Daniel Lubetzky, Aiming High and Digging Deep to Engender a More Peaceful World

Daniel Lubetzky. photo: KIND

From developing healthy snacks to advancing the Middle East peace process, one entrepreneur keeps biting off as much as he can chew

Serial entrepreneur and best-selling author Daniel Lubetzky has some timely advice for start-ups seeking funding.

Inflation and recessionary warnings have had investors pumping the brakes, but Lubetzky finds a positive in that. “Investing during a downturn has the benefit of helping to reveal values-aligned partners with the fortitude to navigate challenges and emerge stronger,” he says. “At the end of the day, a good investor is a strategic partner, not just a source of capital.

“In times of major economic disruption, it can be particularly tempting to look for ‘easy answers’ by relying on someone else’s playbook for success. The most epic journeys don’t follow a road map; they are forged by teams whose values help them navigate the inevitable twists and turns ahead.”

Entrepreneurial Experience

The Mexican-American billionaire had a multicultural upbringing, the son of a Holocaust survivor born and raised in Mexico City. He moved to the US with his family as a teenager and studied economics and international relations in Texas, Israel and France. Daniel Lubetzky is fluent in six languages.

The altruistic exec began his entrepreneurial journey early. “Back when I was an undergrad at Trinity University, I started a watch company called Da’Leky Times. It taught me a ton about business and retail merchandising that has helped me throughout my career.”

He went on to earn a Juris Doctor degree from Stanford Law School in 1993 and spent brief spells at Sullivan & Cromwell and McKinsey & Company. Daniel Lubetzky was drawn to social entrepreneurship and was awarded a $10,000 fellowship to foster joint ventures between Arabs and Israelis. In 1994, he founded PeaceWorks, a “not-only-for-profit” business uniting Middle Eastern neighbours in multicultural understanding and commercial co-operation.

The company produces a line of Mediterranean-inspired pesto sauces and tapenades. Olives for the flagship brand MEDITALIA are grown in Palestinian villages, the glass jars come from Egypt, and the sun-dried tomatoes from Turkey. Five percent of profits go towards fostering peaceful co-existence and economic co-operation.

“When I was starting PeaceWorks, I considered all of my energy net-positive,” Lubetzky shared in a 2016 Inc interview, “so I didn’t filter it. I ended up distracting my team with hundreds of ideas, which was a recipe for overextension. In the consumer / packaged-goods business, that may be the most common mistake — people launch a product, it does well, and then they have this urge to launch more and more and more products.

“And some are mediocre, which makes you vulnerable to competitors.”

Daniel Lubetzky used the profits from PeaceWorks to fund further social ventures. He believes business can serve as a vehicle for social change while delivering products and services in a free market. “First and foremost, this is a business,” he says. “But there’s an added reason for being. It’s not just to make money. It’s also to try to have a positive impact in society, however small that may be.”

In 2004, Lubetzky launched the New York City-based snack food company KIND. It creates nutritionally dense snacks that are healthy for communities — and the planet. “When I founded KIND, it was just me and a couple of [food-tech friends] in Australia. I had been traveling a lot for PeaceWorks and was frustrated with the food choices on the road. I was always eating things that were either healthy and tasted like cardboard or were tasty and too indulgent.” Product development took a turn for the better when they landed on an irresistible recipe. “I knew we got it right when I couldn’t stop eating it.”

The company brought in $1m in its first year. Within four years, KIND had secured a private equity investment of $16m from VMG Partners, to provide a cushion of working capital and to fuel expansion plans. Lubetzky says it was the right move at the time — but he accepted a clause requiring the business be sold within five years. The closer the deadline loomed, the more convinced Lubetzky became of KIND’s potential.

“Four years into the deal, I was realising that KIND could become so much bigger,” he told CNBC. “My investors were pushing me to sell the company and were very eager. My vision was to continue growing the company for many years to come. And their vision was to exit and get a return on their investment.”

Daniel Lubetzky bought out his investors in a $220m deal funded with company cash and $200m in bank loans. “Now, because I hadn’t pre-negotiated the terms for buying them out, it turned out to be very, very expensive — and very risky,” he said. “Things could have gone wrong. I could have lost the company. But I believed in KIND.”

That faith was well founded. KIND emerged as one of America’s fastest-growing snack brands. The buy-back negotiations took two years, culminating in 2014 — when KIND annual sales nearly doubled.

Lubetzky decided to sell the company in 2020; confectionary giant Mars Wrigley took ownership in a $5bn deal. Mars first took a 40-percent stake in KIND in a 2017 deal for an undisclosed amount. “I am still a meaningful stakeholder in KIND today,” says Lubetzky, “and I still guide them. We’ve agreed with our partners at Mars that KIND will be a separate, stand-alone platform, and KIND is still growing by double digits.”

Philanthropic Initiatives

Daniel Lubetzky has taken a leading role in charitable initiatives concentrating on education, peace-building, and community development. KIND has been praised for its social impact activities in addition to its commercial success. The company has appointed an action team to lead diversity, equity, and inclusion initiatives, and forged partnerships with historically Black colleges and universities.

KIND has pledged to donate $150,000 through its “Snack & Give Back” project, which will this year be split between organisations supporting homeless LGBTQ+ youth, the families of war veterans, and school food-equality programmes. The KIND Foundation has distributed $1.1m to people “transforming their communities through kindness”. It has donated $100,000 to organisations addressing systemic racism, such as the Equal Justice Initiative and the NAACP Legal Defence Fund.

In 2022, the Lubetzky Family Foundation launched a $1m programme to support displaced Ukrainian scholars in the US. The initiative is co-organised and sponsored by Michelin-starred chef and humanitarian Jose Andres, global human rights and pro-democracy activist Garry Kasparov, and retired US Army Lieutenant Colonel Alexander Vindman. The four all came to the US as emigrants or asylum seekers, and urge global citizens not to take their freedoms for granted. They hope to educate peers on the fragility and importance of democracy, and to encourage proactive public engagement.

Fostering Entrepreneurship

“Over the years of building KIND through every stage of its growth, our team has amassed tons of experience building a formidable culture, beloved brand, and highly successful business by focusing not just on where we are going, but also how we are getting there,” Lubetzky told Retail Brew.

Now Lubetzky and some of KIND’s founding members are putting that experience to use at the start-up incubator and investment platform Camino Partners. Lubetzky established the firm, previously called Equilibra Partners Management, in 2018 and serves as its chair. He remembers how he built KIND up with a $5m initial investment, and he’s eager to pay it forward through Camino Partners. Lubetzky intends to deploy $350m over the next five years, supporting and shepherding the next generation of transformative companies.

According to Forbes, the serial social entrepreneur has an estimated net worth of $2.1bn as of May 2023. Lubetzky also co-founded a luxury fashion line that partners with artisans from the developing world and a food company specialising in Mexican cuisine.

Lubetzky was a frequent guest on Shark Tank, an American reality TV show where aspiring entrepreneurs pitch their ideas to investors. He warns entrepreneurs not to approach investors without a compelling product and a strong team. “Both are necessary — and neither is sufficient without the other.”

Daniel Lubetzky wrote about his Shark Tank experiences in a 2020 article for Fast Company, and highlighted what he calls “the three phases of entrepreneurship”: creative, critic, and crusader.

“At the outset, you want to think outside the box, brainstorm and dream big. Then, once all the crazy ideas are out on the table, you need to be honest with yourself, question and scrutinise. Play devil’s advocate and poke all the holes you can before you head out the gates and become the crusader.

“It is in the critic phase when you have a unique opportunity to pause and make your product, and your team, the best they can be.”