Advice Line with Carlton Calvin of Razor

0:00 This episode of How I Built This is presented by Engine, the modern travel and spend platform built for businesses that are growing. Book faster, save more, and watch your rewards stack up. Stay tuned later in the episode to hear how Engine is helping thousands of businesses travel smarter. Hello, and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call, and you just might be the next guest on the show. Our number is 1-800-100-100-100 433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it. This week I'm joined by Carlton Calvin. He's the founder and CEO of Razor USA. You've probably seen a Razor scooter, maybe you've owned one, or bought one for your kids. Carlton built Razor into a hugely successful company, turning an

1:10 Overnight craze into a classic toy. Carlton, it is great to have you back on the show. I love being here. I would love having you. Well, so you were first on the show uh back in September of twenty twenty five. And as always to anyone listening, if you haven't heard that episode, we'll put a link to it in the show notes. Really great story. Um and I have to say you as as you will hear in the story, Carlton has this

1:30 uncanny way of knowing what kids want even before it happens, um, including how about two decades ago you caught wind of a of this sleek, collapsible aluminum scooter was trending in Japan. You saw the potential immediately, you reached out to a factory that was making them, you locked down the exclusive US rights, and then You brought them to the US and before long it was a massive crazy cu you were selling a million units at at one point every single month. It makes me wonder, Carlton, I mean obviously. trends have changed and it's not a million units a month, and and the technology has changed. You also have electric scooters and electric bikes and so many of the products you sell, but Um, do people still buy the

2:11 o standard aluminum collapsible scooters? Absolutely. I think it's our still our largest selling item by volume. So m you know. Close to a million units a year, I would say. Um I know we talked about this when you were on the show about like succession. I you own this company. This is your company, right? Yeah, with partners. With partners. I mean it's a privately owner, I should say, yeah. Yes. But uh you know, you do a bunch of other things I that we didn't really talk about on the show. You you're interested in art and and you support different initiatives, um

2:44 W what do you sort of see your role in Razor. I I mean do you At some point Focus on

2:53 the other things that you're interested in or are too absolutely am trying to do that. Yes one hundred percent. Yeah. But this one part of it, I've got amazing uh people that work for me that are super Capable, but this Weird Talent that I have for the new product, that's very, very hard to

3:15 Find a new person. Yeah. uh you know, I'm getting on in my years and I am trying to Institutionalize it, razor, my trend seeking abilities. I am actively trying to see if I can figure out. А та кіч піпо. I'm kind of a fun analytic person and I'm trying to analyze and see if I can come up with like an algorithm for it in some way.

3:37 In a sense, right, what you're saying is you have developed this instinct. Well you have an instinct, but you've you've honed it over the years. Cause you picked some losers. It's normal. We all have, right? But you've picked a lot of winners. And In a world where there's lots of people out there in this space looking for the next winner. It's gotta be like almost like

3:58 the analogy I think of is like Going to the beach with a metal detector. You know, and and you're just it's like bottle cap, bottle cap, bottle cap, bottle cap for hours and hours. And then maybe you you you know, you get a quarter. And then if you're really lucky, you get a silver dollar, like once every month. Is looking for the next big toy kinda like that? It depends how

4:17 energetic you are. And I think that What's been very satisfying to me. is that in going trying to develop this algorithm, I'm exercising that

4:28 Uh organ. Much more aggressively than I have been in the last several years. I think for many years I was

4:37 Even I might say passive. Just like I don't have to go out and look. I'll just spot it when it comes. And it did. You know, it always came through for me, but now in the process of trying to make this transition. And I'm seeing a lot more opportunity. I think if you're really out there looking, you can see more. But it is

4:55 rare the things that really shift the culture are rare. But if you keep your eyes open, there's more than you would ordinarily think. Um uh one that's probably people already No just burst like maybe Two months ago is hacky sacks are coming back in a huge way. Huh. And Razor already has hacky sacks in the s you know, in the stores start shipping this week. I mean, we move very quickly.

5:21 to hop on that trend. But I've got many more on my plate right now. Carlton, I'm curious about and earlier this year you won a patent infringement case against some uh competitors who've been copycats of one of your products at the the hoverboard, I think. And um so you won that. And I you know, from uh the outside perspective you hear, oh, they won and you'd assume, oh, you got a bunch of money and whatever, but actually it can be a mixed bag, right? I mean it costs a lot of money, it t a lot of time. And in the end, it may or may not resolve the problem. How how has that been for you?

5:55 I think that's a deep insight. I think I've learned a lot pursuing patents over the years. Um I think they're most helpful for a inventor.

6:06 Going after a big company. Or big companies battling each other. My biggest challenge is We want our patent lawsuit that helps me clean up the market.

6:16 But actually getting all those damages They're they're very small. Copycats. So there's no assets. They don't actually have much money. No, there's no deep pockets at all. So It costs millions and millions of dollars to do a patent case. And then you get nothing except

6:32 helping to clean up the market. It's very, very challenging. It's kinda demoralizing when you think about it,'cause it's like the system and the courts work so slowly. I mean they I guess by by nature, by definition, they have to. But it it really does disincentivize

6:47 brands from protecting their products and just I guess many brands are say, you know what, we're just gonna focus on brand. the brand rather than trying to go after these copycasts'cause it'd be a waste of our time. That's exactly right. I just think that the copycats are j again, just to the point, they're so thin that there's It I mean the patents have some functions like in drugs or you know big where you have big deep pop good people to sue.

7:11 So you gotta focus on the brand and you gotta be you gotta focus on being quick. And delivering a good product. Yeah. Yeah. Um, Carlton, we've got callers waiting.

7:20 Online for your wise advice. So uh you ready to take our first call? Sure. All right, let's bring in our first caller. You are on the line with Carlton Calvin. The founder of Razor. Uh please tell us your name and where you're calling from and a little bit about your business.

7:36 Hi Guy. Hi Carlton. Uh thanks for having me. My name's Sean Barassa. I'm calling from Saskatoon, Saskatchewan, Canada. Wow. And I'm calling about a party game that I created called Ugye. Uh so the premise is everyone playing is at a funeral. And the game helps you create the character you're there to mourn the loss up. And then the winning player gets to pick who's gonna perform the eulogy for the character you just made.

8:01 Wow, this sounds depressing, but I don't I think it m I might be wrong. I think it this might actually be f more of a funny game, right? I would be surprised if Uh, based on the layout of the game, if anyone could make it uh a serious game like sorry, it's a serious subject, but the game itself just usually gets ridiculous. So In round one you pull a portrait and it's kinda like Cartine humanity game well, so

8:24 Each uh player takes a turn being the judge. Yeah. Round one, they flip a portrait and everyone else writes a name down that they think goes with that portrait. Uh put'em into the game box and then they'll read one out. The judge picks their favorite name. Now we've named the character whose screen we're at. The rest of the rounds are all different life stages, so birth and toddler, school age, young adult career, family life, old age and death.

8:48 So you bring them to life through all these different rounds in that same format, you write the answers and then uh you kill'em and someone's gotta perform the eulogy. So Oh wow, and then how do you win? Uh so each round has a point. So if you if uh if you write the answer that the judge selects for that round, so round two a prompt would be something like Uh we didn't have toys growing up, so we played with blank. And the judge will pick their favorite of all the players who submitted. Got it. Okay. And it's called U Logy, but spelled Y O U Logy. And uh how did and and how long have you been how when when did you launch this this idea?

9:23 So this was a Covid baby. Like I kinda I'm an extrovert and I lost all my social outlets and then I uh most of my mind I tell people and then I had the people in my bubble. I don't know if you guys had the bubble in the States where you could hang out with A certain amount of friends and I was like, Do you guys want to play a homemade board game? And everyone was kinda like, Oh yeah I wanna play your homemade board game, but then when they laugh. They were like, Oh my gr like they they wanted to play again and again, like it was a long night. Wow.

9:52 So you decided to turn this into a business. Yeah, so uh so right now we've um we did a Kickstarter in twenty twenty four and then we got our product in twenty twenty five now. And I have an I like I have a vision To make this uh replicate the basic game structure with different

10:12 life events. So you're gonna kinda get us the same game flow. If you know how to play one of our games, you'll know how to play them all. Yeah. You'll get an entirely different experience based on uh Based on what you're doing. Got it. Okay, and is this your full time job, Sean? Uh no, I'm uh by day I'm a registered nurse at the pediatric hospital in uh in the operating room. So Amazing. Okay, so you have and ha and how many copies of the game have you sold so far?

10:36 We've sold just shy of a thousand. Okay. Uh and then uh on top of that we've given some away. So we've got about an inventory of about five hundred currently. Got it. Okay. And before we dive in further, tell us what your question is for us. Well I've created something that like I've proven to myself is special. People have told me this is special. I have visions of this being the next household name in party games is my my question's basically how do I get it there? Got it. Carlton, uh please say hello to Sean. Before we answer his question, do you have any questions or or thoughts for Sean?

11:10 I think I understand. So You know Again, I've been in the toy business for a long time. I do know that You know, a very, very traditional way.

11:22 of getting your game out there is to bring it to a Publisher, a toy, another toy company. And I think that's a super solid way to do it. Um You know, I would often suggest to people who invent And whether you love being in business.

11:39 Like which I did. You know, I do. I mean The day I started doing Scorpion Pogs, I was like hooked. For the experience of selling and packing up the stuff and sending it out and

11:52 bookkeeping and everything. I loved it. So if you love being in business Be in business. If you love inventing toys. Then I would say Um

12:02 You know, I would license it for sure. Yeah. I work with inventors and they've done extremely well from me. Carlton, I have a I have a question for you'cause I'm thinking about this licensing question, which is And you know this, and I I've got a kid's media company, we make kids' podcasts, and I think I've I've told you about it. We actually We actually have a line of toys and

12:23 My general sense is that Toy companies don't actually buy ideas that often. You are definitely right. Uh that that is the sad That's a sad half. Yeah. Um The other side of it. I w and I was gonna sort of

12:37 Give you that. Little bit of a warning. Um The people who buy games are gonna look at hundreds or thousands of games and buy one. So your chances of getting

12:48 It's a great thing if you can make it happen, is what I would say. But they want a proven product, right? They want something that already has traction which is w and it g sort of get gets to this idea of like and and Carlton, I think you're getting to this, which is that Sean needs to needs to prove this out more. Like a thousand units is great, but it's like Need like a 10,000 unit sold, or like right, like retailers asking to carry it. The other thing I would say is.

13:14 You know, the upside of you scale it yourself is huge. I mean I mean we had we did exploding kittens on this show. They've got like a bunch of different card games and They built this on their own, you know. Um I guess if you were able to just luckily get this as you know this becomes a hit, you own the thing. But I think before you even

13:35 Think about trying to pitch it to somebody, you've got to prove that you know, that there's demand for this, right? And striking light lightning would be striking if somebody brought it from you without any track record, like Gaia saying. So I would assume You would have to go into these this licensing strategy, assuming you were going to be rejected. And then I agree, build it on your own, which is also. That's extremely challenging. You have to

14:02 Go to all the toy conventions and get it into every mom and pop little store and you have to go knock on the doors yourself and you have to have game night. I mean you must know all this. I kinda knew this answer going in almost, right? Like you you have to build it yourself. I'm not I'm not uh opposed to that. So that's that's such sound advice is like Keep putting in the work. Um

14:23 Now I'm at the stage where people are coming back to the conventions and they're like, hey, we played this and it's so fun. So that's such a rewarding thing to actually be on the ground level and and so That is the part that I really enjoy. Yeah, I mean trade shows, you gotta get into trade shows Obviously you've got a full time job as a nurse, you have a very important job, but uh but maybe you have plans to go to a trade show if one's coming up. I mean right now and you know this, Sean, people are are are looking for community. Or at least people are talking about wanting to look for community. And um, you know, their games cafes here in the Bay Area, there some of them are doing very well. People

15:01 are showing up to be together and so and so you're you're on to something. You've got something interesting Now you just gotta get into more hands. Not easy, I admit. And I will give you and I will give you one more compliment. You have a very um unique Sounding game. You know what I mean? And that's a good edge. So if there's something that's

15:20 An interesting story to it. It does have the potential to get some traction. On Instagram or in some kind of a news format. For sure. I like the story. Yeah. And thanks for saying that, because tha that's that is a really fun part because people will introduce me to people that they've created and then uh Tell me all about the person they've created. So that's pretty fun. Sean Barra said the game is called U Logy Y O U Logy. Uh good luck. Thanks for calling in.

15:46 Thanks so much for having me. Appreciate you guys. 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. We get support from Engine. A lot of founders start with a product or an idea. But at some point the business becomes something else.

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17:54 No contracts, no booking fees. More than a thousand businesses join Engine every month. Join them and get five hundred dollars when your business signs up and starts traveling. at engine.com slash built. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Carlton Calvin, co-founder, president, and CEO of Razor USA. Carlton, let's bring in our next caller. Welcome to the advice line. Please tell us your name, your name of your company, uh, where you're calling from, and uh just a little bit about your business, please.

18:34 Hi, Guy. Hi, Carlton. I'm so excited to be here with you guys. I am Cherine Tibbett. I'm calling from Houston, Texas, where it is a thousand degrees. And I have a business called Honey Bespoke Stationary and Paper Goods. I am a designer of stationary such as flat note cards. Birthday invitations, birth announcements. Um, and one of my biggest sellers right now is collegiate stationery. And I have licenses with uh a number of Big schools.

19:03 So yeah, I sell paper goods. Yeah. Amazing. I'm looking at your website and and this and so you design all of the cards or or stationary, like I see personalized stationary with you know note cards with people's names on it, but And you've done licensing deals with some universities like Indiana and Clemson and Texas. So that's cool. So and tell me a little bit about How the business is doing. It's doing well. I my um revenue last year was 120,000, nearly 120,000. Um, which is funny because I I talk to people about it and I think people think it's just like a little side

19:36 job like a fun thing that I'm doing, like a little hobby, your cute little Etsy business. I'll get that kind of comment. But I'm like, no, it's actually it's doing pretty well. Um I'm not doing as well this year. It's been a little bit slower, but like I mentioned, I sell predominantly on Etsy. And that marketplace gets very saturated, uh, with competitors. So yeah, that's that's been That's part of why I'm calling today. So let's jump into it. What's your question for us? So my question is, I do sell predominantly on Etsy.

20:08 And but I have a website, which I also build my website all by myself. I've done all of it by myself with my my AI partner. I wanna know how I transition from keeping my customer base on Etsy because there are people who are shopping. Specifically there, but also shifting over to my own website. How do I get found in this sea of Other stationaries. You know, I I was listening to um Carlton's episode. Well back, and you had mentioned you weren't the first scooter.

20:39 But You set yourself apart. How do I set myself apart? Okay, I wanna bring Carlton in. Um Carlton, please meet Shireen. Um Tibbett Honey Be Spoke Making Stationary and Pretty good business, hundred twenty thousand dollars in sales. uh last year, but of course crowded space and uh everybody everybody wants to know this. How do you stand out? So

21:02 Before you answer the question, any questions that you might have for Shreen or thoughts? Well, I would say I'm not an expert on how to drive people to a direct sales website. So I am someone who sells at retail and that's what I w I think you could stand out.

21:19 Um by doing the hard work of trying to get into stores into stationary stores. And even I'm I mean in my initial thing that sounded really good was probably getting the stationary stores associated with the schools that you have licenses from. And I've got questions about that too, but I'll let Guy Guy

21:38 Do you have any other Yeah, I mean I think I think that's an interesting idea, especially if you're talking about like uh cards, right? Um sort of b you know, you've got some beautiful designs here, I'm looking at them and and you could Uh uh a lot of what you do, of course, is personalized, but there are lots of things that you know are just universal, right? I I I there's a card store near where I live and they have beautiful embossed cards and Uh, they're they're lovely and they're like seven to ten dollars, sometimes more. They're uh there and I buy them, believe it or not. You know, I wonder if you have tried first of all, have you d have you done paid advertising?

22:14 Yes, and that is one of those things where I did it in I started at the end of March for the first time on Meta. And did for about a month or two, and my sales skyrocketed. Awesome. But no, not so awesome because I don't know. I I felt like I was just throwing money out there. I was like oh okay, let's put a hundred here. Let's put I wasn't Doing it smartly just because it's confusing to me. I'm I'm a one woman show. I'm doing all of this, literally everything by myself. So the the advertising I think would help. I just don't understand how to do it.

22:47 And how were you advertising? Were you doing social media videos? Were you doing just stills? No, just still. I have what's called flat lays. Like when you look at my website and you see the Yeah. Picture, I just boost that. I boost it on Instagram. I boost it on um Facebook. And most of my sales were coming through the Instagram. I did look at that data. but it would lead traffic to my website, which was great. Um

23:13 But But yeah, then it slowed down. Yeah. Yeah. Okay. Let me ask you a question. How did you learn how to how to design carts? Well, it was another Covid story. Uh I had time at home. I had a

23:27 seven month old baby and we were being very protective of her during COVID. So we were at home. All day long. So I decided I loved playing with on the computer. I liked doing things on the computer, graphic design things. And long story short, I took an Adobe course on YouTube. So but you learn this by watching videos, basically. Very much so. Okay. So the so this is important because I think that you can do a similar version of this with how to advertise. I could imagine you getting taking your iPhone and putting on a tripod And angling it and

24:00 Sho a video of you sketching designs. And and a video of you Being kind of the face of this brand and putting some money behind not too much money, maybe a hundred bucks, share bucks, and seeing how that does because I think that there's something about you. making this

24:18 will resonate in a diff in a way that is different than just seeing a static image of stationary. I agree with you, and because when I when I look at other people in this marketplace, other women who have these businesses or men, but it's predominantly women. The one difference between the two of us is I'm not putting my face out there. I'm not putting videos of myself out there just because I'm not comfortable on camera, really, to be honest with you. Um But I realize when people see a person, it makes a difference. And so I have thought maybe that would make a great story story. Yeah. I I I don't know. Carlton, what do you think? I mean, I'm a hundred percent there. I mean, I think you're doing very well I mean, I'm only seeing you on Zoom, but I think you're doing very well on Zoom.

25:00 Thank you. That's another way of saying that. But yes, I think you're you're photogenic and I think you could develop a following on Instagram or TikTok and just like You can even have your narrating it, right? Like a voiceover, like, you know, I I I couldn't find cards I loved, so I decided to make them myself. And I just never thought of this. Yeah. You know, and it's like your voiceover with you, just images of you like putting a car together and you know, uh design it's your design table, something like that. It it can be a cool thing. Just a short It's not easy to do. I'm not going to be able to do it.

25:36 But you can figure it out. And I'd almost say you'd have to do it because paying for advertising is always a very challenging thing in in the in your kind of space. If you can develop Your own following. That's that's everything.

25:50 For for what you're trying to do. Um, and also try to get into the stars. I would say that too. Like if you can get up the nerve to you know, and get up the budget to go to a show and just start start building that, you have to I mean, I could give you the whole thing with sales reps and the whole thing. You have to get a line together, but there's like Tens of thousands of stores out there you could be selling it. But people are so focused on the internet, but Getting some of that old fashioned get into the stores. But if you're gonna do it on the internet, you have to have a social presence. And you have to and you have something to take advantage of, I do.

26:21 I was hoping that you wouldn't say that, but but I think that you are correct. And then um I I have considered going to the the big market places. There's a big Dallas market, there's one Atlanta, and I actually was reached out to by the Dallas Market, uh, the lady who puts that together. Just a few months ago, and I thought, maybe I should put some money into doing that. Maybe I'll see a return on that. You need to go to the markets and you need to get reps. And the whole thing is about getting reps. And it's Okay, okay, that's good to know. I never I never even thought of that. Yep. All right, well you have you get some arching or a sharing. Thank you so much. Thank you so much. The brand is called Honey Be Spoke. Good luck. Thanks so much for listening for calling. Thank you for your time. Bye. Thank you. Alright, we're gonna take another quick break, but we'll be right back with another collar. 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.

27:26 I'm Guy Roz, and today I'm taking your calls with Carlton Calvin. He's the co-founder, president, and CEO of Razor USA, the Scooter Company. Let's get back into it and take another call. Let's go. Alright, let's bring our caller in hello. Welcome to the Vice Line. Please tell us your name, uh where you're calling from, and just one quick line about your business, please. Yeah, my name's Mark Anter. I own Little Water Distillery in Atlantic City. We're a craft spirits distillery, um, and we've been Going since two thousand and sixteen.

27:56 Awesome. Welcome to the show, Mark. And tell me what do you guys do? I mean, I'm assuming vodka and gin and Yeah, so we we make uh I really do this without actually giving the brand names. We Rusty Revolver Gin, 48 Blocks Vodka. Liberty Rome, prosperity room. um sixteen knots bourbon and Forty eight blocks espresso martini, forty eight bloc chocolate martini, and then a barrel aged old fashioned. Wow, okay those three are have have really been kind of

28:22 running the show for us recently. All right, I got it. Okay, so tell me a little bit. So this is uh Little Water Distillery based in Atlantic City. You mentioned you started in twenty sixteen. Did you come from like the Spirits world? Were you in this world when you launched this? Yeah, not entirely, not entirely. Um, I worked for Total One and more um on the design development side and really kind of building out their retail facilities and kind of getting them to the point where we turn them over to the operator. So I was familiar with the industry. I had some contacts within the retail, you know, industry. But The the whole thing started with, you know, just a random gift for a seven year old man. My father turned seventy in two thousand thirteen.

28:57 My brother and I bought him a copper pot still. And we as a as a as a father and son spent time together really kind of playing with it and We became aware of the craft distillation laws being enacted in New Jersey and um applied for one of the earlier licenses and and and We're like, I guess we're doing this. So we we kinda put the business plan together and and launched. Left our careers and and kinda went cold turkey and then launched the business.

29:21 and tell me a little bit about where you sell your spirits, mostly restaurants and bars, are you in shops or both? So the the spirits industry, the alcohol industry is regulated in the US. So in New Jersey with this um license, we're able to manufacture Operated tasting room. So we can sell retail out of our tasting space.

29:43 direct distribute or go through distributors. And we initially went you know we did direct distribution because we get to keep a lot of that margin back at home. But you quickly wearing a lot of hats for a small business. I mean, you're a manufacturer, you're marketing, you're you're now distributing. You have to have a you know a vehicle or vehicles on the road, you have to have salespeople employed, but then you're also operating on the retail side. You have a tasting room, so you're doing almost hospitality and you have to staff that's completely different, you know, staff Then then you'd have to have a tasting room and you are Spirits. We're manufacturing. And then we're also taking them to market. We're also branding them. And we also have quite a few SKUs, you know, for what we do. I mean I I I I I'm so envious of like a brand like Tito's. They make Vok, it comes in three sizes. That's it. And and how is the business how is the business doing? Like are you guys

30:32 profitable or you uh what's telling them about how it's you know we had some ups and downs. Obviously we went through Covid and when we we kinda came through that with shining colors because of So we pivoted and produced uh A huge amount of hand sanitizer during During Covid. During COVID. So we actually were able to really turn a profit that year, but Um I've taken on a fair amount of debt.

30:52 in recent years and yeah, I'm so jealous of some of these other callers because you're starting out that you know they're they're early on in in in the in the operation, in the process. Um and and they have, you know Nowhere to go but up. And we've we've kind of seen some contraction of our sales and we we recently made the decision to work through distributors.

31:12 because we just couldn't figure out we we couldn't get the direct distribution model working to the point where it was profitable for us. bars and restaurants and liquor stores to some extent. They're used to working with distributors. They're used to having like one sales guy come in and have a thousand skews or five hundred skews or whatever. So we we decided to to Yeah, make the strategic decision and go through distribution.

31:32 All right, so before we get to to Carlton, tell us uh your question. So Like I said, I'm I'm jealous of of of those brands that have one product or two products. Um that's part of our challenge. We have too many out there, but we have one product, um, our forty eight blocks espresso martini, which is really Best in class. It's truly the best product out there. Um

31:52 It's price is a premium and it's it's a premium product and the the industry is trading down. A lot of what you see is coming out in cans. You know, smaller like where quality's being kind of Training up for convenience. How do we Take this product from where we are, which is solid but very small local reputation to

32:11 This is the the industry standard for the best espresso marketing. All right. I wanna uh bring in Carlson and Calvin Carlton. F first of all, uh Say hello to Mark. Um Hi Mark. Hi. Thank you. And as you heard, he's got this brand, um but of course it's a challenging in general in this industry.

32:29 across the board, wine and spirits. But he's gotta make some some decisions here. So um thoughts or questions for Mark? Um Yeah, I mean my overall I do like this idea of focusing. I do like the idea of

32:45 You know, you're really trying to tell your story about get how do I get my story about my product out there. Which is making a good story out of it. You need to Get out and be the face of your product. You have to have an Instagram presence. You have to have a TikTok presence. You have to again you're in a highly regulated industry. I don't even know what you You could do, but you could show how you distill, you know, the process of distilling and what makes yours better and show it.

33:11 The other thought is if you could get some influence or somebody with a reputation for judging quality to endorse your product probably out of just Affection for you. I think there's you're you're on to something there for sure. Carlton I wanna double down on that. Mark, I question for you. H what are your best selling

33:29 You've got Ram, Rom, Jujin, vodka, express martini, chocolate. W what's the what are the three top best sellers? So forty eight blocks espresso martini, forty eight blocks chocolate martini, and they're they're they're a line. Espresso and chocolate both. Again, top top. And and the chocolate martini, the espresso martini are made with vodka. The vodka vodka is called Forty Eight Blocks vodka. Okay. So it's it's a the bottle, the Espresso Martini has the espresso and vodka in there, and you just Chill it and pour it over a glas in a glass, basically. Cocktail shake it with ice, shake it strain. And the coffee we use is from Lock Cologne. We use a cold press Brazilian espresso from La Colombia. Fantastic coffee.

34:05 You know, no one in the industry is talking about the quality of the coffee and the quality of ingredients. They're simply pushing convenience. I mean it sounds like you're already moving in this direction, but I think I think you've gotta reduce SKUs right. Because You're talking about

34:22 A challenge around Cash. and debt, right? And And as you probably know, many companies that die don't die because the demand goes away necessarily. They they die'cause they run out of cash.

34:36 So I think If you want to optimize, and it sounds like you do, you want to optimize for cash for the moment. Simplify the product line. And then you focus on the the highest channel margins. Maybe you you continue to m make smaller quantities of the other ones for the for the tasting room. I don't know, but really lean into those

34:58 Especially the the chocolate and the espresso. Martinis And you build around those. while you conserve cash because And you want to talk about what you just mentioned.

35:09 It's la Cologne coffee. What kind of chocolate are you using? In your in the Yeah, so it's it's a it's a custom roasted chocolate from a a small producer, a small chocolatier called the Dairy Chocolates in North Carolina. I mean amazing. La colombe coffee this high quality chocolate I think that could I mean is that realistic to really

35:30 double down on Especially those two products and maybe sunset some of the other SKUs. Yeah, it's it's it you know, it's hard, right? That's the challenge, right? It's emotionally hard, which is a terrible terrible reason, terrible excuse, but yeah kind of getting past it and then also limiting the experience of the tasting room. That's where you know that piece, which is weekly revenue. That's very important. We've gotta figure out how to keep that interesting while we

35:54 Focus on these distributed products, these two distribution products. um and really grow them because that's where that you know we're limited by the four walls in the tasting room, but the market is is vast and endless. I hear you, right. And that's hard, right? Because you it's gonna come to a point where you're gonna have to make a decision and it's gonna be painful. We've had many examples of this on the show over the years where people are like, We abandoned

36:18 You know, our main product. And we went with this product, MailChimp. It's a great MailChimp is a classic example You should list that episode. They were a web site building business. That was ninety percent of their revenue, but they they saw that there was potential in this. email list site. And they basically

36:34 drop ninety percent of the revenue in you know, instantly. But Mailchimp, you know, I don't want to sell for many billions of dollars. The the point I'm making is that it's it there is gonna be pain, but you never know what's gonna emerge from it. I mean, in five years time, you might be the Martini brand. Got espresso martini, chocolate martini. Now you're making dirty martinis and pickle juice martinis and And your story is we put the best ingredients in the bottle.

37:00 You know, and that that might actually be What you are in the future. I'm not saying it's gonna happen, but that put sort of sets you in ideally a more efficient course. And and

37:12 I would just add My experience is always It's so rare to find anything that resonates with the consumer that if you've got one thing that does resonate or two things that resonate, really focus. You y you don't have time for anything that doesn't sell. in my world.

37:29 I have one more question for Carl and specifically about kind of the trends because you're you're you know, you have that as you said, that gift of identifying trends. And part of the challenge right now with what we're doing is is not following a trend, which is trying to take what we do and put into cans. Because cans are extremely trendy right now. But I feel like the consumer

37:49 perceives like a lower quality product than they can and we're trying to maintain a position of of premium quality. What do I do? Yeah, and so my general analysis is you want to be on those trends early. But If you can perceive a trend in your business like cans, like the I I even even I'm seeing You know, and I don't drink, but I'm seeing trends in the alcohol world. And

38:14 And I think there is for sure Uh This notion Where like I have my vision. I'm gonna stand out and be very different.

38:24 I'm like Don't fight the culture. Just like because uh American Idol you know, came out and be you know, did a uh Uh

38:33 You know, singing contest on TV. You'll notice there were twenty seven other singing contests that came out after them. Some of them exceeded the American Idol. And Being second, being third, being tenth. I you want to be inside the culture. So I'm not saying it's these cans, but if you can see anything that's happening in your industry.

38:52 And and you're one of the early people to notice that's a huge advantage. Are there are there there must be Uh, maybe not. Are there espresso martinis in cans? Oh, there's there's quite a few. Yeah. By the way, just as a as an aside.

39:05 Is there a world where you have like a sort of a white Russian meats and espresso martini where it's it's you've got the espresso in the vodka, but you add a little bit of Cream or milk. Yeah, I mean there there's there this core can can have extensions to it. This line, you know, we can we do various we combine the shot in the espresso and make a mocatini, which is very, very trendy. And there's no there's no R and D to that. We just

39:29 Um Together in a camp. Yeah. I think there's something to this martini thing. Anyway, you I think you've got you've got a sense of what you gotta do. It's not gonna be easy, Mark. I do not envy you, but it's

39:42 probably what what's gonna be best for the business. Thank you so much. Yeah. It's Little Water Distillery. Mark Gannard, thanks so much for calling in. Thank you for having me. Um Carlton.

39:53 Before I let you go, I want to ask you a question that I've been asking everybody who comes back on, which is n now that you have all of this experience, If you could go back to when you were first starting out, what advice could you now would you now give to your former self? Um I mean I made so many mistakes when I was starting. You know.

40:11 And this gentleman was also the in the distillery. You think oh, I don't want to give up my margin. To a sales rep. because they'll take five or ten or fifteen percent. But you have to delegate. You have to give the

40:25 sales reps, they're so much better at selling. And you can't do it all. So that was a big huge thing that I You know. Took me a long time to figure out. Just trying to do it's very fun and satisfying to do everything yourself, but you can't. You have to

40:39 delegate it all out and it it really that Transform my business. Yeah. That's Carlton Calvin, co founder, president, and CEO of Razor USA. Carlton, thanks so much for coming back on the show. My pleasure. And by the way, if you haven't heard Carlton's original How I Built This Episode, please go back and check it out. We will put a link to it in the show notes, and here is one of my favorite moments from that interview.

41:04 Wait, so in June of two thousand you were selling a million a month? Yes. And January of two thousand one You couldn't sell one the s the sales stopped? Yes. Doesn't make sense. It makes no sense. It Doesn't make sense unless you understand crazes. It's happened to me so many times.

41:19 And no matter how many times the retailers go through this, no matter how many times I went through this, everybody's thinking to themselves, this time is different. Yeah. Like this time it's gonna sell a million a month for the next three years. And they can't even just do simple math that there's not that many people. 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 this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you 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.

42:16 This episode was produced by Casey Herman with music composed by Ramteen Eroglui. It was edited by John Isabella and our audio engineer was An Lee Huang. Our production team at How I Built This also includes Alex Chung, Carla Esteves, Sam Paulsen, Chris Massini, Elaine Coates, JC Howard, Catherine Seifer, Carrie Thomson, and Neva Grant. I'm Guy Roz, and you've been listening to the advice line. on how I built this lab. Thanks again to Engine for their support. If your business is growing and your team is traveling,

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