model. And in a way, because of my proximity or at least my exposure to Brett and his way of thinking, and then all these other folks. I don’t want to overstate the relationship at the time, but definitely he was an inspiring figure locally. I continued to build this agency with an aim to try and launch new products.

Matthias Metternich:

And right at the time I was graduating, there was an opportune time for me to exit the agency and sell it to my partners. But also I had heard of a couple of agencies in London that were really remarkable working with really big clients, and were the ideas of the digital arena. These think tanks that were also creative. They knew about marketing, but they were also about creating valuable products and services. And these were bigger agencies. And I hadn’t really realized there were big agencies doing this. And so I decided to move to London and joined those firms, and then start firms like that with them. And so that gave me exposure to a ton of global brands and really big brands and exciting big projects that I would have never ever done in my small studio. But I was serving global clients very quickly at a young age, working on some very challenging and complicated platforms and services and products across insurance, across consumer goods, across whatever it was. And so I had some really remarkable opportunities in that context.

Chris Erwin:

I think that your agency/incubator was called Popsicle Vision.

Matthias Metternich:

That’s right.

Chris Erwin:

And so did you end up selling it to a London-based incubator?

Matthias Metternich:

No, I didn’t. I sold it to my local partners in California, and then I moved to London to join this firm.

Chris Erwin:

You move to London, you kick off this journey. Is this your first career moment where you’re actually working for someone else?

Matthias Metternich:

Yeah.

Chris Erwin:

It’s not a business that you had founded?

Matthias Metternich:

Yes. That was the first time working for someone else. And I had the opportunity to sit down with the partners of this firm, and they had no idea what to do with me. And I had no idea what I was going to do there. And credit to them they said, “Well, why don’t you just hop a board and see what happens? And you can help us with the business and help us think about building the business because we’re also stuck serving all these clients. Maybe you can pull out to [inaudible 00:21:24] and help us understand what services we’re offering, what should we should be doing more of, whether it’s intellectual property that we could maybe build out.” And I was thinking very much from Silicon valley startups, building tech companies, building products and services. And these guys didn’t really have proximity to that in London.

Matthias Metternich:

I was put in a role that was very fluid and they gave me a lot of runway to do whatever I wanted. To the extent that one day I got a call, and I could barely understand. It was a very thick accent. And I hung up a few times, and they kept calling back, until they finally said, “Hey, we’re a publicly listed $10 plus billion telecoms company based in Istanbul. And we’d like to fly you out to Istanbul.” And I looked over at one of the partners and I said, “I think I’m going to go down in Istanbul and talk to these guys. I have no idea who they are, what they want, but it sounds fun.” And I got on a plane and I went down there. And sure enough, it was the biggest company in Turkey, 90 million plus subscribers.

Matthias Metternich:

It’s Turkcell, it’s the largest telco company down there, huge offices, beautiful offices, huge budgets, massive projects, total desire to transform their organization, build all these new products and services, and no real domestic talents, no real Turkey based agencies, able to pull any of this stuff off. And so there I was feeling like a kid in a candy shop, and also feeling really comfortable in that environment, having lived in all these different countries, where I basically called the partners back in London and I said, “I’d like to build the agency here. We’ll share the business. And I’ll drive business back into London. I’ll use the portfolio and we’ll see where it takes us.” That was a chapter that moved me from London to Istanbul.

Chris Erwin:

So I have to ask Matthias, if I’m following your timeline right, you’re right out of undergrad call in your early 20s, maybe mid 20s max?

Matthias Metternich:

Yeah.

Chris Erwin:

I assume that in the London office, looking around the different cubicles, you have people that are right out of undergrad analysts, junior level, and you’re getting calls from major executives in Turkey that are then flying you out. So it feels like your role is more like that of a partner. Is that what it felt like to you and did that felt natural?

Matthias Metternich:

100%. Totally felt national. It wasn’t pretentious on my part. It was just that I also wasn’t… In some cases I was noticing these junior staffers or mid-level staffers were vastly more proficient in the one skill they’d been honing for years. So I wasn’t going to compete with them. And also I didn’t want to compete with them because I wasn’t wanting to work within that silo. And I didn’t see myself progressing from a junior level person to a mid-level person, to a senior level person within that function. And then maybe get into graduate into the executive suite that never really made sense for me, because I was perfectly proficient by that point to speak relatively fluently with partners about some of the actual business challenges and some of the business logic, and what we should be going after or not going after.

Matthias Metternich:

And so, when you’re in that growth mindset of making things and creating things that isn’t limited by the bread and butter of what you already do, then you’d just by definition, get to live at a more fluid state. And by the way, it wasn’t just me being exceptional or anything like that. Consultants have the same privilege. There are a lot of second or third year analysts out of college who work at McKinsey or Boston Consulting Group who have exactly the same experience. Because that’s what they do. They get to parachute into an organization and work with the senior leadership on what the future should look like. So it was unique to me, but I was doing it within a function that wasn’t necessarily the big four cost and consulting or McKinsey type places.

Chris Erwin:

I think you assumed this consultant advisory role for around five years after undergrad, before you returned to the US. Is it true that you bounced around to a few different companies? And I’m probably pronouncing this wrong, but Poke MEA and a global partner at Aqua.

Matthias Metternich:

Yeah. AKQA.

Chris Erwin:

Okay. AKQA.

Matthias Metternich:

Yeah. So these are two of the sort of leading digital transformation agencies. And I worked with clients across the gamut of industries. But when I was sort of tired of doing that because we sold the agency to publicists and then AKQA had been sold to WPP, I wanted to go back to building products cause that’s what I was doing, advising clients, that’s what I was helping them think about. So I wanted to go back to building my own company. So I started an enterprise software company that was backed by a bunch of venture capital funds in London, and spent three years building that. And that was an enterprise software business in the FinTech and marketing automation space.

Chris Erwin:

And what was the name of that company? Was that Believe.in?

Matthias Metternich:

Yeah, that’s Believe.in.

Chris Erwin:

I look at what you’re doing now at Art of Sport, which is you’re disrupting the body and skincare industry. And there’s also a major intersection of media around the talent network that you’re building out, very different from enterprise software. So was your heart in this product that you had created back then or, hey, you perceived opportunity, you had a unique set of skills. There was a moment in time.? Or was it something that you were generally very passionate and interested in as well?

Matthias Metternich:

I can be very quick to fall in love with opportunities that don’t exist in the white space. And so because I think the world of having built different things in the fluid nature of digital businesses and products and servicing all these different clients, and some might have been banks, or insurance companies, or race teams, or Skype, or [inaudible 00:26:37], seeing all these different types of companies, I think you come away with an appreciation for different types of businesses, at least a fidelity of understanding what the rules of the game are within those different verticals.

Matthias Metternich:

So when you see, hey, I can bring this design thinking, or this distribution differentiation, or this ability to scale to something that hasn’t been done before, I tend to fall madly in love with those. So I love B2B businesses, I love B2C businesses. But with Art of Sport, it was a very clear white space to go after, creating the first sports brand to define application what you put on your skin every day. And so I took inspiration from Nike, and Nike did that for decades with what you wear. Gatorade did that for decades with what you drink and defined what that should look like. And really built a team that was focused on the athlete and creating real cultural residence, but no one had ever done it in the skincare space.

Matthias Metternich:

And I felt that was a huge opportunity having played sports my whole life, and knowing the category, knowing very well that consumer who chooses a brand tends to stick with that brand for decades. And that to me, was a very powerful opportunity to not just define what the Nike of skincare should look like, but also have that proximity to a consumer who applies this to their skin every day for the rest of their lives.

Chris Erwin:

And before we go deeper into art of sport, actually want to go back to when I think it was the early days when you were actually really interested in the intersection of culture and commerce. You had founded, I think a digitally native brand called COCODUNE back in 2014. What’s the story behind that? Because I felt like that kicked off your artist sport journey in a way.

Matthias Metternich:

It did. I mean, it transitioned me back to the United States and I saw an opportunity where I want him to get in on the e-commerce game. And what I liked about e-commerce compared to software was, I liked the idea of a physical asset. And I liked understanding the balance sheet from the perspective of future earnings and lifetime value of consumers to individual one-off orders, where you’re selling a product, and you’re making it for X and you’re selling it for Y, and you have the potential to scale that business off of that model. And so I was very intrigued by the fundamentals of e-commerce. I was very intrigued by what I was seeing in the social media space. And I was interested about every product having its own set of variables that expresses what I call the physics of that opportunity.

Matthias Metternich:

So certain products weigh a certain amount, certain products you can sell for a certain amount, because there’s ambiguity about the actual cost of making them. Certain products are hard to shop for in the real world, therefore they’re more suited to online. Certain products haven’t seen a lot of innovation. So there’s a lot of really interesting questions to be asked about a category. And I honed in on what I thought was a very interesting one, which was swimwear for women. And it sounds crazy. And I certainly had a lot of people in my world who thought I was crazy going from all the things I was doing before to bikini’s. But there was something really interesting in the fact that, okay, this is a product that weighs almost nothing. It’s a product that sold for 350, sometimes, dollars. It costs about between six and $10 to make.

Matthias Metternich:

And paradoxically, the less fabric there is the more expensive these products are. There were all these friction points that I saw, plus all of these variables within swimwear that I thought, “Hey, this might lend itself very well to be commerce, especially if we can predict the integrate, especially if we can create a really seamless experience for the consumer trying this product on at home, free shipping and free returns. Maybe we send them a several sizes so that they can find their size without friction, and they could send back what they don’t like, because there’s that lower weight.” And so therefore the shipping rates aren’t going to necessarily be arbitrarily that much higher or lower, depending on if we send them actually more inventory, we can always bill them retroactively. In some cases.

Chris Erwin:

That’s like the Warby Parker model in a bit.

Matthias Metternich:

Exactly like the Warby Parker model, except with eyewear you choose one model and you stick with that. You don’t really explore things. But with fashion, you might go with the polka dot one, you might want the black top, and you might also want the striped one, and you might want this color, and so on. So there was a lot of opportunity for cross and lateral selling. We also were making silhouettes that were sometimes very fashioned bourbon. And then sometimes we were making them a little bit more sporty. And people who are swimming or going on holiday, in some cases, were buying four or five, six, seven, eight, nine pairs of swimwear, and then those fade, and then you buy them again for the next season.

Matthias Metternich:

And so, there was a very rationalized construct behind why I did this. And one thing that I had learned from that business that was so interesting was, one, people buying things online and what triggers them. But two, we had a, surprisingly, very successful offline business through wholesale. And I remembered we had these two young women who were hosting a pop-up in Nantucket of all places. And they have this tiny little store, and they asked if we could send some product. We sent product, and the next day it was gone, sold out. And then we sold more and it sold out. We sold more, it sold out. And we were doing tens of thousands of dollars for this one, tiny little pop-up in Nantucket.

Matthias Metternich:

And I remember thinking to myself, this is actually putting some burden on our inventories, it’s annoying actually. I mean, it’s great that we’re getting this revenue, but we’re trying to build an e-commerce business. And I remember ignoring the wholesale business. And I remember thinking to myself, the offline business is not what I want to be building because I was buying into this mantra that it was all about pixels and not bricks. And have everything centralized in the warehouse, low cost of operations, warehouse vertically integrated and ship it. Have those DTC metrics really prove out because you can scale it into a unicorn.

Matthias Metternich:

And I was never delusional enough to think that I was going to be as big as Warby Parker, but I did remember hearing that Victoria secret had a $500 million swimsuit business, and they were discontinuing swimwear. And I thought to myself, there’s a big of an opportunity to get something like this to 100 or 200 million revenue, except I can’t get distracted by wholesale. And so I remember as we started to try and rationalize the business and figure this business out, we neglected the wholesale business. We also found that the cost of acquisition was creeping up because social channels are really saturated and becoming more and more saturated. And so we ended up leaving that business where we were selling it for… We sold it for parts. We had different types of attributes and assets that were interesting to a different parties in different ways.

Matthias Metternich:

And that’s how we moved off of that business. And it was also an interesting time not to get too lost in the weeds here, but I raised a bunch of capital from fashion and tech investors in London because I had been in London and I was operating out of California. And my capital was partly held up in pounds, in British pounds, Sterling. And when Brexit happened, the pound massively devalued against the dollar. Part of the reason we ended up selling it for parts is because we were in a position where an enormous amount of our runway basically disappeared overnight with the de-valuing of the British pound when Brexit happened.

Chris Erwin:

It’s one of those things that you can never anticipate.

Matthias Metternich:

Never anticipate.

Chris Erwin:

It’s like you’re building a startup. You know you’re going to have many headwinds. And this is, as they say, the unknown unknowns.

Matthias Metternich:

I’ve always said this, everything that could possibly go wrong doesn’t help describe enough how many things can go wrong when you’re building a startup. And that was one of them where I just was thinking to myself, “This just can’t be possible. How are we going to position where the future of the business is dependent on currency exchange?” That’s insane.

Chris Erwin:

So I’m curious, because looking back when you were growing up, Matthias, you had bootstrapped companies that were cashflow positive, recurring revenues through these amazing service contracts with the schools that you had structured in your teen years, which is very impressive. Then you go into raising capital from other investors for enterprise software at Believe.in, and then for COCODUNE. And then you have… These aren’t material exits for you they’re challenges. And so does this start to dissuade you from, “Hey, the next company I built, I’m going to do differently?” What was going through your head?

Matthias Metternich:

That’s a great question. Because I think that that’s really fundamental to, I think, of a lot of entrepreneurs journey is when they think about the venture capital versus self-funding and profitability. And I had this conversation just last night with someone, where… I mean, look, it depends partially on your risk profile and what you’re in the game for. I’m motivated by money. No question. I mean, we all are in some ways. But I’m also motivated to make something of my time and I want to make sure that I’m doing stuff that’s exciting to me. And as much as I can. And the idea of spending 15 years building a cashflow positive business slowly, but surely it doesn’t necessarily appeal to me.

Matthias Metternich:

I mean, I like the idea, but that’s slow going. That’s a lot of risk that you’re taking on yourself. And this is the really, the big point of discussion me, is if you look back historically… And I like to think of myself as somebody who studies this a little bit and you look back to the 17th century, 16th century around businesses, most of these were family run, small operations that had a really tough time getting loans, really tough time having any liquidity whatsoever, really tough time being able to fund inventory.

Matthias Metternich:

And so we’ve migrated over hundreds of years to a place where access to capital is not only available in the form of these really great debt instruments, but we’re also talking about a new frontier in asset class, which is called venture capital. And venture capital provides capital to entrepreneurs with ideas at stages of their development, where they have no idea how it’s going to shake out. And it’s right at the beginning. And not only that, the capital’s available at prices that are very, very effective and accommodating for entrepreneurs to own. Most of their intellectual property that in into itself is an enormous privilege, that we live in an era where theoretically, you could raise a million dollars or more for 20% of your business. And there you are with 80% of your business and a million dollars, and hopefully a good plan to go and execute this, but you have the whole world ahead of you to go after.

Matthias Metternich:

And depending on the type of business, it might be 5 million, it might be 100 million, it might be a billion dollars. But we are in this very unique period in our world, in our lives, where we get to articulate ideas, we get to get funding for them, and we get to own meaningful stakes in those endeavors. And typically, you get to do that with relatively limited downside of personal risk in the way of liability. And that, to me, fundamentally from just a historical perspective, the time that we live in a generational perspective is one of the greatest, most remarkable things that I’m privileged to experience in this era. And so, to that end, it’s a case of all… I mean, excuse my French, and you might have to bleep this out, but why wouldn’t I fuck with that? Why wouldn’t I go after that? Even if the risks are such that you lose everything at least on paper. You fail the endeavor. Okay, fine. Get up again and try it again.

Chris Erwin:

I’ll poke one part of that, because this has come up something that I think about for myself and also from some of my peers is, Matthias, the argument that you just made in terms of the financial opportunity, the risk profile and ownership is very compelling. A potential counterpoint though, is that if you’re doing, say, a 15 year cashflow business versus a venture funded business, the pressure from investors, the feeling of a bit of lack of control, and that you have to grind, and this word hustle, which is increasingly going out of fashion, could be very unappealing to entrepreneurs that are like, “Look, I want to work hard, but the classic venture hustle maybe is not and I don’t want to burn out early.”

Matthias Metternich:

100%.

Chris Erwin:

There’s certain operators, maybe like you who have more grit resilience, and are actually better at finding the balance with a venture business.

Matthias Metternich:

Yeah. I think those are valid points. I don’t think those things are mutually exclusive. And I think you have to ask yourself, who am I, and what do I want? I think that if you’re going to take venture capital, then you can’t delude yourself to think that you can somehow not play the game. You’re entering into a contract that is just like any pro athlete. The expectation is that, “Okay. If I’m going to go sign for the NFL and play for a franchise team, or the NBA, or MLB, then I’m expected to put my life into this thing,” because it’s an opportunity. That’s an enormous privilege. But it also in the case of the startup world, the upside could potentially be enormous.

Matthias Metternich:

And so from that perspective, I think it’s a mindset. And I think it’s really about asking oneself, “Am I that person,” or does that just really sound cool and sound fun? Because you’ll very quickly realize that, “Hey, if you’re not willing to put that time in and willing to orchestrate or structure your life to prioritize that as the number one, because you’ve entered into this contract, then maybe you shouldn’t play in the professional sports,” at least if venture is… We’re calling professional sports for this analogy sake. I 100% here you. Look, I think amongst entrepreneurs and most of my friends are entrepreneurs and they’re venture backed, and many of them are also self-funded, there’s always that discussion.

Matthias Metternich:

And I think some of them that are funding it themselves can really stand there and point to having built something slowly, being able to control their own destiny, being able to pay themselves what they want to pay. And they’ve gone through that ringer in the wars in ways that venture capital folks or venture funded people might not have gone through. And I think a lot of venture-funded startup entrepreneurs look at people who own their whole businesses and are, let’s say cashflowing positively with massive admiration, because they know what tip to get there. But the stresses within venture capital are very different, and turning something from zero value into 100 plus million valuation in three or four years is also extraordinary.

Matthias Metternich:

From my perspective, it’s all good. But still it’s a privilege and it’s an opportunity, and it’s a flexibility that the entrepreneur, the operator has never had historically. All of those instruments that are available to us, all come with different conditions, different expectations. And I think one thing that I think entrepreneurs also get wrong is they point often at venture funded businesses and look at those boards. And they say, “By definition, the pressures are going to be crazy. Expectations are going to be out of saying, everyone’s going to expect to make a shit load of money really quickly. I don’t want to do that.” But that is a trope.

Matthias Metternich:

Because I’ve only had experiences where my board is aligned, where my investors understand the business we’re in, they understand the challenges, they understand not exerting too much pressure onto something and doing something that’s super inorganic or unhealthy. And so, I think it’s on the entrepreneur and on the partners to all find alignment and understand the physics of the game that they’re in. And that alignment will create solid expectations and solid foundations for running something that is hot pressure cooker, but it’s within reason and it’s within rationale.

Chris Erwin:

In a way to sum it up, I think it’s important to know thyself. Know who you are and also know the people around you that you’re getting into business with. Hey, listeners. This is Chris Erwin, your host of the Come Up. I have a quick ask for you. If you dig what we’re putting down, if you like the show, if you like our guests, it would really mean a lot if you can give us a rating wherever you listen to our show. It helps other people discover our work. And it also really supports what we do here. All right, that’s it, everybody. Let’s get back to the interview. So look, speaking of sports analogies, I think this is a great transition point to talk about the founding of Art of Sport. After COCODUNE, you ended up founding Art of Sport. How did that come to be?

Matthias Metternich:

Well, it came to be because I was coming out of that pressure cooker, and I was looking for my next one. But I also was looking to roll my experience, building products into something where I would avoid the same pitfalls. I’d be able to do certain things a little bit better. And really, it was just a matter of time before landing on a big idea that I saw real passion for and excitement for. Only this one, Art of Sport, was one that was very, very deep to my heart. I was introduced to Brian Lee, who’s my co-founder in Art of Sport. And he’s had an incredible career and someone I really look up to. He founded LegalZoom in his 20s. The defacto online legal platform in the country, is just remarkable.

Chris Erwin:

The trademark for RockWater I think was done through LegalZoom.

Matthias Metternich:

Very good. And then he went on to found on his company with Jessica Alba, which was the first player probably since Pampers to go into the children’s baby early family stage arena with products that were better for you, made more natural, under the banner of trying to create a safe, happy world for children and young families. And it was a very exciting trajectory that he, took going from a D to C to an omni-channel brand. And I think north of a billion valuation. And so Brian and I have over the years, shared a number of venture capital investors who’ve invested in our businesses respectively. And there was a lot of good connective tissue there that facilitated our meeting and facilitated, our both as entrepreneurs, just rolling our sleeves up and starting to share notes on what we’ve learned in the past and what we want to do in the future.

Matthias Metternich:

And we landed on the very early innings of a rough idea around Artist of Sport when Brian visited Target and saw a bunch of copper tones sport sunscreens on the end of the aisle, and just, I think, probably being in the Headspace of having looked at brands and looked at formulas and wondering what makes a good formula [inaudible 00:44:54]. I think he asked himself, “Well, why is this sport formula? What makes it sport?” When he shared that idea with me, we walked the aisles together. We looked at the sunscreen aisle, and then we walked over to the deodorant aisle, and then we walked into the body wash aisle, and then we walked into all the other aisles of application and products and formulas. And we saw sport being used by a number of these legacy brands. And we asked ourselves, well, do we think of Coppertone or [inaudible 00:45:21] when we think of a sports brand?

Matthias Metternich:

Do we think of a sports brand when you see Axe sport blast or Old Spice, [inaudible 00:45:30], probably not. You really think of the Nike’s, the Addidases, the Gatorades, the Powerades, brands that were born on the field with the athlete, and developed by athletes and made for athletes, and that’s your north star. And everyone in the organization is serving that one unique mission. And we thought to ourselves, no one has touched the application. Nike, and Adidas, and Puma, and Under Armour, and you name it, they’ve touched what we wear, [inaudible 00:45:57]. We’ve got the Gatorades of this world and the Powerades, and the body armors, and the Vegas, and the RX Stars and whatever it is, and power bars that touch nutrition, and you put in your body. How is it possible that no one’s touched what you put on your skin?

Matthias Metternich:

And we intuitively knew that that was a huge market. And we intuitively also knew that application spans a lot of different types of categories and a lot of different types of products, and then there’s a lot of really interesting connective tissue into that athletic world through sunscreen. But there’s also interesting applications in pain and recovery, showering when you’ve been taking multiple showers in a week or a day, even because you work out so much and dry skin. The way you smell, the way you feel in your skin, feeling confident, feeling fresh, feeling ready to go challenge the day. We knew in our bones that there was something very big here if it could be executed correctly, and that was the Genesis of Arts of Sports family.

Chris Erwin:

And it’s interesting to hear you describe the story. So personally as a surfer, I look at different types of skincare and sunscreen. I would go down to the aisle like the CVS, and I would look at, okay, Neutrogena skincare and the Neutrogena sport, and then other brands are regular and then sport. And then I would look at the ingredients on the back and then be like, wait a minute, literally the exact same ingredients, it’s just branded differently. And I’ve found that very frustrating and also very confusing. What am I missing here? And then I think about, I use right guard deodorants. The one that I ended up using is Right Guard Surf. Now, is there anything related to surf? Not at all. It’s just the branding that I like, but it does resonate with me.

Matthias Metternich:

Yeah. Well, I remember when we were exploring the idea, we happened, I think quite serendipitously, to meet the guy who at Gillette, was the guy who created Gillette sport. And he was describing that he had no budget for any innovation. And there was nothing that was new about the product. It was the same product. And he had to figure out a path to creating something meaningful. So he slapped sport on the label. And I think it three X the business, and he was chuckling at that. And I was, on the one hand amused by it, and the other one, I was completely agas, that this is a proxy for that entire arena where sports been used as a marketing device, less as an actual purpose, and mission, and focus, and design with intention, and the same way that these other sports brands that we love have devoted all their resources to doing this.

Matthias Metternich:

And so, when we started the business, we knew we needed to be as authentic to the process and deliberate the process as Adi Dassler, who was literally cobbling shoes together for Jesse Owens at the Olympics, and Phil Knight at the University of Oregon, with people on the track and field. And we knew we needed to have deep proximity to the athletic community and have them deeply involved in our business. And I remember Brian and I thinking, well, who represents the kind of tenacity, and focus, and mental, and physical commitment to being the best version of yourself possible in the sports space, that has done so successfully that they’ve transcended their sports? And it really took us almost no time to say, “Well, that’s Kobe Bryant.”

Matthias Metternich:

And we asked ourselves, well, what would that look like if we got him involved? Do we think we could get him involved? And our paths took us to his door and we presented what we had, which was very rough at the time.

Chris Erwin:

How did you actually get to Kobe, did you go through his management or an agency?

Matthias Metternich:

Brian, had some, I think distant connective tissue there. They’d come across each other, of course, over the years. Brian’s been an entrepreneur in LA for 25 plus years. So, he’s made a name for himself. He has a great reputation. He’s got the Midas touch. And so doors open whenever Brian wants to talk to folks. But we also had really one of Brian’s old friends and somebody who was deeply involved with LegalZoom as well later in the business, was a guy named Jeff Stibel. And Jeff Stibel founded the Bryant Stibel fund when Kobe retired. And it was essentially one of his investment arms. And so we went to Jeff and we spoke to Jeff about the opportunity, and Jeff facilitated a conversation. And we went down to Newport and that’s how we ended up sharing the idea with Kobe.

Chris Erwin:

What was his reaction in the room? Did he immediately get it, or did it take a few sessions to explain how big this could be?

Matthias Metternich:

I mean, he just had this incredible beaming, natural charisma, incredibly handsome, charismatic, sharp, fun person, and walked into the meeting room and instantly commands the space he’s in, and sat down. And I had a bunch of samples from my factories that I’d been working with for several months on early iterations, new fragrances, and oils, information about the ingredients and why things were being constructed. We’d been working with some scientists that were some of the leading skincare scientists in the world to really cement the innovation and cement the formula standards around athletes. We have tested some of these with young athletes. So we had a body of work. It was really not a sketch on a napkin, hoping that he’d see the vision. We showed him the vision and we showed him our focus on how we would execute it.

Matthias Metternich:

And he sat there very quietly. You could tell he was very absorbed in the information. Instantly grabbed all the samples and played with them, and smelled them, and looked at them from all different angles. And then the first thing he said was, “How does this not exist yet?” That was a relief.

Chris Erwin:

It’s exactly what you’d want to hear.

Matthias Metternich:

That’s exactly what you want. That’s exactly what you want. But it was almost like this is too obvious. Am I missing something here? This is so obvious that maybe it’s not even an idea. Or is it such a big idea that it’s… It’s so obvious that it’s such a big idea. And fortunately for us, I think he had gone through the experience of building Body Armor. And Body Armor massively successful competitor in the drinks space, going after Gatorade, $6 billion business.

Matthias Metternich:

And he always had lots of proximity to that in the early stages, was an investor in the business. And they had, I think, just sold part of it for a billion plus to Coca-Cola. I mean, the timing was quite fortuitous, in that, you have to remember Kobe helped build the Nike brand, so what you wear, for 20 plus years. He was involved with them in China and everywhere else. Then he was involved in a beverage player and what you put in your body. And so it was only natural for him to see that sequence, and say, “Hey, I think I have a role to play in defining what applications look like.”

Chris Erwin:

Did he challenged you in any areas where he said, “Hey, this about the product design, the packaging, the ingredients, the perfume,” anything like that, where he had a pretty strong differing opinion from the start?

Matthias Metternich:

Immediately. So one of the areas that is always an interesting talking point is how do you design a sports brand that doesn’t just appeal to gym rats and hardcore athletes? How do you build one that transcends time? How do you build one that connects with all walks of life? How do you build a culturally resonant brand in the same way that Nike has done it, or Adidas has done it, because these are brands that people are wearing. Nine times out of 10 they’re not going for a run. Nine times out of 10, they’re wearing it because they connect with the lifestyle. They like the brand, they like the vibe, they like the aesthetics, and they feel it represents them and their values. And it’s cool. And so you have to have a very careful balance between those two things. And one of the areas that he was very adamant on and wanting to speak about in detail was, how do you stay resolutely focused on performance?

Matthias Metternich:

How do you stay resolutely committed to the athlete, and how do you not get too caught up in trends? And how do you not get too caught up with what Adidas is doing with all of its fashion labs, the stuff that takes it out of the lane of sport, versus Nike that remains deeply wedded to sport constantly and stays focused on that and still manages to create a cultural halo around it? So we were operating, I think, at quite a high level when it came to just general strategy and brands. That was an area he had a lot of passion for. And then he wanted to go away with the products and use those products a lot and pass them around to his network of athletes so that he could gather his own data rather than just assume that our data was accurate.

Chris Erwin:

And it feels like everything that we read about and that we talk about with our clients is, when you look at the chance to partner up with talent, that could have not only just incredible insights into unique product or unique audience, but the exposure, the audience that they can bring, their brand awareness. But if you solely rely on the latter of that relationship, you’re not getting the full force of everything they could bring to that company, that startup, that idea, that vision. And so it seems that you approach this with Kobe from the start thinking in a much broader way. Does this conversation happen… Because I think the company was founded around 2018 when you first had your seed. When was the Kobe conversation?

Matthias Metternich:

The conversation with Kobe was in 2018, and we launched the business in 2019.

Chris Erwin:

Fast forwarding a bit here, but him being a key integral thought partner to the business and an ambassador, and then the unfortunate circumstances and Kobe’s passing in early 2020, how did you manage around that? What was the direct impact of the business?

Matthias Metternich:

Obviously an enormous loss. And I think we were just shellshocked for months, and just trying to process the information was hard enough. We didn’t rush to just define the business, and define the impact on the business, and define what it would do to our bottom line, and these sorts of things. I think we were pretty deliberate. Not even deliberate knowingly, but just really prioritizing the loss of a partner and a friend, and someone we respected deeply. So that’s where our hearts were for a long time. And then when we started to come up for air, what we saw were athletes rushing to us. We saw the community come to us. We didn’t see people running away. And we saw people wanting to support us more, then we saw that the permanence, let’s say of his legacy, was even deeper in a way that is unfortunate when you see brilliant people, brilliant minds, brilliant artists, brilliant athletes pass away in their prime, they pass away too prematurely.

Matthias Metternich:

And so, the outpouring of love and support that we saw was enormous. We were a couple of weeks away from launching the biggest partnership of its kind with Target nationally in the skincare space. It was a huge, huge partnership. We’d spent over a year, quietly and carefully crafting. And Kobe and I were going to do a media tour to promote the brands. And, of course, the first folks that we ended up calling to let them know what had transpired and what we were going to be doing, and how things were going to continue to work was with Target. And Target were very supportive.

Matthias Metternich:

They were very keen to make sure that we didn’t actually heavily promote the brand when we launched, because we were all cautious of not wanting to be commercializing the passing of one of our founders, which was a pro and a con, because we were doing the right thing and we all felt very good about it. But it was also launching a new brand at that scale nationally and not being able to talk about it was a scary idea, because that’s the moment you really want to be talking about it.

Matthias Metternich:

And then we rolled from that into peak lockdown with COVID, which was also incredibly challenging for everyone. And so, a really tough time to launch a consumer brand offline, especially for us. That was one of the sort of unfortunate sequences of events that had the potential to put a really dark cloud over the organization, a really dark cloud over the team. But we came together as a team and just like in sports, you have to overcome some pretty devastating losses. And I think we really banded together to try and continue on with our mission, and things were looking very bright now. That was a testing time for everyone.

Chris Erwin:

So it raises the question in that moment where you had this outpouring of love and support for the passing of one of your co-founders. Did that also cause you to think about the business and say, “Wow, look at all these different relationships, personalities, potential partners that we can maybe think differently about how we’re building off of this magnetism and this energy that Kobe had created around his whole life. And there’s a way to actually take that energy and propel it forward in thinking about your talent network differently?”

Matthias Metternich:

Yeah. I think what we did was, when we started the business, we started with Kobe and we had seven other athletes. So we had a round table of athletes that we felt represented a cross section of America. We did that very purposely and intentionally because we believe sport is one of the great equalizers in this world. It’s one of the great ways for everyone to access it and participate. It’s inclusive by design and it’s diverse by design. And so, there’s something really special in that. So when we brought seven of the athletes around the table, we chose people from different sports, different ages, different ethnicities, different genders. And we gave them all platforms to participate in communicating what our brand represents, and why their followers should care. So my point is this, we were always believing that the brand and the story was never going to be told by one athlete alone.

Matthias Metternich:

It was going to be told by, and was going to incorporate lots of different perspectives. So our storytelling was as it was before. And to an extent, because we looked at Kobe as our business partner, only as our business partner, rather than an endorser of our deodorant sticks, we captured the mantras, we captured the guidance that he’s given us over the years, we captured that north star, we codify that mission and that purpose even more. We’ve retained, I think, the spirit of why we started this and why we’re doing things. So that became a stronger, more concentrated focus in the business and storyline. And we continued to believe that the story should be told by athletes of all different walks of life and stages of career.

Matthias Metternich:

And so I wouldn’t say there was a big transition in how we approached our storytelling or our media, but I will say that the legacy of Kobe is an important one for us to keep alive. We will find ways to continue to do that tastefully and respectfully in a way that continues to champion the fact that he did have his finger on this business. He helped design this business and he helped carry this business from its infancy into being sort of 15,000 plus retail locations. So that’s an important thing for me personally, but also for the organization at large.

Chris Erwin:

And speaking of your talent network, I have to give you kudos, because I think you’re reaching into both traditional and alternative sports, including Ryan Sheckler from skateboarding and Sage Erickson of surfing. So these are two sports that I grew up with that are near and dear to my heart. But I wonder with your talent relationships, what are their obligations to the brand? And as you think about building story around them, what is the media strategy that is included there?

Matthias Metternich:

Great question. I think that’s always shifting. It’s always changing, because, one, there’s always a cultural calendar. One sport is more active than another and has these moments of glory, and others are maybe dormant until the next season. So there’s a constant evolving cultural calendar. These athletes individually are doing all different things, both in and outside of their sport. So we try to understand the diverse nature of their minds and the diverse nature of their interests and try to play into those. I’ll give you some examples. Juju, for instance, has an incredible following on YouTube that he’s honed by playing Fortnight. And he does that with other social influencers, and with Drake, and with Travis Scott. And so he has this identity that has made him larger than life early in his career to the point where he’s one of the most recognizable football players in the league, even though he’s only in his second year. That requires its own consideration when it comes to architecting a media program around him that takes advantage of him and incorporates them in a way that he’s passionate about already.

Matthias Metternich:

With Ken Roczen, for instance, Ken produces a ton of amazing content of himself out in the track and training. He also went through a profound recovery, where he almost lost his arm and back, and the sport. He’s competing for a title as we speak. And he was involved in the pain cream, he was involved in helping influence that product, and recovery for him was a very big theme. And also the nature of his sport is one where they had just moved from outdoor mud tracks and whatnot to stadium races that were bringing 80,000 plus people into a single location where they could go to concession stands and get a drink, and then sit down, and watch this crazy sport unfold inside the stadium, which has led to enormous growth within that particular sport.

Matthias Metternich:

And it actually is drawing a very young consumer, 14, 15, which happens to be right squarely in the bullseye of some of the communication that we’re doing as these young men and women are choosing products that they care about that they’ll stick with for years, hopefully. So that requires its own media strategy. And what we’ve learned is that because that sport is less dominant when it comes to global and national sponsors compared to say the NBA, there are lots of pockets of media opportunity within that sport that we can afford. Whereas we can’t necessarily afford all the things that the largest brands in the world are buying when it comes to basketball and football.

Matthias Metternich:

So how that particular sport and community gets activated is also partially informed by the cost of playing in that sport. And so we’ve seen all of these really interesting arbitragable unique contexts, and we try to sculpt programs, both around the individuals who are ambassadors within those sports and what is important to them, and how to really leverage that and get them excited. But then also play it into the unusual and interesting dynamics each of those sports, whether it’s big, popular sports, or the more endemics action sports.

Chris Erwin:

Matthias, while we’re nearing the end of our time here, right before we get into the rapid fire questions. As we talk about unique personality and talent in sport, I think there’s also a member of your family, that was an inspiration for you, who is also an Olympic athlete. Tell us about him.

Matthias Metternich:

Yes. That’s very nice of you to bring up, and you’re right. He deserves his fair shine. My brother, Alex. He was born mentally handicapped, unfortunately. And he did not, I think at birth, get oxygen fast enough. And so I grew up with a brother who needed to find his place and come into his own in a world that was more challenging, I think, than it is now for someone with mental handicaps. And one area that he found a lot of passion from and fulfillment from was participating in the special Olympics, which he did throughout his life, in both swimming and track and field. I recall just the sheer number of the metals and trophies he’d bring home. Of course, I didn’t have any of those. So I probably didn’t recognize the effort and enormous commitment it took because I was probably jealous and in my juvenile state.

Matthias Metternich:

But I think he exposed me to, not just the world of sport, but the world that sport can mean to people of all walks of life, and in particular, that handicapped community that doesn’t necessarily always get to stand center stage and be part of the national dialogue. I think in some respects, that’s probably why sport to me is such an important vehicle for the messages we want to see in a modern society around equality and inclusivity and diversity, and especially in a time in an era that is so fractured. And hopefully, we’re coming out of that a little bit. But that is so deserving of social context and social realities for so many different people. I think sport allows me to exercise that language in a way that is inspiring and fun for people who engage with our brands. So yes, thank you for mentioning the Olympian within the Medtronic household. I don’t think he’d referred to himself as that, but it’s high time that we start doing that.

Chris Erwin:

I like how you ended the note, in thinking about how sports can create a great platform and channel and a way to amplify voices of different sports personalities that, like your brother, maybe didn’t get their share previously. All right. So closing note on Art of Sport. I think about lots of rumors about different digitally native vertical brands. I think of a way I think of Allbirds. I think of Warby Parker and even Anesco, that are thinking about IPO-ing this year, as the IPO markets have really exploded. And thinking about the future of Art of Sport, where are you headed?

Matthias Metternich:

We continue year on year to be the fastest growing skincare brand in the country. We’ve only recently, as of last year, started going offline. We started as a digitally native brand. We launched, as I mentioned, the largest partnership of its kind with Target, which was a huge launch for us, huge learning curve. As of two months ago, we launched into a further, call it 14,000 locations around the country. And our vision was always to be available to athletes wherever they are, wherever they play, and wherever they perform, and wherever they live, we want to be the brands that they can rely on, and find, and shop, and use. And so it’s always been part of our channel strategy to be on the channel.

Matthias Metternich:

Brands that we’re seeing considering going public. Some of them are pure digital players. Some of them are pure digital players that have some retail exposure through owned retail ecosystems, i.e., their own popups or their own stores away, and Allbirds are examples of those. And then some are brands that are digitally first, but have also leveraged large scale, big box retailers like Target, which is your honest company example. So they’re not all the same. And I think what that tells us is that every product has its own physics. It has its own potential. And each of these companies has to maximize the opportunity that best plays to the physics and the laws of the categories that they’re in. And these businesses have found channels where they can show consistent growth, they can show ongoing product proliferation. They’ve created great retail moments, whether those are owned retail experiences or through third parties.

Matthias Metternich:

And they’re feeling very bullish about the future and going public. On a personal note I think it’s always inspiring to see that. I applauded them for going that route. I think that there are a lot of… And probably this will exhaust our time, but there’s a lot of subtext behind a lot of these decisions that can paint a more complicated picture of what’s going on. And I think it would be remiss of me to not just mention the fact, of course, that markets are hot, interest rates are low, investor interest is high. People are flush with cash after a year of being at home. And so, these are also moves that are opportunistic, and they should be. I mean, that’s business, Moving into lanes and moments in time that are the best opportunities or moments in time to make those adjustments to your organization.

Matthias Metternich:

So, I think there’s a lot there that’s interesting from a timing perspective. It’s very educational. I don’t know how those will shake out for those organizations. But it is certainly one of the great liquidity events and liquidity moments for the operators involved. I think there’s been a lot more pressure on profitability. We’ve seen a lot of DTC brands go bust over the last two years. And so, the emphasis for many of these organizations I think has been to get to more sensible businesses. So hopefully, when they do go public, the economics will follow and it won’t be a black mark against other digitally native brands. But from my perspective for Art of Sport, we have a huge trajectory ahead. We’re just getting started. Three years ago we didn’t exist. And now we’re in 15,000 plus stores.

Matthias Metternich:

I see that growing, I see our product family growing, I see our relationship with athletes growing. And we’ve constructed a global brand with Art of Sport. Because sport is a global story. So we could, and we’ve seen a lot of gravitational pull to Europe. We’ve seen a lot of Asia ask us for our products, and the sky’s the limit. So my goal personally is to continue to be aware of what constitutes building a smart business, what constitutes smart opportunities given the times we live in. And to the points that we talked about earlier, make sure that I’m aligned with my board, and setting clear expectations that are not introducing severely inorganic or unrealizable business objectives. And if I can do those things well, then we can continue to grow at an aggressive clip and pursue these opportunities without embedding the firm and pursuing an all or nothing strategy. So that’s a long answer to your question, but there’s a lot to it. So it’s worth unpacking. Because I think about it all the time.

Chris Erwin:

Well, it’s okay. The next section is very, very short answer. So we will offset it. Before diving into that, a closing note, I always reflect on these conversations. And I think about what I’ve heard from our guests. And what I’ve heard from you, Matthias, is two things stand out. One, it is clear that… I believe you are a polymath. That you have an understanding about a wide variety of topics, particularly as it relates to business, but also beyond. And I think that gives you skills and ability, as well as also a network to build great companies and achieve many great things. But I think something that I’ve also heard that’s in between all of that, and I don’t know what the right term is for this, but that you have incredible passion for a lot of different areas.

Chris Erwin:

As you, I think said earlier, it’s not necessarily about just financial profit and motivation, but that you are generally intrigued and interested in challenges to the customer white space in business markets, and wanting to build something special to solve problems for your different constituents. And I think that that really sets you up as a very genuine and sincere entrepreneur, that then allows you to rally incredible people around you, like Ryan Lee and Kobe Bryant, some of the biggest names that anyone would ever want to have around their founding team in starting a new business. So big kudos on that front.

Matthias Metternich:

Wow! That’s incredibly generous. That’s incredibly generous of you. Thank you very much. I mean, that’s very touching. I’d like to think that those are principles I live by. And my goal is to be a student for life and to do things that transcend just the short term gains. And we’re all on this planet for a relatively short amount of time. And if we don’t think about those things, then I think things will go sideways for us and we might not be on this planet for as long a time as we otherwise could be. But I know who I’ll reach out to when I need an author for my obituary. I’m looking forward to having you commit to that soon, but thank you very much. That’s very kind of you.

Chris Erwin:

Very welcome. All right. So moving into the rapid fire. Six final questions. And the rules are as follows, very short answer. It could be one sentence or maybe just one to two words. Do you understand the rules?

Matthias Metternich:

Yes.

Chris Erwin:

Great. First one, proudest life moment?

Matthias Metternich:

I have to get back to you on that. Nothing stands out.

Chris Erwin:

We’ll circle back.

Matthias Metternich:

Okay.

Chris Erwin:

Second question. What do you want to do less of in 2020?

Matthias Metternich:

I want to do less worrying.

Chris Erwin:

Okay. And what do you want to do more of?

Matthias Metternich:

I want to do more creating.

Chris Erwin:

What one to two things drive your success?

Matthias Metternich:

Perseverance and self-loathing.

Chris Erwin:

That’s a new one. I haven’t heard that before. Next, advice for direct to consumer exact going into the second half of this year.

Matthias Metternich:

Keep an eye on your budgets.

Chris Erwin:

I actually want to go back to self-loathing. I need to have you expand on that a little bit. What do you mean?

Matthias Metternich:

I’d like to think I’m a critical examiner of things. But by default, that means you also critically examine yourself. And so, I think I like to think of myself as an empath as well. Somebody who cares deeply and processes things around me. But that also translates to critically examining my deficiencies when things aren’t going brilliantly. I put a lot of pressure on myself to try and get better, and haven’t yet gotten great at being myself in the process.

Chris Erwin:

Well, I like the spirit of kindness. Because what I just heard is extreme self-awareness, which is a very positive thing. A little bit of a better spin than self-loathing.

Matthias Metternich:

Okay. I’ll adapt to that.

Chris Erwin:

But it makes for a good podcast interview. All right. Last few here. Any future startup ambitions?

Matthias Metternich:

Yes.

Chris Erwin:

Let’s go back to proudest life moment.

Matthias Metternich:

It’s an odd one. I remember hiking a 500 mile trail through the outs and blowing out my knee in the process, about two thirds of the way through. And getting to Paris, looking homeless. And buying a little cheap razor that I shaved off my beard off of in the train station toilet, and then taking the train south to see my parents. And I was sitting and I anted up and bought a $50 ticket to sit in first class. And I think I remember just seeing a reflection of myself in the window with a clean shaven face and a fresh set of clothes, and having just gone through the nightmare of that track. And thinking, “Hey, it’s crazy, just a few hours ago, I was on the top of this mountain, and now here I am doing something completely different and feeling like a million bucks.” And I think it was just an affirmation of how much one can do in one’s life and how much I was trying to do with my time.

Chris Erwin:

I love that story. I think you’ve just seated our second podcast. We’ll have to spend most of the time talking about that. As a fellow outdoorsman, I’ve gone into back country. I’ve been snowboarding for about 30 years, but got into back country split boarding over the last couple.

Matthias Metternich:

Wow!

Chris Erwin:

And surmounting mountains with your own energy, and force, and mental fortitude, and then figuring out how to come down. Traveling the world, surfing new brakes, which can be really scary. Those are incredible life moments [crosstalk 01:16:54].

Matthias Metternich:

It’s incredible moments. Actually, if it’s of any interest to you, I started to look Indonesia a little bit more. [inaudible 01:17:02] understood philosopher, but he deliberately moved himself into essentially isolation in this beautiful mountain town in Switzerland. And by being surrounded by these mountains and going out into nature and summiting these things, came to the conclusion that happiness really was only accomplishable if you set yourself these obstacles, and that really resonated with me when I heard his views on how to achieve happiness.

Chris Erwin:

Happiness through obstacles. I dig it. All right. Last easy question. Matthias, how can people get in contact with you?

Matthias Metternich:

The fastest way to get in contact with me is buying a deodorant stick and then contacting customer service with some constructive feedback. And I’ll probably be the first person there to take your feedback so we can get better for you.

Chris Erwin:

Awesome. All right. Well, Matthias, this was a delight. Thanks for being on our show.

Matthias Metternich:

Thank you for the time. Brilliant questions.

Chris Erwin:

Man, hearing that story about his outdoor journey and then coming back on the train and shaving in the train station, I love that stuff. I might have to think about doing a separate podcast about outdoor adventures, but I digress. Anyway, we love to hear from our listeners. We’re always looking for ideas for different guests. Actually, I interviewed Matthias based on an inbound from one of his marketing executives to our email. So if you have any ideas for guests, you can reach us at tcupod@wearerockwater.com. Always looking for feedback for how we can do better and give you guys more ear delight. All right, that’s it. Thanks for listening.

Chris Erwin:

The come up is written and hosted by me, Chris Erwin. And is a production of RockWater industries. Please rate and review this show on Apple podcasts. And remember to subscribe wherever you listen to our show. And if you really dig us, feel free to forward The Come Up to a friend. You can sign up for our company newsletter at wearerockwater.com/newsletter, and you can follow us on Twitter at @TCUpod.

The Come Up is engineered by Daniel Tureck, music is by Devon Bryant, logo and branding is by Kevin Zazzali. And special thanks to Andrew Cohen and Mike Booth from the RockWater team.

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