Interview with Tero Isokauppila
Building an 8-Figure Mushroom Empire with Four Sigmatic Founder, Tero Isokauppila
Today, I’m talking with Tero Isokauppila, a self-proclaimed Finnish nomad turned into a fungi lovin’ foodpreneur, who built an 8-figure mushroom empire!
Tero capitalized on a time when the health and wellness industry was booming, marrying his family’s farming background with a market opportunity. And with that, Four Sigmatic was born.
As a 13th-generation family farmer, Tero’s exposure to mushrooms started a lot earlier than other kids. And throughout his life, mushrooms just kept popping up. Realizing some of their health benefits, Tero grew obsessed, experimenting and concocting herbs and natural products.
Today, Four Sigmatic is an omnichannel brand selling nutrient-dense, “really good for you” everyday magic products, like mushroom coffee and plant-based protein.
In this episode, you’re going to learn how a farm boy from Finland started and scaled an 8-figure mushroom coffee company that’s served over 100M customers, the risks and rewards of investing in the CPG category (both from a private equity and venture capital perspective, and Tero’s criteria for reducing risk and evaluating which companies to invest in.
Featured on This Episode: Tero Isokauppila
✅ What he does: Tero Isokauppila is the founder of Four Sigmatic. He grew up in Finland on a family farm that’s been around for 13 generations. There he learned to appreciate the best off-the-beaten-track ingredients and the absolute worst puns. Tero started Four Sigmatic to share these feel-good Finnish traditions with the world.
💬 Words of wisdom: Just having patience and as an investor of compounding returns and as an entrepreneur, slow but steady progress really gets you far. It’s definitely a marathon. It’s not a sprint. It’s probably an ultra-marathon.
Key Takeaways with Tero Isokauppila
- Comparing the average diet between the US and Finland.
- How a farm boy from Finland started and scaled an 8-figure mushroom coffee company that’s served over 100M customers.
- The benefits to using Amazon to sell your products.
- Investing in consumer packaged goods (private equity vs. venture).
- The major difference between tech startups and CPG.
- How to reduce risk and recognize winning investments.
- Understanding business valuations.
- Tero shares some of the products he has invested in that have done well.
- Becoming a great entrepreneur AND investor.
Tero Isokauppila – Four Sigmatic Founder on Building a Family Legacy
Tero Isokauppila Tweetable“There's nothing wrong with you being a consumer to an awesome product, but that doesn’t necessarily mean you have to invest.” – Tero Isokauppila Click To Tweet “As an entrepreneur, slow but steady progress really gets you far. It's definitely a marathon, not a sprint. It's probably an ultra-marathon.” – Tero Isokauppila Click To Tweet
- Four Sigmatic
- Khalil Rafati
- SunLife Organics
- TIGER 21
- Wolt Delivery
- Oura Ring
- Magic Spoon
Rate & Review The Lifestyle Investor Podcast
If you enjoyed today’s episode of The Lifestyle Investor, hit the subscribe button on Apple Podcasts, Spotify, Stitcher, Castbox, Google Podcasts, iHeart Radio, or wherever you listen, so future episodes are automatically downloaded directly to your device.
You can also help by providing an honest rating & review over on Apple Podcasts. Reviews go a long way in helping us build awareness so that we can impact even more people. THANK YOU!
Connect with Justin Donald
Get the Lifestyle Investor Book!
To get access to The Lifestyle Investor: The 10 Commandments of Cashflow Investing for Passive Income and Financial Freedom visit JustinDonald.com/book
Read the Full Transcript with Tero Isokauppila
Justin Donald: All right. Tero, I’m so glad to have you on the show. Thanks for joining in, and I’m excited to just have a continuation of the last amazing conversation that we got to have together. How are you today?
Tero Isokauppila: I’m great. Thanks for having me on. I’m excited to talk about all things investing.
Justin Donald: I love it. Well, you’ve got a lot of experience here, experience both with hands-on but also hands-off and so I want to dig into all this. I really enjoyed our conversation at our mutual friend, Khalil Rafati’s place, SunLife Organics. We got some smoothies, acai bowls, kind of hung out. And I got to tell you, I share this with you after the fact but our conversation is easily my favorite conversation I’ve had with anyone this month and potentially even anyone this year. I just thoroughly enjoyed the depth, the presence, just all the cool things that we got into. So, I just want to thank you for your willingness to continue this with more than just me with my audience.
Tero Isokauppila: Thanks. Yeah. I loved it as well. It’s also easy to meet up in the beginning of the year so you become the best of the year easier. You know, it’s like February is a good time to meet people.
Justin Donald: That’s right. Yeah, without a doubt. So, obviously, your claim to fame, if you will, is this incredible company, Four Sigmatic, and I want to get into that. But before we get into it, I want to kind of hear more about your story because you are Finnish. You’re from Finland. You moved here. And I’ve got to imagine this is just a whole different world on many levels. And you know, I’m curious, first and foremost what it’s like being an entrepreneur in Finland and then moving here, your business here, and becoming an entrepreneur in the U.S.
Tero Isokauppila: Yeah. Well, some facts as an entrepreneur are stable wherever you operate, right? You want to seek alpha in different ways, right, as an entrepreneur and then some are very cultural, for example, usually people-related, so customer relations and consumer relations and everything that is unique. America and Finland are similar in certain ways, in certain ways, very different. And I think there is much more of an entrepreneurship culture in America. So, people there, it’s a big country, there’s a lot of entrepreneurs. People are very optimistic, very positive and very social, very driven and very ambitious. Finland is more historically an engineering country and there’s free health care, free education, so that actually leads to a lot of people to like be comfortable in a non-entrepreneurial world because there is this safety net versus I always thought, if you have a safety net, you should really go for it. Because now if you fall, you’re kind of okay. But funny enough, I think America is much more entrepreneurial.
Justin Donald: Yeah. And it’s interesting because I was just learning some data. I was at a TIGER 21 National Conference and one of the speakers was talking about how entrepreneurial the U.S. is compared to a lot of other nations, a lot of big nations around the world, and in many instances, it’s kind of frowned upon in other countries like it’s not good to be an entrepreneur, whereas in the U.S., it’s very highly desirable. People desire that and it’s praised. And so, I’m curious what that is like in Finland. Obviously, we know what that’s like here.
Tero Isokauppila: I think there’s more and more Finland has had a lot of tech success, some bigger companies like Nokia in the telecom, but then gaming, Angry Birds so the parent company Rovio, Clash of Clans called Supercell, lately a food delivery company called Wolt. So, there’s been a few success cases so there’s more of that culture but definitely Finland it’s not frowned upon but it’s not the peak success in society. And I would say like I grew up on a farm and then I grew up passionate about health foods, organic foods. So, I’m a farm boy hippie who was entrepreneurial. So, definitely when I started, from Finland as well, so when I started, all the things I was into were not cool. They were nerdy or weird. And now health and wellness, food and beverage startups, entrepreneurship, those are like the hottest things ever. And funny enough, also, Finland is now, I think, two or three years in a row, the happiest country in the world so Finland is finally getting some attention globally. So, by growing up, that was not the case, and the path I chose was definitely not sexy or desired by most.
Justin Donald: Well, it’s great that we were talking about this the other day that it’s so cool that being healthy is cool, that today it’s a lifestyle. These are lifestyle choices. It’s not a fad that it’s cool to be healthy. It’s cool to be smart. It’s cool to be educated. It’s cool to learn and grow and have mentors and all these things that were maybe frowned upon in the past. And so, I love it. You’re obviously really fit yourself. It’s interesting probably going from a country where people are really fit, quality life is great, you come to the U.S. From a fitness standpoint that the U.S., our median, our average is really disturbingly unhealthy. And we talked a little bit about that and some of the stats that you’ve dug into for your upcoming book.
Tero Isokauppila: Yeah. I mean, America is a huge country. You know, I believe the third most populous country ahead of Indonesia and just behind China and India, and there’s a lot of people. In America, you have the top of the top like the creme de la creme here. So, you need people who are just jacked and live a long time. But the average probably in Finland it’s more of like the average consumer does saunas and cold therapy and eats a lot of wild berries like wild blueberries so like the average consumer is probably a little bit healthier. And one of the most eye-opening statistics is comparing government health care spending against life expectancy. So, in one way to look at the ROI or the IRR of what the government spends and what we get and the US has a much higher spend with worse results than many other Western countries. And what makes it worse is the last few years, life expectancy has gone down for the first time in this modern postwar era, which is alarming. You know, a lot of the advances we made with technology, health care, medication, surgery, many things are now they reach their peak and we’re going down actually for various reasons.
Justin Donald: Yeah. We should be healthier. We should be living longer. We’ve got better technology. We’re spending more money yet it’s the opposite effect. And, yeah, I think that that is alarming. And hopefully, this is a wake-up call to people that we probably need to get our act together and various different health categories, right? So, I’m curious where you kind of came up with this idea for Four Sigmatic. And by the way, I’m a huge fan. I use your product. I think it’s great. I feel incredibly blessed that you gave me a chance to try out one of your new products, this creamer, which is awesome. But how did this come about? How did you decide, “Hey, mushrooms are amazing and we need to be consuming them more?” And especially for people like me, I actually don’t like mushrooms but with your product, they don’t taste like mushrooms.
Tero Isokauppila: Yeah. So, I’m a 13th generation family farmer. We’ve had a family farm at least since 1619, and hopefully, me and my brother’s kids will be the 14th generation and we can keep it going. Finland is very much food-friendly. A lot of these mushrooms grow in Finland and they’re studied in Finland so I studied chemistry and then nutrition, and a little over 50 years ago won an innovation award for discovering this mushroom variety with my friend. And, yeah, that was kind of the starting point. The inspiration for the coffee came from the fact that Finns drink more coffee than any other nation per capita. So, like almost three times as more as American, which is hard to believe when you go on the line of Starbucks and look at the size of those drinks. But I feel like Americans, there’s a lot more sugar and maybe a little less caffeine. But, yeah, so during Second World War, Finland was attacked both by the Germans and the Russians, and we ran out of coffee beans and there was a shortage so we started brewing this mushroom that grew in our backyards called Chaga, C-H-A-G-A, and then people felt great.
And after the war, the University of Helsinki started studying and found out that it’s probably the highest source of antioxidants in the world. So, one cup of that mushroom coffee sort of say would equal to like 30 pounds of antioxidants from carrots or many other examples. So, yeah, grew up on a farm, learned from my dad, who was an agronomist. My mom taught physiology and anatomy. They’re part of our lineage, a lot of inspiration from coffee, had some awesome friends who were into similar things and read books and studied both in school and outside of school, and that’s where it came in. Obviously, like any company, there’s been an evolution of products and what we do but that’s kind of the origin story for the brand.
Justin Donald: That’s so cool, Tero. And what I also think is unique is in you starting this business, you’re getting a chance to kind of work in this whole legacy space because this is, number one, it’s like Finnish traditions and kind of you’ve got your natural resources and what you’re growing in your own blend. But then it’s also like a family business or a family tradition. So, there’s legacy on kind of both sides with your heritage, your family. And then at the same time, you can use this to help other people. You educate people on health, you can help people live a healthy life, and then while doing so, make a good profit, make a good return, have a living. This doesn’t have to be a side hustle. This is your hustle. This is your business. And so, what a cool passion project that has family lineage, that has just all the different pieces that could keep someone super engaged, super focused, and someone that can scale it long term.
Tero Isokauppila: Yeah. I guess if you wait long enough, everything becomes cool eventually. I think this might be relevant for both nature and investing but my father would always say that a quarter in agriculture and nature is 25 years, not three months. And I think sometimes when you think of compound interest and investing is having that longer time horizon solves a lot of problems and market’s going up and down. So, that same truth can be true for nature.
Justin Donald: Yeah. Well, and I know that you’re a privately-held company. There’s tons of perks to that. Stay private as long as you can. And obviously, the goal for a lot of people is to go public at some point in time. You get the revenues high, high enough, you get EBITDA. In some cases, EBITDA matters, in other cases, revenue matters, generally both. And you get to a point where you can go public, you can scale this thing, you can get the capital that will really allow you to take it to the next level. That’s hard to do sometimes, staying private, but you have this beauty of kind of keeping the financials to yourself and all the different components. But I’d love to just have you share the success that your companies had because you’re a strong eight-figure business and you have a ton of customers. I’d love for you to share, just brag a little bit about all the cool things you guys have done.
Tero Isokauppila: Yeah. I don’t know if Finns are good at bragging but we’ve been passionate about what we do. We love having happy customers. It’s one of our three key principles. We call them first principles. So, having happy customers serving nature is an ancient intent is a second one and then playing to win big, that’s the third one. So, those are things that are important to us, and we’ve been grateful enough to have success. We obviously stand on the shoulders of a lot of giants, a lot of educators who came before us. Maybe they didn’t get it to mainstream America but they did a lot of awesome work, both researching these ingredients but also educating people about these ingredients. And I’m sure there will be many more companies that come after us innovating in different ways using these nutrient-dense mushrooms and adaptogens.
Justin Donald: How many customers do you have at this point?
Tero Isokauppila: Well, it’s very hard to – so we’re an omnichannel brand. We sell to over 60 countries. In overseas, we use a lot of distributors. So, we sell to distributor, distributor sells to store, store sales to customers. So, there’s a little bit of a data issue. Within the US, we sell both. Our biggest business is our own dot-com so FourSigmatic.com followed by Amazon and then more retail distribution, which is a lot of these large retailers. So, we have a big data gap and we have a lot of data from online and we know for sure we’ve served more than 100 million customers, but it’s hard to know who repurchased how many times when they buy from Whole Foods or something like that. So, some data is hard to come by in the retail side and international side, so we really don’t know. But we do surveys and we ask people and we have indications but we don’t know.
Justin Donald: Well, that’s incredible any time you can be north of 100 million. I mean, any time you could be north of 10 million, that’s impressive, but 100 million, and who knows how deep into that? But this gets back to the debate, right? I’ve got a lot of friends. I’ve invested a lot of money in this space where you kind of go back and forth. Do we use Amazon? Because if we do, they capture customer data but its access to customers, we may not reach otherwise. Or do we only sell ourselves, not use Amazon and capture all that data? You know, what’s the secret sauce there? What’s the right split? And I’ve got people that are on both sides, some that are exclusively through Amazon, some that are exclusively through their own website, others that kind of do a split or they limit the maximum amount allowable on Amazon. And I’m curious to figure out from you why you did so the way that you did where it’s blended.
Tero Isokauppila: We want to serve as many people as we can, and Amazon is the important player in that. To answer the question between your own direct consumer business and Amazon online sales I would say industry and category matters. Not every category is equal. Stage of the business matters, access to capital matters, and in a little bit of the competitive price point. But in an ideal scenario, you obviously want the customer D2C but if you don’t have the ability to drive traffic to your website and you are in a desirable category with a lot of organic queries on Amazon, this might be a more cost-effective way to grow the Amazon business. Risky because you never know if it goes away, right? But that being said, like if you don’t have massive access to capital, you’re in a category where people search for those types of products. You can be in Amazon. It’s impressive scale and volume. Amazon is also shifting like any, I think, a large company, but they’re really investing in advertising, which was not the case before. They created this search-based AMS advertising and now they’re definitely going in more broadly competing against Google and Facebook or Meta. So, that’s also shifting in the marketplace.
Generally, I say eventually you are going to be on Amazon through you or others. It’s very hard to prevent that. So, yeah, I’d rather manage it. I would say rather you manage it than someone else managing it. But I can understand both arguments and therefore industry category size, access to capital, access to qualified labor who understand these channels is all very important. So, there’s not a one size fits all solution to managing between your own dot-com and Amazon.
Justin Donald: Yeah. That’s a very well-thought-out answer and I know that there are a lot of factors but, I mean, you make a great point because Amazon is the second largest search engine. Most people don’t realize that. They look at Google and they probably look at whatever is in the same category as Google is maybe the next greatest but Amazon is not far behind Google. And when you think about like, “Hey, when you search for a product,” a lot of people don’t go to Google. They go to Amazon, right? And a lot of people, that is their default search.
Tero Isokauppila: Yeah. I don’t know if my data points are valid anymore, so apologies if they’re not but I believe more than 50% of product searches online happened on Amazon, and Amazon is the number one product search engine. Out of all searches, I believe Google is number one and YouTube number two, which is another way to sell product, by the way. But as far as product goes, even if you buy it at Walmart, you’re probably going to search Amazon to see what the price is, what are the reviews, are people happy with it? So, even if you don’t sell on Amazon for credibility and social proof, it’s quite an important channel.
Justin Donald: Yeah. It’s great kind of bringing that awareness in as well. So, let’s talk a little bit about maybe the success that you’ve had investing in this space because I personally find this space that you’re in. We can call it – the acronym would be CPG investing, right? Consumer packaged goods. And so, this is kind of a tricky space to invest in but when you know it, it can be an incredible investment and you know this really well. So, I’d love to hear some of your insight on this and how you’ve done well with your dollars outside of Four Sigmatic.
Tero Isokauppila: Yeah. I would say if you’re new to this space, don’t invest in CPG venture. If you can invest in CPG-centric private equity if you have the capital for it. It’s very lucrative. I believe it’s the number two highest IRR category in private equity after software as a service beating many other large categories. But in venture, it’s very difficult. Why is it difficult? Well, there’s few reasons. First of all, almost all CPG products are indefensible. So, anybody can enter and copy the product like we don’t own mushrooms like anybody could in a way copy our product. Think of Coca-Cola like, “Oh, it’s such a secret recipe.” It’s not that much of a secret. Like, you do a blind test and often Pepsi or some other product wins despite people’s emotional response. But it’s pretty well proven now that you can reverse engineer recipes and products. So, indefensible business challenge often high velocity, high volume, low margin business. Some exceptions, some worse categories than others but it’s a real game of scale to be profitable. Good news is once you hit that scale, which is why private equity usually wins, is it’s pretty stable like people drink coffee. Like, they’re going to drink coffee, buy snacks, yadda, yadda, yadda.
So, when you hit that, weirdly, you can protect it and once you hit the large distribution channels, you can also protect them. So, it’s like an oil tanker than a speedboat. Maybe in the beginning it’s a little bit more like a speedboat. So, yeah, it’s challenging. And unless you know what you do even though if your cousin or neighbor has an awesome muffin brand, probably stay away from investing in CPG even if you love the product. There’s nothing wrong being a consumer and loving a product versus investing in it. But if you know what you’re doing and you can kind of navigate the operator risk, product risk, category risk in terms, then I think there are some awesome opportunities. And ideally, you invest in something that gives you a profit but also makes the world a better place through these beautiful products. But if you are new to it, I would say stay away from early-stage CPG deals.
Justin Donald: Yeah. And by the way, just to help clarify here, it’s important. So, you decipher between venture investing and private equity investing. And on the venture side, it’s generally earlier stage. It’s unproven. This is like maybe a new concept, a new fad or health product or whatever. So, we don’t know yet what the market’s going to say. It might be a home run. It may not be a home run, it might be a home run for like one year and then fizzle out and just be dead. Versus in that private equity stage, you have a track record. You see that the market wants it. You’ve got, I mean, private equity generally doesn’t invest unless there’s profit. It’s a profitable company. It’s proven. And so, I just want to clarify that for people because it is so easy to get sucked into this CPG category because there’s always something new that some of us healthy-minded or health-conscious people want to try or, “We just did this. This is incredible. It’s going to take off because we had a good experience.” But if people never learn about it, how can they have that experience? You can have the best product, but a team that can’t get it out there or doesn’t have the funding to get it there, it’s never going to go anywhere, right?
Tero Isokauppila: Totally. And again, there are great exceptions, and I’ve been lucky to be part of a few of them. But generally, like, there’s nothing wrong you being a consumer to an awesome product but necessarily not an investor, right? There’s nothing wrong with that. And then, on the other hand, it’s sometimes hard for any investing to not – we like to look at ourselves as consumers, especially any consumer product and not just CPG, but we think of ourselves like if we love it. But sometimes you got to be honest. Maybe you are not the consumer. And is your consumer habits scalable or attractive? Right? And you know, I’m a weird Finnish guy, and sometimes I like to buy products that probably don’t have a lot of market, outside of weird Finnish guys. So, yeah, that’s something to keep in mind. But I don’t want to deter. There were many awesome, great success stories but I also know there’s a massive graveyard next to it.
Justin Donald: Yeah. And conversely, as an investor, you kind of have to get out of the consumer mindset and the consumer role because some things take off. And for me, I would never use it. So, like it makes no sense. So, the consumer side of me would say, “No way,” but sometimes you’ve got to look at it from that investor frame. But at the same time, I think that the consumer frame often is that one-two punch but it is funny how completely different. Like, there are some products that took off that I never thought they would and some other products that I thought would take off and they didn’t. And it is really kind of funny and some of it is timing, some of it’s how much capital is behind it, who are the influencers behind it? But it is a tricky space. That’s been my experience.
Tero Isokauppila: Yeah. And there’s also a difference between, let’s say, technology startups and early-stage ventures also fail at a high rate. But because they are defensible, there’s intellectual property, there’s custom to lock in, there are other ways how data plays, which you can add value over many, many years where then the multiple and the upside, especially with digital products scale quite nicely. So, once you hit product-market fit, it scales a lot better than physical goods. So, let’s assume even if your hit rate on startups in CPG is better, you succeed in 2 out of 10 but in tech, you achieve 1 out of 10, then 1 could be so outsized that actually, the blended portfolio performs better. So, that’s also something to keep in mind between, let’s say, technology and CPG.
Justin Donald: Yeah. There’s no doubt, and part of the reason that SaaS is in that number one category is because it only takes one, right? One deal often makes the entire portfolio and it’s crazy how that happens and how big like the ceiling is so high on something like that. Your multiple is based on revenue. It’s not based on EBITDA or some other financial calculation dealing with profit. And so, it’s an interesting way of looking at those numbers. And so, I think that – and by the way, you said it very well that venture investing even on the SaaS side is super risky. And once you have more of a proven concept, this thing is profitable, it’s another category at least in terms of safety and market, I guess, proof of concept, market fit, all that. Now, when you talk about defensibility, a lot of this can be the IP, right? A lot of this can be like – what are all the ways that you look at an investment and say, “Hey, this is good. The moat that they have built is so incredibly defensible that this makes a good investment?”
Tero Isokauppila: Yeah. I do have an extra layer that is not necessarily a financial layer but it is a layer of making the world a better place. I start with that layer. It doesn’t always lead to the best investment decisions but it’s something I’m comfortable with. So, be it a product or service, it has some sort of net positive vision for the world and you can achieve that many ways. That’s just important for me to get excited. But normally I look at the total market like how big is this market or how big this market could be? I look at the team and I look at their tactics because especially early on, you need to find these for lack of a better word mousetraps, arbitrage. So, you have to find a way how you outperform the average market. I mean, in software as a service, there’s a little bit of a playbook on how to win. But in order to outperform your competitors, you got to have a new angle on how you acquire customers or how you produce the product, or some fresh way to add leverage in this competition. So, I look at a lot of those. Not all of those are scalable. I just want that for the next two years before the next round of funding they have a way to like have an angle of growth. Usually, it’s growth-oriented, almost always. And in terms like what are the terms?
There are some great investments I passed that just had, I would say, pretty bad terms. And I felt like that didn’t justify, especially now in venture valuations have gone up. Sometimes it’s warranted because now entrepreneurs are wiser, especially second and third-time entrepreneurs are wiser to know that like, “Hey, the VC will still get their return if we win,” so I have a little more leverage to have a network this and that. So, sometimes it’s warranted. But more often than not, I hear first time entrepreneurs without a network, without experience to say, “Well, the guy next door got this multiple, so I need to get this multiple and maybe sometimes the person next door had a reason why they got the multiple and you don’t. So, sometimes it is like a potential deal but because how it’s structured, it’s risky, especially if it’s capital intensive, and the first rounds are structured poorly with participating preferred or they’re valued too high, and I feel like raising capital will be an issue going forward. Sometimes it’s just like not worth my risk profile because I’m an individual. I’m not a fund. I don’t invest other people’s money.
Justin Donald: Yeah. And so, I see it all the time. I see these valuations that are just ridiculous. I don’t see how they get there. And in some cases, you want to say, “No, this is an absolute no based on the valuation.” But if you like the company enough and you see where it’s going, that’s going to be the cheapest valuation you ever have a bite of the apple at. And so, it’s this weird dichotomy where you’re like, “Alright, do I invest now even though I think it’s overvalued? But I really think this is going to go well and I’d like to get in because the next time is going to be way past that current valuation.”
Tero Isokauppila: Yeah. And, I mean, different categories have different multiples but let’s say you have a business that is multiple of 3 that is a number 6 player and then you have a multiple 4 on a 1 or 2, then probably you want to invest in the higher value, potentially a little overvalued, but position on the market as number 1 or 2. There’s a reason why probably they’re positioned as a 1 or 2. So, sometimes it’s worth paying up. That being said, when you probe further and you’re like, “Why did you end up in this valuation?” if the reason is some kind of like, “Well, other people got it or this got it or this lead investor said okay,” unless it’s super credible lead investor, I’m usually like, “They’ll love that answer.” If they say, “Massive 10, killer team, UD and economics through the roof, beating competition left and right. We’re worth this,” I actually respect that answer much more than the answer of like, “Well, other people have this valuation.”
Justin Donald: Yeah. You know, I mean, we could do a podcast just on valuations, terms, all this. I mean, we could have some fun with this. I’d love to hear if you’re comfortable sharing some of the products or investments that you’ve invested in that have done well, especially if there are any that we might know of.
Tero Isokauppila: Yeah. I wonder which ones to mention. Oura Ring, which is a smart tracking device out of Finland, represent Finland. You have one. Yeah.
Justin Donald: I have one. I’m an investor. Love them.
Tero Isokauppila: Magic Spoon is a protein cereal, an example of maybe a higher valuation than normally would see but I knew both of the founders for a long time, and I’m thoroughly impressed with who they are as human beings and operators, and they’ve done really well. So, yeah, those couple of examples like that.
Justin Donald: Yeah, that’s awesome. And by the way, because of the space that you’ve been in, because of being an entrepreneur, because of being an investor, you’re kind of straddling both of those, and then used to live in L.A., your network is just incredible. I mean, I just had a lot of fun like learning about who you know, who you’ve connected with, who you’ve collaborated with. I just want to give you props because your network is just incredible. And some of the conversations you have had with some of these brilliant people, some of the most brilliant people on planet Earth. It just has to be so inspiring and intriguing and stimulating. And I’d be curious if there’s anything that you want to share in that space.
Tero Isokauppila: Yeah, definitely not planned, a farm boy from Finland coming to the US, L.A. I’ll tell a story. I think the first or second night I landed in L.A., we had a publicist in the beginning and they invited us to a Hollywood Hills party in Los Angeles, up in the mountains, a beautiful, gazillion-dollar home. And there’s Warren G, which some of you might know, an old-school rapper.
Justin Donald: Nice.
Tero Isokauppila: And there’s a taco truck with free food. I’m a sucker for free food so there was that. Kogi barbecue, Korean barbecue, taco truck outside. And I’m just like new to L.A. and I’m looking down the Hollywood Hills. Definitely not my wide overall but it was just insane that like second day and I’m like looking at the city lights and listening to Warren G rap while eating free food. And that was to me, it’s like, “Well, hey, things are possible,” but it was not planned. I’ve never tried to be transactional trying to get to know people. I guess I’ve done different unique things that attract people who are curious and want to learn. So, we’ve been lucky enough to have a lot of Austin people reach out or meet them, and then you get to learn from them as well. So, that’s been really helpful. And there’s also a lot of glitz and glamor in America that is very surface level. Yeah. Not all of these gurus are real gurus or even what they say so, yeah, whatever.
Justin Donald: Yeah. That’s interesting. And I love that you look at relationships and people in just what I would say is different than a lot of people where it is not transactional. And I think the reason you’ve been able to attract so many amazing people into your world and your ecosystem and I’m talking about the who’s who in the world of entrepreneurship and investing is because of that, is because they can feel and tell that it’s not transactional, that it’s very authentic, very genuine, and you’re just curious. You want to learn, you ask questions, you ask great questions. And so, I think that that energy is very magnetic to people that probably hang in circles of influence, that that is not the case. So, very cool.
Tero Isokauppila: Yeah. Also, it’s a small world, especially in a large metropolitan city. So, I mean, there’s probably some exceptions but that classic saying that we’re always like one person away from like the US president is pretty true for most people even though it sounds crazy or two people away. You know, it’s like, especially the digital age, it’s possible to connect with a lot of surprising people.
Justin Donald: Well, I feel really fortunate that on your first day in Austin, your move to Austin, and one of your first days in L.A., you got a chance to hang at a Warren G party. I feel blessed that I could be at a party with you on day one in Austin. All right. I know I don’t carry that, you know, I’m not in the same category. I love Warren G as a rapper. I’ve really enjoyed a lot of his music over the years. But why Austin? Why did you move here? I mean, L.A. is supposed to be the place, and it’s funny because tons of people from L.A. are moving to Austin, as you know. But I’m curious for you, why did you move here?
Tero Isokauppila: Yeah. I almost feel bad for some of the Austinites that all these people are moving in. But, yeah, I moved here in 2020 with my family. We were just about to have our first child. I knew I wanted to leave L.A. for a long time, even before we found out that we’re expecting our kiddo, looking at different like quieter places anywhere from Hawaii to Wyoming. And honestly, like my fiancée soon to be wife loved Austin the best. And it was great because we have a lot of our influencers out here in Austin, Whole Foods, H-E-B, Central Market, our Facebook and Amazon agencies were here and yadda, yadda, yadda. So, it just seemed like a good place. And then moving here, we’ve been blown away since we decided to move on to how many other awesome people have moved and the communities, both from people who are from here and people moved here. I mean, pretty impressive for the size of the city. Everything is 5, 10 minutes, max 15 minutes away but still, you have awesome restaurants, great nature, and community, which usually you don’t get. You get one or the other. You get nature and quiet and no traffic or you get awesome community and a lot of traffic and a lot of pollution. So, so far, Austin has exceeded our expectations.
Justin Donald: Oh, that’s great to hear. I want to be really careful that I don’t build up Austin too much and you don’t build up Austin too much because we don’t need more people moving here. You know, obviously, I love just all the cool people that I have met that have moved here. And I’m a transplant about six years in at this point but I’m thankful to have a community that has welcomed me with open arms and that I can do the same for new people coming in. But I got to agree with you, at the highest level, I have never been in a place that attracts so many incredible people, big thinkers, but not just caring about the bottom line, also caring about social impact. And just the way that their business can also align with other charitable organizations or educational things for legacy purposes or whatever it is, it’s really just a place, a community that attracts a certain individual, and it is an inspiring place to meet people and have conversations.
Tero Isokauppila: Yeah, I agree.
Justin Donald: So, what new projects are you excited about right now? Maybe it’s a new project within Four Sigmatic. Maybe it’s a new project outside. I’m just curious what you’re most passionate about right now outside of obviously being a new father and soon-to-be husband.
Tero Isokauppila: Yeah. I mean, obviously, that family stuff is first and the community here in Austin, but outside of that, I’m just finishing my manuscript for my next book. Hopefully, it comes out in the fall of 2022 with my publisher. So, working on that so hopefully can announce more soon. And then at Four Sigmatic, I would definitely like we launch a lot of innovation after a break like the creamers, the plant-based functional creamers that you got that I’m very excited about. And honestly seeing our team grow and evolve from a band of pirates to a coast guard. You know, over the years, it was just no map sailing wherever we think the gold is and kind of lost and tough life on the sea and then getting a little more organized feels good. And then, yeah, I’m ever curious about frontier technology and frontier science, particularly like hard sciences and nothing I can announce today but hopefully, like that’s still like area of how you change the world is like true innovation. And sometimes in CPG, there is true innovation, but oftentimes not. And I think like frontier science and frontier innovation is something I’m curious about. But as an entrepreneur, you can only do so much and we try to manage it also. But, yeah, those are things that I’m excited about right now.
Justin Donald: That’s cool. So, let me ask you this. You’ve got an incredible lifestyle. You’ve got an incredible business. You’ve got, even more important than that, an incredible family. You’ve got so much going for you but it probably hasn’t always been this way. The entrepreneurial life is not an easy life. The investor life is not an easy life in the beginning. It can be further on. I mean, sometimes it’s still not but I’d love to know just some lessons learned as you’ve kind of grown-up as an entrepreneur.
Tero Isokauppila: Yeah. There’s never a dull moment as a new parent or as an entrepreneur. Certain things get easier financially, particularly, but the stress and the pressures continue evolving. Things that have been true. There’s a lot of lessons along the way but usually time is a real magic sauce like time heals a lot of things. Time solves a lot of things. I think a lot of entrepreneurs and people, in general, very Type A, we want it now, sometimes entitlement. I can sense that from myself as well at times. And I’m like, “Hm.” And just having patience and as an investor of compounding returns and as an entrepreneur like slow but steady progress really gets you far. It’s definitely a marathon. It’s not a sprint. It’s probably an ultra-marathon. So, even if you crush it, it’s like five years, that’s like unheard of fast and it’s probably more like 10 to 20 to most entrepreneurs. So, time is a huge factor. People, if I meet entrepreneurs or other business people and we start to talk like what’s our challenges in the professional side, it almost always is somehow related to people, be it investors, team. I get some with people. So, technology has taken a lot of that away and with a very automated and self-service, but people still matter. And especially now with the stressors of COVID, like a lot of people have left companies, a lot of people have burnout, yadda, yadda, yadda, questioning their life purpose, which is I think awesome. But people, it’s very difficult to lead people. I find my own boundaries very quickly as a leader but it’s also super important. And then I would say customer is like the more you can listen to customers, it’s like a whole hour, like getting consumer feedback, customer feedback, customer intimacy. It’s not the only way to win. You can win with scale and operational excellence. You can win by having the best product. But definitely like having customer intimacy often helps solve a lot of problems in the product and the business.
Justin Donald: Yeah. That’s great. I mean, well thought out there. I love your comment about more people waking up and pursuing their life’s purpose. I think that’s so amazing. Like, get off of autopilot, get on to intentional reality, purposeful living, figuring out what it is that you enjoy, where your gifts align and talents align with the things that you want to do, the things that you take enjoyment from or gain fulfillment from. So, I think that that’s incredible. Very few people are able to span that chasm of being a successful entrepreneur and a successful investor. Generally speaking, successful entrepreneurs don’t do well investing. Successful investors don’t do well as an entrepreneur and it takes just a special person to be able to bridge that gap and figure out how to make both work because there are two different skill sets. Though there are some synergies and as you gain expertise in a certain industry that may give you some added advantage but that doesn’t mean that it’s actually easy, and I think it’s great that you’ve been able to do both. But more important than that is that you have figured out the balance in your life to live a good life that is on your terms.
And that’s why I wanted you here is for people to hear your story. You’re a very successful founder, CEO, and investor, but you put life first, you put family first, but you still make the time for all the other things. And it’s very admirable and I want to wish you well on this next journey. And I’m just excited for having you on the show, and I’d love to find out from you where people can learn more about you and learn more about Four Sigmatic.
Tero Isokauppila: Yeah. You can find Four Sigmatic on all social media as an online and your favorite store. It’s F-O-U-R S-I-G-M-A-T-I-C. I’m not on social media. I never had Facebook. I do have Instagram, which I’m not using currently. I’m on at least a six-month hiatus. Completely deleted it. You know, talk about putting family first. Like, if I put family first, I would not stare at computers or phones. So, definitely, it’s like a forever balancing act and sometimes you have to keep up on certain things to get what you wanted. Social media has been one of those things, TV. So, all great things and a lot of value in them but hard to manage all things at the same time. So, you got to say no to something. So, I’m afraid I’m hard to find but, hopefully, in the fall there will be a book that you can get on Barnes & Noble and Amazon and whatnot. Yeah. Maybe that’s a way to connect with me when it’s out.
Justin Donald: I had a mentor of mine telling me this a long time ago. He said, “Too much of a good thing is not always a good thing,” and that has just always stuck with me because things in moderation are great, even healthy things in moderation are great but to do healthy things beyond moderation to even working out, you could say working out is so good, it’s so healthy. But what happens when working out becomes the most important thing and trumps everything else, trumps relationships? That’s when too much of a good thing isn’t a good thing. And so, I love it. You have the discipline to be able to just tune it out, close it up, and say, “Hey, social media, you’re going on a break so I can be more present with those I need to be present with.” Very cool. Well, I want to end our show today as I always end it. And by the way, Tero, this has just been great. I love our time together. You are a wealth of knowledge and just an incredibly interesting person with a such a cool story. So, thank you for sharing.
And to all my listeners, to those you watching, what’s one step you can take today towards financial freedom and towards a life that is one on your terms, one that you truly desire, that’s not on default, but is a life by design? It only takes one step. What’s that step today? Thanks. And I’ll catch you next week.