Longtime VC Stuart Rudick: ‘The biggest opportunity today is water’

Rudick is also bullish on plant-based protein and alternative farming.

Stuart Rudick, founding partner of the VC firm Mindfull Investors, has long been an early adopter. When he was bar mitzvahed at 13 his father asked him what he wanted to do with the $2k he had been gifted. “I said, ‘I want to invest it,’” Rudick recalls. 

But it was a bear market, and Rudick learned from his quick losses to pay closer attention to undervalued assets. After college, he rose quickly at Bear Stearns and then in 1983 started his own investment firm, Mindfull Investors. The firm’s mission was ahead of its time: investing in companies that promote health and wellness and those that have leaders who believe in health and wellness.  

Rudick’s investments have included Earthlink.net, Muse, which makes brain-sensing headbands for meditation purposes, the organic food company Urban Remedy, and “clean greens” company Organic Girl. He hasn’t been perfect: Mindfull was also a key investor in the failed blockbuster juicing startup Juicero (known as the “greatest example of Silicon Valley stupidity”). 

We spoke to Rudick, 60, about the biggest opportunities he sees in health and wellness, tips for cultivating a healthy culture at startups, why companies need to promote planet-friendly behavior to win customers—and about Juicero.

Key Takeaways 

  • Water is the biggest opportunity in the health and wellness space, and billions of dollars will flow into companies that ensure clean, healthy water for people and agriculture.
  • Despite massive gains by Beyond Meat and Impossible, the food industry is going to continue to scale.
  • Your company should be doing a daily or weekly practice—meditation, sharing statements of gratitude—to transform morale.
  • Founders need to create a ‘manifesto’ of values and look back to whether they broke those values when their company struggles.

Everyone talks about health and wellness and being socially conscious now. How did you see that there was a need and an industry for wellness and mindfulness and health in the 1980s?

Yeah. Well, it’s because when I was in my teens, I started practicing Kundalini yoga. And when I did that, I started realizing, understanding the importance of not just body but body, mind, and then body, mind, soul integration. And so in my practice of doing that, I saw how it flowed over into my life outside of just when I was doing yoga or meditation. And so, it just made me aware of this was not a separate aspect.

So when I started in the investment community back in 1980, I started looking at companies and investments that were doing well in the world and were doing good for people and good for people’s lives. It’s just been, to me, a belief that there really isn’t a separation between … really there isn’t a separation between anything. Everything’s all connected. So, looking at business and investments, I’ve always believed that by investing in ideas and companies that are doing well, is actually the best investment you can do and the highest returns. It’s not about having to take longer and lower returns, it’s the exact opposite. And that’s beginning, I think, to be embraced and understood today.

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Especially in the last few years, how has the world changed, and made it more important to think about companies that are about health and lifestyle and things like that?

I think that what’s beginning to happen, fortunately, is that more and more companies are realizing that as consumers become more educated, they have a choice. More and more, they’re making a choice that’s not only a financial choice, but they’re making a choice that is more of a health choice for their body and for the planet. So I think that is really becoming the new standard, and that we’re beginning to see, not the small entrepreneurial early stage companies, but we’re seeing Unilever as an example, is espousing this. And of course, Patagonia’s been doing this for a long time.

The way forward for the economic viability of companies is exactly that, is that they need to take into account the impact on our health and the planet. And, the youth, Gen Z, is a key testament to that. They’re willing to pay more for something when they believe it’s healthier for them and it shows the integrity and quality of a company and its values.

I’m actually in the midst of creating a really interesting new model called Transformative Business, which is the operating system for early stage companies to enable them to operate in a way where their actions for creating a business are highly profitable, and they transform the business, the industry. And, more importantly, they transform all the people that are touched by the product, whether that’s all the employees, whether it is the suppliers, and of course, all of the customers for these products. I think that that’s going to be the future of business. It is going to be what I call transformative business with transformative products, which would value people and all of our resources.

How would an early stage company live up to that transformative business model?

Well, it starts with the founders and it has to be based on their own personal values. Why are they creating this business? They want to make money, that’s fundamental. They also want to do so in a way that is more embracing of doing well for people and doing well in the world. So, they first have to start out with creating their mission, their vision and most importantly their values.Those values are based upon, pretty commonly, on looking at having honesty, trust, integrity, forgiveness, compassion, and generosity. Those are some of the fundamental qualities for people to have in business. Then, when you create a, I’ll call it a manifesto, in the company, these are the company’s values.

Everybody that works for this company knows of them and agrees to them and values them. If they don’t, they’re not a fit for the company. Then when you have that as a standard of your business and you have these as very clear credos, whenever you have a challenge or a problem in your business, you come back to those credos and say, “Where did we come off base?” Where did we miss the mark, where did we not try … ourselves or someone and how did that cause for this problem to happen?” 

And once you come back and look at that, then you take responsibility for it and you say, “You know what, I messed up, whatever. I became selfish, or I just, I hid this and I didn’t tell the truth because I was afraid of being found out and et cetera.”

When you always come back to that and you have that trust and you have that honesty, then you don’t get penalized for it. Because we’re all human. Every single person makes mistakes and that’s how we learn. So, you value the person. That’s what it’s about. 

But with knowing someone’s really, really dishonest and really, really self-proving, that’s another story. They don’t belong in your company. And you just say, “Sorry, but this is not a fit.” 

So, the whole operating system of how do you operate as a business? I’s really, just like I said earlier with me and with Mindfull. It wasn’t just about me being and doing meditation, yoga. It’s about how do I bring that off the mat? How do people bring their personal values into the business life and do both where they live the highest quality and purest life that they can?

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Everything you just said sounds like a great way to start a business and to have a great culture. But why is it easier said than done, that some companies aren’t really built that way?

I think the fundamental problem is that people are enamored with the theme and glamor of money and all the things that it brings. And I hope that is more of an older model and paradigm. I hope what young people are seeing is they want to do what’s right and what they feel right about that has integrity. I think there’s a shift of saying, “Yes, we want to go into business, we want to make a great product that people are going to love and all the friends are going to tell each other about it and it’s going to be hugely successful. And we’re doing this because, one, we’re using it in our personal life, it benefits us, it benefits all of our friends and family, and it’s just the right thing to do and it’s helping everybody on the planet.”

Money is just a piece of the equation, but I’ll call it health and wellbeing is really what’s more important. That comes before the money. The money comes as a result of doing things with the high value and intent and integrity.

Some of the companies you’ve invested in include Muse and Urban Remedy. With these companies and others out there, why are they able to succeed?

As you mentioned, whether it’s Muse, whether it’s Urban Remedy, whether it’s Yertle, Organic Girl, these companies that I’ve invested are businesses that are visionaries, that are focused on creating really big, successful businesses. They’re doing it because once again, it’s really what matters to them. Two, they’re using these products in their own lives, which are healthy for them, and they’re creating a culture inside the company and teams of people that are aligned with this. They’re rewarded for their activities financially, as well as emotionally.

Each of these companies on a daily basis does some practices at their company, whether it’s meditation, whether it’s doing some gratitude statements with each other. Bringing in a daily practice of some sort, it transforms your life. When you do that, you feel great, you’re rewarded and you create a product which is good for other people. 

Muse has practices where every day they meditate together and have a meal together. They have an open mic session every Friday where people get up in the company and talk about a topic and people comment on it. 

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Your firm is wanting to invest in companies that are doing something that’s good for the world. What do you think are the best opportunities out there for young entrepreneurs or inexperienced people who want to get in to the game?

Well, people should do what they’re passionate about. If you follow your passion, you will be successful financially, emotionally, and spiritually. That’s the basis of everything. Do what you love, and the money will flow from that. 

Where I see the big opportunities, the last 5 or 7 years, agriculture has become a really big industry for the growing of food—whether it’s indoor or solar grow houses and vertical farming. I think that will continue to be a big sector. 

Food has gotten to be the biggest space. Even though plant based protein is nothing new, it’s now the rave and everybody’s into plant based protein. Impossible Burger and Beyond Meat made it now instead of being the healthy vegetarian or vegan, they made it for all the meat eaters. I think the food industry is going to continue to scale. You have all these new innovations and technologies with acellular agriculture and creating cell cultures for dairy and milk and all these other products.

But the biggest opportunity today is water. Water is it. 

That’s where I’m focused right now. My energy for the next 10 years is all focused on water. because it’s our most precious resource and we have defiled it. We have used it at a rate where it’s not replenishing itself in the natural cycle of evaporation, condensation. So, we’re going to be shorting ourselves with water that is clean and healthy. 

We’re beginning to understand that many of the diseases we have, whether it’s cancer, whether it’s autism, ADD, dementia, Alzheimer’s, or Parkinson’s are being linked to what’s in the water that people are drinking. I believe that water is going to be the most important industry for investment over the next decade and that billions of dollars will flow into water innovations and solutions.

I’m creating a new accelerator program for water entrepreneurs. It’s going to help people focus on water solutions to help accelerate their ideas and technology.

What are some of the possible solutions for water? Do we know them yet?

We need to purify our water and there’s many abuses in purifier water, which are beyond our tap water. Our tap water is purified but it’s a very elementary level of purification. They’re mostly purifying for bacteria, of course, and for some metal, but they’re not doing so for pharmaceuticals. There are a lot of technologies that do water purification in your home or at the office or in corporate facilities.

And then water in agriculture is a critical area. There are ways—it’s called structuring water—to help plant growth, whether it’s indoors or outdoors. There are ideas of desalination that are starting to come forward that are more economically viable.

Being into the mindfulness space for decades, are there any books or resources you’d recommend? 

The first step is meditation. That’s it. Meditation is the foundation. That’s the first entry point for people to begin to quiet their mind and get more connected. 

There are so, so many books. An older book that comes to my mind is by Dan Millman and called Way of the Peaceful Warrior.

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How did you get into Earthlink.net, back in the salad days of internet service providers?

I met this guy, Sky Dayton, a 19 year old kid who had this idea of creating an ISP. When I first met him, I had no idea what he was talking about and I just didn’t know what it was because no one knew what it was. Three months after I first met him, he had some projections of the number of subscribers he was going to have, and he tripled the number of what his projections were. That was the first time I’d ever seen anything like that. 

Do you still have an earthlink.net email address?

I don’t use it anymore, but I still have it.

Nice. Another more recent investment, Juicero, has had its struggles. What do you learn from when something like that happens?

You’re being generous, they had more than struggles.

I know. It’s defunct now.

Yeah. It always gets back to one thing. It’s about the people and (ex-CEO) Doug Evans, who was a friend of mine—and we’re still friends—was one of the typical entrepreneurs. He was very smart, had a lot of chutzpah, was very opinionated and just believed he could do anything he imagined to do. And his idea was, Juicero was a brilliant idea. It was very, very timely. But I think that, one, they raised too much money and therefore they spent too much money too quickly.

And I think that they made a number of errors in developing the product and some of its technology, how they went to market. Bloomberg did a story about them that really took them down, saying that you could squeeze the same thing by hand. You didn’t need the machine. It just had them crater. 

The key is always people in management. And I would hope that Doug would take full responsibility for the fact that he messed up and/or the people he brought in, another senior guy who ended up becoming president before this all happened—I think he’s culpable as well.

One article that I just did was about aging and how we’re all going to live to 110 now and not feel terrible. What do you think of that potential?

I’m in that camp. Most people don’t think I look my age. And I don’t think I act my age, and it’s because of my healthy lifestyle. 

But I’ll just tell you: Water is the most important thing in our life. 

It’s not just the fact that we have to drink water to stay alive, but it’s because water is the element that we’re made of. It’s the carrying agent for everything. When you drink better water, when you look at the blue zones, have you heard about the blue zones?

Yes. The regions where people have been found to live longer.

Yeah. If you look at that, the water they have is a critical factor of why they live so long. That’s the key. It’s … everything. Lower stress is a key, diet, exercise is a key, but water is the carrying agent to everything in the foundation.

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