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Brewed To Stop Deforestation:
The co-founder of Runa, Tyler Gage, stops by the studio to discuss with Pedram how he started his company. A graduate of Brown University, what made him leave behind his suburban life to go explore the Amazon rainforest with indigenous elders at the age of 20? Runa, according to Inc Magazine, has become one of the 500 fastest growing companies in the US. How has Tyler been able to expand his the company so quickly?
How does Runa’s mission statement help better the Amazon rainforest while still allowing growth and expansion in a consumer economy?
– Hey guys it’s The urban monk happy to be back in studio pretty much done with the Prosperity film. And now I’m hanging out with a new friend who is a hero in that space. He has done some phenomenal work in the Amazon and has really lived with these people studied with these people and has brought the principles back to create a company and a business methodology that uses the wisdom of the Amazonian shamans in how we deal with chaos and the world that we live in. Tyler Gage is the co-founder of Runa Tea. It is a wonderful wonderful product. I’ve consumed myself and the fact that he is out there doing this work and keeping to those principles becomes a real kind of case study of how we could do business in the future and how we can do business that doesn’t destroy the planet. So Tyler welcome.
– Thanks for having me fun to be here.
– Yeah well man this is great. I’m a I’m a big fan of your product. They run you through circles and literally it just so happened that you were in town and I was just like oh I’ll move everything and get in the studio. Here we are. I appreciate it. I love it. It works out like that.
– Yeah totally and then we’re hanging out live.
– So you know one of my first exposures to your product was I was at Thrive market and I realized that not only the founders but that entire company was drinking your product like religiously. Where is the stuff. And so I had someone i go oh. I get it. I’m clear I’m calm I’m energized and I’m focused.
– That’s a great combo. That’s the goal. Yeah yeah.
– So what is it? And where did you find it?
– First place is so it Runa all of our products are based on Guayusa which is this rare Amazonian tea leaf that comes from the upper Amazon in Ecuador. So it’s a leaf that’s brewed like tea but isn’t actually related to green or black tea. It’s actually a variety of the holly family that’s native to this one little sliver in the upper Amazon. You get this diversified blend of stimulants and more balancing compounds that give you that characteristic focus and clarity. I’m hyper caffeine sensitive. When I went to the Amazon and they said This plant was energizing I was very scared but I was really struck by the way it almost feels like it holds you from behind as opposed to punching you in the face like a red bull or a triple espresso. So I fell in love with the plant and then a lot of our business has been building the whole supply chain to bring it to market. So you said an interesting case study with us as a business because no one had ever commercially produced this so it wasn’t like coconut water that had big supply chains or Asai that big supply chains in foreign countries made the leap to the US when we went to Ecuador and asked these farmers that what we said we wanted to pay cash to buy these leaves and put them in drinks and sell them in the United States of America. They would just give us these blank stares and then laugh hysterically.
– I just thought it was like a huge joke and that idea of you know money and commerce meeting the sacred historical plant was just bizarre. So it’s been a lot of work but also is really the biggest window we had for innovation because as opposed to say Fairtrade coffee or chocolate. We weren’t fighting against any industry. So from the get go we could basically put the flag at the upper end of Fairtrade business practices sustainable farming permaculture organic rainforest grown and basically set the tone for gwai use it or reach market based on those principles which were fully inspired by the Spirit and culture of this leaf in the Amazon.
– Amazing. So one of the things that is a really important thing to note here is that this leaf this plant this tree grows in the shade covered canopy this looks much like the business model of what Guayaki, which does the same thing. It incentivizes the kind of financials to make sense. To keep the rainforest there and grow this in the canopy.
– Exactly yeah.
– And so you knew this going in. And so now the point is the more of this you sell the more rain forest you save the more deforestation you offset and all that.
– Yeah. And we were very inspired by companies and the way they’ve used market driven models to support conservation and in our case it was a nice combination between the commercial model set by those companies. And this ancient practice of forest gardening in the Amazonian which is different from maybe like the chocolatiers that we know from from other places but it’s a self-sustaining way of managing rainforest and preserving biodiversity for productive means.
– So essentially what we did is we took that traditional model which had the cultural familiarity and then technophile it slightly with a bit more increased Guayusa of production to make it more profitable than destroying the rainforest for cattle or palm oil or soy.
– OK so you needed more plants per hectare or whatever in the same canopy to make the animals pencil. But you were able to maintain a canopy 100 percent.
– So I mean you know like a tea plantation you have like this much space between trees in Gaza in the forest gardens there’s like 16 metres between trees so where it’s grown if either of us walked around it totally looks like the rain forest is just using an economic incentive through production to then help solidify the economic base for these farms.
– What’s fascinating to me is when we were doing the story of the cow with the indigenous people in Panama. We’d go out to the plantation I’m like well where the hell’s the plantation right. It was exactly where we were. It’s like oh. Got it. Got it. The rain forest and everything is still intact and that’s why this works. And then the people were happy and all that. So I want to kind of get into the economics of the grazing and the you know the things that cause the deforestation and like what you know what’s causing the cutting down of these trees in the first place is it mostly cattle and beef or what. Like in this region it’s really a mix.
– It’s really a mix. The transformative experience I had when I was down living in Peru in college with people. I had one afternoon heard this incredible story from one of the community leaders about how his grandfather’s spirit lived in this big tree by the village the next day he came back with a big chainsaw having just cut down the tree and was ready to sell it for pennies on the dollar. And in my you know Bay Area you know environmentalists arrogance went up and tried to call him out on the seeming hypocrisy of this maneuver and he said well if you had the choice between cutting down a tree or not having money to send your kid to school. Which is what you make or if it was cutting down a tree or not having money to send your mom to the hospital what would you do that. W And that was a big punch in the gut for me that was the major transition from sort of kind of deep Chaumont study into wanting to start a business. And it was also a representative where these communities don’t want to have to cut down or split the rainforest. But it’s a sacrifice to have access to the global world and education in certain parts of health care that they don’t they don’t know. So the incentives for it a lot of it is force degradation. So rather than just fullscale force destruction it’s taking out key species like some of these hardwood species that then has a big ripple effect for the rest of the ecology there is predicting Ecuador or a lot of African palm in the upper Amazon there it’s a big big driver of deforestation for palm oil palm oil. Palm oil is big in Brazil soy. A bit more which is actually mostly uses feed for cattle. And so it’s a bit of a loop but it’s it’s a puzzle. I mean the deforestation from oil isn’t actually as much. It’s more of the secondary impacts of oil spills and destruction of community values that is the big impact there. It’s pulling them off to work jobs that aren’t exactly you.
– And that’s really what we want to do is we want to make it more profitable than any other solution for people to sustainably manage farms so more profitable and moving to an oil field more profitable than cattle more profit and profitable than African palm. And if we can prove that model that’s really the strong strongest but we can put forward. And our goal is to really transition this conversation from just morals or carbon statistics and economics. I truly believe that if we can use economics as our fighting ground that’s the most powerful way to pave the way forward.
– Amen. You know one of the things that I got very kind of viscerally when I was in South America talking to a lot of these individuals was you know these young men don’t want to leave their moms and their sisters and their villages in this beautiful place to come to San Diego and mow someone’s lawn.
– Are you saying like like you know it’s like why the hell yours while like building a wall to keep these people out. It’s just like they don’t want to leave their home. So what happens when we line up the incentives and make the abundance work so that they can stay with their families and have a livelihood that you know is sustainable and actually allows them to get education thrive. So what’s a living wage. How does that work.
– So for us we work exclusively of family farms so we’re bizarre in the industry that 100 percent of the gwai you say is grown by family farms. Almost all teazed grown and plantations even the majority organic and fair trade has grown in plantations. So the fact that we can support local farm economies is very different and therefore it’s not about us paying them as employees. Autonomy’s farmers so we pay them. High fair trade prices further waste of the. We generate a few hundred thousand dollars a year direct cash income on top of community enterprise investments for about 3000 families now and that’s a big income boost for them to support their families in the ways that they can. It is important always to note that being quote poor in the Amazon is much better than in a slum. I mean these people live off the land primarily so their ability to get Yuka and plantations and fruits and hunt they can do that very well. It’s when it comes to things like emergency medicine or education where they’re a bit stunted in that way with the resources. And our goal is really put the decision making power in their hands. So if someone does they have to make some money on my farm and then sell it. I moved to San Diego. That’s their choice. So we’re not trying to bring a paternalistic like oh you’re these romantic native people and we need to keep you just the way you are or like that that is. I mean atrocious or funny perspectives. We want to say hey we’re good business people.
– We’re going give you a viable solution to manage your farms if that’s what you want to do. And if that’s not what you want to do or however you want to your resources that’s yours. We’re here to be good partners.
– So one of the things that we found in Panama which really kind of blew my mind it was it was it was a big issue when we were bringing this kind of like sustainable play to these island this island nation really was the sanitation right where it’s just like OK so we’re going to triple the amount of money coming into your community which means these plastic bottles of water and diapers are going to be like Barbie dolls like you know other stuff. So the sustainable growth model to try to say OK look this is what happened to our world when we you know grew without thinking about it. So how can we intercept that for your world so that now these why use of trees aren’t like littered with plastic bags all over the place. And that’s a hard one.
– So first we created a hybrid organization. So in the spirit of quite you say goal you say it’s central to the communities and the spirit of collaboration and exchange in the Amazon. The tribes get up at 3:00 in the morning. The whole community sits up around the fire and drinks quite you and tell stories interpret dreams and the spirit of this plant is about exchange and working together to live in a healthy way as a community. So we said what if as a business we took basically that same inspiration and design our organizational structure in the same attention. So we said we can have a business which can be the sort of leading masculine edge of income generation production bring products to market and then as you know what for lack of a better term a feminine counterpart to that we can have a nonprofit which can think much more broadly and holistically about how to improve livelihoods in the broadest sense of the word for these people. So how do you introduce market economics in the most biodiverse place in the world in a way that has respect and awareness and education alongside of it and isn’t just oh here’s some income and everything is going to work out perfectly. So through the nonprofit we’ve been able to invest in lots of community enterprises do large scale force management planning and also do a lot of education around savings co-operative development and capacity building housing.
– So you’re actually kind of you’ve got a toe in both worlds though because you know the traditional kind of nonprofit model is do whatever you do you know don’t worry about your wake and then donate to charities or organizations or go clean it up and do this. But your primary business model much like like like he is like the social enterprise model which is every time I buy a bottle of Roona or you know the teabags of Roona what I’m also doing is supporting the economics that support you know the maintenance of this canopy. Right. So it’s like you’re on both sides of it which is also interesting.
– Yeah. And I think this word livelihoods we always come back to because if you’re an Amazonian person living in the rain forests your livelihood is the rain forest and it is your community. It’s not just your income or your own self-identity that’s not how these people see themselves or the foundation of their traditions. So for us to be able to support that in a broad holistic way and be very conscious of this transition of indigenous traditions meeting the market and there’s incredible potential there but it’s difficult and it’s messy and it takes a lot of awareness and humility and listening to. Weave those different levels together.
– I know a lot of NGOs get fed up and frustrated a lot of companies get fed up and frustrated and leave because you know I feel you know and get them I’m saying this with the utmost respect as you go in thinking like you know where the like you know destructive Westerners and then we’re here to save the noble savage type of thing and it’s like that the whole kind of paradigm which is absolutely false right these are just people. And so you get there you want to help these people and you realize they have their own intrigues they have their own corruption they have their own dramas they have their own embezzlement. It’s like Oh man people are people. Absolutely. And it’s hard to help that.
– Yeah. And that’s where I think the business approach in many ways has the most sustainability and opportunity there because we said hey we’re not here to save you. We’re not here to try and manipulate your future goals. We’re going to be partners. So we want to listen. We want to collaborate. And the foundation of our business was what we call the liberal arts approach to business. You know I studied Amazonian languages and creative writing and my business partner studied marine bio. So business expertise wasn’t really fully loaded in our domain. When we started. So we did really the only thing we knew how to do which was act like students. So for the first six months in Ecuador when we got going all of our time was dedicated to talking to people listening trying to match perspective see what their ideas their ideas were and building the design of the business off of that collaborative listening space. So it wasn’t saying what do you mean we’re just going to do it. It was hey we want a partner Here’s our ideas they’re your ideas and any healthy relationship there is that beautiful fertile space of the unknown that happens when people come together and share ideas and something magical gets created. Well five five years running now we’ve been selling for five years working for about eight.
– OK. So it took three years to kind of get things going and give the splotches chain going. How does one start. So if I’m like a young entrepreneur and I’m like yo I love this right. I’m assuming you have mosquito bites to show for it I mean you’ve had you know hair infections all year. All right so it’s not always pretty right like Indiana Jones don’t no one sees Indiana Jones in the off moments right. But so you go when you start these conversations then you get to deal with like tariffs and exports and all that. So what’s the risk of being able to actually hatch this egg.
– So a fundamental teaching which is where the title for the book came from this idea of being told by the book and second all because I can but this idea of being fully alive in the Indigenous perspective isn’t this idea of being perfectly radiant inspiring people all the time but it’s really about learning from obstacles as teachers. And they really have this incredible ability to look at discomfort and challenge as opportunities for growth. And I think most fundamentally for any entrepreneur you have to be in that mine said if you can’t look at the challenges and struggles for an invitation to dig deeper for your own strength and support. It’s impossible. So sort of foundational level that perspective and mindset. Harold what kind of stuff. Exactly. From there we did a few things early on which really helped I think similar to some things you talk about. So anytime we think about you know we’re 23 in the middle of the jungle and wanting to build a beverage company a supply chain. Think about what that would look like five years or even a year from starting was completely paralyzing. So we set three month goals and we said are what do we need to do for 90 days. We don’t have to call our parents and have them bail us out and flies back to you to your houses. And that was a really practical way not only to make progress but also to build credibility.
– And I think as a very young entrepreneur with no experience we tell people that starting this business figures we’re going to do an ninety nine point nine percent of people thought we were almost out of our minds and we’re going to fail today. That’s fair. Here’s an I’m going to do in the next three months we’re going to sign an agreement with the indigenous Federation we’re going to start our first processing trials etc. etc.. It’s a great few months later we called them back and say hey here’s what we did here’s the next three months. And that is a great way to build credibility of some of our early investors. And we even got the national government of Ecuador to invest in our company.
– Wow. Wow. And how long down the arc did that take? That was that wasn’t that wasn’t it wasn’t it a three month mark.
– Actually that was a two and a half years in. They created this really pioneering investment fund inside of the government to make equity investments in growing green businesses that could support impoverished people in the country. So out of 800 companies we were one of three that won. And they invested half a million dollars in the company. Well the other reason we liked it is that their plan which we’re still working on has been to then transition their shares to the farmers. So actually really interesting mix of you know for profit capital to grow business and then open and democratize the ownership structure to then bring the farmers in.
– We follow those dollars those tax dollars going into it. Yes.
– I mean in theory every Ecuadorian owns a piece of VERRINA. We are able to do something similar. So Leonardo DiCaprio invested in our company last year and when he invested we came up with this idea that he would then donate his shares to the farmers as well. So we were able to lead the charge with that investment structure. And I think it’s a great model again as we talked about trying to break this business and charity disconnect and look at how not only in an operation of a business like we do but even in the structure the funding the nuts and bolts of how business operates how can we be more creative and innovative and draw from different traditions to build businesses that look pretty different than the ones that we’re used to.
– So let’s talk about cold hard but there’s this first second. Right so DiCaprio I mean whatever he makes 20 million a movie that he can afford to afford to do. Right. But let’s just say he’s like yo you know this is this is my money and I need you know a return do you structure it in a way where he gets a certain return before he can basically then divest and just you know let his shares go.
– So most of the money we’ve raised has been a bit more traditional mostly from family offices and a lot of other celebrities and angel investors. And it is a nice thing about the business where the more beverages we sell the more income we create for farmers. So there isn’t really a fundamental disconnect between the core growth model of the beverage company and the impact that we’re creating. So for the most part if we continue to do well the investors some of them will say hey I’m going to donate all my profits. Some will say part of it. Some will say great job of the business. Thanks for the return and I’m glad we could create a sustainable income source for the farmers. So we haven’t created any fixed the model for certain limited returns on and on investment but have a lot of very mission line investors who have also given grants who have or informally set aside part of their return to go back to the foundation or directly to the farmers.
– Very interesting. Jeffrey Hollander of some generation that’s doing this where he was trying to you know give a percentage of the company back to the employees every year. And you know there’s obviously pushback from so the capital sources and all of that. I mean this is it’s never it’s never pretty you know it will because people actually I mean it’s self-interest you know enlightened self-interest versus you know interest for the collaborative and I think that’s the conversation that’s now happening right now is the independent versus interdependent you know mine versus ours. And so you that kind of bleeding edge of that and you have conscious investors that are helping that conversation move forward. It’s really interesting what’s manifesting and what could come from this too. You know look no man no margin no motive and business right. So people want to come in. They want some returns obviously or they don’t want to lose their money. But to be frank on the front end right. But then afterwards it’s like how does this kind of keep building and what’s the legacy. So as you are scaling this right now it’s been five years. You know you’re you’re in Wholefoods you’re in thrive market. Amazon’s a big place where you distribute and it’s a wonderful product. Where do you see this going like what’s the long term mission of like you or are you trying to grow back and offset rainforest.
– So for us it’s primarily driven by income generation. So we’re an organization that truly believes that the main driving force has to be income generation for farmers and that’s the portal through which we can do all the conservation work and support local economies. So thereby It means they’re selling as many beverages as we can is the name of the game and at this point with the company in the U.S. It’s a very focused beverage company. It’s all about the ins and outs of promotion and distribution and product innovation and the things which are exciting but very very beverage industry looking which have the impact of what we create in Ecuador. Sure. So on the foundation side we’re doing some really cool things to amplify impact and I’m spending more of my time there because it’s all the more ripe for innovation. And as an entrepreneur not a beverage executive it’s more high impact for me. So a couple things we’re doing. We have been getting involved with building some of the world’s first medical clinics for Amazonian plant medicine. So trying to create actual clinics in facilities where Western doctors and traditional healers can side by side treat patients from around the world and look to do clinical research to potentially prove the efficacy of these treatments. And as far as I can see this might be the singular potential for global industrial interest in protecting these resources.
– If we can tap into the demand for health and health care and that pharma dominance in the world and show that these plants are more effective at treating autoimmune disorders anxiety depression are two of the things that we’re looking at the potential interest in conservation from that sort of like what’s in it for me for the global audience.
– Could be exponentiate it more than anything else I can see gave multitrillion dollar industry into the mix and suddenly the re-inforced has a lot more value. Exactly. Actually you know if them and introduce you there’s a doctors group Doctors that I work with that do naturopathic medicine and they have clinics in Ecuador and I get I can get you lots of boots on the ground love it that super humble and their whole thing is you know you show up. I’m actually this is through my Hosp. battalion order. And so like you know these guys have you know I have certain amount of like volunteer work I do every year type of thing and you show up in the hole. The whole point is you know OK look barefoot doctor what. Do you guys use for this this and this. Let’s bring back your local indigenous tradition first and then you know interventions if need be. Rightly so is going into labor. I get it right. But there’s a lot in the lifestyle spectrum that is what’s costing the most money for sure. And so you know then there’s you know basic things like sanitation. And a lot of these communities would offset a lot of medical costs if done right. So it’s not so great. That’s you know this is cutting edge. Right. Like you guys are really you know dealing with a lot of the social issues in a very small amount of space with very specific you know population.
– But you know in looking at how to take this like if I if I’m watching this right now is like a young entrepreneur and I’m like yes I have you know I’m mission driven. I really want to support you know all these things that I care about and I want to do it through business. What are the lessons I can learn here like how do I start. How do I begin to unpack the wisdom of you know this book. Great book by the way I highly recommend it available on Amazon now everywhere books are sold. Call fully alive. And this is really his lessons from the Amazon going into business in life. So it’s it’s it’s such a new era for business and business schools that I you should be lecturing at a major business school country what would you say to these young people.
– So it’s a weird experience. Stanford has a big case study on it and I go speak there and Harvard and brown and is someone who didn’t study business. It’s a very strange experience to be going back. So two things for both small companies and big companies who are looking at the similar question of infusing not just concrete impact but it’s also this question of meaning and purpose. With the two I don’t think are extractable And I think in the social impact space they get separated more frequently than it should. But the first point of it for me is digging deep into the authenticity of who you are and what you do. And I think especially in the bigger company perspective it’s trying to follow trends or think about what we should do or what would be right or what would be looked upon well. I admire the companies who dig into the spirit of who they are what they do and try and create more impact internally and externally around that set of core values and core competency. So for us we’re involved in Amazonian plants and Amazonia cultures. So we’re digging very deep there to do everything we can in that space. We’re not trying to you know donate books to schools in Brooklyn which would be amazing. It’s just not who we are and the authenticity of what we do. It gets us rallied and therefore has the most momentum and magnetism. The other thing just in terms of the How-To side of it is I’m a big believer in the value of the unusual and the unexpected.
– I think our stories often got told as you know we had this perfectly clear idea in charge in the Amazon and built this whole business. In reality I was anxious and depressed when I was 19 through following a few strange curiosities found myself in the jungle and a lot of that has been this willingness to listen to those curiosities and feelings that are just under the surface and don’t always line up with the sort of rational loops of things. And I feel like some of them with concrete leaps in our business came from being willing to either listen to some deeper intuition or follow something that didn’t seem linear or clear at the time that then unpacked itself in a broader and richer way. And I think in the world of entrepreneurship we love to talk about the reality distortion fields and dreams and these things in more philosophical ways. But I think it actually can be a very practical skill set of deliberately listening and following curiosities and valuing and inviting in the unusual to learn and to grow.
– Yeah well I mean that’s you look at Dali look at Einstein you’ve got all these guys that can actually get a pop in the clutch and go to this place of creativity and this place of instinct to then guide and follow the bread crumbs into you know where they ended up you know really sitting in their genius. You know for me I actually you know see this almost as like a binary system is there’s this new symbiotic model of business that’s all about you know people planet purpose and all these of quadruple bottom line types of conversations and then there’s this old Paris that the people who are sympathetic parasitic model right which is about extraction and externalities and it doesn’t matter because you know our bottom line is our bottom line and every quarter we get to put up some numbers and you know basically let the government.