Paul Underhill of Rumble: Surviving the Storm

Between almost losing his business due to a hurried expansion into the U.S. and a string of devastating health and personal crises, Paul Underhill has had a tumultuous few years. Now, taking the lessons from those experiences, the cofounder of Rumble knows to trust his instincts — and to stick to the plan.

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Paul Underhill emerging from the ocean at Clover Point, a place he frequents with his kiteboard. Photo by Jeffrey Bosdet.

If having a compelling backstory was all that was required for a business to attract its market and succeed, then Rumble would have it in the bag. With his inspiring journey through life-threatening illness, Rumble’s creator and cofounder Paul Underhill brings an irresistible story of perseverance.

“Paul is the heart and soul of the brand,” says James McQueen, another Rumble cofounder and its general manager. “We have a deep-rooted authentic story that starts with Paul and his health needs. Then there’s the other side. When you interact with our brand, there’s a playfulness and quirkiness that ties back to Paul’s personality. As does the product’s efficacy because he uses it … so he’s a pretty important guy.”

Underhill initially created the Rumble supershake in his own kitchen. Born with cystic fibrosis, a genetic disease that affects mainly the lungs and digestive system, he needed premium nutrition but didn’t always have the time — or the appetite — for full healthy meals.

Realizing that other people would also benefit from these shakes, Underhill worked with some friends, including McQueen and a nutritionist, to perfect the formula and develop the Rumble brand. But before the product could make it to market, Underhill’s health deteriorated to the point where he was forced to undergo a life-saving double-lung transplant.

Just one year after the operation, Underhill completed the 140-kilometre Tour de Victoria. Another year after that, in 2013, the Rumble supershake hit more than 500 stores across Canada.

“Rumble fits in perfectly, as our grocery department is 100-per-cent non-GMO,” says Carmine Sparanese, general manager of Lifestyle Markets, one of the first retailers to carry Rumble. “I remember when I first spoke to Paul back then, how his story really touched me. He’s very inspiring.”

With its healthy and tasty nutritional beverage, Rumble has the quality product to go with the memorable story. But as Underhill knows first-hand, there are many factors that play into a business’s success — and not all of them are in the owners’ control.

“It’s been a real roller-coaster,” he says of the business and personal challenges he’s faced in the years since the launch of Rumble. “It’s a cliché, but the term definitely applies in this case — rarely have I been in a place in my life where so many things were going wrong simultaneously.”

Douglas connected with Underhill in his Cook-Street neighbourhood to hear more about those ups and downs — and the lessons he’s learned along the way. 

Immediately after you won a Douglas 10 to Watch Award in 2013, Rumble appeared on Dragons’ Den. What came of that?

We were very fortunate to get the level of interest we did from all five dragons. We did a handshake deal with Arlene [Dickinson], who then joined with David [Chilton] for negotiations. Often in these Dragons’ Den appearances, there’s an intent to make a deal, but most of the time the dragons will back down. But Arlene was quite serious about pursuing it, and we were as well. Where it became difficult was the amount of money. We’d asked for $200,000 because we already had a pretty solid lead for $500,000, but [the Dragons] wanted to come in at the $500,000 level. At the end of the day, we found them to be really professional. Arlene said it might be better for us to work with the [initial investors] because they had beverage experience.

What did you do?

Instead of moving forward with the Dragons, we did a deal with another investor group out of Toronto called BrandProject, which at the time felt like the right decision. They did have experience on paper that was relevant to us. In retrospect, you wonder if maybe it might have been different if we went with the Dragons. It’s hard to say.

So it didn’t work out?

Our original plan was to stay in Canada and then go into the U.S. regionally. Instead, [BrandProject] encouraged us to go essentially nationwide in the U.S. prior to getting what we would now call sufficient capitalization. We got into Whole Foods in the toughest regions in the U.S., which was fantastic. But with the increase in orders came additional expenditures. Cash flow became our number 1 challenge. The number 2 challenge was keeping sufficient Rumble on the shelves because the demand was higher than we expected. We were having to do more production runs, which were costly, and that meant we didn’t always have sufficient funds.

What did that mean in the long run?

It culminated in an unfortunate series of events. We were out of stock, and while we were consistently making our loan payments to the Business Development Bank of Canada (BDC), we missed a royalty payment on purpose, so we could divert those funds for a production run. I guess the BDC thought that out of stock meant we had no sales and were in dire straits, so they called the loan. It was highly punitive terms. That was a major factor, I would say, in what ended up being the necessity of the complete financial restructuring we did in 2016/2017.

How did Rumble recover?

As we failed to complete the round of financing that would have allowed us to continue on in the original legal structure, we had to essentially find a solution that would allow us to keep the brand and hopefully find investors who were better aligned with our values and ambitions. We were very fortunate to find backers here, right in Victoria, with the Pomme group, who have experience in grocery. Those guys — who are looking to invest in more businesses — are our principal backers now.

What lessons did you learn from almost losing the business?

Looking back at what we did, the number 1 lesson is that we really should have listened to our instincts and followed our desire to make deep connections with our customers and retailers — to allow the growth to be more organic and regional, rather than trying to go too far, too fast. The secondary lesson is to be as careful as possible in choosing investors and partners and making sure that they are fully aligned with your ambitions, goals and values.

How is Rumble moving forward?

We sat down with Pomme and found ways to make the brand continue. We’d always been interested in improving the viability of the business. One of the things we did was put more money into the ingredients by doing a reformulation, removing some allergens and adding grass-fed proteins. We paid for that by switching to new packaging, which is also fully recyclable and has a lower carbon footprint.

We don’t yet have the retail footprint we had previously in Canada because we still haven’t got into all of the stores we used to be in. That’s the goal over the remainder of 2019.

I understand that during that time of Rumble’s financial stress, you were also going through some personal challenges.

It was one thing after the other. I shattered my femur in a cycling accident. My wife had a second bout of breast cancer. I was having health problems and needed abdominal surgery. My dad, who had been slowly dying of prostate cancer, was also in hospital. I visited him and said, “Dad, I’ll see you after my surgery.” When I came out of surgery, the nurse said, “We just want to let you know your dad passed away when you were being operated on.” That was shocking. It was just seven weeks later when my mom passed away. I also got shingles in that time. It was a rapid succession of one thing after the other, which caused a lot of stress and then a decline in [my] lung function.

All of that, it was basically simultaneous. There was a big parallel between the bumps on the road with Rumble and in my personal life with my health and family.

Did you ever consider not continuing with Rumble?

This is where having the team was crucial — when I had to step back and focus on my health or healing or on Mom and Dad. At those times, James [McQueen] really carried a lot of weight on his shoulders personally, especially as he was the lead on financing. Right now, he plays the role of general manager, but as cofounder in the first iteration, he was the one stuck with leading that charge.

To answer your question, I knew in the short term the absolute necessity of stepping back to look after my health, which is what I’ve done. And I’ve never been back to full time. But
Rumble has always been something my heart goes into. And as long as the brand is alive, I
will always be a part of it.

This article is from the October/November 2019 issue of Douglas.