[MUSIC] Hello and welcome to the advice line on how I built this lab. I'm Guy Aras. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call. And you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you like help with. All right, let's get to it. Joining me this week is boxed, co-founder, Che Wang, Che. It's so great to have you back on the show. Thanks for having me back, Guy. It's going to be a great conversation. So you, Che, you were first on High Builtness in 2021. And as always, if you guys haven't heard that episode, we will put a link to it in the show notes. But basically, 2013, you launched boxed. Which was an online bulk retailer that you could get toilet paper and laundry detergent. And I think it was like 500 of the most common household items, products, foods that people would buy. I remember you talking about, you know, packing up boxes and pallets of boxes coming to your parents garage in New Jersey. And you guys sent out tens of millions of these boxes of groceries around the country. Since then, boxed went public in 2021. And ran into some difficult times after the pandemic ended. And unfortunately, by 2023, you guys filed for bankruptcy. Which I'm sure was extremely difficult. I mean, the story of building boxed and the success you guys achieved was amazing. And I'm sure just what happened was so hard. I mean, I have a million questions for you. But first of all, what was it like for you just personally, going through that? Because I can't imagine it was easy in any way. Yeah, it's been a wild traumatic, I would say decade, since the founding of boxed. But if we had a time machine and we traveled back to my parents garage and we told that person that story about what will happen in the next 10 years of our journey in my life, I would say, "Sign me up now." Because the people I've met, the people we've helped, the things I've learned, I just wouldn't trade it for the world. I love that. It's interesting because a lot of people write in and say, "Why don't you guys focus on companies that didn't make it, that failed?" But of course, over 10 years of doing this show, we've had some companies that are around anymore. It happens. There are a variety of reasons. In your case, there were probably macroeconomic challenges and competition from Sam's Club and Costco and other big box retailers. Ultimately, in your view, was there anything that you could have done or could have been done differently to have prevented bankruptcy? For sure. First and foremost, any decision, especially business decision in life, could I have done better? We probably need 10 hours of tape in order to go through all the things that I feel like I personally could have done better. But hindsight's 2020. With that said, the macro factors were really tough. We were coming out of COVID. We were a new issuance of public stock and the New York Stock Exchange. We were unprofitable. Small-ish cap. We were a little bit above a billion in terms of market cap and e-commerce COVID story. That was really tough. As your stock price starts to go down, people get spooked. Your vendors get spooked. Everyone gets spooked. We still had what, almost $20 million cash left in the bank. But collectively, we decided the best path forward was box was to sell our software business. BlackRock ended up buying that and owning that. The e-commerce business, unfortunately, was shut down but has since been resurrected. But I have nothing to do with the box that has been resurrected today. I know you presumably took some time off, but I think you did some interesting things afterwards to distant with the world economic form, I think. Now you are starting up a new company. Tell me about it. Someone I had known for a while, who is a recruiter called and said, "I've got the perfect job for you." I said, "I think you're full of it." He's like, "Why?" I said, "You're a recruiter." This is exactly what you say about every job. He said, "That's true, but this one is really compelling." It ended up being at the world economic form. Being able to get that point of view on macroeconomic conditions around the world and being able to meet interesting people from around the world, both in the private and public sectors really helped me incubate this next idea, both from an idea perspective, but more importantly from a co-founder perspective. Tell me more about how it works. The company is called Pellgo, P-E-L-G-O. My co-founder in this company is a gentleman named Frank DeSouza, who might have met at the World Economic Forum, he co-founded and was a CEO of Cognizant, which is now a Fortune 2 or 300 company founded in the 90s. Basically, we had the thesis that there's going to be not only job destruction in America because of AI, but also job creation. What we found was that there's so many folks incentivized on job destruction. If that happens, who's taking care of the folks that are actually exiting their jobs? Meaning that who's helping them prepare their resumes? Who's helping them retrain? Who's helping them find their next job in an AI-enabled world? Of course, we came upon this industry called Outplacement, but what we found is Outplacement is cost several thousand dollars. Unless you're at a certain level of executive, you generally don't get it. We thought, "Why don't we create an Outplacement Service where it really is for everyone? It costs a fraction of what it does normally." That's what we do. We help folks land their next job faster in a more cost-effective way, and that's Bellgo. Well, congrats. It's exciting to be. I'm sure now back in the trenches. I love every moment of it. I feel like my stress is up 100%, but my happiness is up 500%. It's a fair trade. Are you ready to take our first call? Let's do it. All right. Let's bring on our first caller. Welcome to the advice line around the chainwang, a founder of Boxed. Tell us your name where you're calling from and a little bit about your business. My name is Alec, and I am calling from Cardiff by the Sea California. It's a small little beach town here in North County San Diego, and I started a small skincare brand called Surfing Cow. It's just simple, natural skincare for people who live outside also a guy. Jay, dude, I'm so stoked to talk to you guys right now. Well, we're stoked to have you on, man. This is crazy. I have to say this also, guy. I've listened to this show since 2016. I love it. 2016, I'm going to business school. I'm like, "Brick, dude, I want to start a business." I'm so inspired by it. Oh, thank you. All the entrepreneurs that I've listened to and kind of felt like I have a little bit of that, and you're able to pull that story, and I related to it. So, yeah, I just want to say thank you. Thank you. That's why we do it. That's why we get people like Che on the show, and they all come back because they want to do that. They want to serve you guys and give you the best advice they can give you. It's all about building. So, Alec, so you are so surfing cow. I'm assuming you're surfer, right? Yeah. And it's a skincare brand, so moisturizer. Tell me what you sell. Yeah. Okay. So, first product was the Sun Bomb. So, mineral sun protection, and then I launched a second product in August, which is a moisturizer. Very, very simple. All right. So, surfing makes sense, because you're a surfer, right? You live in near San Diego. What's the cow part? Yeah. It's a great question. So, beaf tallow, which is a really, really great ingredient, historically, for many years for skin, is one of the main ingredients in both products. Okay. So, the beaf tallow, like basically, how do you turn would be tallow into, I guess, it's soft, right? Yeah. Yeah. So, it's just a, it's a, it's a, it's a fat, a beaf fat, suit it, and then you, you render it down, render it down, you can deodorize it. It's so similar to our own skin barrier, it's very bioavailable for your skin to absorb. Wow. Okay. So, this is really interesting, because this is very, it's certainly unusual, right? It's, it's, it's skin stuff and sunscreen made with beaf tallow, which inch, we're living in a beef tallow moment, as you know, right? We're at a beef tallow. Everybody's talking about beef tallow this and frying and beef tallow and. My sister kind of turned me on to tallow, the ingredient. A few years prior, I was getting into skin care, and then I was using tallow. I'm like, dude, I grew up in San Colmany, small beach mountain. Yeah. I never wore sunscreen. Yeah. Because I hated the fit. It was greasy. I was like, dude, the stuff just is like not great. A lot of it historically has chemicals in it. Mineral sunscreens becoming super pop. You're saying, I could make one in the kitchen. Tell me, uh, how, so you launched this, uh, when did you launch this? Yeah. So, I started in January and I was just like, I'm going to document every step and then in April, I launched. So, last year of 2025. - Correct, yeah. - Cool, all right, tell me.
a little bit about how the business is doing right now. You're making it yourself or you have an outside manufacturer. Last year it was just shy of 74,000 and then this year were projected to do like 220 to 50 with the way January, February marches has gone so far. So pretty cool but I'm still in my house so I'm like I guess I can just keep going. I love that I'm looking at your website and you've got the you break down how much it costs you to make each unit. So which is amazing obviously you sell it for more than what it costs because you got to make a profit but that's really cool. So all right so you are on track to do about $200,000 this year in sales you think? Yeah yeah I mean this month just in March has been like you know from like three orders or five orders to like it's like 20, 25 a day. And all social media marketing or social media ads is that how you're doing it? Are you reaching people? Yeah. Wow. Awesome. Okay before we dive in further tell us what your question is for us. My question is I want you guys to close your eyes here first. Okay. All right. If you were in my shoes obviously I've started this business I'm a solo
preneur if you will and there's a lot of people saying maybe do this do this do this. It's a growing skincare brand I'm still making doing everything at home. I'm packing the orders. Che I'm writing the names on the thank you cards. I'm signing them. What levers would you guys pull? What would you be focused on right now for this business to ensure that it's grows healthy and I don't lose the soul that people have fallen in love with. Hmm. Okay. Interesting. What would you do to make it grow? Okay. I have some thoughts but Che thoughts questions for Alec. This is really interesting guy. I'm really glad you invited me because learning about these companies is fascinating and Alec I just closed my eyes and I couldn't help but feel jealousy that you're next to a beach and I'm you're freezing in New Jersey. But but man I mean you it seems like you're starting to catch lightning in a bottle. I even when guy kind of like clarified the revenue number I was like wait like can I can you say that again and you just started that is pretty wild and I'm just wondering what happens if literally three thousand orders comes your way tomorrow. I feel like your neighbors are going to be really angry and you're going to be usurping their kitchens. All my friends make fun of me still because they'll call me they're like are you and are you in surfing catwhq which is just now you know and they're like are you cooking? I call you know cooking because I make everything myself. So my initial reaction is like jeez your number one job right now is to make sure this thing can scale so the wheels don't fall off in the coming months. If your orders are late if they're substandard that's an Alec problem that's a surfing cow problem that's not a customer problem they don't want to know that oh so many other folks like this brand that I can't get it anymore or it takes two weeks to get it. Getting the working capital to actually potentially begin professional manufacturing of this product that's something you're going to have to figure out and figure out pretty quickly. Yeah I think I agree you can't make this yourself in the long term especially if you're looking at trying to hit 200 grand in sales this year that's just not possible and I'm sure you're hiring some people part-time to help you you know fill jars and label them and ship them out but it's just not sustainable. I mean you've got to really find somebody who can make them for you and what you want to focus on right now is locking down the formula. Now you may have already done that but if you haven't you really want to finalize your exact formulation because when you go and work with the company factor you know small changes cost money and so you want to really have it have it locked down as close as possible to what it should be. It means you need to be testing and maybe you've already done some of this shelf life consistency. How does it affect you know heat if you stick it on a counter and you're in a warm house as it turn into coconut oil liquefies right so yeah you want to kind of look at all of those things and then you want to find a small to mid-sized contract manufacturing you're very lucky you are in California. There are probably half a dozen of these places in California and Utah and other states that are FDA registered that specialize in in natural products that have worked with early stage brands like yours and so you really want to start focusing on finding that partner to make your formula to the exact specifications. Now in terms of growing the brand in other ways I think you also have this natural opportunity to be surfing cow you're a surfer there's a lot of interest and enthusiasm around natural products especially animal products you're not going to get vegans using this of course but that's a small percentage of the of the population but I do think you have an opportunity to go and see if you can do collaborations with some other San Diego based brands like Viori you know huge brand bit on the show before reef see if they might be open I mean they're bigger brands but see if they might be open to doing something with you and then you know down the road you want to start to look at whole foods right because whole foods loves local products but I wouldn't jump into huge orders right away I would really start with pilot runs working with a command but that to me and I think you know agreeing with Che here that's got to be your priority. Yeah Alec I've literally been in your shoes before and so I'm getting PTSD because you're at that cusp of like this thing really beginning to kind of be a thing. Harkening back to my box days we did not scale early enough from that point and so we were still fulfilling out of my mom's house and we had to like undrill her garage door and you were 40 foot trucks coming down you know a residential street so I think yeah I mean getting someone to manufacture this and the thing is like every single successful consumer brand that guy has had on the show has been in your stage and has had a co-man bet on them and given this website that I'm looking at and how you're you're you're this radical transparency uh uh eat those at usbows it doesn't shock me that people are giving it a try I mean you even put up your your actual fixed yeah it's cost yeah fix costs it's like how much LLC filing has cost you that's it's pretty well man you have like the bridgewater associates of the beach it's wild I just thought it'd be a cool idea when I started I'm like you know like I've I've always had these questions of starting a business and obviously this podcast has been a huge resource but the manufacturing piece I guess I've been a little apprehensive because it's like on one side of the coin I feel like yeah I need to really just marry this business and maybe that does mean taking on outside capital and going to guy you had mentioned FDA regulated facilities sunscreen is regulated as what they call an OTC drug so it's it could be if I don't white label a formula which I wouldn't this would be like my own formula um you know that could be upwards of 50 to $80,000 per skew it's a nine to 12 month process and that's not that I'm like afraid of doing it but I guess what I'm saying is I feel like you guys are giving me the maybe validation of like dude this thing has legs go for it because that's sort of my I haven't taken any money since I've done this I've tried to just fund it all myself and I would love to continue to do that but I guess the question is if it sounds like if they if I can't continue to just do it myself as it's like do I just go for it and find manufacturing if that means taking on outside investment just so be it I feel very strongly here guys so hopefully it's okay if I jump in so in everyone I've ever talked to at your stage has asked the same question you're asking us and as well as you're asking yourself I you know I'm only sharing my opinion and for every one of my opinions you'll probably find a counter counterpoint I think it's okay to take outside capital because most businesses the end result and the the quote unquote end result for the founder most businesses are quite binary like meeting that this is going to be really big like we're going to see surfing cow and Sephora and Whole Foods and everywhere over the next five 10 years or we're going to see it nowhere and actually when you think about the dilution that you'll take from outside capital you know if this becomes a billion dollar business Alec I think you're not going to find a very sympathetic Jay when you say oh my gosh but I had to sell 15% of a billion dollar business I'm like well Alec here's a hundred dollar bill dry your eye you know because it's still so big and it be so life-changing but you know what you don't want to have happen is that it could have been a billion dollar business but you didn't want to give up 15% of the company so it's a zero dollar business today so that's why you know I always say don't worry too much about it focus on making this a really big business and all those other concerns are tertiary I would alter slightly and saying if you do raise money you want to and I think you know you're not going to get institutional capital now you're too small but you want to get small dollar amounts from people you know so I wouldn't raise really I would not raise more than 50 thousand dollars at most and I would try to do it you know with small checks from people that you know that you know that believe in this you know people who might be able to throw on a towel.
I think you want to be really conservative about that because at the end of the day, in order to really scale, you're going to have to have many, many, many more skews, right? Right now you've got just a few and you're going to want to expand out around this sort of idea. And it may naturally evolve into something that isn't just beeftello, but it might be, you might decide to have a vegan option with avocado oil if you have something. You know what I mean? Who knows? The core here, the foundation here, isn't the cow part, it's the surfing part. That's who you are, that's what this is, it's about a lifestyle. You're going to need to evolve and grow and build out and create more products. But I do think that if you want to go for some cash to get these first production runs in, that would be my recommendation. I might never get this opportunity, so I have to ask you, but guys, you end every podcast and you say, what do you attribute to hard work and what do you attribute to luck? And everyone in these CPG brand spaces, when they talk about co-man, they talk about that sort of being this magic sauce. That said, you guys are both talking about finding a co-man. And I have spoken with a few, but the question is, is there something that I'm missing here? Are there certain questions? Is it gut feeling or is it just a stroke of luck? And someone's going to be like, yeah, like I heard you want a podcast or I saw your video and like, we want to help you. Or is it just pick up the phone and just be like, I'm going to dedicate a month to just finding the right one. It's both. If it's somebody who's like, I really want to work with you, that's a great sign, but they may not have the capacity to do it in the way that you need them to do it. I mean, really, you want to visit these places and you want to talk to people. Part of it is instinct and you will make mistakes, which is why you, you know, we've had, we've had brands on the show that work with the same co-man from the very, very beginning to this day. And others that changed for a variety of reasons. So you really want to test the waters. You're dating right now. You're not asking anyone to marry you. And I think that's how you have to approach any relationship you enter into and, you know, the answer will come in the result that you see. And Alec, I'm guessing just given what I've heard. You know, I think you're going to have your own manufactured luck based upon your energy and based upon the fact that you've cooked 200 grand worth of beef, tallow, sun products in your own kitchen. I get the feeling you're a hustler out there and you're going to find some luck if you keep up that hard work. I appreciate it. I actually don't mind it, but I agree with you guys. I need to get out of the kitchen. Get out of the kitchen, man. Alec, the brand is called Surfing Cow. Thanks so much for calling in. Good luck. Appreciate you guys. Thank you. Stay with us because after the break, we'll talk to another founder working to take their business to the next level that's after the break. I'm Guy Ross and you're listening to the advice line right here on how I built this lab. [Music] [Music] Welcome back to the advice line on how I built this lab. I'm Guy Ross and my guest today is Che Wang, co-founder of Boxed and Che, you ready for next call? I am ready. I couldn't be more ready. All right, let's bring in our next caller. Welcome to the advice line. You are on with Che Wang, founder of Box. Please tell us your name where you're calling from and a little bit about your business. Hi, Che. Hi, Guy. I'm so excited to be here. Thank you for having me. My name is Jessica Dubin and I'm calling from Indio, California. And I'm the founder of TailSinch, which is an equine products brand focused on innovative and sustainable tail care and other essentials for horses. Awesome. Welcome, Jessica. So Indio, not too far from like Palm Springs, Coachella area, right? Yes, it's right. I'm right across the street from the Music Festival. Oh, wow. Wow. There you go. Tell me about TailSinch. What is it? Yeah, so my hero product are reusable tail ties that I made for polo ponies because I'm myself a polo player. And when horses are galloping, they naturally swish their tails. So you want to tie them up to get them out of the way for safety reasons and obviously to keep the flow of the game going. It can be very dangerous if a malloc gets stuck in a horse tail. So the status quo is electrical tape, which I ever since I started with polo, I found to be very wasteful. A lot of people just throw it on the ground after the game. They don't pick up after themselves and it just drove me crazy. So I thought there had to be a better way to do this that maybe was reusable and also more attractive than vinyl electrical tapes. So I created these reusable tail ties and their Velcro. Their Velcro and they have a faux leather strip on the outside for style. And then they have silicone grips on the inside so that they stay in place and don't slide down. I love this because this is super niche. I mean, not to not I mean, I mean, I mean in the best of ways, right? Polo is a game that a tiny fraction of people thoroughly play. But it's probably a necessary thing for so just to clarify horses tails are tied with electrical tape like they do they put it directly on the tail of the horse. Yes. That must be painful to remove it. It can be yes, especially on the inside where the where the skin is exposed to the top of the tail has hair and the bottom is more just skin and it's not great. And but yeah, it's interesting because even though I started this with polo and poloponies, it turns out that a wide variety of horse owners and equine practitioners have a use case for tying up tails. And so it just grew out of there. So now I've got horse owners of all kinds using my products. So that's okay. So okay, this is really interesting. I have a lot of questions for you. But before we get to to say, tell me a little bit about your your business. How what what are you guys doing in sales right now? So I do between 70 to 80,000 a year in revenue and I've been a business for four years, you know, I pretty much hit that number every year, you know, but I'm not really growing from that. And I think that sort of brings me to my main problem right now. Please. Yeah, to what you're so tell us your question. So I've seen a lot of traction with paid social and influential outreach, but both can be expensive and difficult to scale on a limited budget. So I'm wondering, you know, do you think that getting my products on platforms where horse owners are already shopping like chewy or valley vet is a worthy brand awareness play not just a revenue play, even if the margins are super thin because my product price point isn't that high. Great, great question for Jay because he knows that world very well. I want to bring you in any first of all before we answer just his questions any questions that you might have or thoughts. My question that a clarifying question that I had was it seems like you have been, you know, I'm looking at the website now and it seems like you are expanding outside of just the tail cinch. Yeah. So it also has that gone because that will also kind of influence the answer I wanted to give you. Yeah, so I it's gone really well and I've gotten great feedback from my expansion products. And I've sort of adopted this direction of trying to make what's out there better because there's not a lot of innovation in horse products. So the people sort of remake the same thing over and over again the brands just like stick to what they know and there's there's flaws clearly because I've seen customers come to me and ask if I can fix them. So the issue is that you know with so many products and a limited budget, how do you market each one. Do I pour it all into the hero product and have people coming in for that, you know, spreading my marketing budget across all the products. That's where the challenge is because I still hit the same numbers even though I have more products. That's fair. And so with that said, my if it was just the TLDR answer would be yes, I do think it is worth it to go on those platforms. You'll know better than we will in terms of which particular ones. But they could be excellent almost if you view it as in zero kind of cost of acquisition kind of ways of marketing. And so as long as you're not losing money and as long as you know data will show whether you're cannibalizing your customers or not, it can be an excellent way to get the brand out there, especially if you have other products. The reason why I asked the question before is that if tail cinches your only product and the only product that's doing well, then it's probably will start to really cannibalize your base business and just erode your margins. But if you can get them say, well, you know what, this tail cinch thing is pretty cool. What else do they have and let me go directly to the website. I think that could be a very powerful tool. What you have to actually really worry about is not so much the erosion and margin, but also the working capital component of it. And so retailers, especially big ones are going to expect a really long payment cycles. And so even though you sell that tail cinch, you might not get paid for it for half a year. And I've definitely seen kind of entrepreneurs get bitten by that. And if you then have to factor that payment, aka kind of finance that payment so you get the money early so you can continue to produce. What also happens is the factoring companies will also take a cut. And so your thin margins just became even thinner. So definitely that true cost.
of listing that product, that's an exercise you should definitely do. Yeah. I'm looking at your product, something you, wow, this is now you're talking about a much bigger, total addressable market. You're talking about flight protection for ankles and for a horse's face and different kinds of products that aren't just for polo players. And that to me is really interesting is what is the best selling product that you have right now? Well, it's still the tail ties. You know, they definitely do at least 50% of the sales come from the tail ties. People love them. I have a lot of repeat customers that come back and buy them again. They buy them in all the, you know, I have 21 different colors. So I have another style of them. So yeah, those are still the hero, but yeah. Yeah, I mean, to answer your question, I agree that that Chewie is worth going on to. It can help with awareness. But ultimately, you want to change behavior. And that happens at competitions, at, through trainers and, you know, at the barn or wherever else that, you know, people are around horses. And something you said earlier really struck me, which is there hasn't been a lot of innovation in the things that people buy for their horses. So I would imagine that most horse owners have to buy certain things like most dog owners buy balls. So their dog can play fetch or, you know, they buy water bowls that they can carry with them on hikes. It seems like based on what you're saying, there's an opportunity to really innovate in these kind of stale products that people have been buying for decades that haven't really, no one's really disrupted or changed. You also, sorry, I to jump in here, guys, please, you brought up a really great point about dog owners and, as well as horse riders. And like, meaning that, I wonder what the data is on the overlap. But I would bet that if you own a horse, there's a very high likelihood that you own other pets at home. And so targeting that audience via Chewie and some of the pet specialty platforms might not be the worst idea in the world to see where that overlap is. That could be that that was quite intriguing. Yeah. Yeah, that's great, great advice. It's a great great point. And there is a large overlap between horse owning and dog owning. It's kind of they go hand in hand. So, and even cats too, because barn cats. So there's a way to connect to them there. Awesome, awesome idea. The brand is called tail cinch. Good luck. Thanks for again for calling. Thank you so much for having me. Yeah. Take care. Yeah. I mean, horses are, it's like a thing that if you are a horse lover rider, like it's it's a huge part of your life. I couldn't agree more. And it's one of those things that unless you're really into it, you would never go after it in terms of a market. And it might be sneaky big in terms of the ability for them to generate profits because it's such a niche and defensible market. I just did a quick, quick search. Apparently the total addressable market for just horse products, right? Just gear and apparel is $20 billion. Oh my gosh. And that's not nothing. I mean, that's significant. You get, you know, 5% of that, you've got a big business. And the thing that I love about it is that you get that audience, I'm going to guess out of out of that audience, probably nine exactly 99.9% of that audience is not cost conscious. Exactly. And that is a market you really want. Exactly. Exactly. I mean, it's the same for pet owners. Yeah, I mean, when it comes to your pet, like for most of us, it's kind of crazy how money is no object, right? When it comes to our humans in our life. But the pets, it's like, yep, whatever they need. I bet even if money were an object guy, if time's got tough in the Razz family, I'm sure you're cutting out your daily coffee run rather than any pet food. So I, you know, that's that's my lived experience as well. Yep. All right, we're going to take a quick break, but we'll be right back with another collar and another round of advice. Stay with us. I'm Guy Razz and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Razz and today I'm taking your calls with Chey Wang, co-founder of Boxed and let's bring in our next collar. Let's do it. Please tell us your name where you're calling from and just a little bit about your business. My name is Eli Mash. I am a co-founder of a coffee brand called McCore Coffee. M-A-K-O-R. We are an organic coffee brand and what we specialize is helping with chronic inflammation. So our main product is 93% coffee and then we have a blend of organic cacao and organic spices that people can get every day within their blend. Nice. Well, thanks for calling, Eli. So it's coffee and you mix it with herbs and spices that are anti-inflammatory. So you mentioned cacao. What else do you put in there? Yeah, we mix it with a few other ones. So we have organic turmeric, salons, cinamins, chaga mushroom, cayenne pepper, and then some ginger. I love that. And I love that you said salons cinamins because I know this, cigun cinamins from Vietnam doesn't have the same anti-inflammatory effects as the salons cinamins. Oh yeah, we definitely when we were doing this blend, I mean, when I started this, I had put turmeric in my coffee for like a decade. Yeah. And nobody really enjoyed tasting it from me. Yeah, it's bitter. So I was looking for some other ones that could taste well but also have other properties. No, it's really interesting because I'm super into this stuff. I mean, when I get a cold, I like, I, you know, grate some fresh turmeric and ginger, and garlic, and put in the cayenne pepper, black pepper, lemon juice, honey, and hot water. And it knocks it out every time, almost every time. If I do it right when it's starting, a really cool idea. How did you, how did you come up with it? So like I said, I had been putting turmeric in my coffee for quite some time. My parents are holistic folks. I grew up in a family of people who really thought of whole food as nutrition. So I thought, hey, this is something I do every day. How else can people use spice that they don't get normally? And how can they actually do it in a way that they're not going to forget about? We forget about your multivitamins. You forget about other things. What can we do to help people every single day and something they won't forget about and coffee's a good way? I love this idea. It's really cool. So you start and is this your full-time job now? Is this what you're focused on? Oh, I wish I have three kids. I've three little girls in my family. So as we're raising them and as I'm building the business, I have a full-time job in software sales as well. So this is really night's weekends and we have a co-manufacture that can do all the activities that, you know, I don't have time to do right now. And you're selling on your website entirely right now, right? So actually, we've been selling on a website for a little over a year now. And we are in a local local store in Minneapolis with 11 stores and we're recently got into another one with 30 stores. So we'll be in about 40 doors by the end by middle of this year. Nice. And I'm looking at your bag. Is it clear? Does it make it clear right up front what this is and why this is different? You know, we could do a better job that I think. I mean, we have the ingredients, think like the RX bar, right? We have the ingredients all on the front. On our website, we do a much better job. But that is one of the challenges, definitely when you're on the retail shelf, explaining things quickly. And how are you doing sales? So I think we're doing pretty well. So we run a subscription business and a purchase one time business. We have about 300 people who subscribe every month. This year we're on track to do between $200 and $300,000 with 95% of it being online. Okay. And what is your question for us? What's your challenge? Oh, so yeah, I have many, I think, but the question I have for you guys and is around, you know, when we have this blend, what happens with these spices? They're finer ingredients, right? So when people are going in and they're brewing the coffee, you know, like a cow can even melt the little bit. And what it does is it it tends to brew slower. So when you get to like that six cups, if you don't, you know, if you're not careful with the right filters, it can overflow. And if it overflow, if people never come back, right? So we're trying to balance this really healthy coffee and having it with enough ingredients that actually helps and adds benefits the same time being able to have this more of a general population where you don't need to think about that. So it doesn't, it's designed to be brewed out. You can brew it as any as a normal coffee, you know, French press, curing, chemx, and a regular coffee maker. But when you do a regular coffee maker, if you get above six cups, it can overflow. Right. If you're not using the right, the right, the right, the right. I want to bring chain in, uh, chain, um, interesting. I don't, are you coffee drinker? I am. I've dialed it back a little bit. But I like this because this gives me an excuse to drink more for sure. Yeah. Uh, you know, um, to your exact question, it reminds me, I'm not saying this is the right answer, but it reminds me of an investor of ours that asked me, do you want to be right or do you want to be happy? And you know that in order for the blend to be to your standard Eli, you know it needs to be a certain degree of the blend. Um, but actually for it to have big uses like six plus cups, hello offices that you might need to modify, uh, kind of the formula a little bit. That is a guttrial decision that you'll have to make yourself that you'll have to live with, uh, as an entrepreneur and as kind of the, um, as, as the parent of this brand, uh, this is basically your fourth child Eli.
But from my opinion, you probably could modify it for that kind of bigger brew because I see Coffee offices being big a big distribution point for this product The reason why I say that is I used to always laugh like when we had like people drinking gatorade or like you know Like a vitamin water in the office. I'm like, oh wow. It's a real workout answering these emails You know you better hydrate but the real out of you is like we're all in the office and we want to do a little bit of good to our bodies So I can see like the button in front of you saying do you want the regular coffee or the anti-inflammatory one? I could see a lot of people wishing that other button So that's why I think it could be a big distribution point that would get them to then say in my home Yeah, I quite like that coffee brand. What was he called again? Maybe I'll sign up for my house as well. That's right You know, I have a question for you about that because it sounds like you you know You want to scale up but part of the challenge is that if people brew it and it just overflows They're not going to go back to it. So a couple questions right? Coffee you extract the the flavor based on the in part based on the grind right if it's super fine It's a press of it's if it's a grittier grind of a less fine grind. It's you know, it's a drip machine whatever it might be or a percolator Can you I'm assuming that with the other ingredients right the turmeric and the cinnamon the ginger It's powderized and so that also helps with the extraction But is there a way to like have tiny grinds like freeze dried grinds that are slightly bigger that still Still bring out that same extraction of what nutrients that you know, you want people to ingest It's it's a really good question. We've you know when we look at suppliers that have all the certifications we need We haven't been able to find that yet in our size and skill We'd have to do all that grinding ourselves Which is you know takes a lot of time. It's definitely a Conversation though to be had and we thought through for sure. I mean if you grind cinnamon sticks to slightly bigger pieces Does it extract the same way do you get the same flavor? We'll get less of it It seems like that's quite a challenge But with challenges come sustainable modes if you're able to have that proprietary grind That could be really interesting because anyone who's gonna copy this and there will be people that copy this We'll have to figure out and walk through the same difficult steps that that you'll walk through Well, you know, it's it is interesting right because you can you know to your guys point There's a lot of different thoughts and things I'm thinking about a time and then it's also around storytelling right and Maybe the the bug is actually a feature too and now chate your point of can't go in offices that way unless you're using a French press or a Cure gear whatnot, but how much do you want to keep your community right and grow with that feature you have versus Tear point change and I think you've advanced the question several ways, but that's how I think through this. Yeah, you know I I wonder whether you Can try something and and you might be doing it. I don't see it on the package, but literally just say best brewed in a French press You know, I know most people don't you know, they probably use drip machines But while you're trying to formulate Something that will because down the road you want this to be in cake-ups, right? Yeah, and so and that's a technology Challenge, which I think is probably a challenge you will figure out how to solve whether it's freeze-dried using freeze-dried Ginger and turmeric that you can then grind to the same you know size as the coffee You know That enable the same extraction or whatever it is But in the meantime, I wonder if it if if you do something like that, you know best brewed in a French press or poor over Yeah, could it be different formats to that point like meaning that a Different formulation for larger coffee machines like drip coffee machines and you it seems like you're very transparent with the Ingredients as well. So it's like you know the real hardcore users that are like Give me all the anti-inflammation I can get well We can't really offer that experience in a drip machine And those folks would naturally because they're hardcore about it They will naturally gravitate towards the pour over or the other kind of ways of of making that coffee You know that could be an avenue to explore Okay, I actually don't know I haven't thought about that. So really good idea Especially when you're here you like that's why when you think about the cop the office space itself You're like, you know, it does work in a drip machine up to four or five cups Which is fine for most right? But if you go to the office you need 30 cups, right? And in that case you're right, maybe it is just a less potent one That allows it to go through that's a very interesting point and you know what like while we're riffing here Like office coffee is like a knife fight of an industry Everyone wants to sell coffee to offices because they become like a newities like you know once you're in there and once happy the fastest way for Team members to burn down the office is to say we're out of coffee or the coffee machine is broken So once you're in there you're in there and the office manager does not want to mess with it And so I wonder there might be some really fast scalable ways for you to get real distribution through that channel Because if you go to some of these bigger ones and you're like hey, here's an innovation that we think will resonate with your offices They might say great because we're we're done with just selling regular coffee like we're looking for innovation in coffee Do you know, you know, we're just I just had a thought we did an episode recently on Justin's nut butter which became a you know sold to Hormel for $300 million dollars and And that was a peanut butter brand and it wasn't nothing was happening It wasn't popping off the shelves It you know it was it was another peanut butter brand of people weren't noticing it What changed the innovation that that really helped that brand blow up was do you know what I'm talking about? I know I think I know what you're talking about yeah, the pouches Yep, the pouches they put peanut butter in a single-use pouch where you could bring on a bike ride or a hike And that is what completely turned that brand around I'm looking at this program thinking well could you do something In addition to what you're making right the beans a whole beans in the grind like a single serve freeze-dried coffee pack But that also has you know, let's say 10% of it is the freeze-dried Herbs and spices in there that is an instant version of this a single-use instant version of this for people to take on the go camping etc See if people respond to that um it's just an idea But I'm just thinking about Justin's nut butter and the pouches yeah guys Sorry, I was I was smiling the entire time you were talking about Justin's because I remember being in line and whole foods and seeing pouched peanut butter Like okay consumer package goes has really jumped the shark right who has thought you know, but Like months later I was on a hike at a retreat and I was starving and someone had these pouches I was like okay get get get me one of those pouches give me one of those pouches Yeah, and I was like this is really it's pro so it doesn't shock me the pouch yeah exactly It's a very good way to trial things as well Yeah, it's good way to trial things to let people taste the you know this and it's anti-inflammatory and so Anyway, just some thoughts. It's a it's very cool. I think you have an opportunity to I mean you know to scale this You got to make it frictionalists and yeah with you can figure it out which I think you could that could be a game changer Appreciate that you live. I'm walking through a whole foods and I see pouches of your coffee out by where you got the idea And Yeah, and we'll expect a commission check for this idea you live Oh, you guys are on the list you're on a list of commission Lifetime supply of my core coffee you like thanks so much calling in my core coffee good luck Thank you so much guys really appreciate you thank you Um, chate before I let you go I want to ask you question that I ask all of our guests you come on come back on the show Oh here we go if you could take all the things that you've learned now as a super experienced entrepreneur You've been through highs and lows and you scale the company to unimaginable heights And you go back to you know to you when you started out you know in 2013 and say hey, Chate Here's what you need to know what would you say? I Would tell myself that It's a life you chose to be an entrepreneur And the reward is the journey and I know that sounds a bit cliche But time and time and again You know what what we experienced today guy it's it's every entrepreneur experiences the same thing Yes, it's problem after problem if we had like another two hours These folks today could have brought on another 20 challenges that they had this morning And it gets tough it gets lonely it gets stressful But as I've walked the path for now almost two decades I I I enjoy it. I think you're gonna find me hopefully back on the show when I'm 75 with the new company You know because I think solving problems and my thing is is affecting people in a good way and helping people in a good way as well Yeah, so if we took that time machine I would say listen you're gonna have ups you're gonna have downs But enjoy the ride because it's gonna be worth it and I genuinely feel that way today That's great advice. That's box co-founder Che Wang Che thanks so much for uh for joining me today Thanks guy And by the way if you haven't heard Che's original high built this episode you've got to go back and check it out You can find a link to it in the show notes and here is one of my favorite moments from that interview I remember I was driving home from a meeting in New York and one of the folks that quit his six-figure paying job to join the dream and sit in my garage Call it and said dude. I refreshed the page over and over. It's not broken. We got zero orders today Oh wow this dropped down to zero two days in a row and he was like dude. I risked my livelihood to do this Are you sure this is still gonna work? Hey, thanks so much for listening to the show this week and by the way Please make sure to check out my newsletter you can sign up for it for free at gyros.com or on substack And of course if you are working on a business
and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing because we would love to try and help you solve them. You can send us a voice memo at
[email protected] or call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you and we'll put all of this information in the podcast description as well. This episode was produced by Ramele Wood with music composed by Rumtina Rablewe. It was edited by John Isabella. Our audio engineer was Robert Rodriguez. Our production staff also includes Casey Herman, Sam Paulson, Alex Chung, Chris Messini, Kerry Thompson, Catherine Cipher, Niva Grant, Nora Gill, and Elaine Coates. I'm Guy Raas and you've been listening to the device line right here on How I Built This Lab. [Music]
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