Transcript

Advice Line with Hernan Lopez of Wondery

0:08 Hello and welcome to the advice line on how I built this lab. I'm Guy Roz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show. who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one minute message that tells us about your business and the issues or questions that you like help with. All right, let's get to it. Joining me today is Hernan Lopez, co-founder of the podcast network Wondery, which also distributes this show, How I Built This. Hernan, welcome back to the show. Thank you so much for having me again. So we first had you on the show back in twenty twenty three, uh and as always if you haven't heard that episode, it's a great story, it's really worth checking out. We'll put a link to it.

0:58 uh in the episode description. But basically the story is Hernan was a uh a T V executive and you left in twenty sixteen inspired by this new thing called podcasting to start a podcast network. You pitched it, you struggled with with investors to to get them on board. You almost ran out of cash, and then you had this really big hit in a show called Dirty John. And soon after

1:21 Uh Wondery became the target of of interest from acquirers and was eventually acquired by Amazon. And uh You're not part of it anymore, but uh that's I mean it's an amazing story of how you built this This brand into what it is today. Thank you. It was one of the most rewarding experiences my whole life to see it go from zero to one to see it. become part of Amazon and then to have the opportunity to advise other founders that

1:49 After I started wondering Have had so many different versions of the challenges and opportunities that every founder has. And this is one of the reasons why I love your show. Uh, was a fan well before we became part of Wandry and I'm Still a huge fan. Thank you, Ernest. Um you know, we talked about this in the show and you ran into some challenges. You were

2:10 Well, just how do I put it in in any other way? You were indicted by the U S government. Uh the Justice Department had an investigation into bribery around Yeah, World Cup soccer and television rights and you've been an executive at Fox Sports and you were implicated in this This took up Five or six years of your life. I'm I I won't go into all the details of the story, you can hear our conversation, but basically

2:32 You were first convicted and then acquitted and then convicted again and then acquitted and then the charges were eventually finally dropped in twenty twenty five, uh, and you were vindicated. You were basically Cleared of this like long six year nightmare of of trying to prove that you were not Guilty. You were not involved in this.

2:53 How does it feel now?'Cause it's just happened at the end of twenty twenty five. How does it feel to have that weight off your shoulders? It feels great in many respects to be able to tell people what I've been saying from day one, not to the people who knew me, because everybody who knew me understood that this was a false accusation that stem from the actions of a former joint venture partner who himself was a one paying off uh soccer officials for his own benefit and when he got caught he falsely implicated me.

3:23 But he does Feel Um like a relief. to really have the the legal case behind me and and be able But

3:33 I'll tell you, guy, what I learned through the process is that I used to be Like most People very quick to judge, I'm very quick to think that prosecutors always get it right though they're good guys and when they go after someone they must know.

3:47 Yeah. And I think a lot of us do just our natural instinct. But when you went through it yourself, you realize that actually That's not right at all. Uh They they get it wrong. They have it wrong.

3:58 to convince a jury of something that really w didn't happen. But um That will be for another podcast episode.

4:11 And I know a lot of people as you can we've talked about this before, a lot of people will approach me and ask me for advice on on starting a podcast and a lot of people have different views of what this industry is and how successful they can be and and and there's a lot of talk about all this Money and podcasting and and Yeah, I don't think people most people don't realize is that it it's a very small number of

4:33 Podcasters and shows that actually You know. primarily do this for their their main as their main source of income. What's your take on I mean, podcasting is growing, more people are listening to it. How do you sort of see this industry spinning out over the next five years? I've been asked this question and I can't answer it because I think the X factor's artificial intelligence and is not clear to me.

4:57 What How that's going to A fact. this industry. What what what's your take? I think we're going to see

5:04 A nu wave of growth. driven by the video players, the streamers. Netflix just launched a collection of podcasts. So did Tuby. Pulu made an announcement recently. You're going to see more of the video Players.

5:21 dig deeper into the podcast space. And that will create more awareness. YouTube most famously has being the number one platform for video consumption of podcasts and Um they had a um

5:34 data point of seven hundred. million viewing hours per month uh going to be a podcast. I don't see AI as a threat to the podcast creating community. I think AI will be used as a tool. to uh help everybody

5:51 produce better output to save time and to improve their marketing. Um Uh materials. And ultimately. The people who are afraid that AI is going to create

6:05 And influx of so many low quality and and uh cheap alternatives to actual real voices. I think what they're not seeing is that in that environment, if that environment does happen the value of a connection, the value of being a guy rash, the the value of um being uh Steve Barlett.

6:23 Only goes up. Um Consumers are going to gravitate. Towards the voices that they trust. Mm-hmm.

6:31 in this environment uh trust. It's worth more than ever. Yeah, well I h I certainly hope so, for one. Um, and on w what do you say, let's take our first call. Yes, please.

6:42 All right, uh hello caller, welcome to the advice line you're on with Hernan Lopez, founder of Wondery. Tell us your name, where you're calling from, and just a little bit about your business. Hi there. Uh my name is Heather Sloan. I'm one of the co-founders of Healy Medical. Healy makes products like kinesology tapes and patches infused with natural ingredients with a core focus around magnesium. Got it. Okay, Heather, welcome to the show. Thanks for calling. Okay, so just explain. These are tape that you would use how? Like this is tape for what? Kinesiology tape, so you'll use it for support. It's an elastic bandage that can wrap around your joints and allow you to go through a full range of motion while you're

7:21 Walking, doing athletics, or even just recovering and resting. For like pain relief. And I've never worn this before. And I mean I exercise and I run, I do all these things, but I've never used sports tape. I see people using it. Somebody might put it on their o you know, on their knee or something. What does it do? So traditional kinesesiology tape is there to support the joint while you go through natural range of motion and movement.

7:45 So uh our tape is infused with magnesium and menthol. So prior to our invention, you were not able to use anything for pain relief because any creams or similar types of pain lotions would loosen the adhesive. So we wanted to solve that and we were as healthcare practitioners very, very fond of magnesium and menthol and learned lots about the combination and infused it inside the tape. Cool. So it allows for pain relief, recovery, support, and style all in one option. Cool. All right. Exciting. All right. How tell me a little bit about When was a business launched and and uh and how it's doing?

8:24 Great. Yeah. Uh so we uh created our first invention, which was this infused kinesiology tape through COVID in twenty twenty and launched twenty twenty one August. And within weeks we actually won an award at a trade show, which was virtual. And that pretty much launched us immediately into big box. So we went right into C V S and Vitamin Shop. Wow. And so now you are and and is that your main sales channel in in stores? Yeah, that is our only st sales channel right now. So we're in twenty six thousand store doors across North America. Wow. So w tell me a little bit about your your sales r uh w how'd you guys do? Yeah, this year we're on track to do about ten million. Wow. So you're really growing really, really fast. Okay.

9:07 Uh you're certainly bigger than ninety five percent of the startups that come onto this show, but still obviously a small business. And uh clearly you've seen some traction. Tell uh tell us what your question is before we dive in further. Yeah, so as we're launching new products this year, we're moving into the infused patch space. Uh so Cunmar and women's wellness, headaches, and we're trying to build a community around it and drive people to our website and roll out our D to C arm, which we have not done yet. But we're also mindful of not spreading ourselves too thin or burning out our existing fan base. So from your experience, uh, for both of you guys, Hernan and Guy, I'd love to know how do you think about balancing both? Uh, is our current pond big enough to grow the D D C arm?

9:49 While we're still supporting our retail. And I guess if we go for it, what's the fastest way to build a bigger and engaged fan base to support this mission? Okay, so right now most of virtually all of your sales are in stores, retail, and now you're you're sort of wondering Yeah, how do we push into D D C and and should we and and so on. Okay. And I want to bring you in any thoughts or f questions first of all

10:10 For Heather. First, my daughter needs to try your product because she was being taped yesterday for back pain. She plays soccer at school. And she's been complaining about my pain over the last few days, so I would a hundred percent run to your website and buy it if I can buy it. Um are have you raised money from venture capital any kind of outside financing? We we did a very small pre seed.

10:33 The rest of it is mostly funded ourselves. That dies. Great news. The only reason why I asked um that question is that The path towards expanding into DTC usually requires you

10:47 to be able to Have access to capital. once you have proved that the unit economics Can work. How many of your products today

10:57 or repeatable purchases. versus um one offs. Because I I assume in any tape that deals with pain. is something that you buy only when you have pain. But other products I isn't that your

11:13 Um Creating. could have the potential for repeatable purchases. Yeah, I think we would say all our products are what we call consumable. So that people would buy them on a repeat order because you could use it as a prevention or a support or a recovery tool. Whether it's the tape or whether it's the patches.

11:31 So I would say that Establishing a direct connection with consumers. So that you can build A lifetime value model. Is

11:41 crucial to getting DTC right. A lot of the brands that want to go into DTC and find that acquiring customers is one of the most expensive and complex parts of the business. But

11:56 They only have a one off or um purchases that are not frequent. find that the unit economics don't work. But when you have a product that people renew on a monthly cadence then you can estimate the total margin that you have or your lifetime.

12:14 And divided by the customer acquisition cost. Uh and therefore most typically when you're at a three to one And you you being able to prove that to your investors. you're going to be able to raise money from investors in your next round.

12:29 to fund a much faster expansion that will allow you to acquire customers more quickly. Interesting. Yeah. Heather, a couple of quick questions. Have you had any acquisition offers or anybody coming in sort of

12:42 You wanna sell? Yeah, we've had a lot uh so far come at us. I think our goal was to launch our new uh products, which are like period pain patches and headache patches, and really differentiate ourselves before we entertain those. Maybe next year. That's smart. Not as smart. Yeah. I mean you're still small, so you you're you're early in in your roadmap, right? So

13:02 you you don't want to sell just'cause someone's calling. Another thing that I wonder about is is and and on alluded to this was cust custom acquisition costs, right? When it comes to D D C They're high. Right, you gotta spend uh fifty, sixty, seventy, eighty dollars uh for a acquisition.

13:19 But what's interesting about your product is you are already In you said twenty six thousand stores? That's correct. In North America? Yeah. And are you

13:29 I mean your packaging is like could be your That's really where you can acquire these customers, right? Because it's a billboard. I mean you're in the stores already. You've got Ad space now. Can you put a a Q R code on your package as a scan here for fifteen percent off your next order or scan here to join the community and then sort of move people to the website. Right. That's a good idea, actually. Thank you. That's a really good idea to consider bringing them into the community through the box.

13:56 I I anyway, I was just I was just spitballing here, but you know. It's great, because the D to C side the m and on the margins are gonna be higher. Well it's not only the margins, it's the the lifetime connection with the customers, right? The ability to to essentially own those w which, by the way, if you do entertain later on an acquisition offer for the company, they're going to value that list at a much higher multiple than your retail sales because the retail sales They will always in the back of their head. Think that they are

14:24 um more constrained they're more subject to competition, whereas drug cells. typically are much more yours. Yeah. And you you talked a lot about the acquisition side. You know, do you guys have any feelings around when the right time is and how you know as a brand?

14:41 This one's for you, Ernest. I have thoughts, which is you're too early. But um you know, again, if someone's coming in and they're saying, Hey, ten million with your EBITDA, and they're gonna offer you boatload of cash. You know, it's up to you. But Ernest, you've been through this. What do you think? I don't think it is too early at all. I think you're at the right time because you don't need to be offering a whole catalogue in order to um to be able to have a direct relationship with your consumers. In fact there are um people if you look at hims and hers, right, when they started, they had one product.

15:12 and they're really zeroed in on that one product that they sold. Before they expanded to be A multiple uh category uh brand. Um

15:22 And How How how um big is your social media presence, your Instagram and TikTok in particular? It's still growing. I would I would say we're pretty small still. I you'll find them that those are probably the channels that convert the most. Yeah.

15:39 Um and it's really difficult to do only organically, right? You always going to have to have a combination of uh organic and and advertising, but I s I think that that's where your consumers are going to be. And And um I would encourage you, when are you going to launch the Apeer patch?

15:56 Yeah, both the period patches and the headache patches will go into the big box stores. Around May. Okay, and so there's no reason to wait too long before you put them at the center of your DTC offering because those sound exactly Like the products that

16:15 Consumers will definitely think they need to buy um frequently and investors will be nearly associated. with a product that has repeatable purchases and that can model a customer lifetime value that

16:29 will allow you to raise money um when you go to market next. One one quick last thought about the acquisition side. Um what we've seen, you know, over seven six, seven hundred interviews on the show. Із офтенс Um I I don't want to say smart, but lucky.

16:46 Found. can take multiple bites of the apple. Right. You can you can sell A chunk of your business once Uh and then oftentimes that a qu that sort of

16:56 owner or m let's say they're a majority owner will sell it again and then you get another bite of the apple and then occasionally they'll take it public and then you get a third bite of the apple. And we've seen that with brands like Solo Stove. They got they got three bites of the apple and actually made their most money when it went public even though you know, they had the smallest ownership share at that point. So I would I would r strongly advise you to try and retain Some significant shares if if an acquirer comes calling. Okay.

17:27 Amazing. Well, thank you so much. Huge, huge fan and beyond grateful to have this opportunity to meet you both and be on the show. Thank you. Awesome product. Congrats. Thank you. What an amazing story. Ten million dollars. Heather Sloan, the brand is called Healy Medical. Thanks for calling in. Thank you. Our relations. Yeah, I mean I would think that, you know

17:46 And you know this having worked with Amazon and on, like a a product like this, right, you wanna find and especially if it comes to getting acquired, you want to find a big brand, like a Unilever, right? Like somebody who really has experience in These channels who can really uh bring incredible value, not just selling it to like a uh you know, some random private equity. Although, you know, that that could be interesting too.

18:10 Then sometimes those private equity firms are ultimately the ones who then sell to an earlier when they do aggregation um of multiple um products in the similar category. I think that she should definitely study What both uh Hemes and Hers think. between companies did because I I can see the roadmap being very parallel. to what they built in the direct to consumer health space.

18:31 All right, we're gonna take a quick break, but we'll be right back with another collar and another round of advice. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Hernan Lopez, founder of Wondery, and we're taking your calls and Hernan, are you ready for for another call? Ready. All right, let's bring our next caller. Welcome to the advice line you're on with Ernest Lopez, founder of Wonder Eight. Tell us your name, where you're calling from, and a little bit about your business. Hi guy, hello Hernan. My name is Noal Audi calling from Detroit, Michigan. I am the founder of Studius Monday, where I built a reliable school uniform making system for Muslim families and schools. Awesome, welcome to the show, Noel. Um, so tell me about so these are uniforms, school uniforms that you're selling?

19:37 So uh they're modest school uniforms designed for the hijab between, you know, the nine to seventeen year old girl who wears the hijab. There was a gap in the market, uh, you know, experienced by myself as a mom who has a daughter and also sons. that go to muslim schools and um There were no school uniforms, uh, for them. Um, it was more about layering and creating and Altering and so

20:06 I decided to create something for them. That's great. That's cool.'Cause school uniforms are are awesome. I mean it it basically it it at levels the playing field, right?'Cause no one is sort of bragging about their, you know Streetwear. brands and their expensive whatever's they're all wearing the same thing. Tell me a little bit about w about the business. How is it I I'm assuming you're selling this mainly locally in around Michigan where you are based?

20:31 Yep, exactly. So um so we are selling direct to consumer through the schools. So the schools are like hey, this is the school uniform for the year. You need to buy this. And um that's that's how we get our customers. Um, so I went from one school last year to four schools this upcoming back to school season. Mm.

20:53 And where are you manufacturing clothing? Are you are are you designing it, by the way? I am designing it. Uh I I manufactured it. It's been quite inspiring for me. Um, you know, as a daughter of immigrants, as well as like my children to To reconcile identity and clothing and fashion. And

21:13 You know, manufacturing in the United States has been Super rewarding. Yeah, for sure. Um It tell me a little bit about your sales. How you doing? How's the business doing?

21:22 So yeah, our sales last year uh was seventy five thousand. Alright. В фон скул, абі я фо скулс. So we're hoping to reach about Two hundred and fifty thousand dollars this upcoming back to school season.

21:37 Awesome. Um, and before we get into this further, tell us tell us your question. So my hesitation has been around Preserving the trust that I've built. um under the name Studius Monday, but many of the families I serve struggle to pronounce it. Many of my families are emigrant family.

21:58 And I And I don't know whether to keep growing the name or transition to something simpler or more accessible. So the question to you're talking about literally the name of your brand. My company name. Yep. Studius Monday. Yeah, Stud. Studios Monday. Yeah, Study Us. Yeah. And uh and so that's this is sort of what you're grappling with. All right, Ernest, I want to bring you in first of all, thoughts or questions.

22:21 uh for in a while. First of all, congratulations. Starting a business, uh serving a community that you love and a very clear Um consumer need is one of the most rewarding parts of being an entrepreneur and and I want to ask you how did you come up with a name? What does a name mean to you?

22:42 So I was thinking about the girl. I was thinking about her and the kind of uh characteristics she would carry Um, and ultimately she is studious and she loves to wake up on Monday mornings and get dressed and go to school. So I put those two words together and I created this name and it became kind of like a verb. Like You know, have a studious Monday.

23:05 kind of thing or you know, there was like a play on it, like between me and my friends, we played around with it and we're like, Okay, we're just gonna call it this. I would uh say I I thought a lot. When I started wondering about the brand name and what it signifies and how People will

23:25 Perceive the name and Wonder uh was the factory of wonder and When I told people that's what it was. Said, Oh, that makes sense and have

23:37 said, oh I did not appreciate that that's what it was. Um but It really was a name that connected The product um in a very emotional

23:49 level with what the consumers were experiencing. Um, I had a number of um bright lines for the brand and one of them was I want to know more than four syllables. And that's advice that I've heard I don't know from whom the the first time Um But I when when he told me Studios Monday

24:08 The first thing that I heard. in the back of my head was maybe that's One syllable too many. And uh and and any brand name that needs explaining

24:20 um k put another barrier between you and the consumer. That you don't necessarily want. So so yeah, that's before you got into the fact that Some of your families have trouble pronouncing it, some of your clients. Oh.

24:34 So if you're going to uh change the brand, I think now is the time to do it. So when when the brand is is young. Um and I'll give you A book to read. It's called Hello, my name is Awesome. I think Alexandra

24:50 Watkins is the author and actually after reading the book, that was the book that led me to Come up with a brand wonder. I've given it to so many entrepreneurs. Thank you, that's so helpful. Thank you. So Nawal, I I'm curious, what is

25:07 When you sort of look out five years from now, what is the kind of the vision that you have? for this for this company. My vision is to be in every single Muslim school across the nation. So I'm down and down the road, of course, you're gonna have to outsource manufacturing and and build a sales team and and and things like that. Um you know g in terms of the name, I mean

25:30 I have a slightly different I don't think it's a big deal, either way. I think Study Us or Studius is kinda cool, but Um, you know, have you thought about maybe integrating the word somehow like modest not exactly that word, but the idea or maybe like You know, modest Lee or some something like that in the name. There's two areas of a contention with me right now. Like do I play into this trend of like modest fashion right now, you know, and

25:59 Incorporate modest into you know the brand name Or Or do I just let The clothes speak for themselves.

26:10 where people see it and know that it's modest without me actually saying it. Yeah. Uh, interesting. I mean I I I think it could uh my view, and I might have a different view, my view is It's worth sort of building that in to the brand. Right. Sure.

26:27 The only limitation If if you feel in the future you would expand so far of that brand. That they w it will be limiting, that will be the only reason Not to do it. Right. I mean is there a chance you may make immodest clothing?

26:42 One day. Probably not. Probably not. Probably not. So today you do uniforms only for girls, um, but yeah, I can imagine that the parents have girls and boys. Yeah, no, fair question. Um, so that's what it was. It started off at girl as girls first, and then when I went to the schools, the schools are like

27:03 Well, you know, I I don't want my family going to two different shops. Two different places. Yeah, two different places. So I incorporated Boys wear. Into our collection. And made it like a Muslim family thing. But I mean, yeah, those are all definitely things to consider, you know? I mean again it's you know, we've had brands in the show like Parachute Home. I mean

27:26 Parachute home is a big business, but it has nothing to do with parachutes, right? It's done very well. So we've had a lot of brands on the show that not aren't necessarily Worby Parker. What does it have to do with glasses? It's a great name, though. Yeah. Um and so Tom's shoes, you know, I'm just I'm spitballing. But I I think that there you could Uh you could experiment with different names.

27:50 You know, so to okay, so who do I test this on? Like where do I go to get this tested? Like are there tools, are there resources? Or are is there like uh are there circles or spaces? Where I could like Like you said, play around with this, you know, with a a a brand name, you know, and and then trademarking it, but like who and where? I would just talk to the people that that you know who are your potential customers. I mean that I don't think you need focus groups or and and frankly I don't always trust focus groups. And I'm sure you went through focus groups on some of your shows where the people hated it and then the show was a hit.

28:24 So, um I know that happened with this show. I we did not actually We we didn't test we what we did do were internal listening sessions to edit, but not focus groups with potential uh listeners. Uh but um The book that I recommended has some resources about how to think about it.

28:42 And that book was written before L M, so Definitely as you're ideating. Talk to Chat TP T and to Claude. Um, they will be great at giving you direction into how a consumer would respond. They're actually tools

28:57 That do something called synthetic research. Where you can Higher. synthetic focus groups and and they act quickly they pretend to be people.

29:08 And they give you answers that rate the brands that you give them from one to ten and they tell you why they respond and not respond to. Yeah. Wow. Okay, wow. That's awes awesome advice. Noel, thank you so much for calling in.

29:21 The brand is called for now Studious or study us Monday. Uh good luck. Keep us posted. Thank you such a pleasure. Thank you. Um yeah, I mean it's it's a

29:32 I'm conflicted over this idea of names because we do, you know, we have had major brands That have Stupid names. And and even the founders admit they have stupid names, but they become multi billion dollar companies. But they had to

29:47 do so much more work at the beginning of their Journeys. to get people to remember what they are and Yeah. Yeah, well they that's true. But I mean there are th again, you know, there are all kinds of

30:02 Names that you just You can imagine people would say Mm, I don't know, you know. What does that s tell me about this product or this this thing and And they did just fine.

30:14 You know, just fine. Apple. Right? Is Apple a logical name for uh Apple's a computer company? Right. I makes no sense. It's the what one of the biggest companies in the world. Uh, so there you go. Okay, next up after the break, another collar with another business challenge.

30:32 I'm Guy Raz, and we're answering your business questions right here. the advice line. on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking your call with Arnon Lopez, founder of Wondery, and let's bring in our next caller. Hello.

31:06 Hi folks, uh my name is Casey O'Leary. I'm the co-founder and CEO of the Snake River Seed Cooperative, which is headquartered in Boise, Idaho. Uh we are a worker and farmer owned co-op where we grow a wide variety of garden seeds. We put those into packets and we sell them on our website and in around eighty Uh other stores in the inner mountain west. Nice. Welcome to the show, Casey. So um it's a cooperative, so uh can you kind of explain how the br briefly how the how works? We are a seed company and we are co owned.

31:37 by a bunch of different farmers. And also by the employees that work for the company. So there's uh so it's a legal cooperative. Uh we have what we call it the seed rodeo and f uh basically farmers sign up for stewardship of different seed crops and every time we need to grow them out, one of the farmers Uh grows them out. And harvest the seeds as well. Yep, they harvest the seeds, they clean the seeds and all that, and then when they come into the co-op. We germination test them, we put them into packets, and then we distribute them through Our ships.

32:07 And tell me about where you sell your seeds. Yeah, we sell them we have our we have a web store and we sell them on our web store and then we also sell them um We're in about eighty. Different Retailers around the inner mountain west region, so garden centers, hardware stores.

32:24 uh natural food grocery stores Stuff like that. And tell me a little bit about your sales. How'd you guys do how how how are you doing? Um, yeah, we're about four hundred thousand a year in sales.

32:36 It's pretty good. And and is that four hundred thousand dollars in sales, does that cover all your costs? Is that Pays salaries and everything. It does. I mean seeds are Yeah, it does. Barely. Ha ha

32:48 All right, before we dive in further, what is your challenge that you're You'd like some help with. Yeah, I mean I think this gets at it. I you know, seeds are cheap, generally speaking, right? I mean this isn't this is a we're competing with a a multinational industry. Right. You can go into Home Depot and buy it. fifteen cent or whatever, a dollar. Yeah. Exactly. Exactly, right? And these are kind of I don't know, I mean I don't want to say garbage seeds, but they are. They're not being stewarded with care. They're not And the people who are growing them are not making a living wage. Yeah.

33:21 But you know, margins are tight, like you said, I mean This four hundred thousand dollars is coming from selling something that's, you know, somewhere between two seventy nine and four seventy nine a packet. Right. Um, so we struggle to cash flow. Um so my question for you all is I'm try

33:39 There's a huge, tremendous public benefit to having a regionally adapted seed supply. And we do a good job of telling that story in our bioregion. Um, my question is how can we leverage that Public benefit In Creative ways.

33:54 That could increase our revenue. Right. Okay. So I think if I'm reading between the lines is how can what are the things we can do to generate more cash for the business is a great question. And I want to bring you in here. Um What do you think? First of all, congratulations on what you guys do. It's it's incredible that to to hear a story of people who are

34:15 Creating a product. Nationally, I mean the cooperative model that um are getting through and competing against industrialized companies that really all the care is is the volume I'm I'm margin.

34:30 Uh Of the four hundred thousand dollars today, how much uh is sold directly versus uh through retailers? It's about forty percent of our sales come from our web store and sixty percent are through our wholesale program. Oh, it's so significant already. And it's I would think that you want to build that sells through your website.

34:50 to the highest level that you can because the retailers by and large, they're always going to Make you compete. with other alternatives that they have and you want to move your product away from the price sensitivity customers.

35:08 into the storytelling and passion and purpose clients. Yeah. Yeah. And I think, you know, I think another thing that we bring to the table is We have this skill set and this knowledge that people want. Mm-hmm.

35:21 And so we've gotten grant money to teach classes about how to grow seeds and how to save seeds and Um so we've done a lot of the educational kinds of stuff, but we've mostly done that through getting grants and then offering that education for free to the public. And so, you know, in some ways I feel like

35:41 Part of what we might be able to leverage is this Yeah. being able to connect people somehow with this skill set that they want to learn about. You know.

35:53 I I I mean, look, grants, as you I'm sure would agree, are not a business model, right? I mean they're great, but but you have to run a sustainable business. And I There there could be a world here. Right. Where essentially Casey, you and and your

36:10 are essentially also consultants you are charging per hour To Help people figure out where to plant things, how to plant things. Maybe even working with sort of you know, creating a part of your business and you may not like this idea, but it could be really interesting where you sort of identify high net worth folks in Boise who really want to have awesome things in their garden. I think that there could be an interesting opportunity with

36:38 With sort of creating classes that cost money or or some consulting as well. And r and really Going deeper. with your best customers, you know. Uh some some I mean, d are you guys doing subscriptions or anything? Are any or have you tried

36:56 Experimenting with that? Yeah, we do a seed of the month club. Oh, nice. So people can sign up and they get um a seed every month with a little newsletter about that particular variety that comes in the mail. And how many customers do you have on that seal of the month? Almost two hundred now. Okay. So

37:12 Actually the advice um um A guy that I thought you were going to go was in another direction, which is to use the experts as Influencers in a way. Think of them, yeah, especially if each of them is tied to one specific seat and it's the The expert in that seed.

37:32 give them each one series of Vertical videos, um I am saying vertical because that's how people now experience Um entertainment and education on mobile. And and I'm talking about

37:47 Videos are short in nature, no more than three minutes. as short as thirty seconds. And by having a unified look and storytelling narrative and a way in which all then speak about

38:02 their association with that specific seed. And you can since we start to build a community of people who Come for the passion of uh learning how to plant seeds and eventually realize that

38:16 They're never going to do it on their own. So they're probably going to end up buying them from you directly on your website. Your retail market is most likely capped. your direct to consumer market. will allow you to essentially grow into a direction where all you need to do is find more customers. That will

38:34 price sensitive and will develop a relationship with you Um that is passion based and not utility base, if that makes sense.

38:45 I love that. I love that because yes, it's it Sometimes it seems like, you know, four four dollars and seventy nine cents for a packet of seeds, you know, compared to what you might be able to buy on the shelf at Home Depot. But when you think about what is inside of that packet of seeds, I mean, it's so much value in there. And so yeah, finding the folks who really understand Why it's important to have people in a region Be skilled up.

39:11 to do this work and do it for the long term and be supported well to do it. Um I think you're right. Those are our those are our people. Yeah, you know, there's a a and especially because When you're explaining that and and your passion is clear, I mean I'm sold here, but now you've gotta you've gotta get that the the word out. There's a a a brand of

39:32 Beans. Heirloom beans, I I believe they're based here in California, called Rancho Gordo. And they distribute around the country. There's like a waiting list to actually to get in their subscription of the month club or whatever it's called. They sell beans, right? You can go to Safeway And buy pinto beans or lima beans or g you know chickpeas. Um but they

39:53 You know, they're they sell these heirloom varieties and and they grow them in a way that they claim and they argue that they taste better. I've had'em, they're great. they have done really, really well. And it's an interesting case study to look at. I would really um uh urge you to look at h what they're doing at Rancho Gordo and see if you can sort of apply some of those Those you know, those ideas.

40:16 Yeah. Bean club, I think I know several people who are involved in their bean club. Yeah. Yeah. Good luck to you, Casey. It uh the business is called the Snake River Seed. Cooperative in Idaho. Thanks for calling in. Thank you so much.

40:29 Congrats. Well and It's been awesome to have you on. And you know, I I I should mention, I mean, you do a lot of this. You're an investor and you work with all kinds of entrepreneurs. I mean, you are because of your expertise in media, you of course do a lot of consulting with with major companies around media, but you also do a lot of this sort of formal and informal advising. I I do um I I invest primarily through funds. I don't invest in companies uh directly. The funds are better at doing that than than I am. It it's really a full time job, but

41:02 I always love talking to entrepreneurs about their challenges and their opportunities and Um In All of the companies that we talked that all the founders that we talk to uh today.

41:14 Uh narrative is a big part of how They get the product. away from that competitive margin base, utility base. Um um yeah, rut. into a place where that can really build enterprise value.

41:30 I don't know. question for you. If there was something that you now know, right, that you that would have been helpful for you when you were launching Wondering and you know, when you're thinking about this in twenty fifteen, what advice could you have given yourself? Back then. If if you go back in time. I wish I had started sooner. Obviously not that idea because Wonder was very timely.

41:51 But I wish I'd started as an entrepreneur. Sooner. Most people Take too long to Make the leap. Um

42:00 For a number of reasons, it's really difficult to go from zero to one. Um, but it the the journey's so rewarding and Once you've uh got to the conviction that you want to Come up with an idea. And turning into a product, it's really difficult.

42:17 to go back to uh wanting to not not be an entrepreneur. Yeah, for sure. Well um And um, thank you so much for coming back onto the show. Thank you for having me, it was so great to reconnect. It's great having you on. Uh and if you missed Ernon's episode or you haven't heard it yet, we'll put a link to it.

42:36 In the show notes it's a really, really good story, and here is one of my favorite moments from that interview. I remember looking at the At The P L statement by the end of that month.

42:48 And we had maybe ten thousand dollars in revenue. Mm. And you had a staff of six. We had a stop of six. And ten thousand bucks ain't gonna cover those costs. Uh no.

42:59 No, they wasn't. Uh Like even if we get to ten times this. A hundred times this is not going to be a Big.

43:08 Scale that I thought that that he would. And I remember thinking, oh my God. What do I do?

43:18 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 guyaz.com or on Substack. And of course, if you are working on a business and you'd like to be on the show, send us a one minute message. That tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them. You can send us a voice memo at hibt at id.wondery.com or call us at 1800-433-1298. 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 Catherine Seifer with music composed by Ramtina Rablui. It was edited by John Isabella and our audio engineer with Quasey Lee.

44:07 Our production staff also includes Alex Chung, Elaine Coates, Nor Gill, Diva Grant, Casey Herman, Chris Massini, Sam Paulson, Carrie Thompson, and Ramel Wood. I'm Guy Raz, and you've been listening to the advice line. on how I built this lab.