Advice Line with Brett Schulman of CAVA (July 2024)

CAVA co-founder and CEO Brett Schulman joins Guy on the Advice Line, where they answer questions from three early-stage founders experiencing growing pains as they scale their companies. Today we meet Devin, who’s navigating imposter syndrome as his spiked root beer gets picked up by stores across Texas. Then Sophia, a Los Angeles mom exploring new sales channels for the accessories she designed to support children’s allergy needs. And Sean, who’s weighing whether outside investment is the best way to grow his Michigan-based coffee roastery into a national brand. 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 CAVA’s founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/40c7b2b2-a8b4-4ed6-b5f9-df5aa2318755/embed as told by Brett and his co-founder Ted Xenohristos on the show in 2023. This episode was produced by Carla Esteves with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was James Willetts. You can follow HIBT on X https://x.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. 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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• 2:16Guy Raz?

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• 5:37Guy Raz?

  Hey, everyone. It's Guy here. I hope everyone's been having a great holiday season so far. And as you can imagine, our team is taking a little time off to be with our families and loved ones. So we're bringing you an Advice Line episode that we really loved. It's the one with Brett Schulman, co-founder of Kaba. And I was so happy to have Brett back on the show to give our callers some advice, because- He was the perfect person to guide them through the growing pains of trying to scale a business. And in a lot of ways, I think it's also a great episode for the new year, since a lot of us will very likely experience growing pains of our own with like new resolutions and goals. Speaking of which, I hope you have a very, very happy new year that is filled with lots of growth and learning and joy. And hopefully, this episode will give you some

• 6:22Guy Raz?

  inspiration. And without further ado, here it is. 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 attempt with me 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. 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].

• 7:07Guy Raz?

  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. My guest today is Brett Schulman, the co-founder of Kaba, a chain of fast casual restaurants that serve a Mediterranean menu inspired by his co-founder's Greek upbringing. Brett, welcome to the show.

• 7:37Speaker 01

  Hey, Guy. Thanks for having me. It's good to be back. Happy to pay it forward. I had a lot of guidance and advice during my journey and happy to share the trials, tribulations, and the dumb tax I've paid along the way. So hopefully, they don't have to pay it as much.

• 7:51Guy Raz?

  It's great to have you back. Last time you were on the show, of course, you told us the story of CAVA. And you were really the fourth founder of that company. You came in when it was just a single sit-down restaurant in suburban Maryland. And you really helped to scale the brand into what it is today, this chain of many restaurants, hundreds. And by the way, if you guys listening haven't heard Brett's story, which he told alongside his co-founder Ted Chino Christos, it is a fantastic episode. It is so good. And you can find it by just scrolling back in your feed or searching wherever you listen to this podcast. And we'll also put a link to it in the podcast description. I think your experience, the experience you had, is really going to help our callers today because it

• 8:34Guy Raz?

  sounds like a lot of, they all have great business ideas, but there are a lot of them are at decision points where they need to figure out how to best scale, or where to focus their limited resources. Let me start by asking you, Brett, about that. I mean, how do you think about how to focus a business? Or more specifically, like with CAVA, you decided to focus on, you know, to take this concept that they had, the restaurant, it was fresh food, it was healthy. But you were able to kind of transfer that to a fast casual format. Tell me about how you were able to kind of see that opportunity.

• 9:10Speaker 01

  Yeah, well, it was interesting because, as I mentioned, the consumer packaged goods, the dips and spreads being sold in grocery stores predated the fast casual. And we had initially thought about growing and scaling that business. But there was clear that this food resonated to a larger audience. And the idea was really about how do we bring this to more people? And that's where this fast format really lent itself to be able or be a vehicle to be able to do that. And I think oftentimes, it's listening to the business or listening to your guests and kind of understanding the need you're filling and leaning into that. And one of the things I've learned along the way and that we've learned is, you know, sometimes what you don't do is more important than what you

• 9:50Speaker 01

  do do. And really prioritizing and focusing on where your strengths are and leaning into that.

• 9:57Guy Raz?

  All right, Brett, what do you say? Should we take our first caller?

• 10:01Speaker 01

  Yeah, let's do it.

• 10:02Guy Raz?

  All right, let's do it. Caller, hello, I think it's Devin. Hello, Devin. Are you on the line?

• 10:06Speaker 02

  How you doing there? Appreciate it. Thank you.

• 10:09Guy Raz?

  Devin, welcome, welcome. It's great to have you on. Tell us your first and last name, where you're calling from, and just a little bit about your business.

• 10:16Speaker 02

  I am Devin Strahan. I'm calling from the great state of Houston, Texas.

• 10:20Guy Raz?

  Nice.

• 10:21Speaker 02

  And the name of the business, Devin's Spike Root Beer.

• 10:25Guy Raz?

  So assuming you, I'm assuming you make spiked root beer, root beer with alcohol?

• 10:29Speaker 02

  I do. Yes.

• 10:31Guy Raz?

  Amazing, which I can't wait to dive into. What, what question do you have for us today?

• 10:36Speaker 02

  My question is, as an entrepreneur and as you start to grow, how do you deal with the sinking feeling of imposter syndrome?

• 10:45Guy Raz?

  I love that question. Okay, let's dive into your business, first of all. How did, tell me how you got into making spiked root beer?

• 10:53Speaker 02

  So to backdate it a little bit, I used to be a private chef and I also owned a healthy muffin company. So what a pivot.

• 11:00Guy Raz?

  Wow.

• 11:01Speaker 02

  Yeah, so from 2000 to 2013, I did healthy muffins. And then I broke a corner rule. I put all my eggs in one basket with this one particular company. And when they went under, my whole life changed financially. So I had to get, go back into the workforce. So I'm working at a liquor store and about a month later, I was like, well, you got been by the entrepreneur book. And just looked around and I was really impressed with the craft beer market at the time.

• 11:31Guy Raz?

  Yeah.

• 11:32Speaker 02

  And how they was like really creative with the different types of flavors. They was putting chocolate cake and cinnamon rolls and fruity pebbles in there, but I don't drink beer. But I'm a huge fan of root beer. My children are huge fan of root beer. But I was like, let me give this a swing and let's see if we can make this into an adult beverage. So that's how I got into the spiked root beer business.

• 11:53Guy Raz?

  So cool. So you were, you were a private chef?

• 11:57Speaker 02

  Yes.

• 11:57Guy Raz?

  Before that, for many years?

• 11:58Speaker 02

  Yes.

• 11:58Guy Raz?

  So tell me, like, and you worked for, for like at, at homes or did you ever work in restaurants?

• 12:04Speaker 02

  No, I never worked in restaurants. I did not want to go in the restaurant field. Sorry, Brett.

• 12:11Speaker 01

  I don't blame you.

• 12:12Speaker 02

  I want to have a life.

• 12:14Guy Raz?

  And you had a muffin company for a couple of years, which didn't work out.

• 12:18Speaker 02

  I had that for a solid 13 years.

• 12:21Guy Raz?

  Wow. I mean, what a gift that was, Devin, because imagine how much you learned from that experience. And it's so interesting, you go and work at the liquor store just to make ends meet. And like any great entrepreneur, you're looking at the shelves and you're saying, where is our opportunity? Which is exactly how so many businesses, certainly on How I Built This have started. You're like root beer. There's nothing, there's no, no one doing this root beer thing.

• 12:46Guy Raz?

  So, and I love, I mean, you're a chef, so you understood flavors, you understood what you. Tell me how you started to like experiment and make it. Did you start to make it in your kitchen at home?

• 12:56Speaker 02

  I did, exactly. I started to make it in my kitchen at home. Of course, I, you know, YouTube everything and read about it. So, interesting part is the original formulation was actually made with rum. And champagne yeast for fermentation. I didn't understand any part of that chemistry. And I was getting people really, really buzzed on my first concoction of this product. But I learned my lesson over time. So it was a lot of trial and error. And I think I got it done in about a good month or so. And I end up going with, with a wine-based product.

• 13:35Guy Raz?

  With wine?

• 13:36Speaker 02

  Yes.

• 13:37Guy Raz?

  Because there's less, different kinds of regulations that make it easier?

• 13:40Speaker 02

  Yes, correct, correct. And distribution and taxes and everything else that comes with that.

• 13:46Guy Raz?

  Okay, so I'm looking at your website. You've got at least, what, eight different flavors now?

• 13:50Speaker 02

  Correct.

• 13:51Guy Raz?

  Okay, dark cherry to pumpkin vanilla, basically, but it's all, the, the, the main flavor profile is root beer, but it might be dark cherry or orange cream or Texas pecan or?

• 14:01Speaker 02

  Yes.

• 14:02Guy Raz?

  And you're now in how many sort of, how many stores mainly in, in the Houston area?

• 14:06Speaker 02

  I'm in the Houston area, Austin surrounding area. So I'm in about 160 locations.

• 14:14Guy Raz?

  Wow.

• 14:14Speaker 02

  But this happened extremely fast. And this is where the problem lies right now because now it's it's still solely me. I do have a dear friend of mine who handles the finance part of it and all administrative things or whatever. He's on an equity play of the business, but everything is still solely up to me.

• 14:32Guy Raz?

  I got a million thoughts, but I want to turn it over to Brett because I think you have a million questions, Brett. So go at it.

• 14:38Speaker 01

  Oh, you answered a lot. I mean, and first of all, credit to you, Devin.

• 14:42Speaker 02

  Thank you.

• 14:43Speaker 01

  I love the story, love the resiliency. You've already done it. You ran a successful business for 13 years and now you've come back for a second act. Most people don't even do a first act. So congratulations to you.

• 14:56Speaker 02

  Thank you. I appreciate it.

• 14:56Speaker 01

  Talk about entrepreneurial spirit.

• 14:58Guy Raz?

  Yeah.

• 14:59Speaker 01

  My question, is it a, is it an inventory cash flow funding the growth issue? Or is it simply a bandwidth issue of being able to get out and market the product to continue to have it grow and be successful or both?

• 15:14Speaker 02

  It's actually both. That, that, those are really good questions. It's actually both.

• 15:18Speaker 01

  And so have you thought about raising capital? And do you have the velocities proven in these outlets to kind of support your growth story?

• 15:28Speaker 02

  So I have, I brought in one gentleman and he came in on a small equity play just last year, which his cash infusion helped a lot. And what I'm finding out is a lot of people really, the people that I've talked to are really interested in the business, but they also see it as a, still a young business as well. So I don't have the track record with these new outlets to show what the, the true potential of the business can be.

• 15:59Guy Raz?

  I, I am looking at what you're doing here and on so many levels, you're doing so many things right. Your, your branding, your logo, the, the little red state of Texas on the front. It looks like something, even though it says established 2015, it looks like it's been around for a hundred years. This looks like.

• 16:19Speaker 02

  Thank you. I designed that too, by the way. Like when I say I was hands on, I was hands on. I designed the look, the color profiles, everything.

• 16:28Guy Raz?

  It's so great. I'm going to start with your original question, which is about imposter syndrome. And I think that the answer to this question really is mostly a pep talk because, I mean, people who have or feel like they have imposter syndrome are not imposters. That's what I've found in my entire life. Most of us have and experience aversion of this at times in our lives. Some people are just better at hiding it. And so what I see in you when I'm looking at this business is somebody who comes to this with incredible standing. I mean, you have over a decade, more than a decade, as a personal chef. So you're a trained chef. You understand flavor profiles.

• 17:12Guy Raz?

  You started a business that you ran for 13 years. It didn't work out, but you managed to build it into something really big. Now you're in spiked root beer. Like, to me, there is nothing about you that is an imposter. Like, everything that you've done up until this point gives you so much standing in this space, like, as an expert. So I think the imposter syndrome is a very healthy feeling. And you just need that, you need that pep talk. And sometimes, you know, if me and Brett aren't here to give it to you, and you can't find somebody, you've got to give it to yourself.

• 17:46Speaker 02

  Yes.

• 17:47Guy Raz?

  Because you're coming to this with all of those experiences behind you. And so you are, you are exactly the right person to be doing this. Okay, I'm going to stop there and turn it over to Brett, because you might have more thoughts about this and about, yeah.

• 18:02Speaker 01

  I couldn't agree with you more, Guy. I mean, that's what I was saying earlier. It's, you know, I think we all have a little bit of imposter syndrome, which isn't the worst thing in the world, because it doesn't allow you to get overconfident and think that you're invincible, which is really important, being an entrepreneur. But I think you've proven yourself to be far from an imposter with everything you've accomplished to date and what you've been able to persevere. Do you, a question for you, Devin. Do you have any advisors or mentors around you, around the table?

• 18:31Speaker 02

  I don't, to be honest. I don't. I bounce things off my, my business partner when we work out in the morning, and it's just a systems check, you know, to see, you know, what's the next stages? What are we trying to do next? The answer is no, to be honest.

• 18:48Speaker 01

  Don't be shy about cold reaching out to business leaders that you maybe admire or respect. I think, you know, when I found throughout the journey, if I had moments of doubt or The, the business might've seemed overwhelming at the moment or a problem. How is I going to overcome this? Having folks around you as sounding boards that you can lean on and bounce that stuff on can help validate your thinking or maybe help you think about it from a different angle. I've, I found invaluable and I found, you know, could help get through some of those moments where you may have a little bit more doubt than other times.

• 19:21Speaker 02

  Yeah, and I think also the, the problem set in, uh, as of recently because of what I just gone through with the business where my first co-packer, they sold their business. The new owners didn't communicate with me about no longer being my co-packer. Found another co-packer and then he was a fully transparent about his finances. And that was a doozy and all this happened within two months of each other. And the last one just happened a month ago. And now I'm working to, to find my third co-packer. And I think that's where they kicked in that I was like, I felt like I don't know what I'm doing.

• 20:02Speaker 01

  Yeah, and you know what? What you just said, every business goes through and know that you've got a lot of company and that I still wake up every day and I'm faced with challenges in our business.

• 20:12Speaker 02

  Yes.

• 20:12Speaker 01

  That, that is business, right? Cause if, if it was that easy, everyone would be running a business.

• 20:16Speaker 02

  Everybody would do it.

• 20:17Speaker 01

  Everybody would do it, right? And it's those who are able to persevere, have that emotional resilience and continue to keep finding a way, have that determination to try and figure out how to deal with all the adversity that's thrown your way. Um, you know, when we bought a company, Zoe's Kitchen back in 2018, right?

• 20:35Speaker 02

  I remember.

• 20:36Speaker 01

  Man, 2019 was the hardest year of my career. And, and there were moments, and I use the metaphor that I was, felt like I was digging through the tunnel and I thought I was about to break through and a bunch more dirt would fall in front of me and I could never get to the light. And, but, but you know, just kept, kept digging and I was fortunate to have some, some great co-founders, some partners and, and we helped get each other through it and kept working to figure out, there's always a way to solve the problem.

• 20:59Speaker 02

  Yeah.

• 21:00Speaker 01

  And when you focus on solving the problem, eventually it got us to that light. So, man, I, I feel you. I've been there, uh, we're often there through the journey of a business, but that's why businesses become successful because they're able to deal with that adversity and get through it.

• 21:15Speaker 02

  Yeah, I appreciate that.

• 21:18Guy Raz?

  The brand is Devon Spiked Root Beer. Founder is Devon Strahan. Devon, thanks so much. Good luck. Can't wait to see what happens.

• 21:25Speaker 02

  Hey, thank you much. I appreciate it, Guy.

• 21:27Guy Raz?

  All right. I've never had spiked root beer. I'm gonna try it.

• 21:32Speaker 01

  I have not either. I need to try it.

• 21:33Guy Raz?

  Yeah, and wine-based, so it's a really interesting idea.

• 21:37Speaker 01

  Which I think is an opportunity because it's differentiated. It's something novel, right? That you haven't seen yet. It's not like another version of something you've seen.

• 21:45Guy Raz?

  No, seltzer or one of these like, you know, White Claw things, right?

• 21:48Speaker 01

  Truly, right.

• 21:50Guy Raz?

  Right. It's a completely, it's just a different, it's, yeah, it's a different thing. So, uh, curious to see what happens. By the way, imposter syndrome is a big theme in this episode that we, uh, have with Tara Bosch, the founder of Smart Sweets, which is a massive brand, low-sugar candy brand. And, you know, she started this when she was like 21, as, you know, drop out, dropped out of college and really had no money, no, nothing. And she was just doing it on her own and, and applied for every competition and business grant that she could get and, and eventually built it into a, to the brand it is today. And she talked about how, you know, when she was like 22, 23, she'd go into meetings with distributors or, or buyers

• 22:34Guy Raz?

  for just small, local chains in Vancouver and just the knots in her stomach and the fear and the terror. But she would just breathe through it, you know, and she didn't say it was easy, but she just kind of breathed through it and figured it out. And I think we've all been there. We've all had that, those moments and still do.

• 22:52Speaker 01

  Absolutely. I, I think people aren't being real if they're not saying they haven't had those moments of self-doubt, especially trying to build a business.

• 23:00Guy Raz?

  Yeah, and I agree with you. I think overconfidence is deadly. I think that's really dangerous.

• 23:07Speaker 01

  Yes, it will steer you into decisions and places that you do not want to be.

• 23:11Guy Raz?

  Yeah. All right, Brett, we're gonna go ahead and take a quick break. But when we come back, a mom who turned her child's allergies into a business idea. Stay with us. I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.

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• 27:16Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. And taking calls with me today is CAVA, co-founder and CEO Brett Schulman. Brett, let's bring in our next caller. I think we have Sophia on the line.

• 27:28Speaker 03

  Hi there.

• 27:29Guy Raz?

  Hello, Sophia. Welcome to the show.

• 27:31Speaker 03

  Thank you so much.

• 27:33Guy Raz?

  Tell us your first and last name, where you're calling from, and a little bit about your business.

• 27:38Speaker 03

  Yeah. I'm Sophia Bowden, and I'm the founder of Little Me Allergy, and I'm from Los Angeles, California. And we make really bright and colorful allergy accessories like placemats, lunchbox magnets, patches and wristbands to help advocate for kids who have serious food allergies.

• 28:00Guy Raz?

  Okay. Sophia, what's your question for us today that you brought for us?

• 28:05Speaker 03

  Yeah, so my question is, as a niche mission-based business, I wanted to know how I should expand my marketing reach and sales channels.

• 28:15Guy Raz?

  Got it, okay. We'll get to your question in a moment. Let me just ask you a couple of questions about the business. So these are, just to clarify, these are, if a kid goes, like, has a metal lunchbox, you can put a bunch of these metal

• 28:28Speaker 03

  Magnets.

• 28:28Guy Raz?

  Magnets on the box that say peanut allergy, dairy allergy, or egg allergy on the lunchbox.

• 28:36Speaker 03

  Yeah, just to make sure everyone stays aware.

• 28:38Guy Raz?

  And also patches that they could put on their clothing?

• 28:41Speaker 03

  Yeah, and their backpacks or lunchbox.

• 28:43Guy Raz?

  Or backpacks, okay.

• 28:43Speaker 03

  Yeah, or lunch bags.

• 28:44Guy Raz?

  Cool, I love it. That's a cool idea. Tell me, I have to assume that there's a personal connection here.

• 28:49Speaker 03

  Yes, definitely.

• 28:51Guy Raz?

  Okay, how did this, tell me how this started?

• 28:53Speaker 03

  Yeah, so when my daughter was a year old, she was diagnosed with a severe food allergy to sesame. And I was terrified. I was a first-time parent and honestly, I didn't want her to leave the house after that. But I knew at some point I had to send her to preschool. So with her being so little and honestly, still learning how to speak, I knew that I needed to find allergy accessories that would essentially advocate for her in my absence. So I searched everywhere for the right allergy accessories, but I honestly couldn't find anything that didn't feel cold or clinical. So I channeled my creativity and I decided to design her own allergy accessories.

• 29:39Speaker 03

  That would essentially make me feel confident in knowing that at every touch point throughout the day, whether it be snack time or lunchtime, her allergy would be kept top of mind for teachers, family, friends, essentially anyone that came into contact with her to keep her safe.

• 29:57Guy Raz?

  Cool. And so it's, I'm looking at the website. So it's, you've got stickers, waterproof stickers that you could put on, I, you know, I guess clothing and patches.

• 30:04Speaker 03

  Water bottles.

• 30:05Guy Raz?

  Even those, those like bracelets. I call them live strong bracelets, but they shouldn't really call them. There's rubber bracelets and with, with allergy, whatever allergies on it.

• 30:13Speaker 03

  Exactly.

• 30:14Guy Raz?

  And, and so you would know, like if there's a five-year-old and they're going to summer, you know, like a day camp on their backpack, you'll just see, it'll say, you know, sesame allergy, peanut allergy, shellfish allergy. And you're like,

• 30:27Speaker 03

  Yep.

• 30:27Guy Raz?

  Good. Cause, cause even though, by the way, a lot of kids grow up with allergies. I used to telling people these things all the time, but as a parent, it probably gives you peace of mind to know that it's out there.

• 30:36Speaker 03

  Yeah. And, you know, I think allergy, allergies among the really young population, like new, newborns even, and six-month, a year old, who are really still learning to speak, to advocate for themselves. And so this kind of provides a kit for parents and families to at least feel confident in knowing that as they're sending them to camp or grandparents' house or school, that their accessories are going to do the work for them to keep them safe.

• 31:06Guy Raz?

  Yeah. And, and you launched this in July of 2023, so about a year ago.

• 31:11Speaker 03

  Yes. Yeah. So we're really new.

• 31:13Guy Raz?

  And how, you're new. And so I'm assuming that it's, it's not easy, that easy to get the word out because your website and, and, and do you have any, you've probably put all your own money into this so far?

• 31:24Speaker 03

  Yes. Yeah. Yeah. I do have a daytime job, um, which affords me to do this, um, in the evenings. So it's my evening job after the kids go down.

• 31:33Guy Raz?

  Do you mind telling us what your other job is?

• 31:36Speaker 03

  Yeah. So I work for a tech company, um, and I lead creative for 3D design.

• 31:41Guy Raz?

  Nice. So this is your side hustle right now.

• 31:44Speaker 03

  It is.

• 31:44Guy Raz?

  And who knows? Who knows, right? I mean, this is how a lot of, a lot of great brands start, a side hustle. Sam Adams Beer started as a side hustle.

• 31:51Speaker 03

  Yeah.

• 31:51Guy Raz?

  So, um, and presumably, I mean, or because you're in design, you design all these things? All these patches and do all the artwork?

• 31:59Speaker 03

  I do. Yes. I. I did all the artwork for all the top nine allergens and then we do like a design your own section for those with multiple allergies as well.

• 32:11Guy Raz?

  Cool. And how have sales been in year one? Are you, have you hit 25,000 or still below that?

• 32:17Speaker 03

  I would say still below that. You know, we have been getting really great feedback as soon as people find out about us. And we've also been partnering with more established brands. We just did a partnership with Planet Box and Abe's Allergy Friendly Muffins, which turned out to be really, really wonderful. So my goal is to continue kind of on that path to really get our name out there.

• 32:42Guy Raz?

  Planet Box is a, it's like a bento box, sort of, right?

• 32:47Speaker 03

  Yeah, it's a metal bento box for lunch.

• 32:51Guy Raz?

  Oh, and perfect because you can use the magnets on the bento box.

• 32:54Speaker 03

  Exactly.

• 32:55Guy Raz?

  Nice. Okay. Brett, any questions for Sophia before we dive into her question?

• 33:00Speaker 01

  Yeah, Sophia, when the allergy issues first came up in your home, when you said you went out and you started to look, where was instinctively the first places you started to look for products like this?

• 33:12Speaker 03

  You know, I honestly, it was just Google and it would bring me not a ton of companies that provided allergy accessories. And if there were, it was very piecemeal. There's lots of also like Etsy makers that do kind of one-off things. It could be a sticker or a patch, but not a full kit or collection. And my goal was to really create something where a parent can come and to the website and say, okay, I need all of these things for school rather than kind of figuring it out on their own, which I had to do. But again, you know, in my search, everything that I found was just really cold and clinical and just felt almost like a I don't know, like a badge of shame in a way.

• 33:57Speaker 03

  And I it's hard enough, obviously, for kids to deal with having food allergies. I didn't want their accessories or their labels to to make them feel othered in a way.

• 34:09Guy Raz?

  I I think your question is about marketing reach and sales channels, right? And you have essentially a basically allergies are mainstream. It's a mainstream issue, right? This is something that affects a significant population, a percentage of the population, one or more allergies, right? Like, I don't know the number, you might, but a lot of people. So this is not a niche thing. It's not like like a lot of kids have peanut allergies, very common. I feel like there's a world and Brett, I'd be curious if Sophia was looking to expand, maybe is there a world where like going to a gift, like a gift trade show, you know, one of these trade shows that that's for gift shops?

• 34:51Guy Raz?

  Because I think I think about going into a gift shop or even a card store and seeing cool things like this there. It's the kind of place that I would imagine buying something like this. Like my, you know, my nephew's got, you know, peanut allergies and and I'd see that and I'd say, oh, this, oh, he's now a grown man, so I don't think he needs it on his lunchbox. But, you know, I I can imagine going to a gift shop and seeing these little patches or stickers or magnets and thinking, oh, that's cool. Is there Brett, do you think there's something to that, to going to like a trade show?

• 35:24Speaker 01

  Yeah, that that was going back to kind of my original question about instinctively, were there any kind of bricks and mortar places that you thought about going? Because certainly what we've seen post pandemic, the, you know, cost of of acquisition or just awareness on the internet or being a DTC brand has gotten really expensive. And people have gotten back out in the world. And even with the changes in third party data, privacy laws, it's it's restricted the ability to drive awareness online solely. So where are there potential bricks and mortar outlets that you can be in front of where your consumer, your parent that has a child with allergen issues or maybe have

• 36:08Speaker 01

  them themselves are trafficking? And where's that need state happening, whether it's Target, whether it's a gift shop? I think often in any of these industries, going to a trade show is such a great idea. And just understanding the landscape, the lay of the land, what the marketplace is, what the potential avenues of distribution are, how it all works. I remember when I was working with my wife on a snack food company, we would do that. We'd go to the trade shows and it helped us really understand the industry and how it all worked and where our product or offering could fit within that.

• 36:40Speaker 03

  Yeah. I would love to be at a Target at like even if there was an end cap that was for back to school allergy friendly end cap that partnered with other allergy friendly, you know, foods. I think that would be really awesome. And even though, you know, allergies are everywhere and it's become some, you know, mainstream in a way, there's still kind of, you know, it'd be nice at a Whole Foods to have an allergy friendly section. I think I still have yet to see things like that, but would love to be a part of that.

• 37:17Speaker 01

  And these retailers will do small tests and small market or regional tests. So at Target, they will do a 30, 50, 100 store test. If you can, you know, cold email, contact the right person and pitch the idea because I do think it's a viable idea, especially for a lot of times they'll do like an in and out for back to school season as a test.

• 37:41Speaker 03

  Right. Yeah, definitely. Guy, I had a question for you.

• 37:46Guy Raz?

  Please.

• 37:46Speaker 03

  Because I know you have podcasts that's geared towards kids. Do you find yourself marketing differently or doing things differently for kids versus your, you know, more podcasts that are geared towards adults?

• 38:01Guy Raz?

  A hundred percent. Yeah. I mean, with kids, there's all kinds of rules on how you, you know, you can market to them and on Well in the World. Unlike on this show, on How I Built This, I don't read ads. We do have ads on the show, but my voice is not as an ad reader because kids don't differentiate between, I'm a character on the show and they wouldn't differentiate between my voice on Well in the World and me reading an ad. And so we're really careful about that, but we do have ads and we do, obviously, these ads are designed to appeal to the parents because we have kid parent co-listening on that show. And so that's really what you're going for. You're marketing to the parents, not to the kids. And that's who's going to be interested in this. But, you know, That's a great channel to think about, too. But there are millions of podcasts out there.

• 38:45Guy Raz?

  And I think that you start with, take a page out of Tim Ferriss's world. You start with 1,000 people, a tribe. You build a tribe of 1,000 people that you can gather around your brand, and those become your force multipliers. And so maybe it's like, I think about my sister, who had a kid with really a deathly peanut allergy, is now a grown man. She was constantly vigilant. I mean, before, they went to a restaurant, she would call up to make sure, well, in airplanes, she would call up to make sure they didn't serve peanuts on the plane. So this is the kind of thing that somebody like my sister, when her kids were younger, would have said to other moms, you've got to get this thing. Put it on the backpack and on the lunchbox. And that's really where you're going to find the momentum.

• 39:30Guy Raz?

  Yeah.

• 39:31Speaker 01

  I was just going to say, I love partnering with the allergen-friendly food brands. And especially when you think about social collaborations and giveaways for the back-to-school season to help amplify what you're doing and be a trusted partner, because that is your target customer. They are already an allergen purchaser, an allergen-free friendly purchaser. And it's almost, again, like a validation and a friendly referral that you can partner with them. Whether it's through influencers, creators, or the brands themselves, I think those are powerful channels to help amplify with an audience that already has that built-in passion for what you're doing.

• 40:11Guy Raz?

  Yeah, absolutely. Yeah. Awesome. The brand is called Little Me Allergy. Sophia Bowden, thank you so much for calling in. Good luck.

• 40:19Speaker 03

  Thank you so much. So grateful for this opportunity.

• 40:22Guy Raz?

  All right, Brett, we're going to go ahead and take another quick break. But when we come back, the founder of a Midwestern coffee brand who's found a really interesting way to stand out in the crowd. Stay with us. I'm Guy Raz, and you're listening to The Advice Line, right here on How I Built This Lab.

• 40:55Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. My guest today is Brett Schulman, co-founder and CEO of the fast casual Mediterranean restaurant chain CAVA. All right, let's bring in one more caller, Brett. I think it's Sean is on the line. Sean, are you there?

• 41:10Speaker 04

  I am here. Hey Brett, hey guy.

• 41:12Guy Raz?

  Hello, Sean. Welcome to the show. Tell us your name, where you're calling from, and just a tiny bit about your business.

• 41:18Speaker 04

  Yeah, my name is Sean Murray. I am the founder of Rootless Coffee Company, and we are in Flint, Michigan. So Rootless Coffee, we're a roasting company, and we make craft coffee, not boring. Ultimately, we bridge the gap for consumers that are looking for better coffee than they can find at a chain or in a grocery store, but are a bit intimidated, maybe put off by the sometimes pretentious and dull nature of third-wave coffee.

• 41:47Guy Raz?

  And are you at the coffee roastery right now? Because it sounds like you're in a loud place.

• 41:52Speaker 04

  I am.

• 41:53Guy Raz?

  Oh, yeah, nice. Not an airplane hangar, that is a coffee roastery behind you.

• 41:57Speaker 04

  It is, yes. It was between this and my home, which is right on a main road, which can be even louder than this, so.

• 42:04Guy Raz?

  It's very appropriate. Tell us what question you have for us today.

• 42:08Speaker 04

  Yeah, so guy and Brett, basically, my question is, how can I be certain it's the right time to seek growth funding for Rootless? And what is the best method for doing so?

• 42:20Guy Raz?

  All right, lots of questions. As you know, Sean, we've done a couple of coffee brands on the show, of course Starbucks, and we've done La Colombe, and Dutch Bros Coffee, too, which is a big chain. So how did you get into it? How did you get into this business?

• 42:35Speaker 04

  Yeah, so it actually started with the craft beer business in the early 2000s. I was a bartender and brewed beer at home, and I really wanted to start a brew pub. That was like my dream, my goal. But I ended up removing alcohol from my life for various reasons. But, you know, and I was, I still had the dream. I've been kind of that entrepreneur shovel, you know, people's driveways in the winter. I had a couple of businesses when I was in college and stuff. So I had that drive in me, and I was like, all right, what can I do? And I was just like... Let's do coffee. I love coffee. I'm gonna roast coffee and I just started pursuing that.

• 43:18Guy Raz?

  So you pivoted to coffee, or you sort of kind of moved towards coffee and decided to start a coffee brand. And tell me about the brand. I mean, it's a, obviously you're roasting it in Flint, but are you sourcing it in a special way? Are you, is there something about the way you're presenting the coffee that's different or that is kind of influenced by your time in craft beer?

• 43:41Speaker 04

  Yeah, absolutely. That was a strategy coming in. So we work with artists, primarily comic book artists, you know, locally, but also across the country. And they design our packaging. And it's really like, what I saw in craft beer was people were like, hey, that looks kind of cool. I'm gonna try it. And then all of a sudden, they come back to it and they come back to it. And I've seen the same thing happen with Rootless where, you know, people will see this cool artwork and they'll be like, all right, a damn fine cup of coffee. That looks cool. They try it and they fall in love with it.

• 44:15Guy Raz?

  Yeah, it's cool. I'm looking at it now. It's like, the artwork is super cool. That one that you mentioned, that bag, a damn fine cup of coffee is like an owl's head on a person wearing a business suit at a cafe, drinking a cup of coffee with a slice of cherry pie. Really, really cool artwork. And so the entry point to you for people, like, it was, you knew that you were making good coffee, but it's hard to kind of distinguish good coffee because some people don't really know, you know, and they don't really know what to look for. But your entry point was just creating these eye-catching, beautiful pieces of artwork on the bags.

• 44:48Speaker 04

  Absolutely. So my thing was, let's just give people that quality, give people that craft still. I mean, we're small batch. We, you know, we source our coffee beans. It's all ethically sourced, specialty-grade coffee. And you can still deliver people the highest quality product, but just in a different way.

• 45:07Guy Raz?

  How many, do you have a coffee store? Like, can you, or do you just distribute the roast and sell it elsewhere?

• 45:14Speaker 04

  Yeah, we have a bunch of channels, actually. So we are, of course, online. We started with e-commerce. It was like smack dab middle of the pandemic, so nothing was open. And then we moved into wholesale. So we do B2B stuff with coffee shops, businesses, all sorts of places. And then our third channel is grocery stores. So we picked up our first, like, four grocery stores, two months after we opened. It was insane. And we are now in a regional chain here with like 30-plus stores. And then we also have a coffee trailer where we do events.

• 45:50Guy Raz?

  And how many employees do you have now?

• 45:51Speaker 04

  Including myself, there are 10 of us.

• 45:54Guy Raz?

  Wow, okay. So you started in 2020. You're in more than 30 retail locations in and around metro Detroit/Flint area. You've got 10 employees. And you're trying to figure out what you need to do to grow, should you bring in outside investment. Before we get to your question, Brett, do you have any more questions for Sean about the business?

• 46:14Speaker 01

  Yeah, I'm curious, with those four different channels, is there any one channel that stands out? What's the kind of channel mix of your revenue? Is it equally weighted?

• 46:23Speaker 04

  It used to be e-commerce was the biggest by far. It was like 60, 70% e-commerce, 30% wholesale. Those two are kind of neck and neck now. And then the event part of it is very low, very, very low. So it really is between e-commerce and the wholesale retail part are pretty neck and neck.

• 46:45Speaker 01

  And are the profitability of those channels pretty similar? Or do you see any differences between them?

• 46:51Speaker 04

  They actually do work out to be very similar. The wholesale is a little bit more profitable, and it's also a bit easier to fulfill, because it's, hey, give me 50 pounds of coffee. All right, here's 10 bags versus here's 50 orders from individuals who want different grinds. And, you know, so wholesale is absolutely where I have been doing my best to focus on, particularly this year, to grow.

• 47:21Speaker 01

  Yeah, I think, you know, this is like the age old question of what do you want to be when you grow up, right? Where do you ultimately want to take this business? Because you're going to be the best one to answer how much you want to grow, when you want to grow as far as taking on investment or not. And so I'd love to hear from you how you're thinking about that.

• 47:41Speaker 04

  Yeah, so the vision is quite large. Actually, very inspired by the Dutch Brothers episode of How I Built This. I would love to eventually have shops all over the country, whether that be a franchise model, or whether that be, you know, kind of the corporate model that we're doing that. But I love marrying quality and efficiency. I think, as you know, Brett, like Fast Casual did that, where they took something where there was only fast food, and it's now like, hey, you can get really good food, and you can get it fast. But it's, you're not sacrificing that quality to do so. And that's like my big, big dream.

• 48:25Speaker 04

  I've really been like, hey, how do we get there? How do we do this in the next like five or so years? It's really a matter of like, we need the revenue to fund things in order for me to be able to kind of put off like, all right, wholesale is now managed by this person, et cetera, et cetera.

• 48:43Guy Raz?

  Can you give us a rough sense of what your ballpark revenue is? Are you under three a year? Roughly, where are you?

• 48:51Speaker 04

  We are actually under a million.

• 48:54Guy Raz?

  Under a million, okay.

• 48:55Speaker 04

  Yep. We've seen really great growth, though. In our first year, we did just about a quarter million, and then we did a 65% year-over-year growth.

• 49:04Guy Raz?

  Wow.

• 49:05Speaker 04

  And then last year, we had 35% year-over-year growth.

• 49:07Guy Raz?

  Wow. Brett, there's some parallels to where you guys were when you joined CAVA. I mean, small, you know, business, and just still at the beginning of its journey, but with potential.

• 49:21Speaker 01

  Well, I think there's a lot of interesting parallels here. I love your vertical integration. We have our dips and spreads, production facilities to supply our restaurants as well as we sell in Whole Foods markets and other grocery stores across the country. And you've got your roastery and you're leveraging it through a few different channels. And one of the things we quickly realized early on is that we were going to focus raising capital to grow the restaurant channel. And we've kept the consumer packaged goods channel growing slowly, but we focused our efforts on the restaurants because we found it very challenging to grow multiple channels at once. And so we tried to lean into where we thought the greatest opportunity was to

• 50:06Speaker 01

  bring this food to people across the country. And I think it also presented a clear story for investors. It gave them a clear understanding of what we were going to do with this capital and connect those dots clearly to the return. Because ultimately, when you're raising money from investors, we're ultimately stewards of their capital. And we're good stewards of capital. We'll continue to attract capital. But that allows us to do what we love to do, right? And build our brand and bring this great food to folks across the country. So how are you going to do that? How are you going to focus that? And you know, I think it goes back to the question I posed to you earlier. What do you want to be when you grow up, right? What pace do you want to grow at? And that's going to determine how much money you raise.

• 50:50Speaker 01

  Because I like to say scaling restaurants is not like scaling SaaS software. It takes people, it takes process, it's building physical restaurants, you're building physical roasteries. So that takes capital and it's hard to scale these things. So being able to afford the capabilities, the talent, the infrastructure before the business necessarily affords it for you through your profits allows you to scale faster and grow faster and do it sustainably and successfully.

• 51:21Speaker 04

  Yeah, absolutely.

• 51:22Guy Raz?

  I mean, my advice to you also would be, and you may have done this already, but to think about finding a consultant on a, on a, just a, a short-term basis. I mean, that's Brett, that's how these guys found Brett, right? It was, and it was serendipitous because it was like Ted's cousin said, hey, this guy Brett, and he came as a consultant. So I wouldn't jump in and just hire somebody right away. I'd look for somebody who could maybe do some consulting. I would look out, especially because you're in the Midwest. I, my, I would really look for somebody who has experience in the food and beverage industry in the Midwest, who understands what your values are, where you come from, how you think about what you're trying to do. I mean, maybe there are some retired executives who are on LinkedIn, who might be willing

• 52:06Guy Raz?

  to do some consulting for you that you could find.

• 52:09Speaker 04

  Yeah, that's, that's actually a really great idea. I think that what I've found with people who have been in business for a very long time is they love giving back, love working with smaller businesses.

• 52:22Guy Raz?

  There you go, with Brett.

• 52:22Speaker 04

  Yeah, exactly. And yeah, that's, that's a great idea. I actually, I do have a question for Brett, if I could.

• 52:29Speaker 01

  Yeah.

• 52:30Speaker 04

  Brett, um, how did you focus CAVA when you had all of those channels? And, you know, you decided on the restaurants that was going to be the growth? My fear is that I, I'm like, okay, if I want to do coffee shops, am I going to neglect my wholesale or my e-commerce? Or did you just kind of bring people into manage those things and let them have their natural growth? Like, how did that work?

• 52:57Speaker 01

  Well, yeah, I mean, if you think about it, there, the channels operate very differently, right? Dealing with grocery stores or wholesale distributors is a different channel and value chain than a retail shop and different than DTC. So you would often need different capabilities, which would then be something that you'd have to hire more people for, right? So I think if you're trying to stay nimble and agile at a, at a small stage and be cost-effective and capital efficient, hiring folks that can do everything you need in the channel you're trying to grow is how we thought about it and how we looked at it. And even today, you know, we, we opened our new production facility, so we, we have capacity

• 53:39Speaker 01

  now to get more intentional about growing the, the consumer packaged goods business. But we've talked about if, if we're going to do that, we need to really hire a focused... Dedicated team that's fully integrated with our larger team because it operates very differently than our restaurants do and that whole distribution channel. So I think it's trying to, you know, we like to try and do fewer things better. It's hard. It's hard to pick and choose, but having that focus helped us have the energy to really make it what it is today. And other things I see a lot of small companies leverages. There's more and more folks who used to be executives at private or public companies

• 54:22Speaker 01

  that have gone on to become now fractional CFOs or fractional COOs.

• 54:27Speaker 04

  Yeah.

• 54:27Speaker 01

  That can bring that experience to you and not have the necessarily the commitment on your end. And sometimes those folks go into full-time roles if they find an opportunity that they really hit it off with the founder or entrepreneur with. And it also gives you a chance to leverage their experience and leverage in a bit of an asset light way.

• 54:45Speaker 04

  Yeah, that's, that's great.

• 54:47Guy Raz?

  Sean Murray, Rootless Coffee Company in Flint. Thanks so much for calling in. Good luck.

• 54:51Speaker 04

  Thank you so much for having me, Brett and Guy. I really appreciate it. And yeah, I love the show and Brett, I love what you guys are doing at Kaba. So thanks again.

• 55:01Guy Raz?

  Awesome.

• 55:03Guy Raz?

  Brett, we are coming to the end of our time together again and hopefully, hopefully we can, we can see each other and eat some tzatziki or I mean, you might be sick of the food that you make. I don't know, but maybe not. We can have like some lamb kebabs and tzatziki and.

• 55:18Speaker 01

  Some spiked root beer.

• 55:19Guy Raz?

  Some spiked root beer. Throw back some.

• 55:21Speaker 01

  Some coffee.

• 55:22Guy Raz?

  Yeah. Before I let you go, tell me, this is a question that I'm asking a lot of founders who come back on the show, which we may have touched on when you were originally on the show, but, but knowing now what you know about the world you're in, and you talked earlier about the stress of expanding, you know, when, when you guys acquired Zoe's, what do you, you know, what do you wish you knew when you first got into this business that would have been helpful for you and maybe caused, maybe caused a few, few fewer sleepless nights?

• 55:55Speaker 01

  Two things come to mind. One is right people, right roles is a mantra I, I say a lot these days. It's, um, you know, it's understanding what kind of capabilities and what kind of people you need at every stage of growth. And I think sometimes I.

• 56:13Speaker 01

  Wanted to believe certain things to be true that weren't necessarily true and wouldn't really force myself to see it as soon as I should have. And I think that the other thing was prioritization. You know, what I said earlier about what you don't do is often more important than what you do do. And that really helped us turn the tide in the challenges of Zoe's is when I finally figured that out and we simplified and focused and did fewer things a lot better. And that helped us get out of the challenging situation we were in. And then, again, bringing in people with the capabilities that were needed at that

• 56:55Speaker 01

  stage of the business because you can't do it yourself. And being able to find people and bring in that you can lean on and that can be a force multiplier of you really helped us get to where we are today.

• 57:09Guy Raz?

  Awesome. Brett Schulman, thanks so much for coming back on the show.

• 57:13Speaker 01

  Thanks, Guy. Appreciate it.

• 57:15Guy Raz?

  And by the way, if you haven't heard Brett's episode, The Story of CAVA and how they turned it into this incredible chain, go back and check it out. It's an incredible story. Look for it wherever you listen to podcasts, just type in CAVA and How I Built This, or just go to the link in the podcast description on your phone. And thank you for listening to the show this week. If you are working on a business and you would like to be on the show, send us a one-minute message. Tell us about your business. Tell us about the issues or questions that you'd like help with and hopefully we can help you. And make sure to tell us how to reach you, please. You can send us a voice memo at [email protected] or give us a call, 1-800-433-1298, and leave

• 57:58Guy Raz?

  a message there and we'll put all this information in the podcast description as well. And thanks so much for listening to the show this week. This episode was produced by Carla Esteves with music composed by Ramtin Arablouei. It was edited by Jonas Vellup and our audio engineer was James Willetts. Our production staff also includes Alex Chung, Elaine Coats, Niva Grant, J.C. Howard, Chris Messini, Sam Paulson, Devin Schwartz, Catherine Seifer, and Carrie Thompson. I'm Guy Raz and you've been listening to How I Built This.