Pod Insights How I Built This with Guy Raz Advice Line: What’s Your Value? About this episode In today’s special episode, Guy and four former show guests talk with callers about how they can prove the value of their products—and themselves.
First, Meagan from Vermont questions whether an experiential pop-up concept for her reusable gift wrap and bags is worth the effort. Then, Amanda from Wisconsin seeks new ways to explain her deck of dog enrichment activities to potential customers. And finally, Mark from New York looks for a complement to help grow his artisanal pesto business.
Thank you to the founders of Shiki Wrap https://shikiwrap.com/, Woofsie https://woofsie.com/, and In Mark’s Kitchen https://www.inmarkskitchen.com/ for coming on the show. Also thanks to WeWork co-founder Miguel McKelvey, Paperless Post co-founder Alexa Hirschfeld, and Chomps co-founders Pete Maldonado and Rashid Ali.
If you’d like to be featured on a future Advice Line episode—where Guy and former show guests take questions from early-stage founders—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.
This episode was produced by Alex Cheng with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Robert Rodriguez.
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 or on Substack https://guyraz.substack.com/.
To hear our returning guests’ previous episodes:
Miguel's original episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/8a630004-341b-435d-a6c2-ef2ef94ca573/embed / Miguel's HIBT Lab episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/164404d1-3086-4838-9edd-9a79c9cf8b0e/embed / Miguel's Advice Line episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/55948622-6c65-432f-915b-a35d524f9588/embed
Alexa's original episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/37fecd5b-6c48-477f-9e3d-f5c83d1ed01d/embed / Alexa's Advice Line episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/3d6d1f95-0cdc-458c-9620-a84e3f509aae/embed
Pete and Rashid's original episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/68f39229-431d-47f1-82c6-49a2a854cbe1/embed / Pete and Rashid's Advice Line episode https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/44567442-1a5d-4d8f-a768-b498af82ee6a/embed
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
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4:24 Speaker 00 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 this show, who will help me try to help you. And this week, we have a special episode. It's a bit of a mashup, three callers and four former guests. All of these conversations touch on a challenge virtually every founder faces. What's my value proposition? And what's the best way to communicate it? By the way, if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you'd like help with.
5:08 Speaker 00 All right, let's get to it. Our first return guest today is Miguel McKelvey, co-founder of WeWork. Miguel has actually come on the show twice before to tell the story of WeWork. First, in 2017, Miguel told us about how the coworking company rose to become one of the most highly valued startups in the world. And then, in 2022, he reflected on WeWork's now infamous implosion. And if you want to hear the whole story, we'll link to both episodes in the podcast description. Anyway, here on The Advice Line, Miguel and I talked a caller through different approaches to introducing a disruptive new product. Miguel, all right, let's bring on our first caller. You ready? All right, I'm ready. Hello, caller. Welcome to The Advice Line. You're on with Miguel McKelvey.
5:52 Speaker 00 Tell us your name, where you're calling from, and just a little bit about your business.
5:56 Speaker 01 Hi, Guy and Miguel. I'm Megan Downey, calling in from Shelburne, Vermont. And I'm the founder of Shiki Wrap. Shiki Wrap is changing gift giving for good with beautiful, reusable, zero-waste gift wrap and bags made from sustainable fabrics.
6:09 Speaker 00 Awesome, welcome to the show, Megan. So Shiki Wrap is a reusable wrap for gifts.
6:14 Speaker 01 Yep.
6:14 Speaker 00 I love that. I was just in Japan over the Christmas break and... It's such a zero, like, there aren't trashcans in Tokyo. Like, people don't throw things away. It's very clean. There's, you don't see trash. And yet, there's so much stuff that they wrap things in, in bags. But then I found out, I asked a Japanese person, he said, "No, we save it. We save the packages and the boxes. We have, put them in closets and we reuse them when we give people other gifts," which I thought was super cool. So, anyway, that's my story. How did, how did you come up with this idea?
6:46 Speaker 01 So, I was the target market for this. Uh, just hated the guilt after Christmas mornings or birthday parties for my daughter.
6:54 Speaker 00 Yeah.
6:55 Speaker 01 Just all the microplastic-covered waste. Um, I had spent two decades of my career before becoming the reusable gift wrap lady in philanthropy, working to solve really important problems. Um, but this was a problem I looked at and I said, "We can solve." So, I did learn about the Japanese tradition of furoshiki. Um, and initially just sought out to purchase some and could not find a product that really had the qualities that I was looking for. So, that inspired our first SKU, which was the wraps. But now, we've, we also have bags available.
7:27 Speaker 00 Got it. So, so it started with that stretchy fabric, right, for gift wrapping?
7:31 Speaker 01 Yep. The fabric is derived from certified recycled plastic. So, there's actually a lot of greenwashing in the recycled plastic space. So, we use certified fabric.
7:40 Speaker 00 And mainly, do you sell in, in online? Do you sell in stores? Like, where, where could people buy your products?
7:46 Speaker 01 Yeah. So, um, we've mainly been online, selling on our website, nordstrom.com. We've had a couple of Kickstarter campaigns that have been successful. The bags are what we want to go to retail with because there's no consumer education that has to happen on the shelf. It just sits nicely right next to the other, um, bags. And we've got price parity with our fabric bags to those, you know, paper bags that usually look bad after a couple of uses.
8:14 Speaker 00 All right. Before we dive in further, what's your challenge and question that you're trying to figure out?
8:18 Speaker 01 Sure. So if you think about how the reusable water bottle was once a niche item before brands like Swell made them ubiquitous, that's exactly what we're trying to drive in the massive gift wrap category. And so retail is definitely one way to do that. But last holiday season, we also found that our reusable gift wrap bar experience where we were actually gift wrapping for people as a service was also pretty powerful, but that's a totally different growth channel. Do you think that that's a distraction that's sort of experiential marketing? Or is that something that you would recommend that we continue to explore?
8:56 Speaker 00 So you're going in person and you're showing people how to use it, but that's a lot of your time. And, you know, the question is, do you focus on doing that? Or do you try to just use e-commerce and other traditional retail to bring in more customers? Miguel, I want to bring you in here. Thoughts for Megan?
9:13 Speaker 02 Yeah. First of all, it seems like a very cool product, but I'm a little confused on the mechanism. Like if I buy one of these things, then I give it as a gift. Then what happens next? Then that person keeps it in their closet? And then they use it to give the gift to the next person and I buy another one? I'm a little confused about the mechanics.
9:36 Speaker 01 Yep. So if you're a mom like me, you're going to take that wrap back and reuse it with close friends and family. But yes, for the wraps, people reuse them as head wraps and tote bags and accessories. So they're actually quite versatile outside of just gift wrap. And the bags, as I mentioned, just like you'd give away your paper bag, the price is the same. So.
9:56 Speaker 02 Got it. I see. And so in the case of the bag, that's something which you're wholesaling to a retailer? And then they're using at their point of sale?
10:06 Speaker 01 Yes.
10:07 Speaker 02 Got it. Okay, I understand. A tote bag is a very common thing already. Is this different than a tote bag in a, in a big way?
10:16 Speaker 01 Yes, it's a high-end fabric gift bag that has a number of qualities. So for example, they're reversible. You get two designs in one. It has a beautiful gusseted bottom. It has a drawstring enclosure that also doubles as a beautiful handle. So it's a high-end fabric gift bag. It's not a tote bag.
10:34 Speaker 00 Are you finding conversions from, from the pop-ups? Or are you finding that they actually, because I would think that that would be a great way to. Introduce this product to people. So what is the challenge for you with pop ups and events? What is the issue?
10:48 Speaker 01 So the bags sell online and I believe that we will get Velocity in Retail. Wraps are also going to be important, but it is sort of like a deeper dive. So to get people to understand them has been the challenge, which is why this reusable gift wrap bar experience is where I saw this magic happening, where people understood what it was and they were able to see how easy it is when we were wrapping for them. But as you said, it takes a lot of time and effort to show up in person. And even though I love the reusable gift wrap bar, I also know I have a limited amount of time and resources and we need to stay focused.
11:27 Speaker 00 I guess my question is, so to me, I would think that that would be a really critical channel because you can see it, touch it. You're describing things here. It's reversible, the material's recycled, it's really special. But it's different when you see that and you feel it and you touch it and you see what it looks like on a gift. And I think, I don't know for sure, but I would be willing to bet the farm that most gifts are purchased around Christmas, right? In the United States at least. And so I would think that if you were to focus your energy on that eight week period or whatever it is, that it would be worthwhile to just throw it all into that timeframe and then focus on the retail stuff the rest of the year.
12:11 Speaker 00 Is that something that you have tried or thought about?
12:14 Speaker 01 I think it's great advice. And also I'll just offer that there's great digital content that you can get from this reusable gift wrap bar concept. Because in the time it takes to just wrap the gift and show that, the person can tell the story of who they're giving the gift to, why did they select this gift? And so it becomes about a story that's much more than just the gift wrap.
12:34 Speaker 00 How far are you from the University of Vermont?
12:37 Speaker 01 It's right down the street.
12:38 Speaker 00 Well, hire some student from the University of Vermont to be your videographer and to film you when you're doing that and turn that into content.
12:44 Speaker 01 Thank you for validating.
12:46 Speaker 02 I'm definitely on board with this because I'm more of like a rap with newspaper kind of person because I don't want to create more waste. And so I think the product is great, but I don't think it translates. I'm looking at the website and while it looks nice, I don't, I don't fully get it. Like, I do feel like touching it, seeing it in real life would be really powerful. So I would imagine whether it's you doing the demo, whether you do even hire a little army of demo people who go out to multiple stores in the area and do this wrapping. It seems like that's how you translate something that really is very tactile and needs to be touched to be fully understood. I wanted to say one other thing.
13:28 Speaker 02 There seems to be a lot of niche people out there who do something where they would really like, this would make so much sense. So for, I was just thinking scrapbookers, for example. I've always heard scrapbookers don't like to put tape on their scrapbooks, you know? And I was like, that's a community of people very niche, but like if you converted some of them, it would spread like wildfire across the scrapbooking community or something. You know, finding those groups of people who care at a higher level about these kinds of things would be really useful. And they all talk, you know, communities are the best customers rather than fragmented individuals. So try to find those communities that this really appeals to.
14:08 Speaker 01 Such good advice. Thank you so much.
14:10 Speaker 00 Absolutely. I agree. Tell me, Megan, what is the, aside from the pop ups and stuff, what is your ultimate hope? Do you want to be in more boutiques in actual stores?
14:22 Speaker 01 The vision is that, I mean, we are like what the reusable water bottle became, right? That we just drive reuse in this massive gift wrap category. So eventually mass retail, but that's not tomorrow. That's likely, you know, a couple of years down the road, but that's the vision.
14:41 Speaker 00 All right, we'll start with the, do the eight week pop up. Have the, and then create the content and then roll it out throughout the year and build up the retail side during the rest of the year.
14:51 Speaker 01 And can I bounce one more question off of Miguel?
14:54 Speaker 00 Sure.
14:54 Speaker 01 Okay, so our wraps, which we just received a patent for, are made in the USA. The bags are currently cut and sewn offshore. If we were to move towards more vertical integration here in the US to make our own wraps, since we have a patent for those, Miguel, I guess, from an investor's perspective, is that a negative? Which I was told it was when we started out, but that may have changed, given tariffs.
15:20 Speaker 02 Yeah, well, I think there's multiple angles to that. Tariffs, obviously, are adding a lot to your landed costs versus making in the US. I think managing fabrication can be a lot of time. And especially for American factories that don't have experience with something, like the time it might take to ramp up and produce at high quality, it could be difficult. So I'm all for US manufacturing as much as possible, but for a very small brand, you just have to be careful. So I would love to hear that you're doing it, but at the same time, as an investor, for a very small company, it would perhaps scare me a little bit.
16:02 Speaker 02 So I think you have to figure out when the time is right for that kind of integration.
16:07 Speaker 01 Thank you so much.
16:09 Speaker 00 Megan Downey, the brand is called Shiki Wrap. Good luck, thanks for calling in.
16:13 Speaker 01 Thank you.
16:14 Speaker 00 All right, Miguel, I mean, listen, this is what it's all about. You went through your thing, and, well, many things, and then you take all that, and here you are.
16:27 Speaker 02 Yeah, I mean, it's really fun to see these companies that are at that really early stage and they're figuring it out, because problem solving is like, for me, the most fun part. So to see these people are, you know, they're on the ground, they're trying in the day-to-day to solve these problems, it's inspiring.
16:47 Speaker 00 We're going to take a quick break, but when we come back, Alexa Hirschfeld, co-founder of Paperless Post, joins me on The Advice Line. Stay with us, you're listening to a special mashup episode of The Advice Line on how I built this lab.
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20:45 Speaker 00 Hey, welcome back to The Advice Line on How I Built This Lab. I'm Guy Raz. And our next return guest is Alexa Hirschfeld, who co-founded Paperless Post with her brother James. They first came on the show back in 2024, and we will put a link to that episode in the podcast description. You'll hear about how Alexa and James wanted to recreate the beauty of a physical invitation online. And now, almost 20 years later, hundreds of millions of invitations have been sent using Paperless Post. When Alexa joined me on The Advice Line, we helped a caller position a product that some people were having a hard time understanding. Alexa, what do you say? Should we take a call? Let's do it. All right, let's bring on our next caller. Welcome to the Device Line.
21:29 Speaker 00 You are on with Alexa Hirschfeld of Paperless Post. Please tell us your name, where you're calling from, and a little bit about your business.
21:35 Speaker 03 Hi, Guy. Hi, Alexa. My name is Amanda and I'm calling from the Madison, Wisconsin area. My business is Woofsy. Woofsy creates enrichment tools and experiences that help dogs to feel calmer, more confident, and more fulfilled by meeting their real needs, not just entertaining them.
21:54 Speaker 00 Amanda thinks you're calling in. Okay, Woofsy, so you make products for enrichment for dogs. So explain what you, what do you actually make and sell?
22:02 Speaker 03 So I created a deck of 52 cards. Each card has a different activity for you to do with your dog. The idea is that you would just draw a card and that's a game you'll play to mentally enrich them.
22:15 Speaker 00 So you draw the card and like the card has instructions for what to do with the dog?
22:19 Speaker 03 Yeah, so there's a QR code on the front that'll take you to the website and show a demonstration video of how to play. Otherwise, on the backside, there's a written description.
22:27 Speaker 00 And so give me an example, like you take a card out, you scan it, and then what do you do? What does it tell you to do with a dog?
22:33 Speaker 03 So you would just draw a card. And so this one would be Tic Tac Toe. This is going to be a more complicated game to play for a lot of dogs because it's going to really test their patience. You're going to set up the game just like you would any Tic Tac Toe, but you're going to put out a treat on each of the squares and you're going to cue your dog to pick a treat. They can only pick one and you will put an X wherever the treat was that they selected and then you're going to pick your treat and then mark it with an O. And you go back and forth until whoever wins.
23:07 Speaker 00 All right, I love it. I mean, of course, I think many dogs would just eat all the treats. I'm thinking about my dogs and one of my dogs would do it. One of my dogs would just eat one of the treats and then I would take one, but the other one would just look at this board and eat everything on it. What is, tell me a little bit about like the sort of the idea behind these games.
23:27 Speaker 03 So mental enrichment is really important for dogs. Most people just think of physical exercise. They don't always think about the mental exercise. But mental enrichment has just so many benefits, like helping to prevent boredom, build confidence, release anxiety, teach problem solving skills, strengthen bonds with their people, and give them a healthy outlet for their natural instincts of wanting to dig, shred, chew, things that people think is typically naughty behavior, but is actually really good for them.
23:57 Speaker 00 I have to imagine you are a dog fanatic. Like you, you've got dogs.
24:01 Speaker 03 Yes. I have a husky and a husky mix.
24:05 Speaker 00 Oh, nice. I have a little mixed mutt dog and then a Belgian Malinois.
24:09 Speaker 03 Oh, my.
24:10 Speaker 00 Yeah. She's a lot, but she's great and I love her. She's my best friend. So tell me a little bit about the business. How did you come up with this idea?
24:19 Speaker 03 So like I said, I have huskies. One of them, he loves to work. Taking him for a walk is just not enough. He wants to keep doing things. And so I kind of researched a lot of like mental enrichment activities that you can do with your dogs. Because like the typical puzzle toys that you get from the store, you know, a lot of people complain that their dog does it once or twice and then now they just know it and it's not challenging them anymore. And so I kind of looked up a bunch of different ideas of games that I can play just at home with things that I already have laying around my house. But just out of habit, I just kept doing the same thing over and over. And then that wasn't really challenging my dog anymore. So I wanted something that would actually tell me what to do. So I didn't have to sit here, try to think, decide what game to play
25:04 Speaker 03 and what all I need.
25:06 Speaker 00 Got it. All right. Tell me a little bit about how your business is doing. Like what do you or what did you do in sales last year?
25:12 Speaker 03 Um, so I just launched this product in like late February of last year and sold about 400 of the decks.
25:20 Speaker 00 Nice. Okay. And before we dive in further into your business, tell us what your question is for us.
25:26 Speaker 03 So I know this is a really great product. I've had a lot of customers have great success with it. But people are used to seeing like dog puzzle toys or these street dispensing toys. And like you look at that and it's fairly obvious of what it is. Whereas this, yeah, it's a deck of cards. So people see it and they're like, oh, my dog's gonna play a card game? It's like, well, no. And so I do have to, yeah, kind of go through and explain everything to them, which I do in-person markets once in a while. So once I'm talking to those people face to face and being able to show them and then I have all the demo videos playing and they can see the games, then that really helps to sell it. But online, I feel like I'm struggling with that, even though I try to show a lot of that in social media.
26:08 Speaker 00 Cool. Let's dive in. Alexa, do you have a dog? You're in New York City. Hard to have a dog.
26:13 Speaker 04 My parents have two big black labs and I grew up with a black lab. So I don't have my own, but I have a lot of experience with dogs and I love them.
26:24 Speaker 00 All right. So before we answer the question, any thoughts or questions for Amanda?
26:29 Speaker 04 How are you selling? What is the main channel for selling the product today?
26:34 Speaker 03 So I mainly sell them online. I do have a couple of wholesale accounts, but it's only a couple of them. Um, I use a lot of social media, but that kind of just gets really tiring.
26:47 Speaker 00 Right.
26:48 Speaker 04 I mean, the question I have is what is it that the people who have bought and used the product and love it, say they love about it in more detail? Because the best way I've found to position your product is to really understand what your most beloved fans see in it and use that as the crux of the positioning, which you're aiming to express to people who don't understand it yet. Telling the story from a human perspective with real examples of dog owners and their experience, I think would be a great inhumanizing approach.
27:25 Speaker 00 Yeah, I think that makes a lot of sense. I see on your website, Amanda, that you've got a few testimonials, but they're not super specific. And I wonder whether you can get a few more because essentially if you go to your website, right? It says mental enrichment, you know, dog games, right? But could you? Kind of flip the script and literally say something like, you know, in 10 minutes a day, reduce boredom and anxiety and destructive behavior. Like, I have a, one of my dogs is highly energetic. So this is really interesting to me. And what is my problem? A problem that a lot of people have is they need to get their dog's energy out. And so this is interesting. And I wonder whether you want to kind of position it like brain games for dogs, right?
28:09 Speaker 00 And hear from people who might say, you know, my dog stopped chewing up the furniture. Or after playing with this for 10 minutes a day, my dog stopped pacing around the house. I don't know, whatever, whatever the problem was. Because that's really what you're after, right? You're after identify, you've identified a problem a lot of people have. I think you can just make it a little clearer in how you market and how you position it and describe it on your website.
28:32 Speaker 03 Yeah, that makes sense. I, I know that I kind of struggle with making it clear. Like, to me, you know, it seems obvious, but then actually relaying the information, I kind of struggle with.
28:44 Speaker 03 On my Facebook, my cover photo, I think I have it, say, like 10 minutes to a calmer dog or something like that.
28:50 Speaker 04 Yeah, that's exactly more what I, yeah, that's, that's kind of what I'm thinking. And I have a recommendation also, if you're interested in doing reading about positioning.
28:59 Speaker 03 Yeah.
29:00 Speaker 04 There is an author named April Dunford, who wrote a book called Obviously Awesome. And she is an expert in positioning. And while her expertise is more around specifically B2B SaaS companies, it is really well-written, and I think it applies to any product. She has a really helpful step-by-step method, and I think that it could help you land on a few one-liners that you could test.
29:29 Speaker 03 Okay.
29:30 Speaker 04 Because I think that people will not necessarily know what mental enrichment dog games are, even though it's a very descriptive term. I think you want to get more at what is the problem it's really solving for the buyer and the dog.
29:45 Speaker 03 Yeah, I agree. I agree with that, yeah.
29:48 Speaker 04 My parents' two dogs, Olympia and Electra, really need this product, I have to say. They need something.
29:54 Speaker 03 I feel like every dog does, yeah.
29:57 Speaker 04 And I think I know the problem that we're talking about, and I would probably respond quickly if somebody articulated that problem and that, you know, this is a solution to that problem. You're kind of selling. Using the problem to describe the product.
30:11 Speaker 03 So I think my problem with that is that there are so many problems that it solves. So I kind of struggle with, okay, which direction do I go, which angle?
30:21 Speaker 00 I mean, I think the simplest one is what you alluded to earlier, right?
30:25 Speaker 03 Okay.
30:26 Speaker 00 You know, 10 minutes a day to reduce boredom and to change destructive behavior in your dog or to reduce anxiety. I mean, I would stick with the, you know, the sort of the three big ones.
30:36 Speaker 04 Okay. I also think the great thing about the sales channel that you use, which is mostly online, is that you can come up with some light tests, just copy tests of different types of positioning and see where you're getting the most response. And then from there, you can work on how can you show this in testimonials on the website or quotes or videos, Instagram gallery, whatever it is, to really bring it to life. But you can start with a few ideas and test them.
31:08 Speaker 03 Okay. I was also thinking of doing like kind of a contest type of thing, emailing my list and asking for them to record a video of them sharing their testimonial of what they like the experiences that they've had with a duck and then being able to use that information.
31:25 Speaker 04 It's a great idea. Okay.
31:26 Speaker 00 Yeah. Yeah, it's an awesome idea. Amanda, congrats and good luck. The brand is called Woofsee. Thank you for calling in. We'll keep tabs on you.
31:34 Speaker 03 Thank you so much.
31:35 Speaker 00 Thank you.
31:37 Speaker 00 All right, we're going to take another quick break. But when we come back, another caller with another question for two former guests, Pete Maldonado and Rashida Lee of Chomps. Stay with us. You're listening to a special mashup episode of The Advice Line right here on How I Built This Lab.
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33:08 Speaker 00 Hey, welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz. And our last return guests are Pete Maldonado and Rashid Ali, founders of the grass-fed meat stick brand Chomps. Pete Rashid first came on the show back in 2023, and they told us the crazy story of how they started Chomps. It's such a good episode. If you haven't heard it, check it out. We'll put a link to it in the show notes. And when Pete and Rashid came on the Advice Line, they reminded our callers that if you want to grow your company, you have to first decide where you want to go. Pete Rashid, you guys ready for the next call?
33:42 Speaker 05 Absolutely. Yeah, I'm excited. Let's go.
33:43 Speaker 00 All right, let's go. Let's bring in our next caller. Welcome to the Advice Line. You are on with the co-founders of Chomps. Tell us your name, where you're calling from, and just a little bit about your business, please.
33:53 Speaker 06 Hey, guys. I'm Mark Goldfarb. I live in Woodstock, New York. I'm the creator of a high-end gourmet line of artisanal pestos in about 50 stores, mostly Hudson Valley, New York City, but some nationwide through fair.com. Nice. Thanks for calling in. What's the name of your brand, Mark? In Mark's Kitchen. In Mark's Kitchen. Okay, cool. How did you, tell me about how you started this pesto brand? Well, I've been running a custom footwear business for 45 years. Custom footwear? Yeah, we do Renaissance Fairs all over the United States. You make custom footwear for Renaissance Fairs? I have 10 artisans that make them for me now, but we started in a school bus that we lived in for seven years
34:35 Speaker 06 and built it to a seven-figure business. Still do it. I run three businesses, actually. This is just one of them. But a very dear friend of mine, Giovanni Scappin, who's a fabulous chef, owned a bunch of restaurants, one of the top guys at the Culinary Institute, begged me for years to do something with my pesto. He's from Italy and he kept telling me it was the best pesto he ever had. So I finally decided, I spent six months and codified a recipe and my wife and I tried dozens and dozens of recipes and finally came up with one and started making it in his kitchen in his restaurant. And now I have these fabulous co-packers in Lake Catrine Pico Farm table that make all my varieties,
35:16 Speaker 06 pack it, freeze it, and then I do everything else. I pick it up, I schlep it, I deliver it, I ship it. And it's just me. Nice. Just you. And it's sold frozen in these stores? It's delivered frozen. It's sold in the refrigerator. It's lab-tested 30 days in the fridge. The reality is it lasts significantly longer than 30 days, but after 30, I stopped paying to have it tested. How much is it per jar? Average retail, low end $16.99, high end is $22. Okay. Eight-ounce jar. It's the most expensive pesto in the market, without a doubt. This is a premium pesto? Completely premium in a glass jar. Right. I use Parmigiano-Reggiano. There isn't another fresh pesto on the market that does.
35:58 Speaker 06 So, well, the basil's grown in an amazing hydroponic facility in Gosha, New York. And I do the four varieties basil, arugula, dandelion, and ramp, which is very seasonal, and then a vegan version of each.
36:12 Speaker 00 How is the business doing so far?
36:14 Speaker 06 Good. This is about five years in. I grow about 25% a year. This year, we did about 80,000, 30% gross margins on that. You're going to ask me what the question is, and that it's a need as well as a question.
36:28 Speaker 00 Yeah.
36:28 Speaker 06 It's just me. I need to find someone to bring in that has experience that can really help me grow and take this to the next level.
36:35 Speaker 00 Got it. All right. A lot to think about here. Pete, Rashid, I want to bring you in. Mark's got a pesto products brand is growing, looking to hire somebody to help him really grow this thing. Thoughts, questions?
36:50 Speaker 07 Yeah. Hey, Mark, this is Pete. Great to meet you. First question for you, are you using any third parties at all? Or is it literally just you?
36:58 Speaker 06 There's one very, very small distributor, Solex Foods in the Hudson Valley, and they handle a few stores that are more than an hour and a half from me. I just don't feel like driving that far. But that is, you know, that's a single-digit percentage, almost nothing. But otherwise, it's just all me.
37:17 Speaker 07 And then you have the co-packer. And then what would you say are your strengths and weaknesses in terms of running a business?
37:22 Speaker 06 Well, certainly, customer service is definitely one of my strongest suits. This custom footwear business has been, it's all about customer service. When you spend 1,500 for a pair of shoes and wait two years, they'd better be pretty good when you get them.
37:36 Speaker 07 Yeah. I think for me, like, what I would do is take a minute to, like, think about is like, using like, extreme self-awareness. When I first partnered with Rashid, I looked at him and he was like, the perfect complement to my skill set. I'm a good, I'm a sales and marketing guy, right? He's ops and finance. And the two of us are able to really just kind of work well together. That might be something for you to consider is bringing on like, a co-founder. Or if you're going to think about where you're going to hire first, whether it's outsourcing or bringing in an internal person, think about what gaps you have that they need to fill.
38:06 Speaker 06 Definitely marketing.
38:07 Speaker 07 Okay. Can you talk about like, brand and how you think about growing that?
38:11 Speaker 06 I mean, I have a presence on Etsy, on Facebook, on my website. I have done actually really well with fair.com. I don't know if you guys are familiar with fair. It's a Very unique wholesale platform that reaches stores all over the country. And almost every week I get a new store from somewhere, whether it's California or Washington or Florida, and that has really helped grow the brand a lot. But you know, I'm not really a marketing guy. I don't have time to sit on Instagram and ping away at posting. I need someone I think that can do that, that can help.
38:48 Speaker 07 Let me reframe my question, actually, because I'm talking more about brand and brand building. So I'll give you the example, I'll use Chomps as the example. We had a really great product when we first started, but we did not really have our brand dialed in. And one, we didn't really even understand who our core customer was to even like create brand DNA or messaging and brand ethos, all of those things. That's something at your stage that you should start thinking about now. What is the brand? You know, what do you stand for?
39:13 Speaker 06 Oh, I understand.
39:14 Speaker 07 You know, culture, all of those different things. So it's like, you know, actually, that might be the first hire that you could bring in someone that really understands how to do that.
39:21 Speaker 05 Excellent. And Mark, the other thing I'll, I'll add is Pete's exactly right as far as like you have to understand the strengths you bring to the table and you have to fill around the gaps. But also you mentioned like you don't have necessarily the time to do the Instagram or do that, but you're picking up basil.
39:38 Speaker 06 Right.
39:39 Speaker 05 And you're doing other things that take time. So you also need to understand like, where are you spending your time? What is a transactional tactical task versus a strategic one where it's worth your time to do, right? You've already, you mentioned you don't use third parties, but you use a co-man. Like, that's the biggest transfer of control that you can do where you're not making it in a controlled kitchen, you're making it in a third-party environment. And while you may be on site a lot, there's always instances where you're not around and you're trusting this third party to replicate the product in the way that you want it to be replicated. So where are you using your time and where can you start leveraging third parties or a full-time employee to start doing some of that? So you can focus on what's going to move the needle, what's going to grow the
40:24 Speaker 05 business and what's the next strategy?
40:26 Speaker 06 Makes sense. Driving three hours to pick up 150 pounds of basil probably isn't the best use of my time.
40:32 Speaker 00 I think the other question you want to ask yourself, Mark, is do you want to hire an operator or bring on an operator or a co-founder who has experience scaling a brand, right? And if you do that, it could be great, but it could also mean that you may have to make certain compromises in terms of your ingredients or in terms of your, your supply chain, whatever it might be. If that's a non-negotiable, you may want to think about almost hiring an apprentice, like somebody who really believes in the soul of this product is willing to say no more than they are willing to say yes to compromises, somebody who can really live inside of that co-packer relationship while you focus on the things that you really care about. I mean, it really depends on
41:13 Speaker 00 what you're after. I mean, if you are after scale and growth, you may want to think about somebody who, who might be recently retired but has experience doing this kind of work. But there might be trade-offs if you go that path as well.
41:27 Speaker 06 There's a limited amount of trade-offs I'm willing to do. I won't sacrifice ingredients. Even my friend who, you know, who pushed me to start this keeps saying you should use gran a padano instead of parmigiano reggiano, which is 25% less, but the flavor is not the same. So I want to be the best on the shelf, and I think I am, but I would love to find someone who has experience in the business, who can look at what I'm doing and go, I know exactly where to take you to the next step, how to get you to the next step.
41:58 Speaker 05 Yeah, I think too, Mark, I mean, your 30% gross margin works in your current environment. That's one thing where you need to figure out, like, how do you continue to grow the gross margin for it to work in a retail setting? Like, 30% is on the lower end. And so you do need to understand, like, economies of scale don't necessarily unlock incremental gross margin. You need to challenge your bill of materials, challenge the way it's being produced, challenge everything to figure out, okay, Do I want an artisanal one-off product because of the price point? And is there only certain retailers? Because like, I can't imagine a conventional grocery store wanting that price point for this product. Like, you've got to ask yourself the hard questions on like, where does the product belong? Where is it going to go?
42:41 Speaker 05 Because you can improve gross margin without changing the ingredients, but it means that you have to have like manufacturing unlock or price pack architecture strategies. There's other ways to do it without sacrificing quality. It's a hard exercise, but it can be done.
42:53 Speaker 06 Right. I really have no interest in big box stores. All the stores I'm in are, you know, one or two unit stores that focus on high-end food.
43:03 Speaker 05 Okay.
43:03 Speaker 06 It's my thing.
43:04 Speaker 00 Yeah. It may be worthwhile, Mark, to think about, I mean, especially if you're not focused on scaling at that level or that you want to stay small, you want to stay in specialty stores and gourmet grocers and, you know, maybe small gift shops around the country. It might be worth looking at somebody who is a little younger, less experienced, but really has a lot of energy and is really committed to helping do with this product which you want them to do. I mean, even somebody who might be a recent business school graduate or might have a couple of years working, you know, at a relatively low level at a P and G or PepsiCo or something like that, who's, who might be interested in trying something like this out and really having a lot of autonomy and helping to turn this into something bigger.
43:48 Speaker 06 Where would you go about finding somebody like that?
43:51 Speaker 00 I mean, part of it is just word of mouth and just asking around and asking everybody you know to ask if they know somebody. You sort of start that way. LinkedIn is also a really good way to do it. You know, you can go on LinkedIn and just start searching with keywords. But I would start by just asking everybody you can, you know, saying, do you know somebody? Have you heard of them? Do you know somebody who might be a recent business school graduate? Who has an MBA, who is interested in products? I would start there.
44:18 Speaker 06 That's a great idea.
44:19 Speaker 07 And Mark, I would add to that. Start with your customer base, because if you have somebody that's already a big fan of the brand, you want someone to start with that passion already. They're like, I love this product. I love this brand. Like, that's the bare minimum of what you need for someone to be successful in this role, right?
44:36 Speaker 06 Really great advice. Thank you.
44:38 Speaker 00 All right. Mark Goldfarb, founder of In Mark's Kitchen. Good luck, Mark. Thanks for calling in.
44:42 Speaker 06 Thanks a lot. Bye-bye.
44:43 Speaker 00 Thank you.
44:46 Speaker 00 Hey, thanks so much for listening to this special mashup edition of The Advice Line, and special thanks to Miguel McKelvey, Alexa Hirschfeld, and Pete Maldonado and Rashida Lee for joining me on the show this week. And again, if you haven't heard their original episodes, or their full episodes of Advice Line, you'll definitely want to check them out. We'll have links in the show notes. And by the way, please make sure to check out my newsletter. You can sign up for it for free at guyraz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you
45:25 Speaker 00 solve them. You can send us a voice memo at [email protected] , or call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you, and we'll put all of this information in the podcast description as well. This episode was produced by Alex Cheng, with music composed by Ramtin Arablouei. It was edited by John Isabella, and our engineer was Robert Rodriguez. Our production staff also includes Casey Herman, Noor Gill, Sam Paulson, Kerry Thompson, Catherine Seifer, Chris Messini, Ramel Wood, Niva Grant, and Elaine Coats. I'm Guy Raz, and you've been listening to The Advice Line, right here on How I Built This Lab.
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