#17: How to Start, Grow, and Lose a 7-Figure Business with Yuri Cataldo

Intro

Sean Weisbrot: Welcome back to another episode of the we live to build podcast. Our guest today is Yuri Cataldo, the former founder and CEO of a bottled water company started from the wells on his parents land in Indiana. I say former because the company no longer exists and in this episode you’ll hear the full story of how Yuri came up with the idea started the company sounds amazing success and then lost it all in the blink of an eye. Yuri is a good friend of mine for over two years, and I’ve never heard the story until now, and I can promise you it’s a great one, so stick with us until the end. Normally I would ask more questions, but he was so passionate about the experience that he told all in one breath, which actually makes it much easier to listen. Yuri recently released a book along with a co-writer called “Be Left Behind,” which helps anyone without a technical background understand what the hell Bitcoin is and why you should keep your eye on it. Today we celebrate Yuri’s passion for creating a business and his vulnerability in telling how he lost it. Let’s give Yuri a warm welcome.

Catch Up (2:00)

Sean Weisbrot: Welcome to the show, it’s been a long time since we’ve seen each other. It’s been about a year. We were in Malta, a very beautiful island for a blockchain conference, where I was trying to promote the upcoming launch of the, what I believed would be Sidekick, and you actually interviewed me for your podcast back then. So, what has your last year look like since we last met? Yuri Cataldo: Sure, well so thank you Sean for having me on the show, that’s, this is a lot of fun and, yeah I and I kinda wish we were in Malta right now. It’s too bad. What’s happened the last year? A lot, a lot has to do with what everybody’s going through, which is just this lovely pandemic. At the start of 2020, I released a book that I have been co-writing with my fellow co-podcaster and so that came out just ahead of when everybody else in the world shut down. So, it was released in February, somewhere in the middle of February, I had a lot of speaking gigs lined up in the states and other places, and then suddenly overnight everything goes away and we’re trying to figure out how to market a book in a world that no longer exists. And how to do speaking engagements in a world that, that where the common place no longer exists. Some it was very difficult, most of those speaking gigs is I think we’ll come back around at some point, but between March and June there was nothing. Around June, events started popping up again, and they were all virtual, and so I, I have since then been doing a lot more speaking engagements, not necessarily about the book but just in what my day job is and a few other things. You know, I, I say, I wish I had a lot more detail to talk about with like 2020, but that’s like…In my world, 2020 it’s been kind of a rebuilding year, where I’ve just been focusing on what to do with the book and what can potentially happen after that. So, the book, which I have not introduced, is an intro book on bitcoin and cryptocurrency called “Be Left Behind,” and the idea behind it was an introductory book written for anybody, primarily people who don’t have computer programming backgrounds and are not like extensively computer literate. So, like the test case was my mom, basically. So we, my co-author and I, we wrote it so that anybody can get an idea of the landscape and make decisions for themselves, which is what I am a true believer in. And it’s, it’s doesn’t matter what I think about bitcoin, it matters what you think about bitcoin, how you see that in your ultimate financial future and the cryptocurrency space. So as much as I can educate everybody on what’s happening so they can make their own decisions rather than you know listen to you know whatever person pops up like right now. Like random people just coming out of nowhere, who are all experts because everybody’s an expert when the market goes up. Sean Weisbrot: What you’ve described as your experience for the year is kind of similar for a lot of people if not maybe everybody. I, I’m sure you’ve heard of the term black swan. This pandemic is something like a black swan event that most people would consider is impossible to predict and yet radically changes the face of our existence in a very short amount of time to a point where you basically adapt or die. Some people literally die, some people financially die, their business is shut down, societies shut down, economies get ruined, things like that. I knew that by the time they were willing to admit to the world what was going on it was too late, and there was already going to be infections in other countries, it just would be a matter of time. So, I could tell very early on that this was going to be a massive event, and I tried to tell everybody that I could you know prepare like wherever you are right now just stay there it’s gonna be 18 months, just stay there and they’re like no, no, no, like it’s the flu, like, you know what no guys, like this is this is a life changing event, you have to be ready for it, and they called me chicken little and guess what unfortunately I’m right. Well, everybody was going about their day going well I hope this ends like so I can go back to my normal life I was thinking okay well my business is not going to survive if I keep going down this route. So, on a professional level, it’s been an amazing opportunity, and personally it’s been an amazing opportunity, because I’m also a firm believer in bitcoin and cryptocurrencies. I remember you guys writing the book and talking about it and preparing to promote it and all that, so it’s awesome that you got it out. I’m sorry that, you know, things turned out the way they did in terms of not being able to promote properly, but I think it also gives you an opportunity because now that events are digital, you can literally do a speech in, you know, 5 different countries on the same day. Yuri Cataldo: So a lot of the speaking engagement I have book related, non-book related, are from other parts of the world and they happen, but still I, I miss the travel part of that and then this, like us sitting down beforehand and having a drink and talking about what your project was and other things, like I, I miss those parts of conferences. I may have tried to recreate them virtually, but it’s still not the same. Sean Weisbrot: I never went to as many conferences as you did. Malta, in fact, was probably one of the only conferences I’ve ever been to.

Before Starting the Company (7:22)

Sean Weisbrot: So, let’s talk a little bit more about entrepreneurship. You used to have a company, and it was a water company. Tell me about how you got the idea to start that company. Yuri Cataldo: I was the founder and CEO of an international award-winning bottled water company called Indigo H2O. It has been shut down since 2015. I still have people who email me on a monthly basis asking when the water will come back. My background is in theater. I’m a classically trained set and costume designer, and a ten years ago, I was working on Broadway until the economy caught up. I was living in New York the economy crashes everything stops which then trickles down to the theater world, and at the same time, I was not a great relationship, and I got a divorce. So everything in my life changed immediately pretty much overnight. I had to live without any income and like sitting on debt and everything else, I moved back to Indiana which is where I’m from and I live with my parents. And I had to just work to pay off the bills I had, and to figure out what was next. I was able to work as a as the engine professor because I had a master’s degree which by the way pays like absolute shit. I think I got paid like $2000 to teach a class, I actually begged for extra. They maxed me out at teaching 5 classes, and they were like, we can’t allow you to teach anymore, so like making, so I was like, that’s $10000 for an entire semester, which is nothing, and so I had to figure out other ways to make, make money. I was cleaning offices at night. I also worked as a server in a restaurant, which was an interesting experience at that time because other people who are highly educated we’re also serving, so it was like, it was me, there were two lawyers I was working with, there were someone who just graduate from medical school. I remember my boss joking about how he had the smartest wait staff like in Indiana because we are all, most, most of us went to Notre Dame or other Ivy League schools. And a lot of scientists, you know, all kinds of areas, but that was just what was happening especially in the Midwest at that time. I realized I had to do something else to break what I was doing and so I talked my way into getting a job for a, a TV station. So, I sold TV advertisements to a lot of small businesses and through that I spent a lot of time just chatting with small businesses to understand what their needs and what they were doing and at the same time as I was learning how local, small businesses are run, how people thought through their ideas, it donned on me that if I wanted to get out of my situation, I needed to you know either get a different type of education or start a company. And I just, I decided to start a company. The other part of it was that my, my parents and my relatives are all entrepreneurial, they all owned restaurants and their own businesses. They’re Italian immigrants, and so they all have some kind of side hustle or business or multiple businesses, you know. They’ll mow lawns in the summer time, sell Christmas trees in the winter time, and also plow your driveway kind of types of businesses, so I’ve been around that my entire life. So the idea of starting a company was like yeah I’ll just like I need an idea, but I’ll just do that because everyone around me does it and I’m used to that part. So, I spent six months trying to figure out like, what it is I wanted to do, and I basically just asked everybody that I knew who had a company or was around, you know, business owners, I would ask them for advice, and just like what we’re doing right now, just have a conversation with them. How, why they got started, what was it about their idea that was interesting? I just interviewed tons and tons of people while I tried to figure out what I wanted to do. At the same time, I had this day job. I would take extra-long breaks and I would go to Barnes & Nobles and I would just get, get a cup of coffee and just go through and start reading every business book that I found interesting. Just was like go through the shelves, actually go to the shelf with a bookmark, put it back, and then come back the next day and where I was, and then kept going, and I did that multiple times. So, through all that I was figuring out exactly like you know how, how to start to think about running companies, how to test your ideas, and so I came up with a few ideas. The idea of the bottled water company came from a couple of different things, it was my own interest, like unique obsession with bottled water that had come from years ago. So, when I was 17, I was diagnosed with a condition called Thalassemia Minora, which means that I have red blood cells that are smaller than the average person. But, basically what happened was, I was like living a normal life, and suddenly I was exhausted all the time. It was like, if you’ve ever had mono, that was like my day to day for a very long time and so I tried to push through it, but it was just getting worse and worse and worse. So, I went to the doctors and they couldn’t quite find anything. Once it was finally diagnosed, there isn’t a treatment for it, so my doctor was just like, well if you take iron supplements, you should be fine, and so I did that. It didn’t really work, and at the same time, so my wife, my parents friends introduced us to a natural doctor that they were going to see, and so I went to go see her and basically her system was to figure out what vitamins and minerals my body was lacking, and then helped introduce those and, and approach health from a holistic way rather than like this is what your problem is. And, so we went through a series of tests with her and, and find out what I was lacking in part it was I was severely dehydrated and I wasn’t getting enough water and helping to flush out all, all the things. And so from that moment on, I start looking at like, okay so you know what it is about water that’s so interesting, and like I grew up in the middle of nowhere in the Midwest, so we have really good groundwater.

Mapping Out a Business Idea (13:32)

What was that like versus city water with chlorine and a few other things? So, I just became a little bit of obsessed with it. I started doing some research and then I forgot about it for a while. And then coming back to Indiana, I’m back in this environment again, and so I am thinking about water and where I was in New York and tasting New York City water, and then you know, New Haven city water. I’m back in the country where it just it tastes different and it always felt different, and so I wanted to know why, and so I started, I sort of bottled up some of our water and went got it tested. And found out there is, because it’s you know there’s a high mineral content where I am in Indiana, there’s a lots of calcium, magnesium naturally occurring in the water. We have hard water, and hard water has naturally occurring calcium, a few other things and so the ground water I was associated with from these wells that were on my parents property were already naturally healthier than a lot of other places. And so, I was like okay, well, if the water here is already great, then you know what if I started, maybe a bottled water company or something? Like it, it didn’t seem like that big of a thing at the time. Because I honestly had no idea, no idea about the industry, or what any of that was like. I just knew my parents property, it was really good water, and I had access to it, like just because we have multiple wells, and so I was not worried about water levels on that side. And so I just started systematically going through and thinking through how to actually get this going, and part of that was, you know, deciding on the type of bottled water company that I would want to buy from. So, most bottled water is recycled, you know, tap water in a plastic bottle, and I knew that I didn’t want to see whatever product I came up with sitting in a landfill that was like, or floating in the ocean that was, that was contributing to this garbage industry that the bottle water industry has come to. I also wanted to find a way to give back to either the local community, or other communities who need access to fresh water. So at the same time, I was chatting with some of the founders of Ryan’s Well in Canada. I think is also shortly after a couple there, there’s a couple of other bottled water companies that started at the same time who did that, like you buy a bottle of water and then we’ll help you build wells and in an emerging country. So I was looking at their model, but the early social enterprise types that you buy one, get one types of, of things, and so I was trying to develop that model, same time developing the company, and not knowing how to do really any of this. Because the most difficult part of all this was, okay so I’ve got water, now how do I put in a bottle? And even more so, like how do I ship it? Like if, if I’m going to not just do a regular plastic bottle, how do I use another container? At the same time, I was looking at, you know, plastic looking aluminum, how does that work? And then how do I physically get it into the hands of, of somebody? And so I was fortunate that one night my parents had a dinner party, and two of their friends started in 1998, this small local furniture store that became the world’s largest online retailer of furniture, and it was called furniturefind.com and they, they started in the, in the early, the early 90s, and it rose and everything went online, they got bought out by some large companies, they took the company public, like they hit the height of the original dotcom bubble, and the moment they sold the company, everything came crashing down and like all their stock options were gone and lost, and like they tried to buy back the company, it was a huge thing. But, they learned so much from like starting this small local furniture company and then launching it online and seeing what happens there and they were just sitting by me at dinner time, and so I had a couple glasses of wine, and I was like, hey guys let me, I got this idea of this bottled water company, can I just, pitch it at you and see what you guys think? And they’re like, yeah, why not? So, that evening I stumbled through whatever I thought was like a pitch of my idea, and through the steps of kind of figuring out how to do everything, they thought it was awesome and they wanted to help me. And so that was like my first real mentorship with them, which was fantastic because they already knew how to start online companies, they already had some distribution ideas, like they already have done this because they were shipping furniture around the world, and so the idea of shipping bottled water, they’re like oh yeah we’ve got a scale down we got to get this out.

Starting the Business (18:17)

And so it was like every week they would help me come up with assignments that I would have to figure out and do. You just to get the different elements of, of this of like how to bottle it, the distribution part, storage, kind of all that, all that beautiful stuff. And so what I ultimately ended up doing was, I didn’t have any money to actually launch this huge company, which is what you really need for bottled water company. On average the plant alone costs around like five to ten million dollars and then everything else goes up from there. So I had to get creative with all of this and so the bottled water part I knew that I wanted to use glass. The only thing about glass I knew was that my dad, and I’ve been helping them for years, bottled wine. So I knew how to get wine, wine bottles, and where to buy them. I knew how to store them, cork them, like make all that sanitary. I knew how to fill wine bottles with fermented grape juice, and so that’s what I did in the beginning. I was fortunate in that my dad had already built this freestanding building on our property because he wanted to have a catering company. And so I was sitting in a—an already approved by the Department of Health—facility that was basically just a large catering kitchen with two very large sinks. And so I came in, and he was like I don’t care what you do with this. So, I rebuilt part of it to be a bottled water plant where I had a section set up where I would bottle all the water, store the bottles, sanitize them, like so I set up a system. In other parts of it, I set up as like a labeling system, and then there was another part where I was, I called it my warehouse area, where I stored the bottles that were full, and sealed them up and the ones that were empty and like somehow threw together a system. So I, I set up my own kind of internal working system on that one, and the early days I did it all myself and it was all by hand. And so before I launched anything, I found the bottles, I went to a local wine store, I bought one bottle of every color they had. And then a week later I went to a party with a friend of mine, and I walked in there with like six different bottles of water, like I put corks on them and they just filled them full of the water I was testing. And I went around to people and ask them how much they would buy, how much they would pay for this bottle of water. and I got laughed a lot. I think the first sale I made was for like a $0.25, or actually maybe it was five cents. and so I gave them a bottle for five cents, I was like great, thank you and at the end of the night I had one bottle left and it was the blue bottle, and it sold for five dollars because the young lady wanted it for a vase. And so I knew that for whatever reason that blue color was what she wanted like what she really latched onto and she talked about how much like, yes you try the water and, and everybody was there, there were all from the Midwest, so they’re all very polite. Anyway, and so she was drinking it, and she’s trying to you know how is like great tasting water. But apart from that, she’s talking about how much she loved the blue bottle and how attracted she was to the blue bottle, and so I was like great. So now for my bottle water company, I got this part, so I know people at least in this, in this individual case, will pay more money for this blue color, and they’ll talk to me about why, and again this is a small test, test case of one person, but everybody else who bought the other bottles didn’t do that, they just bought it, like great, thank you, and then kind of went away, but she spent extra time talking about why this blue color was so important to her and so for my test case, I was like great, let’s go blue, blues beautiful anyway like who doesn’t want a crisp clean blueish types of water. In the area I live in, there is also, it’s a very industrial area, so I did more research and I found they were actually label companies up the road from my parents’ house, and then shipping box companies, and so I went to each of those and I got samples and I got quotes and so I came back and I compiled everything and so that I knew that if I want to launch the company I could just turn the key and go for it but in order to give the idea of like selling what it was, I photoshopped everything together. So I taught myself Photoshop. Photoshopped the label on the bottle in nice locations. The mentors I had helped me get this terrible, terrible website up like mid-January 2011. I launched what was called Simple Water, it was the simplewaterstore.com was launched and I had just enough money to do a month and a half of Google Adwords to see if there was any interest in this company. And so I turn the, turn that all on and I was like great we’ll, we’ll wait and see. And every day I was kind of tweaking the Adwords and just seeing what happened.

Idea Validation (23:12)

A week goes by and I get my first sale. It’s for a case of water and this person, again I had no idea about pricing either, so I just guessed. This person bought the first case of water, I think it was for $89, and so I was like great, I’m, I’m almost in business, like so I’ve got enough, enough interest so far, someone at least is, is kind of interested let’s wait and see. The fortunate thing about at least the law anyway, not sure if it’s changed, but you’re legally allowed 60 days before you have to deliver a product to somebody, so when you like to see that As Seen on TV, and they’re like allow 4-6 weeks for shipping, doesn’t take 4 weeks for shipping, it means the product hasn’t been created yet and they’re just seeing if there’s enough interest before they go through the process of, of buying this because they can, they can still cancel the order and so going into this I knew that. So I knew I had once, he bought his product, I had six weeks before I had to deliver him something or giving his money back. and so I ramped up my Adwords campaign, and then just sale, after sale, after sale, after sale came in, and so after I reached my first thousand dollars-worth of sales in the, in the first week and a half, I knew that I had something here, and I was ready to pull the trigger. And so I went out with that money and I bought labels and I bought bottles and I bought caps, and initially I was actually, I found a cheaper way to ship it by using USPS pre-paid labels, and just wrapping the hell out of the bottles, and so I knew I could control certain things and then just like pulled the trigger and launched it. So like the company was officially live in, in February of 2011. Sales continually started going up, and up, and up, which was awesome. And I was learning how to tweak the distribution, how to start working with retailers, how to start finding international distribution, what does it mean to wholesale? Like all the stuff I learned on the job and had no idea what I was doing. To be honest totally was just making it up as I was going along. After reading a bunch of things asking people questions after the first six months I realized that, so the name was originally called Simple Water, when I started googling my water brand, the first thing that popped up was the search term “Simple Water scam.” So it turns out there was this company in Canada that, that there was selling filters, and they would go in to older people’s homes and tell them their water was garbage and then sell them a bunch of stupid filters and were doing it over, and over, and over, and over again, so much so they were being sued by the government. After realizing that, like well I shouldn’t have a bottled water company name where I can’t own the search rights. I also didn’t own the website simplewater.com, like somebody else owned that. I couldn’t get the, the trademark to it, like, so everything about that pointed to the fact that I just needed to pick a new name.

Becoming Indigo H2O (26:08)

At that same time as I was running this, I still had a day job just to pay down my debt, and at this point, I was, I talked my way back into being a professor. And so I was sitting down for coffee one time with a friend of mine, and I was like I need help with a new name help me out with something and so we, we just started spit balling things back and forth, most of which were stupid, terrible, garbage ideas. But at some point he was, looked at the bottles like yeah you know like what other some names for blue. And we start naming them, like indigo, that’s kinda, that’s kind of interesting, like Indigo, well you know it’s water…H2O, Indigo H2O, Indigo H2O, and he kept on saying and I was like okay, that has this weird, cool, kind of rhyme to it that’s happening, and I turned to some random person who’s also at this cafe and I was like, “Hi, I have a question for you. What do you think of the name Indigo H2O?” And she looked at me and she started singing it back at me. She started singing, “Indigo H2O.” Like I was like, that’s so interesting and bizarre, thank you so much, that’s like and she’s like kept on singing it, which was so strange. I was like if that’s, if whatever random thing just happened here, like somebody is so excited this name that they would sing it back to me, there’s something there, and so that’s when the name Indigo H2O was born from. And it just so happened that nobody owns the rights to anything, so I got the trademark, I got like, I own the website that you know, Twitter, Instagram, Facebook, all of those, I own them all. So that was a great, that’s even better because I can own this name and then launch from there. And then from the moment I changed the name, like everything just got easier and better with the company. The bottled water was accepted into the gift baskets for the MTV video music awards in 2012. That got a ton of press because from there, I learned how actually to, to get better at PR and marketing. Before then I was kind of like stumbling figuring it out you know being from a small-town Indiana and then suddenly having this product, this locally produced product in an international award show was a really easy way to get press. So, I contacted some local reporter and told them what I was doing, and so they’re like yeah we’re writing stories, and so I think I still the original newspaper article somewhere around here. There’s like the local newspaper about, you know, photograph of my water in the paper and it was awesome. Like, I ran into the local grocery store to find it and take a photograph of the of, the actual article, and then again huge spike of sales happened. It was there I realize that the more times I can get my water known publicly in places, that I can start controlling some of these huge spikes on top of what else I was doing. And so, I just had the systematic approach where I was targeting award shows for inclusion on top of my other, other sales of like getting included into traditional grocery stores like Whole Foods and few other places. And so right after that, I got into the Emmys, I got into the Golden Globes. So every year I would just get another award show or get into another type of event, and then every time I did it, I got better and better at my PR pushes and so I was featured in more articles, and more magazines, which, you know, led to, you know, Ink, and Forbes, and a few other places. They were just kind of showcasing the company and what I was doing and then building and building and building from there. And I got into Whole Foods, and Whole Foods, they loved the products so much that they originally bought enough for one store, which is my local store, and then they expanded from there. And then I was in like 5 in Chicago, and then they started expanding further from there. So everything about my company was getting better and better, year after year, and I was learning how to handle the sales and distribution and marketing and everything else of a bottled water company. I was able to hire some people. So I, I had some friends who are getting their MBA actually at, at the Notre Dame and Mendoza school. And so I had some MBA is working for me helping me bottled water at night, and then run the company in the daytime, and it was it was awesome experience. And then in 2015, everything changed. So in February, I was included into the Oscar gift baskets and it was completely amazing. And so I, I knew ahead of time. Started my PR push, and at the same time then, I skipped over this a couple times, but there are international events that award medals to water for, for the taste of it. Very much like beer tastings and champagne tastings and wine tastings, there are water tastings, and the biggest one is in Berkeley Springs, West Virginia. Happens every February, and I heard about it at some point, I don’t remember what, I think I was just trying to find a way to get awards for my company, and I came across this and in 20, I think was 2012 I just sent my bottle of water in not expecting anything, and I won 3rd place. I was like that’s awesome. And then I sent in the next year, so 2013. 2014, I sent it in again, I won 2nd place. And so going into this in 2015, I was like this is gonna be awesome. Like every year I would finagle with the taste of the water because I can control that and by adding more or less minerals to things I would do like this whole tasting event leading up to it, so I could send them what I thought was the best tasting water I possibly could. 2015 in February, I get included the Oscar gift bags. It’s fantastic and I knew this a week ahead of time, so the week leading up to that, I’m getting a lot of actually fantastic press from everywhere, like I was owning the news cycle in Indiana, Illinois, Ohio, like all around me, it was great. I had more interviews than I’ve ever had in my entire life. I was actually able to do a lot of onsite TV interviews at Whole Foods, which I had to get special permission for, because they don’t like it when companies do that. But because I had been, yeah because my story, because I had made friends with the store manager, they loved it and so like every day for a week it was another TV station who drove to me and interviewed me next of these large special things that that were built up for my bottled water company. Like we go into it that weekend that Saturday night then, I win the award for the best tasting water in the world from this Berkeley Springs thing and, and I was actually speaking at a conference in Chicago that night about creative entrepreneurship and so as I’m driving home in the snow storm they call me and they’re like the people of the other line were like screaming on the phone with excitement, partially because they knew I was getting all of this publicity about being the Oscar water and so, there was this, I was kind of the favorite going into this, mostly because they knew that if I won I would give them more publicity, because I was better at it than they were. So they call me, I’m driving like having like the night of my life on there. I get home the next day, of course the Oscars happen, and there’s a big, whole big deal about my water being there. Because I had won that, that night, like press releases went out, and they made a bunch of phone calls so, so starting on that Sunday in the snowstorm I was doing another set of interviews about having the best tasting water in the world. And so I drove back again to Whole Foods, and had like six in a row interviews with TV stations, whole new TV stations about what was like to be the Oscar water and to have the, the water that was the best tasting in the world. And then this really cool thing happened, where people just started like coming in the store to buy the water while I was still being interviewed for things. Like, we sold out almost immediately, because these were live television streams going out, and so people were driving like an hour away to come to the Whole Foods in Mishawaka Indiana to buy the Oscar water, and to meet the founder. It was like this weirdest thing I’ve ever experienced, because who really cares about bottled water that much. Well, apparently a lot of people do, and so it was great. For the, for the following week then, I was getting more interviews sales, were exploding. I think my sales for that, for that following two weeks were, went up like 3000%. I had distribution deals from around the world coming in, I had a higher sales team, I was like, I finally hit the tipping point. I spent money and bought some new equipment so that the bottling was being more, more, more automated. I bought a lot more inventory.

Being Sued and Shutting Down (34:45)

Yuri Cataldo: I was looking at ways to buy a warehouse to expand operations, and then suddenly I got an email and everything changed. The State Department of Health decided, of Indiana, that my company appeared to not be operating at the level they thought I should, and by operating, I mean paying a certain level of taxes or being monitored at a certain level, because everyone bottled water company and beverage company is regulated. Sometimes by the FDA, sometimes by the local authorities, depending on whether you ship intrastate or outside the state. So they contact me, and they say well, we know, so we know that we gave you a permit to operate this company but based off of everything we’re seeing, we don’t believe that you’re a small startup that you claim. We believe that you’re a large international conglomerate that’s trying to get out of paying taxes. So you’re, you have to physically stop right now until we can do an investigation. And so I was sent a “Cease and Desist” immediately, was told to shut down all operations, so we had to pull off like every bottle of water on the shelf. Fortunately for me, because I was so hot and popular, everything sold out ahead of time, and so I was just stalling my distributors while I was trying to figure this out. I had to hire a beverage attorney, which I didn’t know they existed, but they do. Chatted with the beverage attorney, really, really smart guy who hates government regulation like that, and we went to town and fought this. Couple things happened. We found out where their assumptions were coming from, it was because the fact that my publicity had gone so well that I was everywhere, that it was like freaking out people, because they didn’t think that a small startup could get that much press, especially locally. Once they realized their mistake, they just basically said they didn’t care, so like I went to one of our meetings, it was the last meeting that my attorney allowed me to go into, well basically like, you know, your like, your, your meeting the founder, I am pretty much running this with a small group of people, but we’re actually giving positive publicity to Indiana. Like you are now known for having the best tasting water in the world, and not for the other garbage that’s happening by our current governor, who was a piece of shit. Also, it’s not a good thing insulting the governor when you’re getting sued by the state, and it’s not a good thing to do. I was like, you know, your, your bankrupting a small business that’s actually bringing, bringing a lot of positive publicity to the state, and you’re doing it for really stupid reasons. And they basically came out like they didn’t care, like they wanted to make an example of my company because they didn’t know how to regulate it, they did not think about it, I’ll they knew was, I was like falling into this area they couldn’t understand, and they wanted to make an example so that other people wouldn’t try to pull whatever thing they thought I was pulling, which wasn’t anything, I was just like, I was operating a legitimate bottled water company, that was above, above what they actually even required in the beginning. And so, we’ve, my lawyer and I fought them, and the reality is, I just didn’t, I didn’t have a lot of money like to keep it. We fought them for a month, and it’s about what I could afford, and he came back, and he was like listen, here’s the deal. They are going to make an example of you. For whatever reason it doesn’t make legal sense. You pissed somebody off at some point, and I don’t know who, I don’t know what it is, but whatever it is, your someone’s target, and so you can do two things: You can keep fighting them until you run out of money, which is going to happen pretty soon, they’ve got more money and more resources than you do, or you can close up shop right now, and you know, go build this somewhere else, or just go do something else, and so that was a really difficult thing to think about, with this company I’ve been running, and built up and was doing so well for four years was now like you know having to be shut down because of some stupid politician or some other stupid person’s opinion that wasn’t based on anything factual. It took me a couple days, I kind of think through, but I was like, you know, I, I, I had a great run, this is a great company, you know, let me, I just, like, I was tired of fighting, I was tired of a lot of things, and so I decided to shut it down, and then, you know, figure out what I can actually do in the future, but I know that I didn’t want to be in Indiana anymore. I didn’t want to deal with the local politicians. I just, I was done and I wanted out, and so I was like, that’s it. And so, it was I think like April of 2015, I closed the doors to Indigo H2O and pulled all the products off the line and shut everything up. Sean Weisbrot: Thank you for sharing your story, it’s definitely comprehensive. So in a nutshell, what was the most important experience you learned from those four and a half years of starting, growing, I believe it was a multimillion dollar company, and then having that happen to you, shutting it down and moving on.

What Yuri Learned (39:49)

Sean Weisbrot: What was the most important thing you learned that hopefully people can learn from your experience? Yuri Cataldo: To not get to you married to your, your company. I wasn’t a stranger to starting things, like as a, as a designer, and I figured this out early on a lot of my experience as a designer, and going from the ideation to actually launching a theater experience was very similar to launching a company. It’s not a straight apples to apples comparison, but a lot of the same ideas of like running through ideas and testing them out, in the, you know, human-centered type of approach to it, very similar to launching my company. One of the things I learned along the way there was not to get too married to an idea, because things change all the time. Like when I was in theater, there was never enough money, there’s never enough time, never enough resources, and so you had to just think on your feet and keep adapting, keep changing and it was the same thing with my bottled water company. I probably did a much better job early on because I didn’t have a bunch of funding and because and have a lot of access to money. All I had access to was like my ingenuity and my ability to kind of just talk my way into rooms and to meet with people. And so, being able to think creatively gave me a lot of motivation, it give me a lot of just, yeah I think it just it helped with the evolution of what my company became, which allowed it to become so much stronger, because what I thought of the company in the beginning was definitely not what happened in the end. It was an eventuality. I also learned the power and sometimes negative power of publicity. Like, until that nonsense happen to me in 2015 I never would have thought that getting too much publicity could have been a bad thing, but in some, some ways it, it kind of is. I say that particularly because I’ve, I’ve had another experience before where I was the CMO of another tech startup and I got a lot of publicity for the founders. And it didn’t affect it in the same way of the like, government regulations, but it affected them in a negative way. And sometimes that means it affects the founders and how they think about themselves, how they think about their product. Sometimes it’s how the world views your, your product and sometimes that can be a bad thing. So those are the two big things, but you know ultimately, it sucks that it doesn’t exist anymore, but it was an amazing experience and it’s, it’s you know it’s the reason why I get to talk to you and I get to talk to a lot of other people, because I figured out how to sell. I figured out how to make water sexy and like that, very few people have done that. I figured out how to make water really fucking sexy and sell millions of dollars of it around the world, yeah it didn’t work out and that sucks, but there’s something there that was just so cool to think about but it still was water.

Follow Up With Yuri (42:42)

Sean Weisbrot: So how can people find you online? Yuri Cataldo: My personal website is [email protected] I’m also @YuriCataldo on Instagram and Twitter and LinkedIn. But if you just go to, you can to yuricataldo.com, there’s like, there’s my speaking gigs coming up, you can look at the bottled water if you want to, the books I’ve written, and then you know other things. I do a lot of side consulting based off of what I’ve learned in working in the tech world, and then also the bottled water company, so I’m always happy to talk to people. Sean Weisbrot: Brilliant, all right, well, thanks for joining us. This has been an epic journey, I hope everyone learned something from it, and thanks for your time. Yuri Cataldo: Great, thank you so much. My pleasure.