Advice Line with Serial Entrepreneur Marc Lore

Serial entrepreneur and U. S. National Bobsled Team qualifier Marc Lore joins Guy on the Advice Line, where they answer questions from three early stage founders. Marc also discusses his latest venture - Wonder - and its recent shift away from food prep and delivery vans; plus, what founders should consider when making their own strategic pivots. First we meet Ben in Oregon, who’s wondering if his chocolate factory should double down on an experiential offering in light of increased cocoa prices. Then Lindsey in Utah, who’s looking for ways to convince retailers to carry her portable diaper kits. And Ryan in Colorado, who’s weighing whether to focus on national expansion for his whiskey brand, or deepening market penetration in the Rockies. Thank you to the founders of Chomp Chocolate, Baby a GoGo and 10th Mountain Whiskey and Spirit Company for being part of the show. If you’d like to be featured on a future Advice Line episode, leave us a one minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [email protected] mailto:[email protected] or call 1-800-433-1298. And be sure to listen to Marc Lore’s founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/6742bec8-02fc-40ea-aea4-c857472d619e/embed as told by Marc on the show in 2021. This episode was produced by Kerry Thompson. It was edited by John Isabella. Our audio engineer was Cena Loffredo. You can follow HIBT on X https://x.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis/ and sign up for Guy’s free newsletter at guyraz.com http://guyraz.com. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 1:32Guy Raz?

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• 3:00Guy Raz?

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• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talk to on this show, because the best

• 4:27Guy Raz?

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• 5:11Guy Raz?

  This episode is brought to you by Klaviyo. Klaviyo helps you build smarter digital relationships with your customers with its unified data and marketing platform, featuring email, SMS, reviews, and more. Make every moment count with Klaviyo. Learn more at K-L-A-V-I-Y-O dot com. Hello and welcome to the Advice Line on How I Built This Lab. I'm Guy Raz. 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,

• 5:54Guy Raz?

  give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at [email protected]. And make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at guyraz.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Mark Lorrie,

• 6:35Guy Raz?

  a one-time bobsled champion and also the founder of diapers.com, jet.com, and Wonderr. Mark, welcome back to How I Built This.

• 6:44Speaker 01

  Thank you, Guy. It's great to be here.

• 6:47Guy Raz?

  So you were first on the show back in 2021. And we, of course, heard about how you founded diapers.com and then jet.com. And if I remember, you got the idea for diapers.com back in the early 2000s when you had young kids. And even though margins on diapers were pretty razor-thin, I think at one point, I remember an investor had said to you, you were selling a dollar for 90 cents.

• 7:13Speaker 01

  Yeah.

• 7:14Guy Raz?

  You ended up getting acquired by Amazon for over half a billion dollars in 2010, which was an amazing, but also I think you had sort of mixed feelings about that acquisition, that end at the time.

• 7:27Speaker 01

  I did, I did. I, you know, we had a, we had a big vision for what we wanted to accomplish. And it was cut short. So, yeah, it was, it was, I mean, you would think after a sale like that, we made obviously a lot of money, me and my co-founder, but. We said, do you want to celebrate? You want to go grab a drink to celebrate this? And we're like, no, I'm like, yeah, I'm in, no, I don't want to either. So, um, it shows you what it is to be a missionary versus a mercenary. You know, it was not about the money. It was about, okay, the, the dream is, is basically dead now, you know? And it was, that was sad.

• 8:02Guy Raz?

  And for those who remember the episode, uh, you went on to take on Amazon. After that happened, you, you launched another online shopping platform called Jet.com, which then sold to Walmart for over $3 billion four years later. And, and these were just amazing pivots in both of these stories along the way and well worth listening to. Somebody actually asked me recently, I went, I went and spoke at a, at a conference and somebody said, name five of, just off the top of your head, of the best entrepreneurs. And Mark, you were on that list. No question that I've interviewed. In, in all the 700 episodes of this show, you are right. You were absolutely on that list.

• 8:44Guy Raz?

  Before we get to our callers, because you are going to help us answer questions from early-stage founders today, which is super exciting. So when you actually came back on to How I Built This, I think maybe a year and a half ago, you were, at the time, were launching, about to launch Wonder, which it was, it was going to be a, a business where trucks, like food trucks with full kitchens inside would come out, you'd order food, the truck would pull up in front of your house and make like a perfect, you know, medium rare steak and perfect crisp french fries and deliver to your door from the truck. That has changed a little bit. Tell me what Wonder, where Wonder is now and what, what it will be.

• 9:23Speaker 01

  Yeah, so you're right. It was out of a Mercedes spinner van, so very small space. We had one piece of electric equipment and the driver had to cook. And we innovated for a couple of years, trying to figure out, how do you cook a steak in six minutes to perfect temp in one piece of electric cooking equipment where the driver has to do it fast?

• 9:44Guy Raz?

  And you developed all this equipment and all kinds of cool things for this.

• 9:49Speaker 01

  Yeah, we, we, I mean, we invested a ton in culinary engineering, food science and tech to be able to do that on the truck. And then at some point, we tested a brick and mortar because we realized that we can put thirty different restaurants in a twenty eight hundred square foot kitchen with the same two pieces of electric cooking equipment and no hoods, no gas, no chefs. And we thought, wow, that's gonna be able to be an incredible offering where consumers can order from multiple restaurants in a single delivery. So we switched to that model. So it is a brick and mortar, like a fast casual sort of restaurant where you can sit down and eat, and there's maybe ten seats, and then pick up and delivery. So they are located right in the heart of where people live, and we set a really tight six-minute delivery radius.

• 10:33Speaker 01

  So you're getting the food fast, hot, really high quality, and of course, multi-restaurant.

• 10:38Guy Raz?

  Was it hard to make that pivot? Did it take you a long time to kind of say, you know what, I'm gonna let go of this thing and focus it, focus on this part of it?

• 10:47Speaker 01

  Yeah, I think, you know, this is what I advise I always try to give entrepreneurs, but it's sort of, you have to be truly objective about what the risk of the status quo is.

• 10:58Guy Raz?

  Yeah.

• 10:59Speaker 01

  Because people, it's easy to see how risky it is to make a change because there's unknown, and people define risk as the unknown. Whereas the status quo doesn't feel as risky because you're kind of doing it now. It doesn't feel risky to just keep doing what you're doing. But I recognize, you know, being objective, that if we just kept doing what we were doing, that was extremely risky. So it made the decision to move into brick and mortar very easy, even though it meant going into the board meeting and telling the board, four hundred and fifty trucks on the road and thirty million in revenue, we're gonna take that to zero. We're selling the trucks, we'll take revenue to zero.

• 11:41Speaker 01

  But being able to have conviction and know that it's still the smart decision and that the brick and mortar had much bigger profitability potential, higher return on capital, like all, all the things that you would, you would want, plus for the customer, it unlocked multi-restaurant ordering, better on-time delivery.

• 11:58Guy Raz?

  Yeah.

• 11:59Speaker 01

  The way I think about it is, you have to have the mentality that you start off a startup and you're sort of digging for silver. But you gotta be in the lookout for gold all the time. And you might just, you might just see gold and when you see it, you gotta go for it. And it doesn't matter what egg on your face. It doesn't matter money you lost. Everything's a sunk cost. It doesn't matter what you told the board, what you told the press, what you told employees. You have to go after the gold.

• 12:24Guy Raz?

  Yeah. Um, Mark, why don't we go ahead and bring in our first caller?

• 12:28Speaker 01

  Okay, great.

• 12:29Guy Raz?

  Um, hello, hello caller. Welcome to the advice line on How I Built This. You are on with Mark Laurie. Please tell us your name, where you're calling from, and just a little bit about your business.

• 12:39Speaker 02

  Hey, Guy and Mark. My name is Ben Bailey. I'm the founder of Chomp Chocolate in Salem, Oregon. We are a cocoa bean to bar chocolate factory doing the whole process. And we make vegan milk chocolate for everybody.

• 12:51Guy Raz?

  Amazing. Ben, thank you for calling Chomp Chocolate. Okay. So you are a bean to bar chocolate? And that means that you, you manufacture the chocolate bars? Everything, you do everything yourself?

• 13:03Speaker 02

  Yeah, I actually built the chocolate factory and didn't know what I was doing, but figured it out piece by piece. And we do the whole process from roasting the cocoa beans to packaging the bars in the, in the factory. And we do oat milk chocolate bars, peanut butter cups. And then we just did a pivot to build your own chocolate bar. Kind of like a Build a Bear workshop, only for chocolate.

• 13:25Guy Raz?

  Wow. Okay, cool. And, and you're in Salem, Oregon?

• 13:28Speaker 02

  Yes.

• 13:29Guy Raz?

  And tell me, I, um, tell me how you, how you did this? I mean, but you have a chocolate factory. There's machinery. It's expensive. This, you know, most people who start chocolate brands, they outsource it and they just kind of sell the chocolate. Right? They'll have the recipe. Tell me how you got into this?

• 13:49Speaker 02

  Long story, but keeping it short, I'm an entrepreneur. Mark, I sold basketball cards when I was 10 years old, went to all the card shows, sold candy to kids on the bus, took their lunch money. Don't feel great about it, but learned some moral, moral lessons, you know? Mercenary versus missionary kind of stuff. Um, started two e-commerce companies in New York City, uh, very small exits. Uh, took a little bit of time, um, to get away from New York City and back to Oregon, my hometown. And, uh, growing up in a small conservative, um, farming community, I saw that, um, a lot of things have changed in the environment. I came back to an orange sky because of the wildfires here on the west coast.

• 14:29Speaker 02

  And I also had a, a little bit of a confrontation with factory farming of animals and it didn't really sit right with me. Um, and I love chocolate. I have a sweet tooth, so I, um, set out, uh, to create the best vegan milk chocolate replacement. Uh, so it's not a compromise for people when they have the choice between our chocolate and a traditional milk chocolate, that it's an easy switch for them. Um, and yeah, so it kind of a big overreaction, but I had sold two e-commerce companies, uh, and put every single penny I had and then some into chomp.

• 15:00Guy Raz?

  Wow. I'm curious. So can you give us a sense of how much it costs to buy that factory?

• 15:05Speaker 02

  So I put $700,000 in, is everything I had, and that got us open. So basically from, from a, a concrete box, a rectangle, I kind of sat on the floor the first day, documented it on Instagram, um, and then learned everything from, you know, antimicrobial floors to shatterproof bulbs and the whole process, bought the equipment. Uh, a lot of ups and downs just to get open and then we opened September 21.

• 15:29Guy Raz?

  Okay. And so now you're, you make chocolate bars and you sell, so first of all, you, I want to get to this other Build-A-Bear side to it, but do you sell chocolate bars to consumers or in stores?

• 15:40Speaker 02

  Yeah. So my wheelhouse is direct to consumer online. So that's kind of why I took the plunge into building a factory. Um, and I knew I could kickstart the company with email marketing, paid advertising. Um, so about 70% of our business is currently direct to consumer and then about, um, 30% is wholesale, uh, retail. Uh, we're in about 400 grocery stores ish right now. But yeah, we did $400,000 the first year we opened, um, and then 750,000 last year. And, uh, this year we're set to do a million dollars, um, and 70% of that's coming from e-commerce. So.

• 16:15Guy Raz?

  Wow. And so you, and now tell me about this Build-A-Bear model here. You can build your own chocolate bar?

• 16:22Speaker 02

  Yeah, so back in March, cocoa bean prices just went through the roof. Seventy percent of the world's chocolate comes from West Africa. We actually don't buy from that region because of some ethic issues, but a lot of the bigger companies that usually buy in West Africa, they had crop failures, which drove the prices up. So we had done something at the Chocolate Factory a year before where we invited the community to come through the factory and build their own chocolate bar. There's nothing like it. It's so much fun. You get to pick all your mix-ins, you get to name your bar, choose your wrapper. And I thought, what if we could take that online? And went on a deep dive through Build-A-Bear Workshop's business model, and they do it online too, and it actually performs very well. And so

• 17:07Speaker 02

  now you can go on our website, and we found a way to kind of like, you know, offset the margins we lost during the cocoa bean crisis and tell either, hey, maybe this is a permanent pivot we take, or maybe we go back to the other stuff, or maybe kind of a combination of both.

• 17:22Guy Raz?

  That's cool. I'm looking at your website now, and I kind of want to do like a gummy Swedish fish chocolate bar. It sounds really delicious, actually. I think it'd be like a chewiness. All right. And tell us, what's your question? What question have you brought for us today?

• 17:36Speaker 02

  Yeah, so my question is, you know, this is definitely my mission era of my life with this company, and my initial goal was to get this out into grocery and retail. And that's proved to be a super crazy challenge, especially doing the whole process and not using a co-packer, since we are, you know, doing, doing every part of the production and fulfillment and marketing in-house. So I'm wondering if I should, even if cocoa prices, you know, come back down, if we should continue and lead with this Build-A-Bear model. It's doing really well, and so I'm wondering what the best option for us to do is.

• 18:16Guy Raz?

  All right, let me bring in Mark Laurie. Mark, you don't have to answer Ben's question just yet. You may have questions of your own, but please, wait, let's, let's, let's bring you in.

• 18:25Speaker 01

  Yeah, sure, sure. I have, I do have a couple of questions. Nice to meet you, Ben. Very cool what you've built. I'll have to, have to try it out. Who is your primary competition in sort of the vegan chocolate bars? How do your costs compare?

• 18:41Speaker 02

  Yeah, our primary competition, I'd actually say now is mainstream chocolate because like, some of the bigger companies launched plant-based versions of their chocolate. We-

• 18:51Speaker 01

  Is Unreal a competitor?

• 18:53Speaker 02

  I would say Unreal is. They're not strictly vegan though, so we're like, I think we're one of the primary only vegan companies, which I'm not sure how much, you know, of a difference that makes to people. What we've noticed like with distribution is taking a chance on a smaller company, even if our quality, in my opinion, and our taste is better and we, we have more of a special process, they're still only going to carry the big companies that put out that version.

• 19:19Guy Raz?

  Like Hershey's, even Hershey's does a, an oat milk.

• 19:22Speaker 02

  They do, yeah. They put out, like, a little bit after we launched. Our peanut butter cups are the, the best seller for us and they, they launched plant-based Reese's too. We've also had to say no to like a lot of big stores, like over 2,000 stores in the last year because, you know, I can't, I have the factory and the production equipment and technically we could produce more chocolate, but funding another crew and then the purchase orders that are 30 to, to, you know, net 30 to net 90 is just really difficult. And we're doing our own fulfillment too and it's, it's been a, I've raised a little bit of money, friends and family. But I, I feel like Build-A-Bar might be a way to, to have this higher margin model that funds the backside of the business.

• 20:03Speaker 02

  And we can kind of take control of our own destiny, being primarily an e-commerce business.

• 20:08Speaker 01

  Yeah, I personally, Ben, just hearing, hearing your whole story, I mean, it's going to be difficult, I think, to compete on a commodity basis, doing it yourself. It's going to require a lot of capital. I know I'm, I'm pretty close with some of the big manufacturers and they've invested, you know, hundreds of millions, if not billions of dollars in, in plant and equipment to get the cost down. And I'm not sure, just the sort of the, the higher quality on a commodity basis, that people are going to pay that much extra to get vegan chocolate. I think the way you're set up though, you can do what no one else can do. There's no way a big company- Can do the sort of Build-A-Bear type approach in chocolate. And so you could really own that market.

• 20:52Speaker 01

  And you have the ability to be so much more flexible and your system's built for flexibility. And that flexibility will give you margin pricing power, right? And people will pay for it. It's gift. I think the market for Build-A-Bear chocolate is still massive if you owned it. So if I were you, I would push that hard and see how big you can get it. And then you could always, you know, move into other areas if you start to tap out. But I think you've got a long runway there personally.

• 21:24Guy Raz?

  Essentially customization. And we should mention, when you build a bar, you get a customized label. You could put your name on it and to, right? You can do all that stuff.

• 21:32Speaker 01

  Incredible, incredible gift.

• 21:33Speaker 02

  Yeah, you can name it. A lot of business to business opportunities too, we've seen. And Mark, I think you're right, like, you know, competing with this commodity level, like, and I think, I know guys talked about this too, is when you kind of find out what consumers care about, or at least what they're willing to pay for. And unfortunately, some of these mission-based things, and I don't blame the consumer, but they don't really matter as much as you initially think they do. So I think Build-A-Bar is kind of my way to almost kind of go into the back door and build a brand that's really fun. Maybe even open physical locations where you get to go build a chocolate bar and go to like, yeah, you know, and like,

• 22:07Guy Raz?

  Yeah.

• 22:07Speaker 02

  And have these really fun experiences with your family. And maybe there's other experiences you have when you walk into a Chompville, you know?

• 22:14Guy Raz?

  Yeah.

• 22:15Speaker 01

  Wedding favors, showers thing. I mean, just like, you could think of a customization in chocolate, endless possibilities there.

• 22:23Guy Raz?

  I guess what I think is interesting is I think you're right, Ben, that consumers don't really care so much about, you know, where you're sourcing it from and the mission. And unfortunately, you know, they're not going to care if you're buying ethical chocolate. Some people will, but most people don't. But I do think what they would care about is the fact that you're doing everything. You're buying these virgin beans, you're roasting them, you know, you control the process, you're grinding them, you're using, you know, your ingredients. I think you should push that a little bit more, especially on your website. I mean, I think that.

• 23:02Guy Raz?

  Knowing that level of quality does matter to a consumer, they might not care so much about the ethics right now. I don't, you know, some people do, but I do think that quality, people do care about it. They know that that's what differentiates you, aside from the fact that it's customizable, that you really are doing everything in this process to bring consumers the best tasting chocolate bar. That's something that I think would be interesting.

• 23:26Speaker 01

  Yeah, I agree there. I agree with you, Guy. I also think being able to make a case that you're sourcing literally the highest quality beans in the world, and maybe even different grades, I mean, maybe even educating people the way they do with wine, you know, like where these grapes are from, this very specific region of Oakville in Napa, at this, you know, elevation and like almost a terroir of like the cocoa beans, and literally charge some crazy price because of the exclusivity of it, and make it almost like a beautiful box, a beautiful, you know, almost like instead of giving a $1,000 bottle of wine

• 24:07Speaker 01

  or really high-end cigars, you're giving this like really high-end, multi-hundred-dollar pieces of chocolate and tell a story around that. I think there's something potentially there. And again, you're uniquely positioned to do it.

• 24:21Speaker 02

  Yeah, I know. I think those are great ideas. And I've always kind of thought about how my farming background ties into it as well. So I think, you know, chocolate is a lot like wine, and it has terroir, and it has a story too. And a lot of the beans we're buying are from small farmers as well, because we're not buying these big commodity beans. So I think those are amazing ideas. I think there's a lot of untapped territory there. So yeah, thanks, Mark.

• 24:44Guy Raz?

  You're gonna have to, you're gonna have to call Mark and ask him to tap, tap you into all of his rich friends, and then you can sell those bars.

• 24:49Speaker 02

  Sounds good.

• 24:51Guy Raz?

  Ben Bailey, Chomp Chocolate. Congrats, man. Good luck.

• 24:54Speaker 02

  Thank you, Guy. Thank you, Mark. Guy, I've been listening since the beginning, and thanks for getting me through to other businesses and hopefully number three.

• 25:01Guy Raz?

  Thank you so much for listening. We're gonna take a quick break, but we'll be right back with another caller and another round of advice. Stay with us. I'm Guy Raz, and you're listening to the Advice Line, right here on How I Built This.

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• 28:54Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz, and my guest today is Mark Lorrie. He's the founder of diapers.com, jet.com, and Wunder. What do you say, Mark? Should we take another call? Sure. Caller, hello. Welcome to the Advice Line. Please tell us your name, where you're calling from, and a little bit about your business.

• 29:14Speaker 03

  Hi, I'm Lindsay Shores. I'm calling from Salt Lake City, Utah. I'm the founder of Babyagogo, a company that provides and creates innovative baby products to make parent life easier on the go.

• 29:24Guy Raz?

  Cool. All right. Well, welcome to the show, Lindsay.

• 29:26Speaker 03

  Thank you.

• 29:27Guy Raz?

  Baby a go-go. Tell me what your products, products or products are. What are you selling?

• 29:31Speaker 03

  Yeah. We currently have two products. We have a diaper kit that fits in your back pocket. It's a vacuum sealed, compact diaper kit, has one diaper, five wipes. And after usage, you wrap it back up, seal it up with a sticker provided on your wipes, and it becomes an odor-free, sustainable bag. So easy way to stash in your purse, or if you're in a public bathroom, a way to seal it up and make it a lot less gross. And then our other product is a magic wipe. It's a small disc that fits in your hand. It's an on-the-go wet wipe, and once you puncture the middle, it slowly grows into a full-size wet wipe. So that's very useful for parents on the go and all consumers on the go. So if you're familiar with the, do you remember those washcloths that you throw in like a tub of water and it expands?

• 30:15Guy Raz?

  Yeah.

• 30:15Speaker 03

  Similar to that, but it's a little more magical because it's very unexpected.

• 30:19Guy Raz?

  Wow. Okay. So these are like, uh, travel diapers and it's a one-off, right? Cause I remember, and my kids are now teenagers, but we would always pack, I can't remember what they were. That those different brands, we would pack the diapers in there, one or a few of them. And then there was a thin wet wipe, we'd put that in there and, right? But there's not, this is just everything in one simple package. It's one diaper, some wipes. So it's designed really for like, I guess if you're at the airport and your baby is just like, pooped all over the place, you gotta go to the bathroom.

• 30:52Speaker 03

  Exactly. Yeah. Yeah. Do you like talking about this subject?

• 30:55Guy Raz?

  I do. I love it. I, I, I love it.

• 30:59Speaker 03

  Yeah, it's definitely, I know Mark's a big lover of diapers and the disasters and messes.

• 31:04Guy Raz?

  Number one and number two.

• 31:06Speaker 03

  Yes, exactly.

• 31:08Guy Raz?

  I have to know how you, I mean, I have to know you came up with the idea because it's a great idea. And, and you know, so much of, so much of how I built this is those moments where people like we, we have an episode about Larry and Lenny's cook, protein cookies. And they're really, these guys are bodybuilders. And one day they were like, I'm sick of chick, chicken and, and egg whites. Like, can we put the chicken and egg whites in a cookie? That's how it started, you know? And then it got to a hundred million dollar business. How did you, uh, how did you come up with this?

• 31:37Speaker 03

  Yeah. So I was traveling a few years back with my family. At the time, my youngest was one years old. And we went to a family resort, a beautiful, very family-friendly place. I always pack diapers for two to three days and then get to the destination, go stock up. No, no brainer. That's always how it works. So going to this destination, I thought, of course, I'm going to find diapers. I was running out on day three of our day eight trip and I searched and searched and searched the stores and nobody had anything accessible for babies or infants. Food, diapers, wipes, all the stuff. So my next best option was to take a half a day and go into town, take an Uber, pay the cost of that, leave my family. It was like, this is crazy. Then it hit me that there's multiple moments at malls.

• 32:21Speaker 03

  You're at the zoo, you're at the aquarium, you're at Disneyland, you're in all these places that you need these diaper kits that are not convenient. So I jokingly told my husband at the end of that week of our trip that like, I can't believe this is such a huge void in the market. I'm going to start a business tomorrow and fix this. And I did.

• 32:41Guy Raz?

  That's awesome. And can you give us a sense of how you guys are doing right now? What, I mean, have you, have you broken a hundred thousand dollars in sales yet?

• 32:48Speaker 03

  No, not necessarily, but we are definitely in the small startup phase. Very excited though. I love the advice you guys have given.

• 32:55Guy Raz?

  Yeah, this is such a great idea. Where are you selling these right now?

• 32:58Speaker 03

  I'm selling these online and then we just recently on boarded with areas, which is one of the largest travel and hospitality companies globally. So we have, we're now in their airport stores as well as a bunch of their turn pikes.

• 33:12Guy Raz?

  How many of their airport stores?

• 33:13Speaker 03

  Uh, six.

• 33:14Guy Raz?

  In, in which airports?

• 33:16Speaker 03

  In Atlanta, which is the number one airport.

• 33:18Guy Raz?

  Oh, wow. Cool, cool.

• 33:19Speaker 03

  Yeah.

• 33:20Guy Raz?

  What's your question for us today?

• 33:22Speaker 03

  My question is, there's always a really positive response when I'm speaking to retailers and buyers about these products. They're really excited about them. They immediately understand the need for them. But because they are new products in a new space, there's not much to compare it to. So my question is how to take the risk and build more credibility in an untested product market and get within the door without offering a discount or a testing phase that might not necessarily be the hook they need and could be a big loss for our company.

• 33:53Guy Raz?

  Okay, Mark Laurie, I think you know a few things about diapers.

• 33:57Speaker 01

  I do, and retail as well, but is the margin structure in such a place that you feel good about, like, the retail selling price? Well, what is the retail selling price?

• 34:09Speaker 03

  Yes, the retail selling price is 525.

• 34:12Guy Raz?

  It's a good price.

• 34:13Speaker 01

  525?

• 34:13Speaker 03

  Yeah.

• 34:14Speaker 01

  Can you do it for 499?

• 34:17Speaker 03

  It was 499, actually, about a year ago, and because of inflation, it's 525. But depending on who retailers we're talking to, yeah, the 499 is still a possibility.

• 34:28Speaker 01

  Okay, and you make good margin at that?

• 34:30Speaker 03

  Yes.

• 34:31Speaker 01

  I mean, have you offered it as returnable? I mean, that's always a protection for the retailer.

• 34:38Speaker 03

  Yes, that's not something necessarily highlighted, so that's a great idea.

• 34:43Speaker 01

  Yeah, I mean, that's the easiest, is like, put it on the shelf, make it returnable, and, like, it's not the kind of thing that spoils, right? So they return it to you, you just sell it somewhere else. In fact, I mean, I would even probably start on consignment to get some sales history. But if you're really strapped on cash and there's no possible way to do that, the next best thing is to say, yeah, make it 100% returnable, no period of time to return it. If it doesn't sell, we'll take it back. Tell the retailer you will stock all the shelves, make sure, you know, you've got kind of one shot to make a first impression, so make sure you have good shelf space, it's on the counter, right

• 35:23Speaker 01

  at, you know, customer eye level, and have a little, maybe, point of purchase kind of display unit that looks really cool, and literally have that box of 20 or however you put in there, and have it right there on the counter.

• 35:39Speaker 03

  Okay, awesome idea. Yes.

• 35:42Guy Raz?

  Yeah, I mean, I just feel like this is a no-brainer, Mark.

• 35:45Speaker 01

  No-brainer.

• 35:45Guy Raz?

  I mean, it's such a great idea.

• 35:48Speaker 03

  This is the same response I'm getting all the time.

• 35:49Speaker 01

  The only thing I worry about is, it does sound a little bit expensive. Like, if you're saying that the demand is there, then it's a home run. But I would think that at massive scale, if you're doing, you know, millions of these, that you'd be able to get the cost, I mean, sort of the retail selling price, down even below 499.

• 36:08Speaker 03

  We can do that. It's, I mean, just speaking and testing out, speaking to a lot of retailers and buyers, that's often the response is, oh, we've got to do these for $4.99 and now $5.25. And, you know, depending on what airport you're in, some have suggested $7.50. And a lot of people I talked to during, you know, testing period and phase, it's like, you guys are dads, you know, it's at the point that you need it.

• 36:31Guy Raz?

  You're gonna pay whatever.

• 36:33Speaker 03

  A lot of people say, you don't care the cost.

• 36:34Guy Raz?

  You don't care.

• 36:34Speaker 03

  Don't care.

• 36:35Guy Raz?

  It doesn't matter. Yeah.

• 36:36Speaker 01

  There's definitely the market for, hey, I'll pay whatever because this is a necessity right this second. And then there's also the price point where it's like, hey, I'll, I'll take a few of these. You never know, I might need them. You know, but it's hard, it's hard to like, say, you know, I'll take, you know, three or four of these and suddenly it's 20 bucks. You could buy a whole box of diapers for that. So I'm just trying to think about how to make the market size much bigger. It's really what you can do at scale. I'm always thinking about scale and working backwards. And I would say, you know, at sort of 10 million units, what's your cost of the, of the display and the packaging, you know, like, and then figure out what the retail price would be off the back of that. And obviously your cost saves a lot higher, but I would sort of grow into it.

• 37:19Speaker 01

  I would basically take no margin in the beginning, you know, and, and, and get the right price point, create much bigger market size, and then eventually get the scale you need. So, so the combination, I would do the airport thing and the sort of emergency charge, we need to charge, make a good margin on it, but simultaneously be working on the much bigger opportunity of a scaled version of it.

• 37:42Speaker 03

  Okay. Love that. Definitely consider that. We started at the DDC idea of subscription model, but to Mark's point, it was just too pricey to stock up. I, you know, we have customers that do it. It's not the everyday customer. And so, um, yeah, definitely excited to roll out into airports and start getting more feedback there.

• 38:01Guy Raz?

  I want to see these vending machines in bathrooms.

• 38:04Speaker 03

  Yes.

• 38:04Guy Raz?

  Yeah.

• 38:05Speaker 01

  Yeah, vending machines, that's smart, too.

• 38:07Guy Raz?

  Yeah. Super cool idea. Lindsay Shore's baby, a go-go.

• 38:11Speaker 01

  Theme parks, too.

• 38:12Guy Raz?

  Theme parks. Yes.

• 38:13Speaker 03

  Yes. Definitely.

• 38:15Guy Raz?

  Congrats. Thanks so much for calling in.

• 38:16Speaker 03

  Thanks, you guys. I'm the biggest, biggest fan of the show. So, so happy to be here. So great to meet with you both.

• 38:21Guy Raz?

  Thank you.

• 38:22Speaker 01

  Good luck, Lindsay.

• 38:23Speaker 03

  Thank you.

• 38:24Guy Raz?

  I like that idea that you're saying about putting it next to the register. Like you've got your 5-hour energy, your Slim Jims, your Pickles, and then the diaper.

• 38:33Speaker 01

  Yeah.

• 38:34Guy Raz?

  Right next to that, you know?

• 38:36Speaker 01

  I think there's probably the actual cost though at 10 million. She hasn't, I guess, gotten that yet, but I mean, it's going to be a fraction of what she's getting now. And I just think that that could be a big market. Like if you get that price point down, you could just imagine every parent having a few of those in their purse, pocket, whatever, right? Like, you know, where it's just kind of part of, you know, part of your diaper spend, right?

• 38:58Guy Raz?

  I mean, how often? I find myself buying like shaving cream or deodorant at the airport all the time. I always buy snacks because I don't eat what they're serving on the plane. So I'm like looking for nuts.

• 39:10Speaker 01

  And you pay like $13 for like a little bag of nuts.

• 39:13Guy Raz?

  For the pistachios, I pay like 15 bucks. And I'm like, all right, so it's available. We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz. Stick around, you're listening to the Advice Line on How I Built This Lab. Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz, and today I'm taking calls with Mark Lorrie. So Mark, let's bring on our next caller.

• 39:51Speaker 01

  Okay.

• 39:52Guy Raz?

  Hello, welcome to the Advice Line. You are on with Mark Lorrie. Please tell us your name, where you're calling from, and a little bit about your business.

• 39:59Speaker 04

  Hi Guy, hi Mark. Thank you for having me. Nice to chat with you guys. My name is Ryan Thompson. I am from Vail, Colorado. In 2014, I started 10th Mountain Whiskey and Spirit Company. We are a philanthropic, award-winning craft distillery named in honor of the historic 10th Mountain Army Division.

• 40:17Guy Raz?

  Thanks for calling in. 10th Mountain Whiskey. 10th Mountain, I believe, is no longer in... Colorado, I think they're in Fort Drum, New York. They're on the border with Canada today.

• 40:26Speaker 04

  You're exactly right, Guy. I'm impressed with your military knowledge.

• 40:30Guy Raz?

  Many years ago, I was a reporter. I covered the Pentagon. So that's the only reason why I know that. But, cool, so cool, cool name. And you, tell me how you got into this business?

• 40:41Speaker 04

  Yeah, when I first moved to town in the late 90s, I bartended around town and did the ski bum lifestyle, skiing the 80, 90, 100 days a year and bartending at night. In 2002, I started a restaurant that I still have my thumb on today with my two original business partners 23 years later. About 12, 13 years ago, I was watching what the craft distillery movement was doing. I home brewed just for fun, for friends and family, and was watching what a couple of competitors and other ski resorts were doing. And I thought someone in this town was going to make whiskey sooner or later, and just thought, might as well be me, right?

• 41:15Guy Raz?

  So you guys bought a still and you bought, I mean, all the things that you need?

• 41:19Speaker 04

  Yeah, that's correct, Guy. You got it. We distill, we mature, we bottle, all in-house. We have a tasting room at the distillery where we hold events, do tours, and hold tasting classes. And we have a off-site tasting room, which is at the base of Vail Ski Resort in Vail Village as well.

• 41:39Guy Raz?

  Alright, cool. I, I'm curious, right? Because there's a lot, and I'm in Northern California, where the wine industry is going through some, some challenging headwinds right now, right? Because there's all, every day, it seems like there's another article about alcohol and being bad for you. And, and, you know, I know that younger people aren't drinking as much as, you know, people my generation and older. Are you seeing any headwinds at all right now?

• 42:08Speaker 04

  Yeah, certainly. You nailed it, Guy. There's, almost every day, an article comes out in regards to alternative opportunities to relax and enjoy.

• 42:17Guy Raz?

  Cannabis, or...

• 42:18Speaker 04

  No and low alcohol movements, the high and dry movement, if you will. And so that is part of my question. So, we're at a pivotal point within the business. We're just celebrating our 10-year anniversary.

• 42:30Guy Raz?

  Congrats.

• 42:30Speaker 04

  We're doing well. Thank you. We're doing well. Here in the state of Colorado, we self-distribute in the Vail Valley. We have a large distributor that distributes outside of our area but within the state. And so about 80% of our sales comes from within the state of Colorado. About 20% are in a number of other states and distributors. However, 80% of my headaches comes from that as well. So a little bit about the 80/20 rule, right? And so I own 100% of the company. I've gotten this far without having to sell equity. I have an SBA loan, beg, borrowed and scraped as much money as I could put together over the last 10 years. However, I'm to a point where if we continue to grow, do I look to sell off some

• 43:14Speaker 04

  equity and bring on some investors? Or given the structural market shifts within the industry, do you think it'd be smarter to maybe pull back some of our distribution in some of these outlying states and just focus more locally and then our direct-to-consumer models as well?

• 43:30Guy Raz?

  Lot to think about here because Mark, obviously, I know you know a little bit about this market too. And it's complicated. Every state has different regulations. So the question, I guess, is should he double? It was a couple of questions. Should he bring on equity partners, but also should he double down on where they're doing the best or really try to push into expanding into some of these markets that are also proving to be a bit of a headache?

• 43:55Speaker 01

  Yeah, I have a couple of questions. First, nice to meet you, Ryan. Great, great story.

• 44:01Speaker 04

  Thank you, Mark, you as well.

• 44:03Speaker 01

  What percentage of the market are you in your current state in Colorado?

• 44:09Speaker 04

  A percentage of the overall market, I'd say we're about 10%. So there's certainly some room for growth there.

• 44:15Speaker 01

  10% of the whiskey market in Colorado?

• 44:17Speaker 04

  Correct. Yep.

• 44:18Speaker 01

  Okay, then what is it about your product that is special relative to other whiskies?

• 44:25Speaker 04

  Certainly where our distillery is, we're at 6,300 feet in altitude. So it's an ambient, dry air climate with some diurnal temperature fluctuations, which adds some different flavors to our products, certainly matures our whiskey a little bit quicker than others. Other areas, our angel share is mostly water that evaporates. And so we're able to get some higher proof whiskies and do some special single barrel picks. And so we're well known for our whiskies. We make a bourbon, a rye and a single malt. We make four other additional spirits as well. And then certainly the amount of respect and support we give back to the military, both active and veterans, soldiers alike. So.

• 45:10Speaker 01

  One last question. In terms of your goals, like would you be happy doubling the size of your business over the next few years? Are you really saying no, I really want to go for 10x or 100x? Or no, you know, in the next few years, if I could double the size of the business and keep 100%, I'd be really happy with that.

• 45:28Speaker 04

  So originally 10, 12 years ago, when we were starting, we wanted to be a national brand. And that was the original goal. Given the industry market shifts, I'm thinking it might be smarter to pull back and just be a regional brand. However, I still have inside me that I want to grow this. I love the challenge of it. It's a tough industry. It's an exciting industry. I love all aspects of it. And so in one hand, it's do we lose the battle to win the war and pull back? Where on the other hand, if you're not growing, you're dying, right? And so it's a little bit of both that I'm having to struggle with here.

• 46:05Guy Raz?

  Are you growing? Are you on a path to grow this year?

• 46:09Speaker 04

  Yeah, Guy, we have been growing about 10% year over year. This year, we're going to be about, we're going to be flat, which in the industry, from what I've been told is a win. Yeah.

• 46:20Speaker 01

  Yeah. So if you're 10% share in Colorado and 10% growth, that means you'd be going from 10 to 11% share if you just focused in Colorado or 12 share is 20%. It feels like just from the outside looking in, given all the things that you've said, where you have a competitive advantage, I would double down on that competitive advantage that you have in the state of Colorado. It's working. The brand resonates with that audience. You've got physical brick and mortar. People are feeling and touching your brand. And if you only have 10 share, I mean, you can go to 20 share. That's why I was asking 20 share and double the size of your business. That's some pretty good growth over the next,

• 47:04Speaker 01

  you know, few years. If you were able to double your penetration. I think the level of focus is not to be underestimated. Like it's, like you said, there's a lot of complexity in going into other states. You don't have the same, you know, marketing power that you do in Colorado, and it takes a lot of time. And so I think there's a benefit of focusing and saying, hey, we're going to double share in Colorado. And this is how we're going to do it and get everyone thinking on the same, on the same lines. And then after you start getting that real traction there, maybe you pick a second state that's closest in that you think would most likely be a state to resonate. But I, I wouldn't, it doesn't feel right to me on the outside thinking about

• 47:45Speaker 01

  taking the brand national without the same marketing budget or bang or that some of the, the bigger players would have.

• 47:53Speaker 04

  Right, Mark. Exactly. I appreciate that insight and your opinion there. And that's exactly what keeps me up at night is trying to figure that out. And so certainly respect your, your career and love your insight to that. So I really appreciate that.

• 48:06Guy Raz?

  Yeah, the challenge is the next state over is Utah. And I don't know how great of a market that is.

• 48:10Speaker 04

  Yeah, I think we'd probably look to go north Wyoming or south New Mexico first.

• 48:16Guy Raz?

  Right now, I may have missed this, but did you mention your annual sales right now?

• 48:21Speaker 04

  Uh, we're a little bit north of 2.5 million.

• 48:24Guy Raz?

  So one question I have for you is what, what do you, what's sort of the end game for? I mean, Vail is a really important, you know, if you're talking about building a brand, Vail is a great, especially a whiskey brand, a great place to do that because it attracts obviously skiers from around the world. It's a, you know, it's one of the probably the five greatest ski areas in North America. I mean, is there a world where you wanna, you would one day want this brand to be acquired by a Diageo or a bigger, you know, a bigger multinational?

• 48:53Speaker 04

  Right, Guy. It's, I certainly love what I'm doing. I love growing it. I love the challenge. I could see me doing it for a number of more years, but I get asked this question often, and everything's got its price, I think, certainly. I will see if there's a price I can't, or an offer I can't pass up, then it might be something I'd entertain.

• 49:13Speaker 01

  If you aren't thinking about, if you aren't thinking about selling it, then it would be more valuable to have deeper penetration in a regional market than a shallow penetration in a national market. So, that's something to consider.

• 49:25Speaker 04

  Got it. Thanks, Mark.

• 49:26Guy Raz?

  I think that's great advice, Mark. The brand is called 10th Mountain Whiskey and Spirits. Ryan Thompson, thanks so much for calling in.

• 49:33Speaker 04

  Guy, Mark, I appreciate your time. Thank you very much.

• 49:35Speaker 01

  Thank you, Ryan. Good luck.

• 49:37Guy Raz?

  Yeah, it's, I mean, we've, we've had a couple of spirits brands on the show that have been acquired and some that haven't, but I think that's exactly, that's just an important point, Mark, which is better to have, to really be a known quantity in a region, right, than to kind of just be...

• 49:55Speaker 01

  Yeah, to be something special, like, you know, really stand out. And I think you start going into the 20 share plus and start, you know, you're, you're starting to become a meaningful brand in that region. That's where I would focus. I think also, he said before, like, how 80% of his time is outside of the existing region, so just switching focus is going to help build that brand. And he's got a much better chance, I think, of doubling in, in Colorado than he is, you know, trying to do it nationally.

• 50:23Guy Raz?

  Mark, before I, I let you go, want to ask you about, you know, here you are, you're still a young guy, you're only in your 50s, and you've accomplished all these things, and you've got a whole new business now that you're, that, you know, we're going to be hearing about for the next, you know, 20, 30, 40 years. If you could go back to when you started diapers.com and even before with, with what you were working on, and you could give yourself advice and say, hey, you know, you need to know this. I'm coming to you from the future. What do you think you would have said to that guy?

• 51:00Speaker 01

  Oh, there's so many lessons. If you're asking for like, what's the number one lesson?

• 51:05Guy Raz?

  Sure, yeah.

• 51:08Speaker 01

  I think I have to, if I could only pick one, I think people. I think, I think I would, I've learned so much about the type of individuals that can really help propel a company. And at the end of the day, like you win or lose, it's, it's down to execution and it's people. And how do you find the people that are going to be most successful in an early-stage startup? I want somebody that showed a demonstrable level of success in everything they've done in their career. You know, they don't have to go to the best school, but, but in, in the workforce, they've shown a demonstrable level of success. They're in a company, they've been promoted, and when they move from one company to another, it's a big step change, like.

• 51:50Guy Raz?

  They make an impact.

• 51:50Speaker 01

  Yeah, stars make an impact, and when they move, it's noticeable, like, you know, and, and those people are the ones that, I mean, 20% of your folks do 80% of the work, and if you can get those top 20%ers, even top 5%, if you're lucky enough to get that, that could make the company. And every company that I've had, there's always a few people that are top 5%, and those are the people that really drove and made the company what it is. So I would have just, I didn't really know that back then, and just hired people and just, you know, I just, I, I, I was like, thought I could interview somebody and find out if they're good, and you just can't. It comes down to a resume, you have a history, you've been in the workforce, what have you done?

• 52:33Guy Raz?

  That's actually really great advice. It's, it's because you've got to surround yourself. Great entrepreneurs are not great entrepreneurs, they're great people who surround them. That's really, I think the greatest entrepreneurs are often the greatest talent spotters. But it's, but you're right, it's hard, because you can, you can talk to somebody, you really like them, and it just doesn't work out.

• 52:52Speaker 01

  Yep. I call it honeypot, you know, you, you sort of, it's like, oh, I can get a beer with this person, they took a good game, and in an hour, you're like, oh, I really connected, I like this person, but then they don't, they're not able to like, really push the ball forward, you know? And there's only a small percentage of the population that can truly invent, create, and make stuff happen. And there's a certain resume that, that

• 53:18Speaker 01

  It shines through, and now I can spot those. And so I would teach myself how to spot that if I went back in time.

• 53:25Guy Raz?

  Yeah, that's great advice. Mark Lorrie, founder of diapers.com, Jack.com, and Wondery. Thanks so much for coming back onto the show.

• 53:34Speaker 01

  Thank you, Guy.

• 53:35Guy Raz?

  It's great having you. And by the way, if you haven't heard Mark's original How I Built This episode, you've got to go back and check it out. You can find it in the podcast description. Just click the link there. And here is one of my favorite moments from that interview.

• 53:49Speaker 01

  I'm happiest when I'm doing something entrepreneurial, building something. I mean, it could be inside of a big company, building something. It's really about the autonomy to just sort of like, just run and build fast and not have to get, you know, traditional corporate buy-in before doing everything. Because, you know, corporations, they just tend to shy away from risk and low probability outcomes. And I sort of gravitate more toward low probability outcome, but massive upside. And I think that's where the opportunity lies for an entrepreneur.

• 54:25Guy Raz?

  Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at guyraz.com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one-minute message that tells us about your business, the issues or questions you'd like help with, and hopefully, we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at [email protected] or call us at 1-800-433-1298 and leave a message there.

• 55:10Guy Raz?

  And we'll put all this in the podcast description as well. This episode was produced by Kerry Thompson with music composed by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Sina LaFredo. Our production staff also includes Alex Chung, Chris Messini, Carla Estevez, Elaine Coats, J.C. Howard, Catherine Seifer, Devin Schwartz, Niva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to the Advice Line on How I Built This Lab.