Nick Green, Co-Founder and CEO of Thrive Market
This interview is part of The CEO Series by Executive House.
Watch the full interview on YouTube
How has remote work changed things for you as a father of four?
Our second, our son, was born at the beginning of the pandemic. We were in lockdown and I was home, and it was so strange to actually be there during the day with him, versus with my daughter. I realized I just hadn't been there. That was very eye-opening, because with her I thought I was really present. In retrospect, I was working all the time. For my whole career before the pandemic, I was in the office 90-some percent of my waking hours. As soon as I got up, I was on my way over, and I came home after dinner at best, right before bed at worst. When you don't know any different, it just works. My dad worked a lot of hours, and he was home when he was home. When we had our first daughter, I didn't take any paternity leave. We were in a high-growth, intense phase of Thrive. Then with my son, you realize there are milestones every day, stuff happening when you're gone, and you don't want to miss it. Remote has been a game changer for having a family. If I was in the office the way I was 10 years ago with four kids, they wouldn't see me.
Where are we?
This is the Thrive HQ in LA. When we went fully remote, we had a transitionary office in the WeWork upstairs. They've been great partners, and when we get 350 Thrivers here, we expand into the WeWork and host events up there. Other than our tentpole in-person events, there are only a few dozen people here on a regular basis. We're probably 60% outside LA at this point and 90-some percent remote. We have about 350 people in core headquarters roles, and over 1,000 across our fulfillment centers, who are equally core to the operations and come into the warehouses every day.
What is Thrive Market?
We're on a mission to make healthy living easy, affordable, and accessible to anyone. We do that with a membership model that lets our members get better-for-you essentials. Think of everything you'd find in the middle of a grocery store, upped in quality and focused on organic, natural, health food trends, the best you'd find at a Whole Foods, but at better prices through the membership model, shipped to your door. We ship anywhere in the US. We have three fulfillment centers, about a million square feet of warehouse space, and we hold inventory on every product, so it's not drop ship from a bunch of different places. When someone orders their Thrive box, they get 15 to 20 items on average in one big box on their doorstep. We offset our carbon footprint from shipping. Ninety-some percent of orders for regular members come through the app, and more and more people use our recurring program. They put the items they want regularly on a schedule, check the order monthly, add one-offs, take things out, and streamline the whole process of being healthy. A lot of e-commerce options are a meal kit or a surprise box. Thrive is about getting the stuff you already want to buy. If you went to the best grocery store you could possibly find, and for most people that means a bunch of different grocery stores, you'd have it all in one place, ultra-curated, at better prices, for $5 a month.
How does a brand get onto Thrive?
There's a push and a pull. In the early days we were pounding the pavement, soliciting the best brands and trying to find them before they went to broader retail. Today, thousands of brands come to us because they want to launch on Thrive. Our sales volume, our 1.7 million members, and the ability to reach health-conscious consumers is attractive. But what's been consistent the whole time is the quality standards. We ban over 1,000 ingredients. We're 100% non-GMO on the food side. We're maniacal about chemical preservatives, non-nutritive sweeteners, dyes, and additives. The big value proposition to our members, beyond great products at great prices, is trust, and that's what we parlay into our underwriting of every single brand. Because we're ultra-curated, we're not trying to build the everything store. We have about 6,000 SKUs, not a million, so we can do the homework on every product and brand. It's hard to get on Thrive. Less than 1 in 10 brands that apply will get on. But those that pass that bar have access to members who want to buy these things on a recurring basis.
Did you grow up eating healthy?
We were the weird house on the block. No soda, no sugared cereal. The highlight of a sleepover at a friend's house was breakfast with Cinnamon Toast Crunch, Cap'n Crunch, and Froot Loops. So I wasn't into it as a kid, but I was certainly required to be, because my mom was very into it. In retrospect, she reversed a multigenerational cycle of health issues in her family, specifically diabetes and also obesity. She was very committed to making sure sugar wasn't in our home in any way it didn't need to be. Through the first 20 years of my life, I rebelled against it whenever I could. By my mid-20s, I was really grateful for the health it afforded me and my siblings, and I'd seen the divergence in our health outcomes versus other people we knew. I was converted on a personal level, and a few years later we wanted to take it to the next level.
Tell me about your family background.
My mom's side is Mexican American, multiple generations back. She was born in Denver, and her parents were from Colorado too, but Spanish was their first language. Raising their family in the '50s and '60s, assimilation and embracing being American was really important to them, so my mom doesn't speak any Spanish. Her parents prohibited Spanish in the home. They'd speak it amongst themselves, but my mom was punished if she got caught speaking it. Another full-circle moment: as a parent, she decided she wanted us to speak Spanish, so she sent my sister and me to a Spanish immersion school. We open-enrolled in a different school district, and she drove us a half hour every morning with my younger brother crying in the car. That's how determined my mom was. I do speak Spanish. And even more full circle, my wife is from Spain, so our kids are very fluent and put me to shame.
Did you eat Mexican food growing up?
Whenever my grandma was in town. It's great food. It can also be very heavy and carb-heavy. Several people in my family were diabetic, and the challenge was a base of pretty carb-intensive food, which itself isn't terrible, with ultra-processed food, sugar, and plain junk food layered on top. My mom cooks great Mexican food, and my grandma cooks even better Mexican food. What we didn't have was that layer of junk food on top.
What does your mom think of Thrive now?
She's a proud mama. She's also our biggest critic. She orders every week and texts me if something comes with a dent or we run out of stock. She's 74 and still a pioneer on health and wellness. She's hardcore into longevity, doing hyperbaric oxygen. She was on the forefront in the '90s, doing research at the library with no internet, and 30 years later she's still doing it.
How does your mom connect to Harvard?
The big things for my mom were health, from her own experience, and education. No one in her family had gone to college. Her parents hadn't graduated from high school. It wasn't "You have to go to Harvard," but from a very young age it was, "College is really important, and we're going to invest in it." That's another place where we were the beneficiaries. I didn't always appreciate the push as a kid, but by the time I got through college and saw the opportunities a place like Harvard opened up for my first business, it was, again, "Thanks, Mom."
Why Thrive Market? Why healthy food?
Part of it goes back to the first company I started in college, an SAT and ACT prep company. We hired Harvard undergrads, and eventually undergrads from across the country, to teach classes in their hometowns. The model was that it shouldn't cost $1,000 to get test prep to get into a better college. It was a value play, and in retrospect mission-oriented. It's wrong that only rich kids can prep for the SAT and get a great score. I was an accidental entrepreneur. I started tutoring kids myself, then teaching classes, then hiring others to teach my curriculum. I graduated in '07, and we sold it in 2010. We sold early because I hadn't made money before, and it seemed exciting to put a win on the board. The year or so after was one of the harder periods of my life. Integrating my business into another business was a real challenge, even though the founders who bought us were really supportive. And it was a personal crisis. I'd thought the capstone would be selling and making some money, but what I actually loved was working with students, the impact we were having, and seeing other undergrads become entrepreneurs. In my late 20s, I was having a version of a midlife crisis. I didn't have to work right now. I didn't want to just go get a job or go to business school. I wanted to start something I could do for a long time with the qualities I loved best about Ivy Insiders: a mission and working with really great people. I didn't have co-founders in that business, and I really wanted a team. And I wanted it to be something fundamental and personal. Education was, but health was even more so. I was realizing how good all the stuff my mom forced me to do had been for me, and remembering how hard it was for her, because we resisted and because there just weren't great options. That's what got me interested in access to healthy food. Then, very serendipitously, I met my co-founder Gunnar, who could not have had a more different background. He grew up basically in a hippie commune in Ojai, California, doing group buying of organic food. He pitched me on bringing the hippie commune to the masses. This was 2013, and the original idea was Groupon for healthy food. There was a period when every business was "Groupon for blank." That didn't work, but the mission was the same from the very beginning: let's make healthy living accessible. I could get behind that. By the end of our first meeting, I was basically pitching him on doing it together.
What was it like having four co-founders?
It really worked, because this business is complicated. You've got merchandising, fulfillment operations, supply chain and inventory. We're a technology company and a content company, because online you can tell the story of the brands in a way you can't in a grocery store. Kate was all content and brand. She'd done one of the most pioneering early blogs in the health food space, The Chalkboard. Sasha, still day to day in the business as our CTO, had built e-commerce companies and worked at Microsoft. He's an incredible technologist and a great business thinker. Gunnar had started and sold a company and understood organic food from the commune. And I had my background. It let us divide and conquer when the business was frankly pretty crazy. Kate left a couple of years later. Gunnar left operationally but stayed on the board for a while. Sasha and I are still at it.
When did you decide to raise money?
We had some capital, and the operative word is "some." Having both had successful businesses, we naively thought we could self-fund. Then we realized pretty quickly how capital-intensive e-commerce is if you want to do it right. Before Sasha came in, we'd hired an agency to build the technology and ended up with vaporware six months later. So there were multiple existential moments in those first few months, which culminated in, "We've got to raise money." That led to a six-month journey through the wilderness of fundraising that was entirely unsuccessful. We thought we were seasoned entrepreneurs with a big market opportunity, so we confidently schlepped up to Silicon Valley and flew to New York. We probably met with over 50 VCs in that first round, and ultimately more than 100. We were pre-launch. We didn't have the capital to build the inventory base to go live. We basically had a deck. Looking back, I understand some of the reasons they didn't invest. But there's an important obstacle other entrepreneurs face too: if you're pitching something that isn't personally relevant to the types of people who are investors, it's a lot harder for them to understand. Our target market was never coastal, affluent venture capitalist men, which is mostly who we were pitching. It was middle-class, middle-American, mostly moms. If you live in New York or San Francisco with a Whole Foods down the street, and maybe you don't even do your own grocery shopping, are you going to relate to a problem of access? Combine that with the complexity of an operating business, and the legitimate skepticism they had. Food e-commerce is a graveyard of companies that haven't made it. The meetings were mostly very pleasant. The tough thing was the lack of feedback. We got a lot of nos from people who wanted to keep the door open, so they wouldn't tell us anything critical, and we'd have benefited from pointed feedback.
How much have you raised in total?
Over $300 million, and the valuation has been over a billion. But what I'm much more proud of is that 11 years in, we've been profitable for three years, the business generates cash, and we haven't had to raise outside capital for the last six years. We've done it as a mission-driven business that hasn't co-opted its business model to be profitable. That mission-driven model has been the driver of our success.
Did any of the VCs who passed come back?
Our Series A lead was Greycroft, and they passed at the seed round. Unlike so many VCs who gave wishy-washy reasons, Dana Settle, a partner and founder at Greycroft, gave us really pointed, candid feedback. She's a mom, she's into healthy eating, and she was actually passionate about what we were doing. "I love what you're doing. Here are the problems you're going to have. Let's talk in six to nine months." We came back, and they led our Series A.
You raised from health bloggers and YouTubers. How did that happen?
Another incredibly serendipitous thing. We'd been talking to these folks about promoting the business when we launched, but because things were taking longer and fundraising was a struggle, we kept pushing the launch. In total contrast to the VC conversations, these health and wellness influencers were amped by the end. "I live this problem, or my audience does, and I want to bring them this solution." We met Mark Sisson at a Starbucks in Malibu, and he was the first influencer who said, "I want to invest." A light bulb went off. No drama, no negotiation, no three-dimensional chess. Just, "I want to back this." He wrote a $50,000 check and introduced us to a bunch of his influencer friends, and the snowball got rolling. We got 100 nos from VCs, and then literally hundreds of influencers and bloggers writing $25,000 to $50,000 checks. Some have sold shares over time, but a lot are still all in, with investments worth seven figures today. What was so unique is they really believed in the business. The money was additional skin in the game on something they were already committed to, and the way they talked about us was totally different from reading an ad during a podcast break.
How does the membership model work, and how did you get to profitability?
The loosely held idea at the beginning was Groupon for healthy food, but the core conviction was never in the model. It was in the mission. How do we make healthy living easy, affordable, and accessible to anyone? We knew that was a big opportunity. I grew up in the Midwest and saw how hard my mom had to work, and Gunnar had seen the power of group buying organic food. That hardcore commitment to the mission made us really open-minded on the business model. Groupon didn't work, so we looked at other models, and the one we stumbled into was the wholesale club. I grew up going to Sam's Club and knew about Costco. The more we studied the way Costco implemented it, the more excited we got about creating a community and building trust in higher quality delivered at better prices. We take margin on the membership and less margin on the products, so we sell them at better prices than a traditional retailer. With natural and organic, the goal is to get premium products at or below the price of the conventional equivalent if we can. The other piece was hyper-curation. We already wanted it for high standards and trust, but it also let us punch above our weight in volume. Instead of spreading purchasing across thousands of brands and tens of thousands of SKUs, we spread it across a few thousand SKUs and a few hundred brands. So many retailers are trying to out-Amazon Amazon by being the everything store. What we figured out early is that when it comes to healthy food, people don't want 100 options of almond butter. They want to know which ones are the best. Smaller selection became a feature, because we take out choice overload. We cut steps in the supply chain by going direct with brands, we don't have brick-and-mortar costs, we take our margin on membership, and we pass the savings on to you. Over time we've turbocharged that with technology and a user experience purpose-built for healthy living: the filters you use to shop, a recommendation engine built on your onboarding assessment and your purchases, and the recurring program. We'll know 70 or 80% of what someone wants in a given order based on their past orders and data from other members, so we load the cart. Instead of building the whole cart, you're topping it off and subbing things out, and it takes five minutes instead of 35.
How do you feel about Whole Foods?
Amazon is the gravitational center of retail at this point, and its gravitational force sucks everyone in its direction. Whole Foods is literally part of Amazon, so you've seen even more Amazonification. Whole Foods was a touchstone for us from the very beginning. John Mackey was a super mission-driven founder, the conscious capitalism model they pioneered was really innovative, and their quality standards were market-leading forever. Their challenge was that prices were expensive and the model didn't support better prices. No membership, no direct-to-consumer, and 50,000 SKUs in the center of the store versus our order of magnitude fewer. One benefit of being bought by Amazon is they can offer better prices with Amazon's volumes. One downside is Amazon has been more focused on the general grocery opportunity than the healthy living opportunity. For me that's sad. I never thought I'd see Honey Nut Cheerios at Whole Foods. But it's a business opportunity for us to step into the void and be the standard-bearer on quality.
Does Whole Foods see you as a competitor?
We're a decade in, but still so early. We have 1.7 million members and we're approaching $900 million in annual sales, which is an exciting level of scale. But the grocery industry is so huge. Are they aware of us? Probably. But they're not coming for us, nor are we going after them. Whole Foods by and large is still a healthier grocery store than your standard one. And I'm not anti-Amazon either. We're the un-Amazon. Amazon wants to build the everything store. We want to build the un-everything store, where you know everything meets this quality standard, because when it comes to health, that's what people want.
What inspired your own brand?
Costco and Whole Foods were inspirations, and so was Trader Joe's. About 20% of our sales today are Thrive Market brand. We started within a year of launching, earlier than it probably made sense, because we were inspired by the innovation. Costco does it well on quality with Kirkland, but Trader Joe's does really unique, innovative stuff. Online, we had so much data on what people were looking for and couldn't find that we didn't have to do the traditional private label model, where you copycat third-party brands and cannibalize their sales. People wanted a higher-quality organic tomato sauce at a lower price, a single-source olive oil they didn't have to worry about being cut with other oils. That's deeply aligned with the mission, super differentiated, and it turns traditional private label upside down. Members talk about it, it drives word of mouth, and it's great for business.
Do you want that 20% to grow?
Five years ago I'd have said absolutely. Now my answer is: if that's what's right for our members. A core lesson we've learned over and over, when we've done things right and when we've made mistakes, is that our business is all about delivering value for members. If we do that with an innovative third-party product, amazing. If we find a gap and create a product ourselves, amazing. If we shoehorn ourselves in and crowd out a brand people like, we hurt the brands that make our ecosystem work. If we bring out a me-too product that isn't differentiated, we undermine trust. We have a really strong hit rate on our own products for two reasons. One is that commitment to launching products we think add member value, which is a mission commitment and also in our interest, because what drives our business is whether members purchase and renew. The other is amazing data. A brick-and-mortar store sees what people purchase, but not what they looked for and couldn't find, the reviews, or the member services conversations. That data drives our third-party pipeline and our private label roadmap. We've had things that didn't work, and every time, we find out why. The lesson is always the same: deliver member value. Costco does that so well that people buy off pallets in a literal warehouse, and when Costco fans talk about it, there's love. That's the experience we want to create within healthy living, much more than hitting some arbitrary private label target.
You ban over 1,000 ingredients. How do you decide?
One by one. If it's clearly bad for health, that's a no-brainer. The difference between us and other retailers is that for things in the gray zone, questionable and maybe not good, we also say no. I think retailers should be stricter. Not to dive into politics or policy, but in the European Union, for an ingredient to enter the food system, it must be shown to be safe. That seems like common sense. In the United States, it falls under GRAS, "generally recognized as safe." In the EU, the default is no unless you show an ingredient is safe. In the US, the default is basically yes, and food manufacturers are asked to self-police. The FDA says you should have evidence it's safe, but you don't have to submit it. There's legislation being considered now that would require that documentation to actually be submitted to the FDA. That's a first step. We go further. We look at the EU standards, and then at things that aren't banned in the EU. If something is a chemical preservative, we don't want it in there, even if it hasn't been documented to have health impacts. Same with artificial dyes. There are hundreds of these things, and we default to no. With ultra-processed foods, which has become a big debate and MAHA has pushed hard on it, we don't think they should be in the food supply, so we lean toward cleaner, simpler, higher-standard items.
Big food is an interesting industry. Where does it stand?
There are some really positive trends, including from big companies like Pepsi, and a lot of challenges and a lot of money at stake, which has led to a regulatory landscape that's frankly inadequate. The good news is some of that is starting to change.
What's your view of RFK Jr. and MAHA?
The challenge is that it's become politicized. MAHA is associated with MAGA, it's wrapped up in people's associations with this administration, and RFK himself is polarizing. We think a lot of what he's saying about ultra-processed foods is right, and most people feel that way. Food dyes, preservatives, chemicals in food. For everyday people, those aren't controversial. But there are also stances on issues that have nothing to do with food, like vaccines, that are super polarizing and have a very different level of scientific rigor. The research against ultra-processed foods as a whole is very strong, and so is the research against many of the specific ingredients they're going after. Before MAHA, liberals were the first ones talking about needing a healthier food system. Now it's a polarizing lightning rod, which is unfortunate. On the other hand, I'm glad we're having the conversation. Look at what MAHA has accomplished. Red 3 is out, and a number of other dyes will be out. They've pushed for an actual definition of ultra-processed foods, UPFs, and I think that definition is pretty reasonable. The challenge is they're up against a lot of special interests. There was a Wall Street Journal article a couple of weeks ago saying the White House itself is starting to push back on the MAHA agenda. The skepticism, or cynicism, is that they're being pushed by the big food lobby. Their stated explanation is that it may not hold up to legal scrutiny and could open the government to lawsuits. But the definition they're talking about includes non-nutritive sweeteners, chemical preservatives, and artificial dyes. Those three should be uncontroversial. Hopefully in the coming years it becomes a bipartisan issue.
Why does the food lobby fight so hard on those three?
They bring costs down. Over time, there are other ways to achieve what those ingredients achieve in many cases. But the supply chains are already built out, they've operated this way for a long time, and there are switching costs. In some cases there will be added long-term costs, but regardless, there will be short-term change costs, and they don't want that. For us, this has always just been a health issue. Health transcends politics, and health transcends socioeconomics. People assume our members are coastal, liberal hippie-dippies. It's 60% middle America, very middle class, under $100,000 average household income, and thousands of members on food stamps. Everyone wants better food and health for their kids and family.
How many of your members get free memberships?
Hundreds of thousands of members have free memberships because they qualify as low income, a teacher, a student, a first responder, or a military veteran. From the beginning, we said every paid membership would be matched by a free one, and we've kept that commitment. Many of the low-income members use SNAP, the food stamps program. About 36 million Americans are on it. Until a few years ago, you couldn't use food stamps online, only in brick-and-mortar stores. When a lot of people live in health food deserts, that means using it at a convenience store or an unhealthy grocery store, often with literally no healthy options. Almost 10 years ago, we petitioned the USDA to accept food stamps online. It's now in a pilot program. The farm bill renewal could make it permanent, but right now it's up in the air.
Twenty states now bar SNAP from buying soda and candy. Is that a good thing?
It sounds like a good thing. But SNAP is a supplementary benefit for most people, about $6 per day on average. If you ban unhealthy food with that $6, it just gets bought with the rest of the food budget. Very few people buy all their food with SNAP. The better policy would be an inversion: incentivize healthy food. If you can buy more healthy food with SNAP, it becomes a bigger portion of what you buy. Banning just shifts it from one pocket to the other. It's well-intended, but in that format it probably won't achieve its aim.
How has your fight for healthy food changed now that you operate at scale?
We've seen firsthand how hard it is and how long policy change takes. Within a year of launching, in 2015, we were petitioning the USDA to accept SNAP online. It's a no-brainer. Fraud is actually lower online, and it's easier to verify. If you let people buy sugared soda at a convenience store, why wouldn't you let them buy healthy food online? We got 300,000 signatures in a few months, and our brands got on board. And it took a decade. Government moves slowly, and there's a push and pull. Even now, the farm bill is being held up, and if it's renewed it would make online SNAP permanent. Regardless of what you think about SNAP as a whole, only allowing it in person while the whole world moves online is crazy. We're proud the pilot started, and we feel we had a role. But it's been humbling and a bit jading. So our approach is, on the one hand, don't wait for the government. GRAS is messed up, so we enforce higher standards ourselves, reward the right behavior from brands, parlay that into trust with members, and let members vote with their dollars. As an entrepreneur and a capitalist, we can move so much faster than a democracy. Democracy's great. Politics take a lot of time. People voting with their dollars will shift the industry, and it already is. Pepsi and others are changing their ingredients, maybe not as fast as we want, but ahead of when the government requires it, because consumers are demanding it. We want to be part of that. We have 1.7 million members today and hopefully tens of millions over time, and those consumers going to other retailers and demanding the same products will create change. That said, there's policy that should happen: a definition of ultra-processed foods and getting them out of the food system, getting rid of GRAS or requiring GRAS documentation to be submitted to the FDA. SNAP right now is basically being gutted. About 5 million fewer Americans are on it than a year ago because of changes made, ostensibly, around fraud. The way they look at fraud is a subset of failed payments, and most failed payments aren't fraud. They're issues where someone who should get benefits isn't getting them. People aren't getting rich on SNAP. It's $6 a day, and 40% of beneficiaries are children who can't work and need food. So no matter how long it takes or how hopeless it seems, we're going to keep fighting on this. It shouldn't be a conservative-versus-liberal issue. SNAP fraud should be combated as surgically as possible, and the families who need benefits should get them. Making it more onerous won't be a net benefit for wellbeing in this country.
(Morningstar segment) PitchBook data shows healthy food companies are selling for three to five times revenue, while the average food company gets one. When a big company buys a healthy brand, is that good or bad for the industry?
It can be good. Often the rationale is broader distribution, more scale, and bringing a better-for-you, innovative brand to the masses. The challenge in practice is maintaining the mission, innovation, and standards of those brands inside a larger food company. There's real pressure to lower costs and lower standards as they scale. So it's not inherently bad, and actually more inherently good in what it could do, but really challenging in practice.
How have tariffs affected Thrive?
We source almost entirely from American brands and companies. Our co-manufacturers and even our private label ingredient sourcing are largely US-based, though we work with some internationally. So we had a lot less direct exposure than many businesses. The indirect exposure everyone has is that tariffs have made inflation worse. Domestic brands sourcing ingredients internationally have higher cost structures. The war in Iran and oil prices are driving transportation costs up, which hits us with fuel surcharges from carriers, both getting products to us and getting them out to members. The policy and geopolitical environment has been challenging for any physical goods business. Our commitment is to deliver spectacular value, so we've looked for creative ways to absorb those costs and partner with our brands to get through it together without passing a price increase on to members.
What's an example of a creative way to absorb those costs?
Honestly, getting better at the things we already do. On Amazon, you get onesie-twosies in boxes arriving at different times. At Thrive Market, it all comes in one box. If we get more items into a box, a higher AOV, we get better margins. If people buy multiple units of an item from one pick location, it's a higher-margin box. If we pack more efficiently so fewer orders go into two boxes, we take out cost. It's not magic. It's blocking and tackling. And it's continuing to scale. The membership gives us ballast, which lets us stay aggressive on prices. As we've scaled, we've concentrated volume on a small number of brands and worked proactively with them. In many cases we buy direct, not through a distributor, which is a better economic relationship for them than selling into brick-and-mortar retail. A retailer needs items constantly because of limited storage. Our fulfillment centers are 300,000 square feet, so we can store product a long time and buy direct. The North Star is value for members. The last thing we want is to extract value from them, especially now, when people are facing inflation and struggling to make ends meet in this quote-unquote K-shaped economy.
Are GLP-1s a net positive or negative for your business?
From a mission standpoint, there's a real challenge on affordability, but they're becoming more affordable. In terms of making it easier to get healthy and combat metabolic disease, and it feels like every few weeks another condition comes out that GLP-1s help with, it looks like a massive net positive for overall health and for costs in our healthcare system. If the affordability problem can be cracked, it's going to be really, really good. For our business, it's been a positive too. People on a GLP-1 are better able to resist ultra-processed food and are more thoughtful about their health in general. They're eating less, which may be a headwind for the food industry as a whole.
What frustrates your members most?
Even the unhealthy stuff, things that could compete for most unhealthy in the grocery store, are making health claims. It's frustrating and infuriating, it undermines trust, and it's a legitimate source of confusion. Those claims give people an excuse to eat it, and some trusting people think, "Maybe this isn't so bad. I'm getting the better version of the chip." A big part of Thrive's value today is the prices and the curation, but more than anything it's the trust. Members are in a store where everything meets a bar, not a house of mirrors where you don't know what is what.
Are people waking up to this?
The good news is the consumer is getting smarter. Eleven years ago we were getting rejected by every VC because everyone thought people didn't want to get healthy. If nothing else, Thrive Market's success has shown that people want this, across the income spectrum, no matter where they live. They feel better. That's why GLP-1s matter too. People eating less and eating healthier feel better. And the industry is responding. If we'd told people 10 years ago we'd have 1.7 million members, they'd have said no way, and we're just getting started. Big CPGs are buying healthy brands for hundreds of millions, sometimes billions of dollars, which shows they're trying to change, if not from the inside then through acquisition. And frankly, this is a competitive threat for us: Amazon, Walmart, and others are carrying more of these brands earlier. That's people voting with their dollars. The political system is slow, but the economic system can move pretty fast. There is predatory stuff that happens, and it's not good. But it is going to get better, and we want to be part of that.
What does grocery shopping look like in 10 years?
I hate to tell you this, but it's going to go more and more digital. It inflected in the pandemic, people thought it would go back, and online penetration has kept increasing. Some of what people dislike, like substitutions or not getting high-quality produce, is a problem specifically with delivery from the grocery store, where you're paying someone from Instacart or wherever to shop for you. Our model takes the grocery store out of the equation, one less stop in the supply chain. If it's live on the site, it's there and it'll be picked. You don't pay for delivery or tip. The assortment is stable, and the prices are better. What's really going to drive things over the next several years is the experiences possible digitally. We've used machine learning for recommendations for a long time, but the models are getting so much stronger, and we're at a size where we have so much data. On first orders, 70% of what people purchase at Thrive Market is put in the cart not by them but by our AI. For people who love to pick each item, they don't get that. But for most people, instead of 40 minutes at the store and 15 minutes driving each way, it's five minutes, and we can do 70 to 80% for them. In some ways AI can do it better. We can know the products you'll like before you do and help you discover brands that align with your preferences. When members come on board, they take an intake survey: What are your health goals? Who's your family? What brands do you like? Some of that goes straight into the cart, and a lot of it feeds big machine learning models. As agentic shopping becomes more prominent, we can layer in content explaining why we picked an item and integrate other health dimensions. Today people tell us about their health. Maybe tomorrow they upload their labs, and we make recommendations based on their ApoB and other biomarkers. There's so much there that literally can't be done in a physical grocery store.
Could AI act as a kind of health advisor?
The dystopian version is an AI overlord telling you what you can and can't do. In the best version, the humans are in charge. That's important. We now have the data, and LLMs are creating the agentic interface, so AI can be your advisor, assistant, and supporter on these challenging journeys. Healthy living is hard. If you're trying to be gluten-free, you're reading labels and doing research yourself. You look at the back of a product and there are 30 ingredients you can't pronounce. Where do you start? And things claim to be healthy when they're not. We could take your wearables data and your blood biomarkers. Imagine a future where we offered blood testing on Thrive Market. Look at Costco: members buy their glasses there, get their gas there, everything. We have this healthy living lens, so if we're building trust and a relationship with members, why wouldn't we try to provide as much as we can? That gets me super excited. Instead of healthy living being isolated islands that you stitch together yourself, you have one place, Thrive Market, that helps you solve these problems, with better value, trusted quality, and AI powering it and helping you discover what you might not have found yourself.
Approaching $900 million in revenue for 2026. Any plans to go public?
No comment. We've raised outside capital, and we've been very fortunate to have really supportive investors. We're fortunate to be profitable today, generating cash, with a great cash position on our balance sheet. We aren't in any rush for any sort of outcome. We think on a multi-decade timeline, and if it's right to raise money publicly because we have a way to deploy it, we'll think about it, but we don't need to.
Does the quarterly-earnings pressure of being public worry you for a mission-driven company?
One of the things I'm most proud of is that the mission hasn't changed in 11 years. We've stayed laser-focused on it, and we've shown, where we've succeeded and where we haven't, that being maniacally focused on helping members get healthier is the way to build business value. That was the skepticism when we were fundraising: is a mission-driven business really going to succeed, or are you pie-in-the-sky do-gooders? I think we've shown the mission and the business opportunity are two sides of the same coin. There's something exciting about doing that on a bigger stage. We're 11 years in, but we're still just getting started. We have less than 10% of our members' grocery share of wallet and way less than 5% household penetration. But I am very concerned, even setting aside being public, that as you get bigger and the dollars get bigger, it's really tempting. Eric Ries, who wrote The Lean Startup, has a new book called Incorruptible, and he talks about financial gravity: the bigger you get, the more temptation there is to extract value. In the public markets, with quarterly earnings and publicly traded stock, that gets super intense. Big organizations are also complex, people are many steps away from decisions, and it's easy for the mission to drift. So as we scale, we should constantly look in the mirror and ask whether we're staying true to the mission and delivering value for members, and be honest where we've seen drift. Once you're profitable and generating tens of millions in EBITDA, there's a push to do more. Governance matters. We're a public benefit corporation, so our mission and stakeholder commitments are in our bylaws, which insulates us. We have founder super-voting rights, so the founders maintain control of the vision even as economic minorities. And we have long-term investors. Our largest, who's invested nine figures and led our Series B, basically allowed us to not go outside for capital since. They have one LP, a single family office, in an evergreen vehicle, so they don't need to create liquidity, and they've been very patient. The right investor base, the right structure, and founder involvement all help, but I still think about it all the time. Very few businesses get this right. Costco is one. Patagonia is one.
Is the purpose of a business to make money?
One of the worst ideas in capitalism today, and it predominates too much, is that the whole purpose of a business is to make money. There's the Milton Friedman idea that the purpose of a business is to generate profit. No. Profit is needed to enable a business to pursue its mission. The magic of capitalism is that a mission-driven business like Costco will compound and create more profit and growth over time. If your sole goal is making money, it becomes really easy to justify bad decisions. And constraints like "we won't undermine our suppliers" and "we won't break our members' trust" actually force you to operate better. That's why Costco is so good at ops. They said, "We're not going to take more than this margin," and they built a half-trillion-dollar business. The analogy I love is that profit is like oxygen. You need it as a business, but it's not the purpose of business any more than breathing is the purpose of life. If a business exists only to make money, it usually doesn't last that long. The businesses with real staying power, that compound and have the love of their customers, have that mission orientation. And people think mission-driven businesses are squishy and ineffective. Most people wouldn't call Costco mission-driven, but look at their integrity with suppliers, how they treat employees, and their maniacal obsession with delivering value to members. That's a mission-driven business. There are proposals to move away from quarterly reporting to an option to report twice a year, which might help companies think more long term. What we want at Thrive Market is to be an example, like Costco and Patagonia, of a business whose purpose is its edge and the way it gets big.
Are shareholders the only stakeholder that matters?
Shareholders are one stakeholder. For us, it's our members, our brand partners, our co-packers, and our employees. Our belief is that when you serve those stakeholders, it ultimately serves shareholders better too, over the long term. Costco is the case that proves it. Social media is the ultra-processed food of content. It's doing to our brains exactly what ultra-processed food does to our bodies. And it's not that there are evil people at these places. I know people at big food companies and big social media companies who are great people and want to do great work. The issue is the structural phenomenon of financial gravity. It pulls companies toward delivering economic outcomes to shareholders, even when it's not great for their other stakeholders.