James Beshara is a founder, an angel investor, a podcaster, and an author. Suffice to say, he’s a man of many talents.

 With a background in development economics, his initial interest in the software world was sparked while working on poverty alleviation in South Africa.

“While working on the ground I saw the role software could have in impacting the world broadly and specifically within poverty alleviation. It felt like the most scalable way to effect change.”– James Beshara

This led James to develop Tilt, a money-sharing and fundraising app somewhat akin to Venmo, which he would run for the next five years before it was acquired by Airbnb. 

His next business venture was Magic Mind, a beverage marketed as the world’s first productivity drink, geared to work in tandem with a morning coffee or caffeine routine to improve energy, calmness, and focus. 

James and I spoke about what those two companies have taught him, what he would do differently, what he has done differently, and his advice for enthusiastic new founders today.

Three boxes your brand must check to thrive

According to James, to build a company of massive significance, you have to do three things:

1. Create a product people love.
2. Figure out growth and distribution.
3. Develop strong business mechanics underneath it all.

“We’ve all seen products–and maybe loved products–that check the first box, but they can’t nail growth so the company is acquired and wound down. Or a company nails the first and the second but they can’t build out the business model beneath it,” James said.

“Once I saw up close how hard it is to nail all three it made me really appreciate the leaders who build companies that do.”– James Beshara

Getting the order wrong: Rapid growth isn’t for everyone

James cites his big mistake with Tilt as getting the checklist order wrong. “I thought, okay, I’ve figured out something people love and now I’m going to grow it as fast as I can...we can monetize down the road,” James said. 

Unfortunately, that wasn’t in the cards, as Tilt got too far down the road to effectively switch up its business plan when the monetization issue was fully realized. “So I think the real order should be: create something people love, build great business mechanics to support it, and then grow it,” James explained.

You can’t always monetize usage

While probably true in the aughts, usage doesn’t necessarily guarantee monetization today.

Think about Vine, a hugely popular app that ultimately failed because despite their 200 million users they couldn’t figure out how to monetize it. Like Tilt, they were unable to build a business model to justify their rapid growth, and so they went down.

Familiarize yourself with failure

Getting comfortable with failure is a good way to succeed. That might sound like an oxymoron, but according to James, it’s true. Let’s get into it.

One of the biggest reasons companies fail is premature growth. So why do businesses continue to prematurely scale if it’s such a well-known route to failure?

James’ answer: insecurity and the need for external validation. 

He knows this because as the young founder of Tilt, he experienced it himself. Slowing down at all can feel like a step in the direction of failure, even though it’s often one of the more effective ways to forge a sustainable business. “It took a long time for me to internalize a few things around failure that I wish we talked about more,” he said. Sidenote: if you share this feeling, you might want to check out Below the Line, James’ podcast centered on exploring the psychological side of the founder’s journey.

Often, founders feel extreme pressure to be successful, especially if they’ve already hit the ground running and received great initial feedback on their product. As a result, they only want to focus on growth and expansion, rather than closely examine what might not be working. 

Advice to founders: Take a little poison each day

Let’s say you’re the founder of an up-and-coming startup. You get up in the morning (maybe you drink some of that good ol’ Magic Mind) and you begin your day, checking in with your team and gathering updates. Rather than only looking for the positive news, James suggests seeking out the negative too. 

“Actively pursuing the bad news each day is what ultimately frees you from the terminal bad news of a business not working out.”– James Beshara

Own the bad news. See what you might be able to do to improve the problem. Use it as an opportunity to work on something you didn’t even know was an issue. “Tilt didn’t achieve my ambitions because of my short-term thinking when it came to searching for validation by trying to grow everything, instead of eating a bit of poison every day and saying, let’s look at the whole equation and spend more time on things that aren’t working,” James said.

His advice: take a little bit of negative news poison every day. The more you get used to it, the more immunity you build, and the more normal it will feel to address what’s wrong regularly.

A ripple effect: Healthy team dialogue

Another piece of advice: share negative news with your team. Not doing so is a disservice to the group effort, because team members will follow their leader, and if their leader isn’t paying attention to things that aren’t working, they won’t either. 

A quintessential illustration of the importance of leading by example. 

Three qualities of successful founders

As an angel investor, James has invested in forty companies thus far. I asked him what he’s observed as common traits in the best founders and he gave me another brilliant list of three.

1. They’re skilled at incorporating the bad news into the conversation openly and maintaining a healthy perspective on work that allows them to enjoy the process of building and not take their companies too seriously. 
2. Some go even further in seeking out negative news and imagine full-blown, highly detailed worst-case scenarios through exposure therapy. They get as comfortable as they can with the idea of failure on a massive scale.
3. Great founders are great listeners. Because of this, they’re able to pivot and change the game plan if they have to.

By the way, don’t make a 30-year-plan for your brand; visions are meant to be flexible.

Slow & steady: How James did it differently with Magic Mind

James’ experience with Tilt greatly affected how he went about his next business venture.

“My traversal from software to drink company was kind of accidental,” James said, explaining the sudden discovery of a heart condition when his seven-cups-a-day coffee habit sent him to the ER. His doctor asked if he’d ever tried green tea, because one of the compounds in it, L-theanine, helps to extend the body’s caffeine absorption over time, along with decreasing the cortisol spikes (natural stress hormones) coffee induces.

James couldn’t get L-theanine out of his engineering brain and began tinkering around in his kitchen, concocting all sorts of recipes in an effort to find his new morning ritual. Seven years later (after 120 iterations of the formulation) Magic Mind was born, a productivity drink with a whole scientific advisory board behind it. 

 “Everything about Magic Mind, subconsciously and consciously, was different from Tilt. It was ‘let me pull on this little string for my issue and then see if it has the same effect on friends’ versus ‘let me think through something big.’”– James Beshara

In the beginning, James was passionate about getting the product right but unsure if he wanted the result to be a company. However, as he developed the drink, feedback from friends was undeniable: this stuff worked and people wanted more of it. 

This time around, James was cautious with his timing and his approach to growth, waiting until he had 200 subscribers before even giving Magic Mind its name. “I was asking for the negative feedback for two years,” he said. 

Focus is power

James calls Magic Mind a productivity beverage, a category he created for it because he conceptualizes productivity as different from straight-up energy. 

“I realized several years ago that productivity is so much more than energy. It’s energy, cognition, flow, focus, memory, and balance. It’s being able to de-stress.”– James Beshara

James applies his philosophy to the inner workings of his team, keeping it minimal and intentional, composed of only part-time employees. A big fan of an asynchronous working style, he has his team use Loom to avoid the arbitrary time-suck of meetings, expressing the belief to me that being constantly reachable is the enemy of productivity. “It’s funny because I started Magic Mind thinking how can I make the most out of each day? And now I try to have a healthier perspective of productivity by measuring it in years and decades rather than minutes and days,” he said.  

At one-and-a-half million dollars in annual sales and 1500 subscribers, Magic Mind is on the steady and undeniable upward climb. So to any founders out there strategizing on how to build a brand and make it last, it’s worth remembering James’ suggestions: incorporate the negative feedback into your day-to-day, pace your growth in a way that makes sense for you and your brand, and don’t fall prey to the temptation of external validation. 

About the podcast

On the DTC Growth Podcast, we talk with founders and leaders of the most exciting DTC brands. We discuss their visions, how they launched, and how they are growing their brands.