Advice Line with Pete Maldonado and Rashid Ali of Chomps

Today’s callers: Yadi from New York thinks through an expansion strategy for her college campus-based empanada business. Then, Zachary from New York looks for ways to break into big retailers with his fresh-made frozen pies. And Josh from Indiana wonders how to go all-in on his small mouth bass lifestyle brand without overhauling his family’s lifestyle. Plus, Pete and Rashid reflect on the ‘protein-ification’ of our food, and how a scare last year reaffirmed the importance of doing right by the customer — no matter the cost. Thank you to the founders of Yadi’s Artisanal Empanadas, Noble Pies, and Achigan for being a part of our show. 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] or call 1-800-433-1298. And be sure to listen to Chomps founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/68f39229-431d-47f1-82c6-49a2a854cbe1/embed as told by Pete and Rashid on the show in 2023. This episode was produced by Kerry Thompson with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Jimmy Keeley. 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/ and on Substack https://guyraz.substack.com/. 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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  Visit mobilefuels.com for details. 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 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. And you can also send us a voice memo at [email protected]. And make sure to tell us how to reach you.

• 5:51Speaker 00

  And also, don't forget to sign up for my newsletter. It's full of insights and ideas from some of the world's greatest entrepreneurs. You can sign up for free at guyraz.com or on Substack. And we'll put all of this info in the podcast description. All right, let's get to it. This week, I'm joined by Pete Maldonado and Rashid Ali, co-founders of the grass-fed meat stick brand Chomps. Pete, Rashid, great to have you guys back on the show.

• 6:16Speaker 01

  Thank you for having us.

• 6:16Speaker 02

  Yeah, thanks for having us.

• 6:17Speaker 00

  You were first on the show in 2023. And as always, to anyone listening, if you haven't heard that story, we'll put a link to it in the episode description. It's an awesome story that eventually led to this amazing brand, Chomps. Pete, you actually came back onto the show for Advice Line, so it's not your first time here. Rashid, welcome to the Advice Line and thanks for coming on.

• 6:38Speaker 01

  Yeah, thank you.

• 6:40Speaker 00

  Before we get to our callers, I want to ask you guys a couple of questions. You know, we're in a protein world today. It just, it seems like people are putting protein in water and yogurt, ice cream. I'm seeing protein everywhere. You guys have been in the protein business for a long time. And every trend I'm reading, every sort of forecast is saying the protein market is just going to expand and boom and grow. So tell me a little bit about, I mean, you guys are both leaders in this category, but also riding a wave, too.

• 7:08Speaker 02

  Guy, I think we're on the right side of a big trend. But like you said, we've been at this for a while and we think like at some point with any trend, there will be consumer fatigue. Like sometimes internally, we talk about like the proteinification of everything. You mentioned water and ice cream and popcorn. And so

• 7:28Speaker 00

  Chocolate.

• 7:28Speaker 02

  Exactly. And so Chomps is winning on the current momentum behind protein, but we're going to win on the other side when folks get a little bit fatigued on it. But at the end of the day, I think there's a lot of room for additional protein in folks' diets, especially convenient, natural sources. And Chomps is that that's all for our consumers.

• 7:47Speaker 01

  You know, listen, this is a cultural shift. It's not a fad. People are changing the way they're dieting and eating and they're educating themselves and that's not going away. Right? And so we always knew, you know, protein was, was, people needed more protein in their diets when we started this 13 years ago. That's why we're here. But we never anticipated, you know, GLP-1s and, you know, doctors all over the place telling their, their patients, you need to eat more protein and it's more protein per calorie, right? And this is, you know, it's a wave for us for sure.

• 8:20Speaker 00

  Yeah. I want to talk to you guys about last year because you faced a challenge last year. And I'll just kind of give some background, which is there, nobody found it, but there was a possibility that one batch was contaminated with, with a bit of metal. And, and this is something that is not common, but it can happen in a manufacturing process. There's metal equipment, there's all kinds of metal that that food goes through and and you know, very rarely a tiny piece of metal can could chip off from a grinder or something and end up in a product. You guys found out about it. Nobody saw metal in their Chomps, but but it was a possibility and you had to recall just tons and tons of products, which I imagine

• 9:04Speaker 00

  was a really was a low point for you guys last year. Can you talk a little bit about just how that, you know, like, just how you kind of handled that?

• 9:14Speaker 02

  It was one of the hardest times in the business, really just figuring out how to react. And I'll say it was an isolated incident, exactly to what you said. We did an internal investigation and identified one of our seven facilities on one packaging line at an evening shift on a Friday where something seemed off. So to avoid any risk, we expanded the scope quite significantly and did a pretty large scale recall. It was painful, like it felt like the world was ending, even though it was so isolated. I mean, like, at the end of the day, Chomps is mine and Pete's baby. We started this from nothing and and it's here because of our consumers. So you think about like the potential risk of Chomps putting

• 9:59Speaker 02

  any of our consumer at that risk, we were not going to do that. So we went through the process and in the end, we didn't find any metal, right? There was no adverse reactions. Thankfully, no one got hurt. We got through it and it was tough. Like, I always say, what I tell the team, one recall is one too many, right? It just, it's not acceptable. We can be better. We have to have processes. We have to have controls in place. But now I can say with with complete confidence that we have handled it. We've got through it. And I think like the organization infrastructure is far stronger because we did say like we can get tighter here, here and here. And now we have new processes to make sure that it won't happen again.

• 10:37Speaker 00

  Yeah, I mean, the way it reminds me of Jenny's Splendid Ice Cream. She had a recall early on in that brand and the way she handled it was so same way. You know, instantly there was nothing was confirmed, but it was like simply because of the possibility, they recalled their ice cream. It cost them millions of dollars and consumers really appreciated that that preemption and that, you know, sort of overcorrection. And at the end of the day, you know, not only did it not hurt the business, but the business just grew exponentially. And I imagine, you know, you had a similar reaction from from your customers, but it, I imagine it cost you a lot of money.

• 11:15Speaker 01

  A painful amount of money.

• 11:18Speaker 02

  It did.

• 11:18Speaker 00

  Yeah.

• 11:19Speaker 02

  It's and it's and it's still it's still TBD as far as the ultimate exposure. Just at the end of the day, we, when we were going through it, the cost or expense never crossed our mind, right? The the goal was to remove any consumer risk, any product risk, and make sure we make the right decision, long term decision. So like, yes, it was a material cost. We're still kind of weeding through the total impact, but no regret.

• 11:47Speaker 00

  Yeah, it sounds like you guys handled that really, really well. All right, what do you guys say? Let's bring in our our first caller. Shall we do it?

• 11:54Speaker 02

  Absolutely. Let's go.

• 11:55Speaker 00

  All right, let's go. Let's bring our first caller. Welcome to the Vice 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.

• 12:05Speaker 03

  Hi, Guy, Pete and Rashid. I really appreciate you having me here today. My name is Yadi Deriz. I am the co-founder of Yadi's Artisanal Empanada here in New Paltz, New York.

• 12:19Speaker 00

  Awesome. Welcome to the show, Yadi. And Yadi's Empanadas, I'm assuming you make empanadas? Do you sell them in stores and grocery stores? Tell me about the business.

• 12:29Speaker 03

  Sure. So Yadi's Empanadas really started, I was a formal teacher for twenty-three years or so, but food has always been a passion. So I come from a Latin culture. Empanadas is just something that I grew up eating as a childhood favorite. And as it became something trendy, and I realized that culturally it was catching on, I honestly couldn't find an authentic empanada anywhere. And everywhere we try empanadas, they were either greasy, not freshly made, they didn't have enough filling. I felt like empanada was really quickly becoming like a quick fast food.

• 13:08Speaker 00

  Yeah.

• 13:09Speaker 03

  And so I really wanted to elevate a street food into something that you feel good about eating, that's made with fresh ingredients, where we're not compromising the quality and the flavor. And so that's really where it all started.

• 13:25Speaker 00

  I love it. So you were a teacher, and when did you start this business? Did you left your teaching career to start this business?

• 13:31Speaker 03

  I sure did. So I taught for twenty-three years, and in two thousand twenty-one, decided that I will resign, and I would start the business right from my kitchen. And so for about a year, we focused on just selling to coworkers and friends and schools. And then from there, we landed in a commercial kitchen, did that for a little bit. We ended up starting farmer's market, pop-ups, events. We then bought a food truck in two thousand twenty-three.

• 14:03Speaker 00

  Wow.

• 14:04Speaker 03

  And from the food truck, we landed at Sunino Bowl. So the opportunity came.

• 14:10Speaker 00

  At the university there?

• 14:11Speaker 03

  At the university there.

• 14:13Speaker 00

  So you opened a brick and mortar space, or a physical space on the campus there?

• 14:18Speaker 03

  So I think that's, so while it is a space that we have, we started, our first location was, we, August of two thousand twenty-four, we opened the far end of campus inside a small convenience store. So previous to that, we were making the production from the commercial kitchen. But when the opportunity came in to go on campus,

• 14:43Speaker 03

  It wasn't approved for us to be producing from the share space. And so the compromise was for us to produce right from their campus, but at a hefty fee.

• 14:57Speaker 00

  Got it. Okay. So you now, you have a, you sell most of your products on the SUNY New Paltz campus now?

• 15:04Speaker 03

  I do.

• 15:04Speaker 00

  And tell me a little about, about your sales. How you guys, how did you do last year?

• 15:10Speaker 03

  So the first year we did, we, from day one, our sales were really good. We were doing, averaging about 1,500 a day on daily sales, right from day one. By the end of that semester, they had moved us into the bigger locations centrally located on campus because we were doing so well. And within a week there, we had doubled our sales. Our sales are currently and have been now for a whole year, on average of $3,000 daily.

• 15:43Speaker 00

  Wow.

• 15:43Speaker 03

  That does go up some days to 3,500 on really good days, but average, we're making three grand a day.

• 15:50Speaker 00

  So three grand a day, I mean, that's, that's pretty great. I mean, you're maybe doing 700,000 or more a year in sales.

• 15:59Speaker 03

  Correct.

• 15:59Speaker 00

  Wow. Amazing. Okay. So before we dive in further, what is your question for us?

• 16:03Speaker 03

  We're wondering at what point do we, do we think about a second location? Brick and mortar, since right now technically while I have this location, it's not really ours. Do I move into other colleges and really duplicate what we have into other schools? Do I go back to distribution? So is that that sort of like road and what do we do?

• 16:24Speaker 00

  All right. So sales are strong at this location on the SUNY New Paltz campus. You're wondering whether you should open a second location or focus on distribution or a combination of both. Pete, Rashid, I want to bring you guys in. Thoughts or questions for Yadi?

• 16:38Speaker 01

  Yeah, Yadi, nice to meet you. This is Pete. Yeah, you're speaking my language here. I grew up eating a ton of empanadas. I'm Colombian and my grandmother used to make them all the time. My mom makes them now. It's the only thing I asked for for my birthday, which is coming up at the end of this month. So I'm very excited to get my batch of empanadas.

• 16:54Speaker 03

  Batch of empanadas.

• 16:55Speaker 01

  But, okay, so my first question is about, you know, labor and management at this, this first location that you have. Are you, is this thing running itself? Like, while you're here talking to us, is there somebody there selling empanadas?

• 17:08Speaker 03

  So it really is now. So when it started, it was really my husband and I and my children. So it was really family working around the clock, 18, 20 hours a day. My husband believed his job goal there. Now we have a team of nine people and I have a manager that's been trained now, family also. It's really trying to keep it family as much as we can. And so, no, I don't have to be there now for, for Yadi's empanadas to, to run.

• 17:32Speaker 02

  That's great.

• 17:33Speaker 01

  Yeah. So it sounds like from like a product standpoint, you know exactly how to replicate this in terms of equipment and all those things, recipe, it's, you know, it's all pretty much, you know, you could just do this over and over again. I think, you know, for, for me, it would be like, you know, management and labor pool would be the, the biggest question marks.

• 17:51Speaker 01

  And then it would be like, you know,

• 17:52Speaker 02

  Real estate. I would say real estate. That's the other question is like, do you have, do you have a unique situation in the current environment where as you start thinking about secondary locations or scaling, are you going to incur an additional cost? So like, Yadi, are you current, like, are you currently profitable in the, in the existing, like at the 700K? Like you're, you are profitable?

• 18:11Speaker 03

  We are. I've worked with a consultant to help us figure out the, where our costs should be in terms of food costs, employee costs, payroll. I think the only concern and well, one of the concerns is that with a college campus, while we do really well those months that we're open, it is closed during the summer. It is closed for a whole month for the winter. So we have all these breaks. And what I found last summer is that, well, we made great money and there was still profit. I now have a period of four month where I'm not making any money. So that's, that's where we are right now.

• 18:48Speaker 01

  Yeah, Yadi, the, the seasonality aspect of working at with colleges, that makes a lot of sense. But then you mentioned before the food truck idea. I think that's the solve. I mean, if you have a food truck and you could have a campus that allows you to have space somewhere on campus, you can hit that target market and then as soon as school's out, you go move that truck somewhere else where it's going to be, you know, uh, get some foot, foot traffic.

• 19:09Speaker 00

  Yeah, I, I guess you answered the first, first question that Pete had, which is, it sounds like this location can run without you on site, right? This existing location. And so is there a person on your team who could potentially run a second location if you opened it tomorrow?

• 19:28Speaker 03

  Yes.

• 19:29Speaker 00

  Great. And I think that the other question is, and, and, and it speaks to this idea of real estate, right? You are in New Paltz, New York. I guess you're between New York City and Albany, right? And New York City is a, I mean, that's, that's challenging. But I think, you know, based on what we know from franchise businesses that have been on the show, their expansion strategy usually begins with one location within 45 miles. So within an hour or so drive. So you can handle that second location to, to kind of test market it.

• 20:00Speaker 03

  We've actually looked into Connecticut. We're, we're really beginning to do our research and investigate Connecticut. We like Connecticut because from New Paltz to Connecticut, we're less than an hour away.

• 20:10Speaker 00

  New Haven's got students, right?

• 20:12Speaker 03

  It's got plenty of colleges. And so I think it's really, really trying to figure out, do we just continue this path of colleges since it's a niche and seem to be working? And/or do I just think about opening some sort of a kitchen, my own sort of commercial kitchen, with maybe a little bit of a front store where I can maybe combine both?

• 20:33Speaker 01

  I like that latter idea, but if you pair it with.

• 20:38Speaker 02

  Think about delivery, like it seems like such a portable, great item. If you think of like DoorDash or Uber Eats, like that option out of a kitchen.

• 20:45Speaker 00

  So, so true.

• 20:46Speaker 02

  So scalable.

• 20:46Speaker 00

  Yes.

• 20:47Speaker 02

  And then maybe you have a second arm where you have somebody that's focused on maybe within a 20 mile radius, bookstores or coffee shops. Like you're morning dropping off the empanadas during that. Like, there's other opportunities where you can kind of be creative about how to scale and get as many empanadas in people's mouths as possible.

• 21:05Speaker 01

  Yeah, that's a commissary model. It's very similar like what the bagel industry up in New York area. It's the same, same exact thing. So they'll make a ton of bagels and deliver them, you know, daily or whatever to all the bagel stores all over the place. You could do exactly that. And whether you're serving your own food trucks or various locations that are, like Guy said, and it's got to be close enough to where it makes sense.

• 21:24Speaker 03

  Absolutely. And I think that that sort of solidifies that, that idea that distribution is where it is, that the cost of renting, the cost of the overhead of expenses of training of employment, while I enjoy it and really is so gratifying to see the students come in and people enjoying a meal, it is a lot. Whereas when we started and we were doing distribution, you make empanadas, they, I really didn't have to work so hard at getting people to get them.

• 21:50Speaker 00

  But, you know, empanadas, it's not, it's not like there's an empanada shop on every corner, like there's a burger joint every corner, right? It's, it's, but it's got the potential to be something really interesting, especially if you're finding success in a college town. And so it, it does make sense to me that you're looking at a place like New Haven, where you've got a lot of students, it's not that expensive, and you could generate a lot of buzz around it like, oh, hey, I heard, you know, Yadi's empanadas are coming to New Haven, you know, especially if you work with like a local alternative weeklies or the, the Yale newspaper, whatever local websites or food writers are out there and you kind of build buzz, it could be a really interesting place to be.

• 22:29Speaker 03

  I think you're very right, and I, I see that in our future.

• 22:35Speaker 03

  As always, you know, there is that that feeling of are we ready? Are we not? But having this conversation today with all three of you really does give me that confidence and the trust and belief that if it's now or never, just where can I have nothing to lose? I quit my job four years ago and I'm here. So moving forward now and taking that next leap of faith and going to the next level, I got nothing else to lose.

• 23:00Speaker 00

  All right, Rashid, final thoughts? Any final thoughts for Yadi? I'm hungry. Like, I don't know why we did this so late in the day. I know. I'm so hungry. I want empanadas now.

• 23:09Speaker 03

  I'm gonna make sure somehow, some way you guys get some amazing empanadas. I'm telling you, once you try them, you'll know what I'm talking about.

• 23:15Speaker 00

  I believe you. Yadi Reis, founder of Yadi's Empanadas. Thanks for calling in. Good luck. Keep us posted.

• 23:20Speaker 03

  Thank you so much for having me today. Thank you.

• 23:25Speaker 00

  We're gonna take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz. Stick around. You're listening to The Advice Line on How I Built This Lab.

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• 27:17Speaker 00

  Welcome back to the Advice Line on How I Built This Lab. I'm Guy Raz. My guests today are Chomps co-founders Pete Maldonado and Rashid Ali. Pete, Rashid, you guys ready for the next call? Let's do it. All right, let's bring in our next caller. Welcome to the Advice Line. Tell us your name, where you're calling from, and a little bit about your business.

• 27:34Speaker 04

  Hi there. I'm Zachary. I'm a co-founder of Noble Pies. Our bakery is located in the Hudson Valley. We make both sweet and savory pies with real ingredients and an all-butter crust. In 2025, we officially launched our wholesale line, and we have three retail stores outside of New York City and are launching our first New York City store in 2026.

• 27:58Speaker 00

  Awesome. Thanks for calling in. So Noble Pies, sweet and savory pies are based out of the Hudson Valley. How long have you been in the pie business?

• 28:08Speaker 04

  Yeah, our business started in 2008 unexpectedly. When the financial crisis hit, my family owned a horse business, and overnight, we pretty much lost our business. Horses are a high commodity item and luxury. So my mother went back to her roots, and she resurfaced some old recipes from my great-grandmother. And she dropped off me, my brother, and my sister at the local orchard to pick a bunch of fruit. We brought the fruit back home. We baked about 50 pies, and we set up a little picnic table on the side of the road of our farm. And literally, within an hour, we sold out of pies, and it turned into an every-weekend business, and now we're here.

• 28:53Speaker 00

  Wow. So tell me a little bit about the business. Where do you primarily sell your pies today?

• 28:57Speaker 04

  Most of our business is out of our retail stores and farmers' markets, and our main wholesale account is Fresh Direct.

• 29:05Speaker 00

  Fresh Direct, okay. And how, and tell me a little bit about your, your, your sales. What do you guys expect to do, or what'd you do last year?

• 29:13Speaker 04

  Yeah, so between our three stores in 2025, we did about 2.2 million in sales.

• 29:20Speaker 00

  Wow.

• 29:20Speaker 04

  And our first year of wholesale with Fresh Direct, we did about $200,000.

• 29:28Speaker 00

  And these are frozen pies or fresh pies you're selling?

• 29:30Speaker 04

  So these are fresh frozen pies, single-serving, sweet and savory.

• 29:36Speaker 00

  Got it. Okay, before we bring our Chomps co-founders in, tell me what question you have for us, Zachary.

• 29:42Speaker 04

  So since we just launched our wholesale line, we feel like we're ready for larger retailers like Whole Foods and Target. I've applied to their regional supplier programs and did not have any luck in the in the past few years. So I'm looking for new tools, strategies, and approaches that work in today's market to break through.

• 30:04Speaker 00

  Yeah. All right. Makes sense. Awesome. I want to bring Rashid and Pete in, guys. So Double Pie's been doing, they've been doing this for a while. They've got a clear track record. What do you think? Any thoughts, questions for Zachary?

• 30:18Speaker 01

  Hey Zachary, this is Pete. Great to meet you. Yeah, great job, by the way. This is, you said 2.2 million. I couldn't believe it. I was like, okay, that's great. In terms of scaling from here, what's your capacity and how much could, how many pies could you make in a day or a week or however, however you're looking at it?

• 30:35Speaker 04

  That's a great question. So we, we can put out about 10,000 pies per week in the facility that we're in now. And within six months, we can triple that with some modifications of our bakery and a little bit of expansion.

• 30:50Speaker 01

  And then in terms of, of distribution, you are, you're shipping these or are you hand delivering these to the stores or how's that working?

• 30:58Speaker 04

  Yep. So right now we're self distributing so that we can stay as lean as possible. It allows us to reinvest as much as we can into our, into our business so that when it's time to pull the trigger with that bigger account, we can be ready.

• 31:13Speaker 02

  Shelf life, how, how long do these, I get that they're frozen, but I'm just curious from a shelf life perspective because obviously when you layer in distribution, you're adding days.

• 31:23Speaker 04

  It's about four months.

• 31:25Speaker 00

  Zachary, a question for you because frozen pizzas have been, I mean, that's been completely, you know, redone, right? There's all kinds of interesting frozen pizzas, but frozen pie hasn't been upgraded in the same way. So what is the, what is the argument you make that, that these pies are better than what might be available right now from like the, I don't know, Sarah Lee or whoever's in the Safeway or even the Whole Foods freezer section?

• 31:52Speaker 04

  So at Noble Pies, we're so true to what is actually in our pies. Our pies are made with an all butter crust. Our filling is made from scratch in small, smaller batches, but it can be made in larger batches. And we advertise how few ingredients are in our pies. You know, when you go to the grocery store now, those product labels are pretty populated with the ingredients. So that's our marketing and branding point. And also the fact that we actually try to source as much as we can from New York State. So we also brand, you're getting a taste of New York and the Hudson Valley because we have tons of farms here. It's a beautiful place.

• 32:34Speaker 00

  So you're making the argument to a buyer that you are the upgrade from whatever's out there right now. That it's unlike pizza, which has a bunch of options. There aren't that many options in pies. You're that upgrade, but I think, and Pete and Rashid, you guys can speak to this, which is the reality of buyers for these big chains, whether it's Whole Foods or Target or whatever, is they don't always discover brands. It's not always their job. Their job is actually to manage risk, right? And to, to focus on velocity. You're basically, you want to show that by bringing this product on, they are de-risked in a sense. Is that, is that a fair argument, Rashid and Pete?

• 33:17Speaker 01

  Absolutely. You also want to be able to have a good sales story. And I think one of the stories that Rashid and I were able to get with Chomps, it was from the data that we had, was incrementality. Meaning we're bringing new customers to the set. You need to be able to find a way to tell that story to the buyer because they need to know that you're not just going to be cannibalizing. If he's going to take somebody else out, another brand out and put you in and sales stay flat, what's the point? Right? So he's got to figure out, okay, I'm going to put them in and they're going to bring new customers to this set that were never shopping here before and grow the category. So like, that's the name of the game.

• 33:52Speaker 02

  Yeah. And I'd add, because you have a four month shelf life, like that's, I assume that's somewhat low in the first. I don't know Frozen that well, but I would assume four months is probably a little bit on the lower side. So like, you have to prove that you have strong velocities, that the product will turn. And you further have to prove your repeat rate, that not only are you going to get that first customer in, that they will come back. And buy it again.

• 34:16Speaker 04

  Okay.

• 34:17Speaker 00

  Zachary, you have that data. You're going to have six to 12 months of that velocity data. You could focus on one SKU. You don't need to show the data for all the products. Because at the end of the day, it's the it's the store manager who's going to be your biggest advocate. Like, if you can get a store manager to be your advocate with Whole Foods, that's going to have more weight than, you know, you kind of cold calling them, right?

• 34:43Speaker 04

  I've always wondered if that still works in this day and age of Whole Foods. And I'm so glad that you're answering that question for me because I haven't walked in and talked to a store manager just yet. So I'm definitely going to try doing that.

• 34:57Speaker 00

  I think those are the people you want on your side.

• 34:59Speaker 02

  And like, Zachary, from to answer your initial question, I think it's going to sound odd, but like getting into the retailer is honestly the easiest part of the process. It's it's staying and performing. So like, you know, you've been at this for a while. It seems like your product has differentiated. There's something there and it'll succeed in retail. But you're going to succeed if you could have some focus, like pick not just Whole Foods, but you should do the Northeast region or just a pocket of stores and keep it really focused and build the story and grow over time. Because the problem is, is right now you're self distributing. Once you introduce distribution into your business, it's a level of complexity and cost that you don't fully understand.

• 35:44Speaker 02

  And then you introduce trade requirements, which you currently don't have. And it's like this slippery slope where retail sounds great, but sometimes it's just a feather in a cap or a vanity metric. Like, if you have a model that works in your retail stores and the farmer's market and fresh direct, which is a direct program, that's great, but you've got to continue to grow depth in those channels. And then pick one more channel and grow that, and then pick another.

• 36:10Speaker 01

  And that's what we did at Chomps. Like we're, we say like we're a 13 year overnight success. I mean, it took us a long time before we approached the targets of the world, right? Before we went to the club channel. Cause if you go too quick, too early, it can really start unraveling and introduce so much complexity and cost where it can materially challenge the business.

• 36:29Speaker 04

  That's great advice because I always feel like I'm a little fish in the sea. And you know, it's true. I should just stay focused on those first customers and continue to serve them and get that feedback. And again, also watch the velocity of the repeat purchasing in the store.

• 36:47Speaker 01

  Zachary, are you doing any e-commerce, direct to consumer or anything like that?

• 36:53Speaker 04

  We actually used to sell on QVC network. We did for about two years. We don't do it now because shipping costs are so high. But we are looking into doing e-commerce again in the future.

• 37:09Speaker 01

  Yeah, I feel like I get like these frozen pizzas from like Gino's East from people in Chicago, like these other, like I know it's got to cost an astronomical amount, but they're doing it for like holidays or seasonal stuff. So it might be something for you to look into, especially if you have people that are just kind of diehard fans of the brand and maybe even just reach out to them and it's kind of survey some of your customers if you have their contact info. But I would just try to find out from them, like, would you ever buy these for a gift? And just kind of start small with it and see if it works. And then you might be able to scale that from there.

• 37:38Speaker 04

  That's great advice. Our email box gets flooded every, every holiday with thousands of emails. Can you ship to California? Can you ship to Texas? So I will definitely do that.

• 37:50Speaker 01

  Awesome. Zachary Bondur, co-owner of Noble Pies. Thanks so much for calling in. Good luck.

• 37:54Speaker 04

  Thank you.

• 37:55Speaker 01

  Thanks, Zachary. Appreciate it.

• 37:58Speaker 01

  All right, we're going to take another quick break, but we'll be right back with another caller. 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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• 39:22Speaker 00

  Welcome back to the advice line on How I Built This Lab. I'm Guy Raz and today I'm taking your calls with Rashida Lee and Pete Maldonado of Chomps. Let's bring in our final caller. Welcome to the show.

• 39:34Speaker 07

  Hey guys. Before I introduce myself, I just want to say a longtime listener, first time caller.

• 39:40Speaker 00

  Awesome.

• 39:40Speaker 07

  Years and years, but I'm also a huge Chomps fan. So we have them piled up in our pantry at my house. So I'm fanboying out a little bit here. I'm going to be perfectly honest. My name is Josh Schreinko. I'm the co-founder and president of A Cheggen Brand. And we are the official brand of small mouth bass.

• 40:02Speaker 00

  Awesome. So tell me what you guys make. What do you sell?

• 40:05Speaker 07

  So we started with kind of the easiest thing we could start with, which was apparel.

• 40:11Speaker 00

  Okay. Apparel around the theme of small mouth bass. Okay.

• 40:16Speaker 07

  Yes, exactly. So quite niche, but we, yeah, started doing apparel. And to be honest, I don't want to get too much into it, but. I started a podcast, um, seven years ago and sort of found out there was a tribe in this like super nerdy, uh, corner of the fishing industry that I was super passionate about. And I was like, hey, I, I want to work in the fishing industry for a living. And I was like, I'm just going to start my own thing. So I partnered with a couple of good friends of mine who are super talented artists and we started putting, uh, shirts and designs and hats and that sort of thing and put it on the Shopify platform and you know, we, we been keeping it rolling. So.

• 41:01Speaker 00

  See, I love this. So there's, there are lifestyle brands around, obviously golf and other, you know, sports and even fishing, you're focused on like a niche of niche, small mouth bass lifestyle brand. And what, what, tell me like, as I'm looking at your website now, it says for those who bleed bronze, which is the color of the fish, right? Can you explain the passion for like fishing for this particular fish? Is it just because they're available and they're, or is it just, there's a particularly just thing about going for this kind of fish?

• 41:30Speaker 07

  Yeah. How much time do you got, guy? Cause I could go on. Smallmouth are awesome. So they, one are native. So it's really cool to think like our, our brand is a chegen, which is the Algonquin word for smallmouth. Um, and that translates into one which fights. So, um, they are super awesome fighters. So they jump really high. They're, they're kind of like the hip, cool fish and bass fishing. Large mouth are a little bit like lazy. They don't like to move a lot. Smallmouth are like crazy. Um, they are really fun, uh, fun to catch. So.

• 42:08Speaker 00

  Right. And, and do you release them or do you eat them or both?

• 42:12Speaker 07

  So are, we, we say this frequently, or actually at the end of every podcast, free the fighter. So we are, we are advocating for conservation. So we definitely promote catch and release.

• 42:23Speaker 00

  Oh, that's cool. So you catch them, release them. Wow. So really it's like about the sport. Okay. So you've got this apparel brand. You sell shirts. I'm looking at your website now, shirts, hats, all around this product. Tell me a little bit about how the business is doing.

• 42:36Speaker 07

  Yeah, so we're in year, we just started year five. Um, we have expanded into a couple of different things. We run an online board game for fishermen and then we also just last spring, we launched our first lure and our line of fishing lures, which is kind of the, in our pipeline, that's the long-term strategy is like build out a several SKUs of lures. And then really start to look at getting that into retail, that sort of thing. We can't produce them fast enough inside of our, our small little office here. They sell too fast, so we're looking for a contract manufacturer right now to do that. And we're also prototyping with the stuff we're making in-house.

• 43:22Speaker 00

  Based on what you're selling right now, what'd you do in, in sales last year?

• 43:26Speaker 07

  So we just missed the hundred thousand dollar mark last year, which I was, that was a big goal of ours to hit that.

• 43:33Speaker 00

  That's still pretty great. And, and, and most of that is coming from hats and shirts?

• 43:37Speaker 07

  Yeah, uh, the, the lures definitely are like a, a little bit of a hack because we can sell as many as we can make. But yeah, still the majority of our sales are apparel, just because that's what most of our inventory is.

• 43:51Speaker 00

  Got it. All right. And before we dive in further, what's your question for us?

• 43:54Speaker 07

  Yeah. So I'm at a place in my business where I want to jump off and I want to do this full-time. I have two kids and a wife and I'm not the, at the age or position in my life where I can eat ramen for two years. Right? So I have to like have some capital to work with to be able to do this. And it is, you know, you guys talk about cash flow. That's a huge, huge challenge. How like strategically, what path should I take to get to this full-time? Cause I have so many things I want to do. Like this is like, I'm so passionate about this business and really just fishing in general.

• 44:35Speaker 00

  Josh, you said you're, you brought it, uh, slightly under a hundred grand in sales last year, which is very briefly, what is your, what is your full-time job? What's your day job?

• 44:45Speaker 07

  Yeah, I own a medical distribution company. So we sell like orthopedic rehab equipment and we we service the local like central Indiana and Louisville area. So yeah.

• 44:57Speaker 00

  And you want to ideally, you want to focus entirely on this and you want to know when, I guess, when to make that leave. All right, Pete, Rashid, you guys, I'm sure have a lot of thoughts on this. You started, I mean, Pete, certainly you had all different kinds of businesses, real estate and and that didn't work out and you know, and then you start this thing. Thoughts, questions, comments for Josh?

• 45:20Speaker 01

  Yeah, I'm gonna let Rashid kick us one off.

• 45:22Speaker 02

  I think it's it's a really interesting topic, especially for Pete and I, because you know, we always joke around like our partnership was not always great at the early days and it's really because, you know, Pete went full time about four years into the business. That was in 2016 and I went full time in 2018. So there was that two-year time period where Pete was full time and I was part-time. And I think ultimately, the question I have, and you don't necessarily have to answer it, but it's something to think about and reflect is like, you mentioned you're doing a hundred thousand, you mentioned you have a family, you mentioned you're not going to eat ramen, right? So you have to start thinking about it's like, what do you need to support

• 46:02Speaker 02

  your life? And at what point can you scale the business to get there, right? And how much risk can you take? And then how much risk can your partners take to run the business? So it's like, those are, it's really kind of self-reflection where you have to figure out what can you do to get there? And, you know, you have the entrepreneurial spirit as far as like creative and ideation, but like successes, I always found it's rooted in focus, right? And and and that's the hard part about it is trying to figure out, right? You have an apparel business, but I looked it online and it looks like this isn't a, it's not like a functional apparel, right? Where it's like technical gear for it's right, it's more, it's purely lifestyle, right? But then

• 46:44Speaker 02

  You transition quickly into a purely functional lure side of the business, right? Because you found a niche. So that's where you try to think about is like, take a step back to see like, where do you want the brand to go ultimately? And have a clear path to get there and also one that can support your lifestyle, right? And your family.

• 47:01Speaker 07

  Yeah. And I would say that it's a little bit of like a self fulfilling prophecy, right? If you don't go full time with the business, it's not going to get where you want it to go. Unless you have a viral moment or you have this like breakthrough, which for you guys, that was the call from Trader Joe's, right? Like you got a call and you're like, hey, like, we got a million dollar P O. Let's go figure out a way to fulfill it. Like, I could keep doing this as, and I'm content to do it for a little while longer, like, just kind of grinding it out and kind of waiting for something to happen. I'm more of a person that wants to make things happen, though. And I am like, hey, do I need to raise some money?

• 47:44Speaker 07

  Which I have never done. And we have had people approach us, a lot of people asking to invest in this business. And it's, I don't, I don't even know what I'm doing there. Just be honest. Do I need to raise money? Right now, we're bootstrapping. So I'm funding it with my personal, you know, finances, which I haven't, I don't, it, it, it is profitable to the point where I don't have to keep putting money into it. But it's also like, it's not, I'm not, I don't have a bunch of bankroll that I'm making to be able to reinvest in the business. We just kind of keep doing what we're still doing. So.

• 48:22Speaker 01

  Yeah, Josh, I think I'm gonna like, maybe speak out of both sides of my mouth here, because it's like, okay, you've got this really niche, niche audience, which is great. That's going to allow you to make an impact and build a brand within that small audience for a small amount of money. That's exactly what Rashid and I did within the CrossFit community back in the day. We had no money to do it, but we went door to door and basically did what we had to do to build a brand within that community. That's, that's, you know, and then we kind of were able to snowball from there and add other communities from there. But I think for me, like you're, I'm looking at your, your.

• 48:53Speaker 02

  Your clothing and then you have your, your lures. You have a lot of SKUs across the portfolio here. That's all, that's going to require a lot of capital. So it's like, okay, that's gonna, if you pulled that back, you limit the size of the business. It's kind of like a, you know, but you have to figure out something. I think you need to focus now on what's going to generate the most revenue for you. So you could actually build this to a place where you could actually go full-time and focus on it, if that's what you want to do. I'm guessing from a margin perspective, the lures make you more money than the apparel?

• 49:23Speaker 07

  Oh, yeah.

• 49:24Speaker 02

  Yeah.

• 49:24Speaker 07

  Yeah.

• 49:25Speaker 02

  Pieces of rubber.

• 49:26Speaker 07

  Absolutely.

• 49:27Speaker 02

  Yeah.

• 49:27Speaker 07

  Yeah, we'll, we'll always keep apparel just because I, that's, you know, it's not free marketing essentially that produces revenue, but yeah, I do think our future is in the lures. And then we have a couple of other like, just like things in the pipeline that we've talked about doing that could be have a wider appeal that we could sell on like some workplaces like Amazon, that sort of thing.

• 49:50Speaker 02

  And Josh, to your question, when you think about like, you know, what signals that's time to go full-time, I think for us, you, you mentioned the Trader Joe's PO, but it wasn't necessarily just the PO. It was really around when we saw the sales performance and the repeat rate, and we saw that the product was really working. Right? You mentioned the lures. You can't make them fast enough. You keep going out of stock. So like obviously you have something there. Now what you need to figure out at the unlock is like, how do you see what high is high, right? How do you assess true demand? Cause if you're going out of stock and you're running out, like you don't necessarily know what the ceiling is. It's like, to me, you need to solve that and that's going to better understand like what is the potential? And then, like you said, most of these technical brands

• 50:33Speaker 02

  provide a technical offering and they wrap it apparel is a value add, right? And so I think you've, you've already proven you have cool, fresh designs that it's are going to attract. You need to create that anchor technical solve, which you're circling right now, but once you figure out the unlock and how do you scale it? I think that's going to answer your question on, are you ready to go? Like, and then, and then think about retail, then think about us, but like, look, Pete and I love e-commerce. We love direct to consumer. Like it's such a great way to scale quickly and learn your product and grow. But I think you're close. I think I, my, my read is like, figure out that unlock on how to scale the lures faster.

• 51:11Speaker 07

  Yeah, and I'll add too, our brand is like, we don't, we haven't paid a dime in advertising. Like, we don't, it's 100% organic, it's word of mouth, we use Instagram, that's kind of our like, growth engine, but it's all organic posting. So I feel like when, if I had a little bit of capital to work with, if I had more time, I could pour gas on this fire and I have a path there. It's just like, it's, it's a tough way to, you know, it's a tough way to jump into, it's scary, honestly.

• 51:44Speaker 01

  You have, you have two other co-founders, correct? Is that, I saw that on the website?

• 51:48Speaker 07

  Yes.

• 51:49Speaker 01

  Yeah, so, you know, Rashid and I, no, I went full-time first. I think we were doing in like the 400, 500,000 range, then Rashid didn't come on until we were doing like 20 million. So it was a big, like, big gap. It was like maybe a couple of years later.

• 52:01Speaker 07

  Yeah.

• 52:01Speaker 01

  But you could find, you could figure out like, you know, what works for you guys. Maybe, maybe one of you guys go full-time and the other two are just kind of, you know, work your other job and then play more of a support role. Um, or you maybe take, you know, it's like shift work or something like that, but this thing definitely needs full-time attention if you actually want it to scale.

• 52:20Speaker 00

  It's, I think that's great advice. I mean, I also think, you know, at the end of the day, you will know when it's time, right? Right now, you, you're sort of worried about, you mentioned, you don't want to eat ramen and, you know, you don't, you can't live on the salary and support a family. But when it starts to feel like doing this part-time is riskier, that's when you know. When, when you start to say to yourself, actually, it's safer for me to jump into this full-time, you will know that. That will be clear to you.

• 52:52Speaker 07

  Guy, you always have sage advice. I always, always hear that from you after, after these interviews, so.

• 52:59Speaker 00

  Well, it's an awesome opportunity because you've tapped into something. Clearly, there's a lot of passion around and, and, and, you know, there doesn't seem to be a lifestyle, a real lifestyle brand around small mouth, you know, bass. So it's, it's a, it's a cool idea and I, you know, I just, I, I think it, I think you could, you can really run with it. So, so good luck.

• 53:18Speaker 07

  Thank you, guys. I really appreciate you having me on.

• 53:21Speaker 00

  Yeah, Josh Shrenko, co-founder of A Chigan. Uh, good luck. Keep us posted.

• 53:26Speaker 01

  Thanks, Josh.

• 53:27Speaker 00

  Yeah, it's, I mean, it really like, it is amazing to me how there are all of these. And, you know, we, we hear about a lot on the show, these small communities, like these niche, what seem to be niche, but actually they're much bigger than people realize, right? Like, all these people who fish for a certain kind of fish, or who are interested in a very particular kind of watch, or, you know, golf club, or whatever it is. And people are building micro brands around these communities, which are becoming interesting businesses.

• 54:00Speaker 01

  Yeah, it's, it's awesome. And it's also interesting to kind of think through that nowadays with AI, the way it is, like, because a lot of them were talking about, like, how do I scale and how I build a team and all of these things. And this is something that Rashid and I, like, back in the day, we didn't have access to AI. It was all about getting strappy and using third parties. I wish I had better advice for them, because we don't even know, we don't even know how to use that. But I hear so many times people talking about one person running an entire organization using AI and automation, and it's amazing.

• 54:29Speaker 00

  Yeah, absolutely. Guys, before I let you go, if I, and I, Pete, actually, I think you answered this question last time we brought you on, maybe I'll have a different answer now, but I'll start with Rashid. If you could go back to when you guys started Chomps, and knowing what you know now about the business and how to, you know, and what you've learned, what would have been helpful for you to know, you know, 13 years ago, when you guys launched this, this brand?

• 54:53Speaker 02

  Huh, that's an interesting question. I mean, I think, I believe it's fortunate that we didn't know what we know now. I think, I think it is honestly, one of the reasons we're here today. Like, we had a lot of folks in our ear giving us advice, but we just did what felt right. I think I'm glad that we went a little bit blind and ignorant, and I think it allowed us to make the right decisions, to build it the way we built it. Yeah, I'm.

• 55:26Speaker 02

  We still have a lot more work to do, but I think we've built, we have a lot of momentum. We're in the right place in the right category with a fantastic product, a brand and team. So like, I don't know, I'm glad we went a bit ignorant and we didn't know what we didn't know. And I think it allowed us to get to where we are.

• 55:41Speaker 01

  Yeah, so I would say it's just being patient, right? With time and, you know, staying focused, things will work out essentially. We've been on this, we call it a chomp roller coaster because it's never just linear, right? We're just, we are either, you know, in having a terrible day or an amazing day and there's nothing in between.

• 56:02Speaker 01

  That's kind of been the entire ride since, for the past 13 years. So I would say, you know, it's being patient and working through issues, whether, and by the way, not getting complacent when things are going great and rosy because it's gonna, like challenges will come your way. So just be ready for it.

• 56:19Speaker 00

  Yeah. Pete Maldonado, Rashida Lee, uh, thanks so much for coming back on, guys.

• 56:23Speaker 02

  We appreciate it. Thanks for having us.

• 56:24Speaker 01

  Thanks, Guy. Appreciate it, man.

• 56:26Speaker 00

  Um, and by the way, if you guys haven't heard Pete and Rashid's original How I Built This episode, go back and check it out. It's a great, terrific episode. You will learn so much. We'll put a link to that in the show notes. And here's one of my favorite moments from that interview. What was your purchase order for?

• 56:41Speaker 01

  1.1 million sticks. And it was larger than the previous year altogether in a single PO.

• 56:48Speaker 00

  Wow.

• 56:49Speaker 02

  And I'm thinking how this is, I was like, this is not what we discussed. This is way more than what, what we had, we discussed. And so I was like, give me a second. So I like, I go in my room, I build my spreadsheet, I'm calculating the total, like what does it actually look like? So I'm like, Pete, we need, I don't know, it's like 1. something million to be able to fund this. And so we then had to figure out like, how are we going to get the money to even fill this PO?

• 57:15Speaker 00

  Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at 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 Love to try and help you solve them. You can send us a voice memo at [email protected] or call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you and we'll put all of this information in the podcast description as well. This episode was produced by Kerry Thompson with music composed by Ramtin Reblui.

• 57:59Speaker 00

  It was edited by John Isabella with engineering from Jimmy Keeley. Our production staff also includes Alex Chung, Elaine Coats, Niva Grant, Nora Gill, Casey Herman, Chris Messini, Katherine Seifer, and Ramel Wood. I'm Guy Raz and you've been listening to The Advice Line on How I Built This Lab.