David Halton: From High School Dropout to Sports and Wellness Tycoon

This episode of Founders in the Wild features an extraordinary entrepreneur who has carved out unique success stories across oceans and industries. David Halton, the founder and CEO of BodyPlus International and the former owner of the Sendai 89ers basketball team, joins us to share his incredible journey.

From a rough-and-tumble childhood in Calgary, Alberta, to building a business empire in Japan, David's story is nothing short of cinematic. Facing the adversity of limited finances and a gang-related past, he turned his life around dramatically. With gritty resilience, he secured distributorship for US brands to market them in Japan—despite starting out from a tiny apartment with minimal funds—fueling his rise from a bodybuilding show nutritional supplement salesman to sports and wellness mogul.

David's tale is replete with plot twists: encountering factory presidents he mistook for janitors, pitching his life into a business gamble with no money, and navigating a foreign business landscape with sheer determination and savvy. Now, his focus has shifted to the multi-billion dollar potential of mineral water reserves, proving that his entrepreneurial spirit knows no bounds.

Join us for an episode that delves into the importance of self-belief, the power of adaptability, and the sheer force of personal investment in pursuit of success. David's insights promise to inspire and shed light on the wild journey of entrepreneurship. So, let's gear up to take a deep dive into this episode of Founders in the Wild. Don't forget to like, subscribe, and brace yourself for a story that will challenge the limits of what you thought was possible in the business wilderness.

Visit Founders in the Wild: https://www.foundersinthewild.com

Follow David Halton:
LinkedIn https://www.linkedin.com/in/davidhalton/

BodyPlus International
https://www.bodyplusgroup.com/
Haleo
https://www.haleo.jp/
Bulk Sports
https://www.bulksports.com/
Quintet FC
https://www.quintet-fight.com/

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Transcript

David Halton [00:00:00]:
So my original thought in coming to Japan was just to lay low for about a month, and then I would. I would come back to Calgary. And so I came to Japan and I never went back. It was one month turned into 29 years.

Dave Mori [00:00:31]:
Hi, everyone. Welcome to this episode of Founders in the Wild. I'm your host, Dave Mori. Today we are in beautiful Steveston, British Columbia, Canada. This is my commute into work right along the mighty Fraser river. And you may notice I'm not with my guest today, so unfortunately he is 7000 km away in Sendai, Japan. We actually tried to film this episode when I was in Japan back in February. Unfortunately, we couldn't make it happen, but we are going to make it happen today thanks to our phones and our camera gear.

Dave Mori [00:01:01]:
Hope you enjoy the episode. Thank you. I'd like to welcome our guest and fellow Canadian, David Halton. David is the founder and CEO of sports and wellness company BodyPlus International and the former owner and chairman of the Sendai 89ers basketball team. David, thank you for joining us all the way from Sendai, Japan. We're really excited to have this conversation with you today. So you've been in Sendai now for 29 years. Right.

Dave Mori [00:01:30]:
But I'd like to go way back so even further. So you're also a fellow half Japanese Canadian, maybe. Tell me a little bit about where did you grow up and what brought you to Japan 29 years ago.

David Halton [00:01:43]:
Okay. That is. That's the shocking story that a lot of people don't believe now when I tell them, but. So I was born in Edmonton, Alberta, and moved to Calgary when I believe I was about three years old. So I don't remember Edmonton at all. But I grew up in Calgary, Alberta. And my mother's Japanese and your father's Japanese, right, Dave?

Dave Mori [00:02:14]:
Nisei. So I'm Sansei.

David Halton [00:02:16]:
Okay, I got it. Yeah. So Japanese mother, Canadian father, and I grew up basically my father passed away when I was, I believe I was around five when he passed away. And I actually didn't learn the cause of his death until quite recently, you know, maybe seven years ago or so. But he had committed suicide, and I just heard that recently, but so I don't really have too many memories of my father. My mother and my father had divorced when I was, I believe, one or two. So growing up with a single mom, single Japanese mom, so she was an immigrant in Canada. And I remember, you know, for some reason, these situations in your childhood, they kind of stick with you, stick in your mind.

David Halton [00:03:22]:
But in my memories, I always saw my mother, you know, calculating, trying to pay the bills and whatnot. So I had always had this sense of non financial freedom. You know, I thought freedoms came from finances. And my mom was always working, so she had her regular job. I believe she had. She worked with Mitsubishi Shoji or something like this. And then on Saturdays and Sundays, she would take Japanese tourists out to Banff. So, you know, I'd come home after school and no one was there.

David Halton [00:04:06]:
I have an older sister, and one time I came home after being teased or bullied for riding my sister's hand me down bike. So it was a girl's bike with these, you know, pink streamers coming out and, you know, the rounded bike with the. It was a girl's bike anyway, and I could relate.

Dave Mori [00:04:37]:
I had two older sisters.

David Halton [00:04:40]:
You know which one I'm talking about? One. The one. I know exactly the one you're talking about.

Dave Mori [00:04:45]:
You don't want to be riding that.

David Halton [00:04:48]:
Yeah. So, anyway, I came back. I think I got in a fight over it, and I came to my mom, and I told her, look, mom, I really need a bmx. You know, all my friends are riding bmxs, and I'm getting in fights. And so if I don't get a guy's bike, a bmx bike, people are saying that we're poor, right? And then she looked at me and she said, you know, David, we are poor. And to me, that was, you know, really shocking, because as a kid, you don't really understand. You know, everything is normal to you in whatever normal situation you appear to be in. That's.

David Halton [00:05:30]:
That's the norm. And I thought being poor was the image I had of, you know, the UNICEF commercials of, you know, children in Africa with not enough food to eat that day. But she said, you know, in reality, I don't have an extra hundred dollars this month or probably this year to buy you a bicycle. And for some reason, you know, I talked to my mom after that, you know, the last time she was here, I said, do you remember that? And she said, no, I don't remember that. But that really, you know, ignited a fire in me that I never wanted the feeling of not being able to buy something or have something. So, you know, basically from that day, I was set on just becoming rich. And then if you look, you know, looking back on it recently, I think I thought that if I was, you know, if I had enough money, then possibly my mom would be with me more. You know, she might have spent more time with us and didn't have to work as much.

David Halton [00:06:45]:
So I probably had that, and that really drove me to make money. So at the time I was, you know, probably I think I was around ten or something like that. But I would do everything that, you know, as a kid growing up in Canada that you can do to make money, which is, you know, probably something you might have done is, you know, the newspapers and then, you know, yeah, and the great, you know, it's a great moneymaker growing up in the Canadian growing up in Canada because you have the different seasons and people generally have big, big lawns out there. So I would, you know, in the summer, I would do. I would mow lawns for, you know, all the elderly in my neighborhood. In the winter, I would shovel the snow.

Dave Mori [00:07:36]:
I'm sure you were shoveling snow.

David Halton [00:07:38]:
Shoveling snow and then raking leaves. Right. So you got like a. You got a pretty good income and then for, for what you can do as a kid. And then from there, when I was about 15 years old, just because I wasn't home a lot, you know, nobody was home. So I started hanging out with other kids that had a similar situation where maybe they didn't have the family structure, you know, both parents home and more of a guiding. A guiding structure or guiding, you know, parents. So we didn't know it at the time.

David Halton [00:08:24]:
You know, no one thinks you're a bad kid, but we kind of started doing, you know, doing things that were considered, well, against the law anyways, so.

Dave Mori [00:08:38]:
But I think at that time, you know, your friends, everybody else was doing it. It felt probably like the right thing to do.

David Halton [00:08:46]:
Well, you know, I was always geared to make money, and when I found out, you know, how much money there is to be made and when you're not breaking the law, you know, of course I don't recommend it, but it's. And that's why it seems like the easy way to make money because you don't have to pay taxes and it's, you know, preying on people. But so I got kind of heavily into that. And there was a. There was kind of a famous gang war in Canada, infamous, if you want to call it, in Calgary. And unfortunately, it wound up that there was 25 people killed in, I believe it was two years. So this is. Yeah, so I think it was, you know, in history.

David Halton [00:09:41]:
In Canadian history, it was like the most fatal gang war. But, you know, the kids that I grew up with, these were the younger kids. And so things had escalated really seriously by the time I was 19. So I remember I just turned 19 and, you know, things were just starting with that gang war. When I came to Japan, it was about three years after that that things really, you know, people started killing each other, seriously. But I grew up with those kids and those people were slightly younger than me, but that was just the cusp of it. So one day I got in a fight and I got stabbed and slashed with a knife. So I had to go to the hospital and I went to my mom's house to pick up my insurance card.

David Halton [00:10:50]:
And this is, you know, 04:00 in the morning and, you know, I'm banging on the door. I'm all bloody. My mom answers the door, you know, what the hell are you doing? And so at that time, my sister was living in Sendai. And my sister, she was living, well, about 100 km from here in a small city, but she was teaching English. And my mother had called my sister and told her that, look, we got to get David out of this situation he's in. Get him out of Calgary. So I believe it was two days later, or even the next day it might have been. My sister called me up and she said, why don't you come out to Sendaid and just chill out for a bit and have fun.

David Halton [00:11:41]:
It's a great place, et cetera, et cetera. And so my original thought in coming to Japan was just to lay low for about a month and then I would come back to Calgary. And so I came to Japan and I never went back. It was one month turned into 29 years. But yeah, so my last day of school, I believe I was 16. And the police, the constable of the school came and I was arrested and I never went back to school. So officially I'm the. In Japanese they call it Chusotsu.

David Halton [00:12:26]:
So I've got a junior high school diploma is my last one. So school of hard knocks. But that's my, that's my story.

Dave Mori [00:12:37]:
You saw that on your, your LinkedIn. My dad went to the school of hard knocks as well. And he always, he grew up and said that that's the best school to go to. School of hard knocks.

David Halton [00:12:48]:
Yeah, well, it gives you the street smarts. And then looking back on it, you know, I learned a lot of what, what I use in business now. It was a lot of branding and all that stuff.

Dave Mori [00:13:01]:
Indeed, indeed. All right, so that's getting you to Sendai. And now, I mean, for a lot of people who don't know Japan, Sendai, it's a big city, but it's not perhaps the main center of commerce. When you think of Japan, you think of Tokyo, you think of Osaka. But you've done incredibly well basing yourself out of Sendai. You've had huge success. Take us back to the early days, you know, when you started body plus international. This is 1999, I think.

Dave Mori [00:13:34]:
Tell us about what actually inspired you to start that business.

David Halton [00:13:39]:
Well, I had come to Japan several times when I was growing up, so, you know, my mom, she had saved up enough to send my sister or me to Japan by ourselves just for summer holidays. And there was one time that really stuck in my head. I think I was 14 or 15, and the first time I saw Tokyo, so I came out of the station and it was in Marunouchi, and, you know, I saw all the, that's the financial district of Tokyo as, you know, complete, you know, opposite of Calgary, what, what I was used to. And, and I just, I just knew from, from seeing that, you know, the financial district, that I was gonna have a business in Japan at some day. So I came to Japan, I came into Sendai, and pretty much immediately I was back into the program of looking for. Searching for the business that I was going to do. And at the time, I still didn't know what it was. I knew it was going to be some kind of a trade, some kind of a product.

David Halton [00:15:02]:
I thought maybe I would import something from Canada and sell it on the market, but I really had no idea. I just knew that I was going to create a business and eventually have a big office in Tokyo. So after being here for a couple months, I needed a job. I needed some income, so I started working as an english teacher. Back then, there was very few english speaking foreigners. So me, with my junior high diploma, but, you know, I was a warm body that spoke, spoke English without an accent. So they threw me in front of a bunch of students. But I was also at that time, you know, since I was basically 14, you know, weight training or just working on the gym was the thing that gave me a sense of kind of hope.

David Halton [00:16:09]:
And then also probably the only discipline I had in my life. And then I knew with hard work and, you know, the correct amount of effort, that results come. I had always been at the gym since I was 14. I probably didn't go a month without training at the gym. So I came to Japan, and I was training at the gym. And in Canada, I grew up with an interest in supplements for some reason. So there's training, you know, there's all kinds of training methods, but I was interested in the supplements, protein powders and then amino acid powders, even as a youth. So I would go into those supplement stores and just kind of hang out and talk to the guys, and they would tell me how the proteins and the supplements work.

David Halton [00:17:04]:
And I had an interest in that area. So, I mean, Sendai, I'm looking for supplements. I couldn't find anything. And then my now wife, but at the time, she was my girlfriend, and she brought a Japanese weightlifting magazine. She gave me a Japanese weightlifting magazine, and in the back there was an ad for some American brand supplements. It's called personal import. So you're allowed to purchase from a company that ships directly from the US to Japan for personal import use. And so then it occurred to me that, wow, this business exists in Japan, and I know the best products, and I could do this, you know, definitely better than anyone else in Japan.

David Halton [00:18:05]:
So that was the. I was. That was the aha. Moment for me. And I decided, this is what I'm gonna do. And from there, it was just, you know, all kinds of learning and mistakes and up and down and whatnot, but.

Dave Mori [00:18:30]:
And you were funding this just purely from income from teaching English at the time, or had you kind of gone and found other ways to make money?

David Halton [00:18:42]:
Yeah, so I would just be teaching English, and the income wasn't too bad, but, you know, it was not a lot of startup income, but I would. So in the evenings, actually, from the start, I tried to figure out how to create a business and get the import licenses and whatnot from. There's an organization that helps support trade in Japan called Jetro. I think you know it. Everybody knows it, yo. Yeah, but, yeah, I went there and, you know, I couldn't really explain what I wanted to do, and they had no idea, so I just thought I'd try it, right. And I would contact. So this is pre Internet, right? Pre Internet.

David Halton [00:19:43]:
So it was all done by fax and phone calls way back when. It was super expensive, but I would come home after teaching English, and then at night, you know, I would call up or fax us brands and tell them that I'm starting this business, and I wanted to be their exclusive distributor in Japan. And for that, I need, you know, international rates. But I'll blow up your brand in Japan. Right. And this is, you know, pre Internet. So they, you know, all things are, I believe I'm a really lucky guy. But.

David Halton [00:20:29]:
So the timing was right for those brands and myself. So they had no one else into Japan, and, you know, they didn't know I was working out of a tiny, tiny apartment, so I was signing distribution agreements and generally, therefore, like, a minimum of I believe at the time it was like 100,000, 100,000 US in trade per year in annual, to be able to have an exclusive distributorship. But I was just signing them, I didn't have any doubts and I didn't really have any other choice either. Right. So I would contact and contract with all of the main, like, big brands in the US to become their Japanese distributor. But before that, I needed samples of all the products. So they would send samples over and I would try, you know, I would try them all, obviously, and then the ones that I like and I thought had potential, I would sell them. So I would actually sell the samples.

Dave Mori [00:21:50]:
That came over 100% margin.

David Halton [00:21:54]:
Yeah, that became the right, and it was actually kind of, you know, I didn't have the intent on doing that, but I would, I would use the products in the gym and in the locker rooms and whatnot. And my gym buddies, the Japanese gym buddies I had there, they would always ask, what are you drinking? What are you trying? And so I would give them, just try this, tell me what you think. And they love the product. And they would say, next time you order, please order for me. So by the time I realized it, I was kind of bootstrapping cash, flowing it from the manufacturers themselves by sending all the samples and I would sell them, which led to some problems later on because the personal import, there's regulations on the amount of product you can import on for personal use. So I didn't know that because they were sending as samples. So I thought that, okay, these products are okay by terms of import regulations into Japan. So I would, you know, I had, you know, I didn't have a lot of money, but I would, I managed to have the brands so interested into getting into Japan that they gave me payment terms.

David Halton [00:23:37]:
And, you know, usually, you know, international trade, even to this day, I don't think they, you know, most people don't give payment terms, but a lot of the, the guys I had a good relationship with, number one, and then number two, a lot of foreign brands just kind of like to, just want to be in Japan anyway.

Dave Mori [00:24:00]:
Sounds good. Sounds good for them, right?

David Halton [00:24:04]:
Yeah, sounds great.

Dave Mori [00:24:05]:
Right, so they were basically funding you with their inventory?

David Halton [00:24:11]:
Yeah, yeah, and, yeah, they basically funded us and provided marketing and advertising support. So further on down the road, they would provide like, x amount. I would negotiate to get x amount in product for advertising. Right, for advertising in the Japanese market. And then from that I actually funded my own magazine, so my own, created my own media instead of using those dollars to buy advertising in magazines. I created my own magazine and got subscription, but that's a. Yeah, that was a little bit later.

Dave Mori [00:24:57]:
David, maybe you could tell us, you know, the audience probably doesn't know how you've actually chosen to sell your product. Can you speak to, especially at the beginning, you know, what was your strategy to actually sell it into the market, grocery, retail, direct to consumer? What was your kind of immediate, or did it evolve over.

David Halton [00:25:16]:
It evolved over time, but, you know, initially I would, I would get product, and I was kind of testing the market. I didn't, it wasn't a deliberate thing, but it was more of a necessity. So I would have all of the product samples and then I would take them. I would actually stuff a big duffel bag, sit on the train, and then go to bodybuilding shows. And thinking back about this, you can laugh about it, but I didn't know, and I probably even didn't care. I definitely didn't care to research it, but I would take stuff a duffel bag full of production, and then I would go to a bodybuilding show and just sit in the lobby of the, you know, they're held at some community center or something like this, and I would sit in the lobby and just kind of set up, set up a booth, like a makeshift booth. Right. That's awesome.

David Halton [00:26:17]:
And the guys would come out and say, you know, did you, do you have, you know, do you have a permit here? Because you have to be a sponsor of the show. We have other sponsors that are selling, you know, the legacy brands, and I didn't understand them, or I pretended not to understand them, but all of the bodybuilders would, you know, number one, I was, I was a lot bigger back then, so they were, you know, and it was kind of unique, you know, us products, right. And us is the, you know, the leaders in that, you know, that technology and that space back then. So all of the guys would, you know, they would bypass all of the paid for sponsors and the booths of the industry at that time, and they would come out to the lobby and, you know, buy my product. Right? Yeah. So I would do things like that. And then, so they were asking, and this is just local because I, you know, I still had a full time teaching job anyway, but I would get names and numbers, and then they would end up coming to my small apartment, and I set up, like, a little shop basically there. And so my goal was to eventually have enough money to have an advertisement for mail order in Japan.

David Halton [00:27:45]:
So mail order, they call it Tsuhan in Japanese. In Japan. This is pre Internet, so they have big catalog. Every direct to consumer brand back then had just, it was catalog shopping. So a free dial number. It's called telephone number. And also a lot of business was done by it just through facts. So I remember the first ad we took out, it was a small black and white quarter page ad and it cost, I think it was the equivalent of $600 or something like this.

David Halton [00:28:32]:
And I couldn't speak Japanese well enough to take orders by phone. But my wife at the time, she was still my girlfriend, but you know, she was employee number one, so.

Dave Mori [00:28:44]:
Employee, employee and life partner number one.

David Halton [00:28:47]:
Yeah, employee number one. Yeah. But so I finally had enough, you know, I got enough samples and inventory and then created a catalog. You know, I would have just a simple type out and I printed it out at the convenience store. And then, so the hours of operation were basically from seven in the evening until nine, something like this. Right. You know, and then fax was, you know, of course 24 hours. So we had, you know, 2 hours of taking phone orders.

David Halton [00:29:30]:
If you look at, you know, you're thinking back at this now, it's like, it's a pretty dumb idea, right? You know, you're, you're investing that money, advertising money and you're giving people 2 hours to call you for orders, right? But anyway, anyway, so we did that and you know, pretty much right off the bat our, it was only 2 hours and we only had one line. So the phone was busy the whole time and people were calling and calling and couldn't get through. So then the faxes started coming. So faxes just kind of started pouring in and then I don't know if you're familiar, Dave, but they have a lot of cash on delivery or they would send cash through envelopes, registered mail. And so, and this really surprised me because, you know, you would never send cash anywhere in Canada or the US, right? But people are just, yeah, you know, every day, you know, envelopes of cash with an order just written in it and you know, perfectly calculated total, just envelopes of cash would come in. And so this was my, you know, our cash flow problem. This is prepaid orders. And I had established, you know, finance terms somehow.

David Halton [00:31:05]:
I don't even know how, but with our us, so we were paid, you know, like 60 days. We had net 60 with most of these, our us vendors and our Japanese customers would prepay in cash. That was the start, if you want to call it.

Dave Mori [00:31:24]:
So year one, what did you do in sales in that first year? It sounds like you had the right timing. You negotiated the right deals. What did you get up to? Do you remember that? It's a long time ago now.

David Halton [00:31:36]:
It is a long time ago. I definitely remember the days where there was zero orders, you know, but I think I ran that ad and I was still working full time for about six months. And then once we, you know, once I was making more than my salary and my wife's salary, then we went full time, and then full time was just making our business hours. And the advertisement, the small advertisement from, you know, I think it was ten to six or something like this. And so I believe I'm going to say we were doing. I think we might have done, you know, 200,000 or something like that in the first year. I'm sorry, this is a long time ago, and I. I don't really remember.

Dave Mori [00:32:32]:
No, but I mean, when you think about it, right? That's a great start to a business that you're starting. Essentially self funded side hustle because you're still working your full time job. That's impressive, right? No, that's amazing. So you started with those products you were importing. What eventually led to you developing your own products? Because that was around. I met you maybe not 20 years ago, but probably close to it, and by that time, you were developing a lot of your own products and your trajectory was already like a rocket ship at that time. So maybe can you walk us through those early years and maybe some of the perhaps struggles that you kind of, you know, faced and obviously got through.

David Halton [00:33:21]:
So, you know, it was definitely trial and error at that point. And so one of the first hurdle we had was the regulations for import in Japan. And like I mentioned, we had first, all of our us brands were sending us just small amounts of product as sample use. And once our business was large enough that we had to import in volume. So I still remember the first order of that product, which was, I think it was one pallet or two pallets worth of product. But so I started as. Yeah, it was a bulk order, so our first bulk order. And I had to do some fundraising for that.

David Halton [00:34:31]:
And that was the fundraising. I went to all my investors, which was my wife, myself, my mom and my grandmother. And I think in total, it was Nihakaman or some BIA command in between that. So, you know, between 20 and $30,000.

Dave Mori [00:34:51]:
Yeah. So would that be us Canadian?

David Halton [00:34:54]:
Right.

Dave Mori [00:34:57]:
Well, at that time. Now it's. It's like, you know, I don't know, the US dollar is so strong right now. But yes, at that time, 20 to $20 to $30,000.

David Halton [00:35:09]:
So that was, yeah, that was a startup and rented an office and all of this. And then I think we had, you know, our first employee was my wife's cousin, and, you know, any, anybody we can grab off the street to help us pack boxes and stuff like this. But I remember the, our first bulk order was, I think it was one pallet worth of product, and it, it was just about $10,000. So, you know, pretty much half to a third of our startup funds. And I purchased, you know, essentially it was one pallet of product. And I got a call from the customs clearance agency and they said, we need your, you know, your import license to and registration for these products to deliver them. And so I didn't, obviously, I didn't have any of that registration, and so they said we're going to have to destroy it or send it back. Right? And, yeah, so that was the first huge blow and that, you know, that kind of knowledge or that research that I, you know, I bypassed and I couldn't, I couldn't find anywhere.

David Halton [00:36:43]:
And to be honest, I didn't really search, you know, I was just looking for that, the transaction and where the customer was, that was my focus. So from then, I, then I had to figure out how to import in bulk. And I had found a, I found, actually, he was another Canadian guy, and he had an import company, and he was importing some foods and actually some other supplements. So I kind of partnered with him to get the bulk imports, and we started a distribution company so we can distribute to all the gyms and all of these larger sales channels with him. And so that was, I created an offshoot. It was a distribution, and he was a partner, and he had some shares in that company and we had some employees in that company as well. And our main business was still personal imports. So we would, you know, have smaller, smaller orders.

David Halton [00:37:52]:
But at the time, they were still, you know, the average order was about $300. So, you know, Sammy, per order. So back then, I think, you know, yeah, Japanese were spending a lot more on products like this. And it was, you know, the market wasn't as big, so there wasn't that much competition, but so I had, I broke the business into two. So there was the distribution side, import and distribution side, and then the personal import side, but the personal import side also, you know, we would have orders coming in. So we were basically getting so many orders in that customs recognized that this wasn't just for personal use. So, you know, they came and told me, they basically, everything I learned in business was from the authorities coming and, you know, trying to penalize us or give us fines and, and, yeah, more.

Dave Mori [00:38:54]:
Hard, not hard enough.

David Halton [00:38:56]:
And actually, the, you know, the tax bureau. The tax agency, you know, they came and gave me an audit right off the bat. And, but, you know, me being me, I don't think, you know, I didn't intend to, like, you know, to, but to bypass, to not pay taxes. You know, my research into doing business in Japan was a conversation with my sister's boyfriend at the time who had the only entrepreneur, the only business owner in Japan that I knew. And so he had a small surf shop. And so I asked him, how do you register as a business and what do you do with taxes? And he told me, David, in Japan, you don't pay taxes until they come and they'll calculate how much taxes you have to pay. And I was like, okay, sounds good to me. Right?

Dave Mori [00:39:55]:
Awesome surfer advice.

David Halton [00:39:57]:
And that's exactly what happened. Right? So they called me up out of the blue and said, you know, can we. This is a tax audit on your company. And so, yeah, every part of building a proper business in terms of, like, regulatory and, you know, the model came from all of these agencies that were basically, in effect, finding me or trying to find me. But because I think, you know, they, you know, Japanese are, you know, they're not, you know, basically pretty kind people. Right? And when I met them, they, I guess they understood that I was, it wasn't my intention to bypass this. They were like, this kid really does not know what the hell he's doing, right? And so they would always give me a chance. And plus, you know, a lot of them became kind of like an advisory role to me because I would ask them things that no other person in their career would have asked them.

David Halton [00:41:07]:
Right? So imagine a guy from the IR's who's auditing a company. I would take that time and ask them just kind of like tax strategies and whatnot. Right? And so some of these guys, you know, like our main tax accountant to this day, he was introduced by the guy that audited us. And, you know, yeah, that's awesome. So a lot of these guys kind of took advisory roles to me for some reason. And, you know, later on, I figured out that, you know, all people generally, if you're not looking to do bad and you're genuine about doing things and doing things the right way, but you just don't know how. And in that situation, a lot of people will help you out that you don't know. And a lot of that startup ignorance was what led to this success.

David Halton [00:42:24]:
In hindsight, one thing that I like to mention is I knew from the beginning, when I started the whole thing, that I wanted my own brand just because I love products, I love good products. So even when I was a kid, maybe going back to that BMX, I would kind of inspect products and I had a genuine interest and desire to build good products. I don't know if it's like an engineering kind of, I don't know, mentality or whatnot, but some reason I always would, you know, dissect products and look at them in all aspects, you know, the, the packaging, the labels, everything. But. So I always knew I wanted my own brand, but I just wanted to touch on how like the startup ignorance and also, you know, not, not always having like a white belt mentality, right. Is helpful, especially when you're, when you're starting up. But because I always wanted my own brand and I knew that I was creating customer demand for that brand and also the channel sales channels. So in the back of my mind I always had this.

David Halton [00:43:58]:
So when I was first starting, I was trying to figure out the sourcing, where to source the, the best ingredients for these food products. And through my research, I came, I found the best manufacturer of amino acids in the world. And they happen to be in Japan, a Japanese company, Ajinomoto. And this is when I was just starting off. So when I had that small dollar 600 ad in the magazine, so I didn't even have my own domain, it was like a, like a hotmail account or something like this. But I figured out that I wanted the best ingredients for my product that I would have someday in the future. I didn't know when. So I looked up Ajinomoto and, you know, the inquiry button.

David Halton [00:44:52]:
So I found that inquiry button and I shut off an email to a ginomoto and like, hi, my name is David Halton, I'm starting a business someday. I'd like to purchase your amino acids for my own brand. I heard they're the best, you know, can I set up a meeting? I don't even know. I can't even remember. But, you know, just the, just the thought of, you know, like our junior employee would shoot an email to, you know, multibillion dollar global company and expect anything to happen to me to this day, it kind of, you know, it seems very juvenile or, I don't know, non business like, right. But that was my mentality and probably still is to this day. I think it's I think it's a strength to not, you know, not limit yourself in terms of, you know, thinking that people won't reply or respond because of your lack of experience or the image of such. But from that email, a guy higher up in the jinamoto, I'll shout him out, taguji san, thank you for that email.

David Halton [00:46:17]:
He basically called me the next day and he said, you know, hey, I'm going to come see you in Sendai. Can I visit your office tomorrow or something like this, right? He called me up and I was like, wow, you know, but if he comes, he's going to figure out that I'm just this startup kid in a messy apartment. So I told him, yeah, you know, our office is going to, you know, we're going to do some renovations soon, so can I meet you at the cafe? Right? And he kind of chuckled and said, yeah, sure, and I met him at the cafe, but he turned out to be instrumental in the production of our, our own brand, my own brand when I kicked it off. And in between, you know, he was kind of my first business mentor and set me up with some other people in the industry. But all of that, to say this, that, you know, I had the goal of creating my own brands and my own business, the best products in the world. And all of the regulatory stuff and all of the organizational stuff, I never really looked at and I just thought I'd handle them as I went on and as necessary. As necessary. Meaning, you know, when these regulatory bodies come and tell you, no, you can't do this, or you can't do that, or we're going to fine you for doing this.

David Halton [00:47:58]:
Excuse me, I'm done. So my first hardships were when I was trying to import for both, both businesses. I had at the time, the end user business, direct to consumer and to the distribution. And so one day I get a call from customs, and for the distribution side, there was a change in the tariff code. So basically the amount of tax they were charging for importation of the american protein products, we had changed. So either they had made a mistake on the customs end or there was going to be an overhaul of that tariff code. So essentially that business was, was going to be finished. All the products that we had imported, our next order would, the tax would double or triple.

David Halton [00:49:09]:
So that business was done after we had, you know, after remaining inventory. So that was that on the distribution side. And I think we had a month and a half worth of inventory, and I had a partner in that company, and we had several employees. And so that business, you know, just in a phone call, that business was done, it was finished.

Dave Mori [00:49:41]:
And how many years into business was this for you?

David Halton [00:49:45]:
I believe that business, we started, you know, maybe three years into the personal import business, so. Three years. But it had been running for, I'm gonna say two or three years.

Dave Mori [00:50:01]:
Okay. Early days for you, right?

David Halton [00:50:06]:
Yeah, still early days, but, you know, very, very successful because it was a great product. And the price point was cheap. I guess it was too cheap. And that's why they wanted to protect the domestic market or whatever the reason was that product, that company was, it was done. And at the time as well, I had on the personal import, I also had a call from a different agency of customs, but they told me I was importing too large a volume for their personal imports, and the actual structure had to be shipped directly from our us brands to the domestic customer. So this is a structure that, you know, it was kind of like a gray area or just like a young area in Japan at the time. And that's why Jetro, you know, they didn't have any information on it. And I was basically developing that market in Japan as we were going along.

David Halton [00:51:17]:
So they were, you know, it's, you know, still to the day, this day, it's a gray area. But this was before Amazon. So that also they told me, you know, they were stopping, I think it was, you know, like half of our orders or more than that, and returning them back to us at that point. So this was also, you know, this business was very, very limited and this hit us at basically the same time. And that was, you know, emotionally very draining. Plus financially, you know, our revenues basically were halved on the personal import and then on the distribution side. We would have zero revenue after we sold our remaining inventory. And, you know, I was basically, you know, in a state of depression after two to three months in that situation.

David Halton [00:52:34]:
But anyway, I had to set up a us hub to consolidate all of our orders from the US vendors because they couldn't ship directly to our customers in Japan. Right. And again, so this is before Amazon. And so I thought I had to consolidate all of our orders. So I had to, you know, I was facing these, you know, do or die situations, but I have many times in life. So, you know, it's just a matter of, you know, just looking. If you look too much in the future and you do too much research, then you're not going to be able to move. That's what I always feel.

David Halton [00:53:24]:
So I'm always just like, movement, right? Just get started, get some momentum going. So at that time, I had to figure out how to get these orders directly to our customers and not through us in Japan. The only thing that came to mind was to create a company in the US that all of our vendors, our us vendors can ship to in bulk, and then we can break down their orders and ship directly from there to our customer in Japan. And me being Canadian, I had no contacts in the US, didn't even have a passport or business license, so I had to figure out how to do this by myself. And so now it was online, but still. So what I did was I bought a ticket to the US, and I still didn't do any research on the best place to build a business in the US, right? Start a business. So I just asked people, you know, where's a good place in, I think I asked my wife, you know, where's a good place to start in the US? And she said, you know, I spent some time in San Diego and that was a very nice place. I said, okay, San Diego sounds good, right? Turns out to be, you know, one of the, one of the, you know, California is one of the most difficult places to do business in the world, I think, but.

David Halton [00:55:09]:
So I said, okay, I'm gonna, you know, I just bought a ticket to San Diego. You know, I think it was in, in about a week's time. So I bought a ticket to San Diego and I got to San Diego airport. I knew no, nobody in America that can start a business with me. So I had to call one of my friends who is also like an ex gang member, only guy that I knew that I could trust from Calgary in my old days there. And plus I wanted to get them out of that situation they were in. So I said, I called him up and what are you doing? He's like, nothing. You want to start a business in the US and run it for me? He said, yeah.

David Halton [00:56:02]:
So I said, okay, meet me in San Diego on this day. I'll meet you at the airport. Met him at the airport. We get out of the airport, we get to a phone booth. I pulled out the white pages and spent 2 hours at the phone booth.

Dave Mori [00:56:20]:
For the young people listening. A phone booth is what people used before cell phones.

David Halton [00:56:26]:
Yeah. So I probably have to explain what the white pages are to people. Right. This is back when they had phone booths before the cell phones. Well, they still had cell phones, but you had to be either a drug dealer or a CEO to have one. But the white pages had listings of all businesses and all phone numbers, all contacts. So pre web for all the youngsters out there. So I started this business in the phone booth outside of San Diego airport, opened up the white pages.

David Halton [00:57:06]:
And what do I need to start a business in the US? You need a business attorney. We needed to find an apartment. We needed to get a bank account, find a warehouse. All of that we did in 2 hours, the San Diego airport. And so I spent about a week there setting up the business. And then I had to apply for an investor visa. And that was a whole different thing. But through all of those trials and errors, I figured out that all of business is building.

David Halton [00:57:53]:
You're trying to create a moat around the business, right, and have it survive until you can get to your next goal. So financially, so essentially you're trying to remove every threat to your business in the long term. So the biggest threat at that time for us was our product is coming from the US. So we're dealing with different, changing import laws and taxation rates plus supply chain and all of these things, and just out of need and necessity to keep our, our companies alive and being able to pay our employees. Then I figured out that, okay, we need to build this thing domestically, right? So we have to have all of our products, all of our distribution domestically where I can go and really handle things man to man if required. So from there, this is where, again, you know, every business chance, every time my business has had a successful or a significant bump in size and growth and revenue, it's been through just a so called serendipitous meaning of people. And, you know, looking back, you realize that nothing is coincidental in life, right? Everything has meaning and it's all part of a pattern. But as I said, the people that I met.

David Halton [00:59:57]:
So the gentleman I met from Ginomoto at the time, whenever I had questions about business in Japan, I would call him and he would offer his help. So I told him, you know, I called him up one day and I said, Taguchi son, I need to produce products in Japan to replace the products I was importing and selling to all the gyms and all the stores. So to protect this sales channel, all of our employees, I need to produce the same products or better, better at the same price point and within a month and a half, basically, right? I mean, this is a crazy timeline, man. Yeah. I mean, knowing what I know today and, you know, if, if you're making any product in my industry, it'll take minimum, minimum six months. So in six months is just, you know, like product testing and scheduling to get into the production line of these factories, right? It takes, you know, three months to get in. So. But me always being the, you know, the naive, naive industry disruptor, if you want to call it that.

David Halton [01:01:24]:
But so I asked him that, and he's, you know, he didn't. He wasn't even able to laugh with me, right? He was just like. He was just kind of like, you know, he's like, you're, you know, I don't even know where to start with this problem, David, but I do know a guy that has a supplement manufacturing plant, and I can make you the introduction, but, you know, this is not something that, to me, sounds feasible at all, right? And I'm kind of. I'm sorry about your situation, but he gave me the contact information for a manufacturer that can produce all these products in Japan. And he was kind of local. So we're in Sendai and he was in Iwate, which is like an hour away by bullet train. So anyway, so I grabbed the contact. I've got basically a month and a half to make this work.

David Halton [01:02:33]:
I got to get these products done. And so I had to also formulate the products, and I also had to come up with a brand right new. So that's how. And I believe at that time, I was actually in San Diego setting up this other business, and I was with my partner, and we were at like a diner at like 02:00 in the morning doing stuff. And I was explaining the situation to my partner. And we had also gone through some supply chain issues in the US with my other business. So making a brand for ourselves was a necessity in that business at the same time. So we're coming up with a brand name and we're writing ideas on a napkin, and it was, you know, something sports, blah, blah, blah.

David Halton [01:03:41]:
But then I thought, what do you think of Haleo? Because my first name is Halton and his last name is Leo. And to us, it was just kind of like an inside joke. It's like, you know, we're just laughing about it, but, yeah, it sounds kind of sounds cool, right? It doesn't really have a name. It doesn't really have a meaning, but. And so, bang. So, okay, I got the name Haleo, and now I got to figure out how to produce the products in the US for our direct to consumer customers, and then in Japan, also for our distribution channel customers. From there, I called the gentleman. Taguchi san from Ajinomoto introduced me to, and I got a meeting with him.

David Halton [01:04:39]:
So I went up to Iwate and I'm still kind of green because I don't, I didn't do a lot of B. Two B. And not with a lot of Japanese either. You know, I'm always direct with our customers and I'm also always in the product side. Like I'm a product guy. I'm a, you know, R and D guy. So I wasn't good with meeting with, you know, bankers or other CEO's and or sales at the time. I'm still not, I still don't, I like, I've got the best guys to do that for me, so.

David Halton [01:05:17]:
But anyway, I had to pitch this guy to create all these products with us, for us. And I met him and it was interesting because this was another do or die situation and probably the first for this business that we faced. And I'm not sure if it was even like if I had the confidence or not, but it was just like I had. This has got to be done. And when things are so tight that it has to be done, I don't think there's a doubt. It's like, it's really survival. So I didn't really have a doubt in my mind either. But I was definitely nervous, right? And so I get to the factory and it was lunchtime, so they had a, for me like a lunchbox.

David Halton [01:06:30]:
And I was sitting there in the meeting room and they told me that at 01:00 the president will come out and see you and just to sit here, wait for him and eat this lunchbox. So I'm eating the lunch and this old guy comes out and he's in a, he's not in a suit and tie, so he's in like a uniform. And he was kind of like sweeping the floor. And he asked me where I'm from, who I'm here to meet. And my Japanese wasn't, wasn't great at that time. But I told him, I'm here to see the boss and I'm kind of nervous, blah, blah, blah. And then he sat down and he started talking and then he gave me his card and then I couldn't read his business card, but we were talking for five to ten minutes. And then I just kind of got the feeling that, oh, like this guy is not the janitor, this guy is actually the president, right? Yeah.

David Halton [01:07:50]:
So he came out and, you know, it was supposed to be my lunch time and I was supposed to meet him at one, but he came out at like 1220 and just kind of started chitchatting. And then he sat down under undercover.

Dave Mori [01:08:02]:
Boss, you man, I guess so.

David Halton [01:08:05]:
Yeah.

Dave Mori [01:08:06]:
Yeah.

David Halton [01:08:06]:
But, um. But, yeah, I figured out that, uh, oh, crap, this is the boss. But it was also, it was also good because, you know, I was super nervous and we had the, we had the whole meeting not in like a, in his fancy office, but it was in the waiting room, basically. And so I basically gave him this pitch that we needed $150,000 in product made for us in a month and a half. And plus, the kicker is I have no money and I have no history of doing business because I didn't have any bank loans or anything like that. It was all like a cash flow basis and we only dealt with American companies at that time, you know. And so that meeting, at the end of the meeting, he looked at me and he said, you know, listen, I'll produce for you $300,000 worth of product, but the fastest we can do it is in, I believe it was two months at the time. And you go out and you sell this product and you pay me back when you can.

David Halton [01:09:41]:
Yeah. So, you know, this is, you know, not, not only. Yeah, not only life saving, but, and this is the first time I ever met this guy. This guy, right? So, like, I'm almost like, I get emotional even thinking about it at the time, but right now. But so I get back on the train and so not only do I am I able to keep the lights on and keep, you know, keep paying our employees and, you know, they've got families at this point, but I've got a, I've got a guy that is going to produce all the products that we need. I just have to go out there and, you know, obviously create the best product on the market, but go out and sell them. Right. So I got back on the train and I was, you know, I was kind of in tears and I remember in my mind, just making a promise, making a goal, setting a goal that, number one, I'm going to be the best customer for this guy, for his business, his biggest customer.

David Halton [01:11:02]:
I'm going to be his biggest customer. And then I'm also going to be a big customer to Ajinomoto and also be able to, in Japan, you have to be an established brand, a trusted brand with a good, you know, high level of credibility for any legacy brands in Japanese corporations. To do business with you, you know, you have to be basically like a 50 year old business that's, you know, not fly by night, basically. But my goal was to create a direct relationship with Ajinomoto. So both of those came true. Right. And to this day, whenever both of my friends, these guys that have really helped me out. Whenever there's an event, I'll come and give this exact talk with them.

David Halton [01:11:55]:
So, yeah, that was the start of our own brands. So they came out of necessity and naivety and ignorance, but just doing what I could do to the best of my ability at that point. So just putting 1ft forward, you know, and eventually things will work out better. But you always have to believe, and more importantly, I think you have to be. You have to ask, you know, you can't be afraid.

Dave Mori [01:12:30]:
So, David, thank you. That was a super inspiring story. I think the listeners will have a lot of takeaways from that. So now you've, you know, I'm assuming two months later, you got your product and you were able to start selling it. So kind of take us through maybe the next, you know, 510 years as you were growing the business.

David Halton [01:12:51]:
Right.

Dave Mori [01:12:51]:
Haleo was your first in house product. Take us through just a little bit around kind of how. What was the trajectory after you kind of came through that difficult period?

David Halton [01:13:02]:
Yeah, you know, it was just. I actually didn't have, I think, from. Okay, I'm trying to think here the. From that time onward, or even I might not have really had a plan of action, so to speak. You know, I've always had one main kind of goal for. For myself, anyway, and. Sorry, I'm kind of just getting lost in my own thoughts here, Dave. But for me, it's always been just kind of head down and focusing on what I get fulfillment out of.

David Halton [01:14:05]:
Right. And I really enjoy just creating things and just the way that I think is the best in terms of functional taste, design, usability, all of. All of these things. So I really didn't focus too much on advertising. Definitely not marketing. No marketing research. I don't. I don't really see.

David Halton [01:14:48]:
I never see, you know, competitors as competitors, because I'm always looking at the, like, the. The essence of the products, I think. And so from the time that I got our own products, our main brand is still halio. And as that developed, I had always just been, you know, kept my head down and been focused on creating more of the products that I like to use myself. That's always my thing, too. I knew I never make anything based on, like, market research on what the market wants or what is a trend. I always like what I just make, what I like to use, what I would like to use, or what I think is cool, or what I would like to have in my life. And that goes with everything from apparel to water to supplements, anything that I use, I tend to try to dissect it and then figure out how to make it better.

David Halton [01:16:01]:
So after that challenge was resolved, then I could just focus on creating the best products possible. And I think I had a couple of years of just creating products. So the. Our brand went from, you know, the initial, I believe it was three products, to maybe 20 in the span of two years, I think so, yeah. And, yeah, that is fast, man.

Dave Mori [01:16:46]:
And all the while, you're using that same partner that helped you out of the jam, is that right? They're basically your contract manufacturer.

David Halton [01:16:57]:
But in that meantime, when I've just been, you know, kept my head down in creating this, the products that, we started to get a lot of calls from famous athletes. I kept my head down so much that I don't, you know, I don't watch sports. I don't. I don't generally, I never watch tv. So I don't know, you know, who's famous in Japan or whatnot. Right. But occasionally, you know, our, you know, my teammates or some employees would be like, you know, David is the most famous blah blah blah in Japan is, you know, using our product or their calling or whatnot. Right.

David Halton [01:17:46]:
So without really, I was so focused on product development that I didn't see that, you know, how well our products were being received by the top people in many industries. So entertainment and athletes and whatnot. So by the, you know, two or three years down the road, you know, people were requesting meetings from top athletes and then athletic organizations that would kind of follow these athletes and entertainers that are influencers and just had different opportunities to expand that way.

Dave Mori [01:18:50]:
I think you've been ahead of the game on using what now people, you know, their marketing brands through influencers. You've been doing that for, you know, decades and very, very successfully. I mean, that was one of the first things I remember you were sponsoring.

David Halton [01:19:06]:
But.

Dave Mori [01:19:06]:
But when you sponsor, those aren't traditional sponsorships, right? Are you just doing product placements? Like, basically supplying them with product because they. They actually like the product versus other brands that they have to pay to basically have.

David Halton [01:19:21]:
Yeah. So, basically. And it's interesting now because a lot of the people that are now champions, the guys that are now champions, so we have athletes, and, you know, basically every athlete are focused on, you know, getting the best trainers and nutritionalists and all kinds of healing modalities. But these guys would, through their research, they would come up, they would find us, and, you know, they would make a call or make a. They would email or whatnot. But, you know, the top of the top guys, they have the money, so they're not searching for, you know, endorsement deals or anything like this, right. They're always top professionals, not just athletes, but in business or in any field, they've got this radar that's tuned for the best. Right? So you're looking as an athlete, you're looking for the best trainer, the best tunnel techniques, the best information, the best food products.

David Halton [01:20:48]:
And so they, they just kind of gravitate to us and they actually purchase our products, right. And they would ask us if we can, if I could teach them how to use the product in the best way possible, basically. And after that, it became more of a lot of these, these athletes would be interested in the spirit of craftsmanship. So, like, how did you build this product and what's important to you? So I find. I find that, that mental frequency, I think, you know, the top level people, they just kind of identify other people that are top in different fields, and they can. They can find similarities or hints on how to better their own art, so to speak. Right? So we. I never approached anybody like, this guy is a, this guy's a famous guy.

David Halton [01:21:58]:
He's got some influence. We want to pay him to endorse our product. It's never that. It's always them coming to us and not asking for money because they're not in it for the money. Sometimes they have a corporate sponsor for a different supplement company, but because they always want the best use our product. Right. They have that relationship with us. So, yeah, it was never an influencer thing.

David Halton [01:22:35]:
It was kind of more of like a friendship and, like a mutual respect for being at the top of your game. And these guys, so the, so some of these guys would just ask, you know, can I put your. Can I put the logo on my training gear? Or, like, I have a competition coming up. I'm gonna be. I'm gonna be on tv. Can I wear your hat or something like this? Right? And so they're asking me, right? And I'm like, of course. Right. But I'd be happy to do that.

David Halton [01:23:11]:
And so this is actually how our apparel line got launched, was some of the top martial artists. This is back when Pride and MMA was big in Japan, but they would wear our logo on their fight wear. And then there was one guy that had a championship fight, and we had to make up a bunch of t shirts for his whole team. And so we made these t shirts, and then we had a bunch left over, and we said we might as well try to sell these online and they just, you know, sold out. So basically our whole apparel line was launched from these guys that were using our products, our nutritional products, but they had a heavy influence and all other things. So, yeah, yeah, and even to this day, you know, I don't, these guys will introduce other people that have a similar mentality. And so we've built this brand. You know, it's not, it's, building a brand is really interesting because there's no, there's no blueprint for it and you could dump a ton of money into it or it doesn't take any money.

David Halton [01:24:44]:
But to build and for it to take off as a brand, it's a really interesting thing to try to fathom. And I don't think there's one way to do it, but I think it's mostly what you do not do more of what you don't do. You know, you don't sell out, you don't compromise, you don't associate with, you know, people and products. Kind of chasing the fast buck. You know, sometimes it's difficult when you're in the startup stage because it's always a matter of getting cash in before it runs out. Right. But keeping, you know, keeping to the core of building a great, great product, I think is most important in building the brand.

Dave Mori [01:25:37]:
So let me ask you this. I know you've done, you have a very similar philosophy. You want to surround yourself with high quality people, teachers, mentors, maybe. Could you speak to some of the mentors in your life that have taught you some valuable lessons? And you could mention one or two, but I know I've always admired that about you as well. You've always had really strong mentors in your life and from all different areas, not just business. Do you mind speaking to that? Because I think that's a really important lesson for entrepreneurs as they're growing themselves in addition to their business.

David Halton [01:26:16]:
That's a interesting question because I don't have one person that I, that I think is a mentor. I mentioned the two gentlemen that really, really helped me out and I owe them a lot to the success. But for me, I think I learned so much from every person. I make it a point to make to learn from every person that I spend any time with in the day. Like I said, when we got a tax audit, I kind of reversed a situation where I'm spending all of his time asking him questions. So there's something to be learned from everybody and anywhere you go. So what I do, I make it a point to do is to get out and interact with as many different industries, as many different people as possible, and especially guys that are kind of in the top of their game, but a wide variety of people, like, in any industry, in anything, and just really kind of have your antennas or your radar open to what you can. What you can pick up from anything, and then use that as a.

David Halton [01:27:53]:
As a tool to get to where you want to go or whatever you want to do. And I see that with a lot of the top performing people in any industry, they are. They never question, you know, like, what is this meaning about? Or what can I get from this? Or is this person qualified to give me information or direction? These people will find that, you know, valuable hints and tools and information in any situation, in any. Anything they do, any interaction. So I believe that's. That's my mindset, and I see that in a lot of successful people.

Dave Mori [01:28:48]:
Thank you. Thank you for that. So I would be interested to hear kind of what led you to, you know, be becoming the owner and the chairman of the 89 ers basketball team. Obviously, it's based in Sendai. You're looking to support your community, but like you said before, you're very focused on your business, kind of what was the timeline and what was the inspiration for making that kind of diversification in your holdings and in your time.

David Halton [01:29:22]:
Okay, so this was maybe five years ago. So the year that we purchased the majority of the shares. So we became the. Had the ownership stake in the team, in the club. The year that we took ownership was the year that COVID actually started. Yeah, interesting, interesting timing. But the professional basketball league in Japan, there was until. Until six or seven years ago, there was always two leagues.

David Halton [01:30:06]:
So there was one kind of a corporate league with all of the big corporations, Toyota. A lot of these old Japanese corporations would have their own kind of corporate league. And all of these. All the players in that league were essentially employees of these teams, and they kind of played on pride. Right? So Toyota versus, I don't know, like a Honda or something. And then there was another league that was more of a commercial league. It was called the B League. And so Japan had these two professional basketball leagues for, I think it was about ten years.

David Halton [01:30:58]:
But neither of the leagues were really growing at the time. And there was some movement to get the Japanese Olympic team stronger. And in order to do so, you needed a kind of a unification to get all of the teams, kind of all of the focus into one professional league in Japan. So the guy that coordinated the professional Japanese soccer league came on board and created the, which is now known as the B League, the Basketball league of Japan. And so when they created that league two years prior to us taking over the Sendaidi Niners, and so once they merged both leagues, they created some qualifications to be a legal a team owner. So each team had some financial obligations and different criteria to continue as a team within the B league. And one of the regulatory people of the B League, they had some concerns about the current ownership or the prior ownership of the Senda 89 ers at the time. So they had started to research local companies that would be interested in taking over the team in Sendai.

David Halton [01:32:46]:
And so a friend of mine was approached as a local team to, as a local company, sorry, to take over the team as a potential buyout, potential buyer of the team. And that, my friend was, well, he was retired. He was a retired businessman. And he said he probably wasn't the best match for him, but he thought of me and he thought, you know, we would be the perfect owner for the team being in this, you know, kind of the sports nutrition industry and been around that area for decades. So I was introduced through him and, you know, it had some similarities where we can branch out and, you know, expand our own brands and the sports nutrition business. But for me, it was more of a new learning experience that I knew I could learn. Like I said, I like to look at anything that I use or consume. And then I tried to figure out, like, reverse engineer it, but from a, a completely naive, you know, brain.

David Halton [01:34:17]:
So that's, that's what it was. Okay, sports, the sports business, now I get it. I get a chance to figure out how it works, and hopefully not hopefully, but I know I can always make a better product. I've got that, that confidence. So that's how that, that came into play.

Dave Mori [01:34:40]:
And then when I think you have actually now sold your interest in the team, are you still planning to stay within the sports kind of business now that you've gotten some experience in it, or are you going to take a break for a while?

David Halton [01:35:00]:
Yes. So for me, the big thing, I think, for a lot of entrepreneurs is we all tend to desire freedom. You know, freedom is a, is a, it's a big thing for entrepreneurs, I believe. And working with a league, working with, you know, the government, it doesn't allow for a lot of freedom, even creative freedom. So. And I figured that out, and that was kind of my first eye opening experience that I attribute to being involved, you know, being a team owner. There was various times when I was fined by the league and worn by the league and things like that that were kind of. Kind of fun because it made, you know, the team liked it, the team enjoyed.

David Halton [01:36:05]:
I would be kind of acting on the team's behalf and, you know, going against the league, and they would be laughing and said, yeah, I saw you got fined and stuff like that. But anyway, you know, I always operate best in, you know, when I've got the freedom to choose and to do things that I like. So I don't know. I don't know if I'll be involved again in that capacity, but. And I also don't. I don't plan too much in the future. It's, you know, things kind of come to me, and then when I. When I can see it, when I can see the full picture mentally, then it's only a matter of time until everybody can see it in this reality, too.

David Halton [01:36:55]:
So it's. It's not something I see right now, but I do see, um, um, somehow being involved, like, as a. Maybe an arena ownership or, um, kind of like a IMG type. So having a performance center where all athletes can get the best and the highest tech training and conditioning and support and then giving them proper management or, like an agency, I do see that in the future.

Dave Mori [01:37:41]:
Beautiful. We'll look forward to seeing that. Become, you know, like you said, turn your vision into reality. I have no doubt you'll do it.

David Halton [01:37:50]:
Yeah. And never say never, because. Yeah, the other day, the local sporting company, whose owner also is a big ice hockey guy, he just asked me the other day, he's like, David, you want to start a ice hockey team in Sendai with me? And then I didn't say no.

Dave Mori [01:38:16]:
So, you know, that would be great. I look forward to it. I look forward to it. So, David, what else do you have? I mean, I know you have. I mean, we could spend hours going through. You have your. I'm crossfit gym in Daikonyama. You have the quintet FC? Actually, maybe.

Dave Mori [01:38:38]:
I mean, please tell the listeners about that. I find it fascinating, not only because I did judo, but it's just a very unique group. Do you mind speaking about that?

David Halton [01:38:52]:
Which one? The quintet. The quintet, yeah.

Dave Mori [01:38:55]:
Because it's not something that I had heard of before looking it up to kind of like, just prep for the interview. I hadn't heard of it because we don't. I mean, it may be around here, but I've never heard of it. It was. It was new to me. Yeah.

David Halton [01:39:10]:
So Quintet FC is a. It's a martial arts organization. So basically, it's a ground grappling. So it's a non strike, non striking martial arts organization. And we hold. We have matches that are team. There are team matches. So there's five fighters on each team.

David Halton [01:39:45]:
And it's based on, like, a judo system. So it's by total weight. So five guys. The total weight of the guys combined. And there's an order for the five guys that you can. It's very interesting because you can have strategies built on. You can have the first guy who's really, really strong. And if that first guy wins, if he beats all five guys, that team wins.

David Halton [01:40:19]:
Or as long as you win, you stay in the competition. So. But it makes it interesting strategy where you put your, you know, your heaviest guys and your lightest guys, and you don't know what the other team, the order of the size of the other guys are until the match starts. So it's quite a fun rule set. And it's. It's very unique to this. And as a. In the martial arts organizations and the martial arts business, it's dominated primarily by a handful, you know, like everybody knows, of the UFC.

David Halton [01:41:11]:
And then there's a handful of other organizations that are competitions, but the big guys are the UFC. Right. And the UFC ties up all of the best athletes in the world. But, so there's. All of those athletes can only compete in the UFC, but where there's an opportunity for them to compete in other organizations is in grappling. Grappling or jiu jitsu. Right. So Non striking.

David Halton [01:41:42]:
So we're able to have, like, the biggest stars of those MMA organizations, the UFC, compete if it's in a grappling competition. So ours is like a mixture of grappling and grappling and jujitsu. So, like, so we can have the biggest names compete in. In our organization. So that gives us an interesting. And those guys, if they compete, they bring their fan base as well. So it makes an interesting business model as well as just a great concept. And so we created that.

David Halton [01:42:27]:
I created that actually, with, there's a Legendary Fighter in Japan. His name is Sakuraba. So he's big in Japan. And created that organization with him also. That was three years prior to COVID. And then COVID. Nothing happened, but we're just getting up and started again this year. We should have a couple fights, and then we'll see how that goes.

David Halton [01:43:01]:
But that's great.

Dave Mori [01:43:02]:
Well, I'll put.

David Halton [01:43:03]:
Yeah, that's Kunta Devc.

Dave Mori [01:43:04]:
I'll put a link in the description. I'm sure we'll have lots of people who listen, who will want to watch as those get published. So, David, can you tell us as you go into the future, what are you, what's interesting you like, where are you being pulled in terms of new businesses?

David Halton [01:43:24]:
My biggest focus right now, the thing that excites me, I've actually got two. I just got back from Shanghai. As you know, there was one thing there, but most exciting right now is we just purchased the rights to two reserves of mineral water. So drinking mineral water in Japan, it's called onsen water. So it's like a geyser water. It's called geothermal water. But as we know, you know, we're facing shortages and, you know, food and water energy. So, yeah, this is something that I'm super excited about.

David Halton [01:44:17]:
It's going to be not only big in terms of the scale of the business, but on the positive impact we can have on the community in Japan and then the rest of the world as well. The reason I. And I see this as the size of the business is like nothing else that I've experienced until now, because I see it as a billion dollar business, but within first five to ten years, half a billion. So our target is $500 million business and water and. But we have to get, you know, something's telling me that we have to get this business out and with the biggest and most impact as quickly as possible. So I'm putting together a team now and considering different types of investment and investment vehicles for this product, for this company. But if you look at.

Dave Mori [01:45:45]:
That's incredible. And, David, is that all domestic in Japan only? Are you thinking this would be sold globally?

David Halton [01:45:53]:
Yeah, domestic in terms of the figures, because those are based on other drinkable onsen companies in Japan. And there's only six companies have the rights to produce and sell drinking water in Japan. Sorry, the type of onsen water that we're selling and. Yeah, so that market share is about that size, but the rest of the drinking water is also of that scale, so. And after that, anything above that is international, which I see, you know, I think we can do a better job than any other import brands. So you've got Evian, you've got Fiji, you've got Fuji, some other things, but there's a lot of different physical properties that are very unique to our water and non physical properties as well, which is a little difficult to explain, but I just know that we've got a better product and our intention for the use of this natural product. You know, I don't see it in terms of as our product, because it's, it's part of nature and we're part of nature. So I'm kind of, I'm humbled and honored to be able to direct the flow of this energy.

David Halton [01:47:33]:
It's an energy source right back and to use it for good. And the reason I'm so excited and the reason I know it's huge, because if you look at any business, right, if you want to see the success of any business or in life, I see all business as directing the flow of energy only, right? Because everything is energy. I mean, if you look at, say, quantum physics, right? So that is just identifying everything on an atomic level. So you see everything as a proton and electrons and atoms and then a subatomic particle. So these are all everything. If you break it down to the smallest particles, everything is just moving energy, right? Vibrating energy. And when we start a business, and when you're young especially, right, you just feel like, oh, I've got a lot of physical energy. And when you're using that physical energy, like when I was going out and selling my products at bodybuilding competitions, you're using your own life force energy, and you're, you're energy is always, it never starts, never ends, but it just transforms, right? So the shape changes.

David Halton [01:49:15]:
So we're typically using our own life force energy. We're changing it in shape to money, to currency, and then into product, and then that product adds energy to the consumer, and it's just a cycle of energy, right? And we can increase that energy cycle within our business by adding more employees, adding more customers. But to get the real, you know, on a real scale, we have geyser water energy. So this is the source of energy and what is believed to be an unlimited supply of this energy. So now we're just kind of directing it and recycling it to people, and then it becomes part of the economy when it transforms into the temporary shape form of money and then just kind of recycling that energy and directing the flow of it. Yeah, it's going to be, it's an amazingly huge, it's not even a possibility. It's just, it's already a done deal. And, you know, it's in my mind, I can see it, and it's like nothing else.

David Halton [01:50:40]:
No other business like, it takes out, it creates a moat around a business and it takes out all of the weaknesses, the threats to the longevity of our current business. Right. So I can see this as a, you know, centuries old. This can be for children and children's children.

Dave Mori [01:51:09]:
That's incredible. David man, you're super inspiring, brother. I have no doubt that it will be hugely successful. But maybe as we, you know, you spend hours with us here now, I would just see if maybe you could pass on maybe some words of wisdom or advice for people who are looking to start a business in Japan or perhaps, you know, take a product into Japan. What advice would you give them from someone who truly went there with no experience or knowledge, and you've become, become extremely successful. Do you have any words of wisdom that you might be able to share with someone who is just literally looking to take a product from North America or just really enter into the Japanese market?

David Halton [01:51:55]:
First of all, I'm going to say not on an entrepreneurial level, or not as a person who wants to market into Japan, but just as entrepreneur or a person in general, a human on this, in this existence. Number one, just know that you have everything that you need to make any success that you can even fathom, you can even dream of, and never, never, never doubt that, right? Like I said earlier, things work out. You know, you get a so called chance meeting or a coincidence, but it's all there for you. The universe or God, or whatever word you want to give it, it will deliver to you exactly what you ask for. But you have to believe it. You have to believe it so much that other people around you believe in you, and they'll take that chance on you. And there's many times when you're faced with a fear or a doubt, and it could be whatever that fear, whatever that doubt is, whatever that anxiety is, I believe that's your higher self giving you this final thing that, listen, take the leap, believe in it. And only those that do that will be able to achieve anything that they believe in.

David Halton [01:53:48]:
But that's my number one thing. So even to this day, after all of this, and I know that everything is possible for anybody, I still have a doubt, you know, for example, with this water thing, I know it, I see it, I smell it, I taste it. But I still have a thing that I'm too small for this, you know? But I also realize that this is telling me that exactly why I should do this. I have to defeat this, this one last demon. So always believe in yourself. Know that you can do it. And never be afraid to ask. Ask the higher, the higher entity or the higher energy, whatever.

David Halton [01:54:40]:
Ask other people. Always, always, always believe in yourself, because nobody else is going to believe in you more than you can believe in yourself. So that's that if you want to get into Japan and that's kind of more of like a physical kind of technical side, but for, for that as well. I think Japanese really, really appreciate how much you're invested into Japan. So big foreign brands are kind of, if they're trendy, they'll give it a chance, they'll try it once or twice. But I think Japanese really like to understand the person that's behind the product, behind the brand, what their philosophy is, and if they have some kind of investment into Japan. So, you know, not a monetary investment, but you're here for the long term. You're not just a fly by night.

David Halton [01:56:02]:
You're not just trying to create a trend, but you're here trying to contribute or you really love this aspect of Japan and you're trying to infuse some kind of a Japanese mentality or characteristic into your product, into Japan, then I think they will accept it as kind of a. Almost as a finished in Japan product. So it might not be born in Japan, so it has that unique western flavor. But if it's, you know, Japanese like to tweak it or kind of refine it in a way that they feel like they have some kind of attachment or involvement in it, then it really takes off. So it goes from, you know, like a ten to, like, 100, if you can figure that out. So either be here or have a. Have a good Japanese partner that understands that. That would be my recommendation if you want to get into Japan.

Dave Mori [01:57:14]:
So thank you, David. That was beautiful. I really appreciate you making the time to be with us here today, and I think there's so many other questions that maybe we could do a part two in person one day in the near future. But thank you, David. Really appreciate your time.

David Halton [01:57:33]:
Thanks again. Dave, this was, I'm not going to say therapeutic, but this is. I love talking about this. So thanks for giving me the opportunity to do so.

Dave Mori [01:57:44]:
Hi, thanks for watching this episode of Founders in the wild. Please remember to like and subscribe. Thanks again.