Advice Line with Brett Schulman of CAVA (July 2024)

0:00 This episode is brought to you by Clavio. Clavio helps you build smarter digital relationships with your customers with its unified data and marketing platform featuring email, SMS, reviews, and more. Make every moment count with Clavio. Lear more at K L A V I Y O dot com. Hey everyone, it's Guy here. I hope everyone's been having a great holiday season so far. And as you can imagine, our team is taking a little time off to be with their families and loved ones, so we're bringing you an advice line episode that we really loved. It's the one with Brett Shulman, co-founder of Kava. And I was so happy to have Brett back on the show to give our callers some advice because he was the perfect person to.

0:48 Guide them through the growing pains of trying to scale a business. And in a lot of ways, I think it's also a great episode for the new year, since a lot of us will very likely experience growing pains of our own with like new resolutions and goals. Speaking of which, I hope you have a very, very happy new year that is filled with. Lots of growth and learning and joy. And um hopefully this episode will give you some inspiration. And without further ado Here it is.

1:15 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 attempt with me to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondery.com, and make sure to tell us how to reach you. And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com. and we'll put all this info in the podcast description.

2:12 Alright. Let's get to it. My guest today is Brett Schulman, the co-founder of Kaba, a chain of fast casual restaurants that serve a Mediterranean menu inspired by his co-founder's Greek upbringing. Brett, welcome to the show. Hey guy, thanks for having me, it's good to be back.

2:29 Happy to pay it forward. I I had a lot of guidance and advice during my journey and Uh happy to share the trials, tribulations and the uh The dumb tax I've paid along the way, so hopefully they don't have to pay it as much. It's great to have you back. Last time you were on the show, of course, you told us the story of Kava, and um and you were really the fourth founder of that company. You came in when it was just a a single sit down restaurant in in suburban Maryland, and you really helped to scale the brand into what it is today, this this chain of of many restaurants, hundreds. And by the way, if you guys listening haven't heard Brett's story, which he told alongside his co founder Ted Chenokristos,

3:05 Uh it is a fantastic episode. It is so good. Uh and you can find it by just scrolling back in in your feed uh or searching wherever you listen to this podcast, and we'll also put a link to it in in the podcast description. I I think your experience, the experience you had, um is really gonna help our callers today because uh it sounds like a a lot of the they all have great business ideas, um but they're a lot of them are at decision points where they need to figure out how to Best scale.

3:31 Or where to focus their the you know, their limited resources. Um let me start by asking you, Brett. uh about that. I mean h how do you think about How to focus. a business or more specifically, like with Kava You decided to focus on

3:45 You know, to take this concept that they had the restaurant, it was fresh food, it was healthy. Um, but you were able to kind of transfer that to a fast casual format. Tell me about how you How you were able see that opportunity.

4:00 Yeah, well it was interesting because as I mentioned the the Consumer package goods, the dips and spreads being sold in grocery stores predated the fast casual. And we had initially thought about growing and scaling that business. But there was clear that this food resonated to a larger audience and The idea was really about how do we bring this to more people and that's where this fast format really lent itself to be able or or be a vehicle to be able to do that. And I think oftentimes it's listening to the business or listening to your guests and kind of understanding the need you're filling.

4:32 And leaning into that. And one of the things I've learned of along the way and that we've learned is Um you know, sometimes what you don't do is more important than what you do do and and really prioritizing and focusing on where your strengths are and leaning into that. Yeah.

4:47 All right, Brett. Um What do you say? Should we take our first caller? Yeah, let's do it. Alright, let's do it. Uh collar hello, I think it's Devin. Hello, Devin. Are you in line?

4:56 How you doing there? Appreciate it. Thank you. Devin, welcome, welcome. It's great to have you on. Um tell us your first and last name, where calling from, and just a little bit about your business. I am Devin Strahan of Call of Fame, the great state of Houston, Texas. Nice. And um The name of the business is Devin Spike Root Beer.

5:15 So assuming you I'm assuming you make s spiked root beer. Root beer with alcohol. I do. Okay. Yes. Amazing. Um which I can't wait to dive into. What what question do you have for us today? Uh my question is uh as an entrepreneur and as you start to grow, how do you deal with Uh the sinking feeling of imposter syndrome. I love that question. Okay.

5:37 Let's dive into your business first of all. How did tell me how you got into making spiked root beer? So uh to back date it a little bit, I used to be a private chef and I also owned a healthy muffin company. So what a pivot. Wow. Yeah. So from uh two thousand to two thousand Uh thirteen I did healthy muffins. And then um I broke a Cartner rule, I put all my eggs in one basket with this one particular company.

6:04 And when they went under uh my whole life changed financially. Uh so I had to get go back into the workforce So I'm working at a liquor store and about a month later I was like, Well You got been by the Entrepreneur Buck. And just looked around and I was really uh impressed with the craft beer market at the time. Yeah. And how they was like really creative with uh the different types of flavors. They put chocolate cake and cinnamon rolls and fruity pebbles in there, but I don't drink beer. But I'm a huge fan of root beer. My children are a huge fan of root beer, but I was like

6:34 Let me give this a swing and let's see if we can make this into another dope beverage. So that's how I got into uh the spy root beer business. So cool. So you were You were a pr uh

6:46 private chef before that for many years. So Tell me like and you worked for for like at at home is a pe uh uh or did you ever work in restaurants? No I never worked in restaurants. I did not want to go into restaurant field. Sorry, Brett. I don't blame you. I want to have a life. And you had a muffin company for a couple of years, which didn't work out. Uh, I had that for A solid thirteen years. Well.

7:12 I mean what a gift that was, Devin, because imagine how much you learned from that experience. And it's so interesting. You go and work at the liquor store just to make ends meet. And like any great entrepreneur, you're looking at the shelves and you're saying, Where is there opportunity? Which is exactly how so many businesses certainly on High Belt this have started. You're like root beer. There's nothing there's no no one doing this root beer thing. Um so I and I love I mean you're a chef, so

7:38 you understood flavors, you understood what you tell me how you started to like like m experiment and make it. Did you start to make it in your kitchen at home? I did, exactly. I started to make it in my kitchen and how of course I you know, YouTube everything and uh read about it. So uh interesting part is the original formulation was actually made with rum. Mm-hmm. And uh champagne yeast for fermentation. I didn't understand any part of that chemistry.

8:04 And I was getting people really um really buzzed on my first uh concoction of this product, but it I I learned my lesson over time. So it was a a lot of trial and error and and I I think I got it done in about a good month or so. And um I end up uh going with uh with the wine based product. With wine. Yes. Because there's less d uh different kinds of regulations that uh make it easier. Yes, correct. Correct. And distribution and taxes and everything else that comes with that.

8:35 Okay, so I'm looking at your website, you've got I at least what, eight different flavors now? Correct. Okay, dark cherry to pumpkin vanilla, basically, but it's all Th the f the main flavor profile is root beer, but it might be dark cherry or orange cream or Texas pecan or And you're now in how many sort of st uh how many stores mainly in in the Houston area? I'm in uh the Houston area, Austin, uh surrounding area, so I'm in about a hundred and sixty locations. Wow. But this happened extremely fast.

9:06 And this is where the problem lies right now, because now it's It's still solely me. I do have a uh a dear friend of mine who uh handles the finance part of it. And all administrative things or whatever. He's on the equity play of the business, but everything is still solely up to me. I got a million thoughts, but I want to turn it over to Brett because I think you have a million questions, Brett. So

9:27 Go at it. Oh you you answered a lot. I mean and and first of all, credit to you, Devin. I I love the story, love the resiliency. You've already done it. You ran a s successful business for thirteen years and now you've come back For a second act. Most people don't even do a first act. So congratulations to you. Thank you. Talk about entrepreneurial spirit. Yeah. Um

9:49 My question uh Is it a Is it an inventory cash flow funding the growth issue, or is it simply a bandwidth issue of being able to get out and market the product to continue to have it grow and be successful, or both? It's actually both. That that those are really good questions. It's actually both. And

10:08 So have you thought about raising capital? And do you have the velocities proven in these outlets to kind of support your growth story. So I have uh I I brought in one gentleman and uh he came in on a small equity play.

10:24 uh just last year, which his cash infusion helped a lot. And what I'm finding out is A lot of people really uh the the people that I've talked to are really interested in a business. Uh but they also see it as a still a young business as well. So I I don't have the track record with these new outlets.

10:45 to show what the the true potential of the business can be. I I am looking at what you're doing here and on so many levels You're doing so many things right. Your your branding, your logo, the the the little red state of Texas on the front, it looks like

11:04 Something even though it says established twenty fifteen, it looks like it's been around for a hundred years. This looks like Thank you. I designed that too, by the way. Like when I say I was hands on, I was hands on. I designed the look, the color profiles. Everything. It's so great. I I'm gonna start with your original question, which is about imposter syndrome and and I think that That the answer to this question really is m mostly a pep talk because

11:29 I mean people who have or feel like they have imposter syndrome. Are not impostors. That's what I found in my entire life. Most of us have an experience aversion of this at times in our lives. Some people are just better at hiding it. And so What what I what I see in you when I'm looking at this business is somebody who comes to this with incredible standing. I mean, you have

11:54 D over a decade more than a decade as a personal chef, so you're trained chef, you understand flavor profiles. You started a business that you ran for thirteen years. It didn't work out, but you managed to to build it into something really big. Now you're in spiked root beer, like To me, there is

12:13 nothing about you that is an imposter. Like everything that you've done up until this point gives you so much standing in this space. Like as an expert. So I think the imposter syndrome is a very healthy feeling, and you just need the you need that pep talk and you need and and sometimes, you know, if if me and Brett aren't here to give it to you. And you can't find somebody, you've got to give it to yourself. Yes. Because you're coming to this with all of those experiences behind you

12:41 And so You are You are exactly the right person to be doing this. Okay. I'm gonna stop there and turn over to Brett, because you might mo have more thoughts about this and about it. I couldn't agree with you more, guy. I mean that's what I was saying earlier. You know, I think we all have a little bit of imposter syndrome, um, which isn't the worst thing in the world because It doesn't allow you to get overconfident.

13:03 and and and think that you're invincible, which is really important being an entrepreneur. But I think you've proven yourself to be far from an imposter with everything you've accomplished to date and what you've been able to persevere. Do you uh question for you, Devin, do you have any advisors or mentors around you? Around the table. I don't. To be honest. I doubt I

13:24 I bounce things off my um My business partner. when we work out in the morning and it it's just a systems check. You know, to see, you know, what's the next stages, what are we trying to do next. Uh Well the answer's no.

13:36 To be honest. Don't don't be shy about cold reaching out to business leaders that you maybe admire or respect. I think, you know, when I found throughout the journey, if I had moments of doubt Or the the business might have seemed overwhelming at the moment or a problem. How is I gonna overcome this?

13:53 Having folks around you as sounding boards that you can lean on and bounce that stuff on can help validate your thinking or maybe help you think about it from a different angle. I've I found invaluable and I found, you know, could help Yeah. through some of those moments where you may have a little bit more doubt. than other times.

14:11 Oh yeah. And I think also the the the problem set in uh as of recently because of what I just gone through with the business where My first co packer they sold their business.

14:24 The new owners did communicate with me about no longer being my co packer. Found another co packer. And then he was a fully transparent about His finances And that was a doozy and all this happened within

14:39 Two months of each other, and the last one just happened a month ago. And now I'm working to to find my third co packer. I think that's where they kicked in now. I was like I feel like I don't know what I'm doing. Yeah, and you know what?

14:53 What you just said. Every business goes through and know that you've got a lot of company and that I still wake up every day and I'm faced with challenges in our business. That that is business, right?'Cause if If it was that easy everyone would be running a business. Everybody would do it. Everybody would do it, right? And it's those who are able to persevere, have that emotional resilience and continue to treat keep finding a way, have that determination to try and figure out.

15:17 how to deal with all the adversity that's thrown your way. Um, you know, when we bought a company Zoe's kitchen back in 2018, right? Remember. Man, twenty nineteen was the hardest year of my career. And and there were moments and I used the metaphor that I was felt like I was digging through the tunnel and I thought I was about to break through and a bunch more dirt would fall in front of me. And I could never get to the light. And but but you know it just kept kept digging and I was fortunate to have some some great co founders, some partners and and we helped get each other through it and kept

15:46 working to figure out there's always a way to solve the problem. And when you focus on solving the problem. eventually it got us to that light. So Man, I I feel you. I've been there. Uh we're often there through the journey of a business. But that's why businesses become successful'cause they're able to deal with that adversity. And get through it.

16:05 Yeah, I appreciate that. The brand is Devin Spiked Root Beer. Founders Devin Strahan. Um Devin, thanks so much. Good luck. Can't wait to see what happens. Hey, thank you much. I appreciate it, guy.

16:17 All right. I've never had spike root beer. I'm gonna try it. I have not either. I need to try it. Yeah, and wine based, so

16:25 It's a really interesting idea. Which I think is an opportunity'cause it's differentiated. It's something novel. Mm-hmm. Right. That you haven't seen yet. It's not like another version of something you've seen. Right. It's a completely dis it's a Just a different

16:42 It's yeah, it's a different thing. So uh curious to see what happens. By the way, imposter syndrome is a big theme in this episode. That we uh have with Terra Bosch, the founder of Smart Suites, which is a massive Brand low sugar. And you know, she started this when she was like twenty one.

17:01 as a you know, drop out dropped out of college and really had no money, no nothing. I'm just just doing on her own and and applied for Every Competition and gr business grant that she could get and and eventually built it into a

17:15 And she talked about how, you know When she was like twenty two, twenty three, she'd go into meetings with distributors or or or buyers for just small local chains in Vancouver and just the knots in her stomach and the Fear and the terror. But she would just breathe through it, you know, and it she didn't say it was easy.

17:34 But she just kinda breathed through it and figured it out. And I think we've all been there. We've all had that. those moments and still do. Absolutely. I I think People aren't being real if they're not saying they haven't had those moments of self doubt. Especially

17:48 Trying to build a business. Yeah. And I agree with you, I think overconfidence is a Is Deadly. I think that's really dangerous.

17:56 Yes, it will steer you into decisions and places that you do not want to be. Yeah. Alright, Brett, we're gonna go ahead and take a quick break, but when we come back, a mom who turned her child's allergies into a business idea. Stay with us, I'm Guy Raz and you're listening to the advice line right here on how I built this lab. Welcome back to the advice line on how I built this lab. And taking calls with me today is Kava, co-founder and CEO Brett Shulman. Brett, let's bring in our next caller.

18:47 I think we have Sophia on the line. Hi there. Hello, Sofia, welcome to the show. Thank you so much. Um, tell us uh your first and last name, where you're calling from, and a little bit about your business. Yeah.

19:00 Um, I'm Sophia Bowden and I'm the founder of Little Me Allergy and I'm from Los Angeles, California. Yeah. And we make really bright and colorful allergy accessories like placemats, lunchbox magnets, um patches and wristbands to help advocate for kids. Who have serious food allergies. Okay.

19:22 Sophia, what um what what's your question for us? Today that you brought for us. Yeah. So my question is as a niche mission based business, I wanted to know how I should expand my marketing reach and sales channels. Got it. Okay. We'll get to your question in a moment. Let me just ask you a couple of questions about the business. So these are just to clarify, these are if a kid goes like has a metal lunchbox, you can put a bunch of these metal Uh

19:48 Magnets. Magnets on the box that say peanut allergy, aler um Dairy allergy, with an egg allergy on the on the lunchbox. Yeah, just to make sure everyone stays aware. And also patches that they could put on their clothing. Yeah, and they're backpacks or back bags. Cool. I love it. That's a cool idea. Ha tell me, I'm I have to assume that there's a personal connection here. Yes. Definitely. Okay, how did this tell me how this started. Yeah, so when my daughter was a year old, she was diagnosed with a severe food allergy to sesame. And I was terrified. I was a first time parent and um I

20:25 Honestly, I didn't want her to leave the house after that. Um, but I knew at some point I had to send her to preschool. Um so with her being so little and honestly still learning how to speak, I knew that I needed to find allergy accessories that would essentially advocate for her in my absence. So I searched everywhere for the right allergy accessories, but I honestly couldn't find anything that didn't feel cold or clinical, so I channeled my creativity and I decided to design her own allergy accessories. That would essentially make me feel confident in knowing that at every touch point throughout the day, whether it be snack time or lunchtime, her allergy would be kept top of mind for teachers, family, friends, essentially anyone that came into contact with her to keep her safe. Cool. And it's so it's I'm looking at the website. So it's you got stickers, waterproof stickers that you could put on I you know, I guess clothing patches, water bracelet. Even those those like bracelets. I call them live strong bracelet, but they're they shouldn't really call those rubber bracelets and with with allergy whatever allergy is on it. Exactly. Um and uh and so You know, like if there's a five year old

21:39 And they're going to summer, you know, like a day camp. on their backpack you you'll just see it'll say you know sesame allergy, peanut allergy Shellfish allergy and you're like, Yep, good. Because'cause even though by the way, a lot of kids who grow up with allergies are used to telling people these things all the time, but As a parent, it probably gives you peace of mind to know that it's out there. Yeah, and you know, I think allergy

22:00 allergies among the really young population, like new newborns even, and six month a year old who are really still learning to speak, to advocate for themselves. And so this kind of provides a kit for parents and families to at least feel confident in knowing that as they're sending them to camp or grandparents' house or school that their accessories are gonna do the work for them to keep them safe. Yeah. And and you launched this in July of twenty twenty three, so about a year ago. Yes. Yeah, so we're going to be able to do that. All your own money into this so far?

22:45 Yes. Yeah. Yeah. I do have a daytime job, um, which affords me to do this um in the evenings. So it's my evening job after the kids go down. Do you mind telling us what your other job is? Yeah, so I work for a tech company um and I lead creative for three D design. Nice. So this is your side hustle right now. It is. And who knows? Who knows, right? I mean, this is how a lot of a lot of great brands start a side hustle. Sam Adams Beer started as a side hustle. Yeah. So um And presumably I mean, or uh'cause you're in design, you design all these things, all these patches? And do all the artwork? I do. Yes. I I did all the artwork for all the top nine allergens and then we do um a like a design your own section for those with uh multiple allergies as well.

23:32 Cool. And how how have sales been in year one? Are you have you hit twenty five thousand or still below that or I would say still below that. Um you know We have been getting really great feedback as soon as people find out about us. Um and we've also been partnering with more established brands. We just did a partnership with Planet Box um and Abe's uh Allergy Friendly Muffins, which turned out to be really, really wonderful. So My goal is to continue kind of on that path to really get our name out there. Planet Box is a uh it's like a uh a A bento box, sort of, right? Yeah, it's a metal bento box, uh l for for lunch.

24:11 Oh and perfect,'cause you can use the magnets on the Bento box. Exactly. Nice. Okay. Brett? Any questions for Sophia before we dive into her question? Yeah, Sophia when when the allergy issues first came up in in your home

24:25 When you said you went out and you started to look What was instinctively the first places you started to look for products like this? Um, you know, I Honestly, it was just Google and it would bring me not a ton of companies that provided allergy accessories. And if there were, it was very piecemeal. Um, there's lots of also like Etsy makers that do kind of one off things. It could be a sticker or a patch, but not a full kit or collection. And my goal was to really create something where a parent can come and to the website and say, okay, I d I need all of these things for school, rather than kind of figuring it out on their own, which

25:06 I had to do. But again, you know, in my search, everything that I found was just really. cold and clinical and just felt almost like a I don't know, like a badge of shame in a way. And I it's hard enough, obviously, for kids um to deal with having food allergies. I didn't want their accessories or their labels to to make them feel othered in a way. I I I think y your question is about marketing reach and sales channels, right? And you have

25:35 Essentially a pro basically allergies are are mainstream. It's a mainstream issue, right? This is something that affects A a significant popul uh percentage of the population, one or more allergies, right? Like I I don't know the number, but you might, but A lot of people. So this is not a niche thing. It's not like Like a lot of kids have peanut allergies, very common. Um I feel like there's a world and Brett I'd be curious if Sophia was looking to

26:02 expand maybe w is there a world where like going to a gift like a gift trade show, you know, one of these trade shows that that that that's for gift shops. You know,'cause I th I think about Going into a a gift shop. or even a card store and seeing cool things like this there. It's the kind of place that I would imagine

26:22 buying something like this. Like my you know, my s my my nephew's got You know, peanut allergies and and I'd see that and I'd say, Oh, this uh he's now a grown man, so I don't think he needs it on his lunchbox. But you know, I I I could imagine going to a gift shop and seeing these little patches or stickers or Magnets and and thinking, Oh, that's cool. Is there it Br Brett, do you think there's a s something to that to go into a Like a trade show?

26:44 Yeah, that that was going back to kinda my original question about In instinctively, were there any kind of bricks and mortar places that you thought about going because Certainly what we've seen post pandemic. The Yeah, cost of of acquisition or just awareness on the internet or being a DTC brand has gotten really expensive.

27:04 And people have gotten back out in the world and Um, even with the changes in third party data, privacy laws. It's it's restricted the ability to drive

27:15 um awareness. online solely. So where are there potential bricks and mortar outlets that you can be in front of Where your consumer your allergy aller uh parent that has a child with allergen issues or maybe have them themselves um are trafficking and where's that need state happening, whether it's target, whether it's a gift shop. I think often in any of these industries going to a trade show is such a great idea. And just understanding the landscape, the lay of the land.

27:44 What the marketplace is what the potential avenues of distribution are, how it all works. I remember um When I was working with my wife on a snack food company, we would do that. We'd go to the trade shows and it helped us really understand the industry and how it all worked and where our product or offering could fit within that. Yeah. I would love to

28:04 be at a target at like even if there was an N cap that was for Back to school allergy friendly NCAP that partnered with other allergy friendly, you know, foods. I think that would be really Awesome. Um, and even though you know allergies are

28:22 everywhere and it's become some s you know mainstream in a way. There's still kind of you know, it'd be nice to add a Whole Foods to have an allergy friendly section. I think I still have yet to see things like that, but would love to be a part of that. And these These uh

28:40 Retailers will do small tests and and small market or regional tests. So a target you they will do a thirty, fifty, hundred store test. Um if you can you know, called email, contact the right person and pitch the idea because I do think it's a viable idea, especially for uh a lot of times they'll do like an in and out for back to school season as a test. Right, yeah. Definitely.

29:05 Um, Guy, I had a question for you because I know you have podcasts that's geared towards kids. Do you find yourself marketing differently or doing things differently for kids versus your um, you know, more Podcasts that are geared towards adults. A hundred percent. Yeah. I mean with kids there's all kinds of rules on how you you know, you can market to them and on well in the world, unlike on this show on on how I built this. I don't read ads. We do have ads on the show, but uh my voice is not as an ad reader because kids don't differentiate between I'm a character on the show and they wouldn't differentiate between my voice

29:40 On Well in the World and me reading an ad. And so we're really careful about that. But we do have ads and we do obviously these ads are designed to to appeal to the parents because we have kid parent co listening on on that show. And so That's really what you're going for. You're you're you're marketing to the parents, not to the kids. Um and that's who's gonna be interested in this. But I you know

30:01 That's a great channel to think about too, you know. But uh there you know there are millions of podcasts out there. And I I think that you start with, you know, take sort of take a take a page out of Tim Ferris's world, you start with a a thousand people, a tribe. You build a tribe of a thousand people. that you can gather around your brand and those become your force multipliers. And so maybe it's It's like I think about my sister

30:23 who's k you know, who had a kid with Really a d deathly peanut allergy is now a grown man. She was constantly vigilant. I mean, before they went to a restaurant, she would call up to make airplanes, she would call up to make sure they didn't serve peanuts in the plane. So this is the kind of thing that that somebody like my sister when she when her kids were younger would have said to other moms. You gotta get this thing. You put on the backpack and on the lunch box, and that's really where you're gonna find

30:50 The momentum. Yeah. I was just gonna say I I love partnering with the allergen friendly food brands and especially when you think about social collaborations and giveaways. um for the back to school season to help amplify what you're doing. And be a a trusted partner,'cause they that is your target.

31:06 uh customer they are already An allergen purchaser, an allergen free friendly And it's it's almost again like a a validation and uh Um

31:17 friendly referral that you can partner with them and Um, whether it's through influencers, creators, or the brands themselves, I think those are powerful channels to help amplify uh with a an audience that already has that built in passion for what you're doing. Yeah. Absolutely. Yeah.

31:34 Um Awesome. The brand is called Little Me Allergy Sophia Bowden. Thank you so much for calling in good luck. Thank you so much. So grateful for this opportunity. Alright, Brett, we're gonna go ahead and take another quick break, but when we come back, the founder of a Midwestern coffee brand who's found a really interesting way to stand out in the crowd. Stay with us, I'm Guy Raz, and you're listening to The Advice Line. Right here on how I built this lab.

32:15 Welcome back to the advice line on how I built this lab. My guest today is Brett Shulman, co-founder and CEO of the Fast Casual Mediterranean Chain Kava. Alright, let's bring in one more collar, Brett. I think it's Sean is on the line. Sean, are you there? I am here. Hey Brett, hey guy.

32:33 Hello, Sean, welcome to the show. Tell us your name, where you're calling from and just a a tiny bit about your business. Yeah, my name is Sean Murray. I am the founder of Rootless Coffee Company and we are in Flint, Michigan. So Rootless Coffee, we're a roasting company and we make craft coffee. Um, not boring. Ultimately we bridge the gap for consumers that are looking for better coffee than they can find at a chain or in a grocery store, but are a bit intimidated, maybe put off by the sometimes pretentious and dull nature of third wave coffee. And are you at the coffee roastery right now? 'Cause it sounds like in a loud place. I am and

33:15 Not an airplane hanger, that is a coffee roastery behind you. It is, yes. It was between this and my Home, which is right on a main road, which can be even louder than this, so it's very appropriate. I'm glad tell us what what question you have for us today. Yeah, um so Guy and Brett Basically my question is how can I be certain it's the right time to seek growth funding for Rootless?

33:38 And what is the Best method for doing so. Alright, lots of questions. As you know, Sean, we've done a couple of coffee brands in the show, of course, Starbucks, and we've done La Calom and uh Dutchb's coffee too, which is a big big chain.

33:52 Um so how did you get into it? How did you get into this business? Yeah, so It actually started with the craft beer business um in the early two thousands. I was a bartender and brewed beer at home and I really wanted to start a a brew pub. That was like my dream, my goal. Um But I ended up

34:12 removing alcohol from my life for various reasons. Um But You know, and I was I still had the dream I've been kind of that entrepreneur Shovel. You know, people's driveways in the winter. Uh, I had a couple of businesses when I was in college and stuff. So I had that drive in me and I was like, all right.

34:30 What can I do and I was just like Let's do coffee. I love coffee. I'm gonna roast coffee and I just started pursuing that. So so you pivoted to c or you sort of kind of m moved to towards coffee and decided to start a coffee brand.

34:45 And tell me about the brand. I mean it's it's a uh obviously you're roasting it in Flint, but but are you sourcing in a special way? Are you is there something about the way you're presenting the coffee that's that's different or that is is is kind of influenced by your time and in Craft beer? Yeah, absolutely. That was a strategy coming in, so We work with

35:07 Uh artists. primarily comic book artists, you know, locally, but also across the country. And they design our packaging. And it's really like what I saw in Craft Beer was people were like, hey That looks kinda cool. I'm gonna try it. And then all of a sudden They come back to it and they come back to it. And I've seen the same thing happen with Rootless, where you know people will see this cool artwork. And they'll be like, All right, a damn fine cup of coffee, that looks cool. They try it and they fall in love with it. Yeah, it's cool. I'm looking at it now. It's it's like the artwork is super cool. That one that you mentioned that that bag a damn fine cup of coffee is like an owl's head on a

35:44 person with the wearing a business suit. at a cafe drinking a cup of coffee with a pe slice of cherry pie. A really, really cool artwork. And so the the entry point to you for for people like it was You knew that you were making good coffee, but it's hard to kind of distinguish good coffee because some people don't really know, you know, and they don't really know what to look for. But but your entry point was just

36:05 Creating these eye catching beautiful. pieces of artwork on the bags. Absolutely. So My thing was let's just give people that quality, give people that craft still. I mean we're small batch, we you know, we source our uh coffee beans, it's all ethically sourced specialty grade coffee, and you can still deliver people

36:24 the highest quality product, but just In a different way. How many um do you have a coffee store, like can you or or do you just distribute the roast and sell it elsewhere? Yeah, we have a bunch of channels actually. So we are, of course, online. We started with e commerce. It was like smack dab middle of the pandemic, so nothing was open. And then we moved into

36:47 wholesale. So we do B2B stuff with coffee shops, businesses, all sorts of places. And then our third channel is um grocery stores. So we picked up our first like four grocery stores. Two months after we opened, it was insane. And we are now in uh a regional chain here with like thirty plus stores. And then we also have a coffee trailer where we do events. And how many employees do you have now? Uh, including myself, there are ten of us. Wow, okay. So you start in twenty twenty. You're in more than thirty retail locations in in and around Metro Detroit Flint area.

37:22 Yeah, ten employees, um and You're trying to figure out what w how you know, what what you need to do to grow, should you bring in outside investment. Before we get to your question, um Brett, do you do you have any uh more questions for Sean about the business? Yeah, I'm curious w with those four different channels.

37:39 Is there any one channel that stands out? What's the kind of channel mix of your revenue? Is it equally weighted? Uh it used to be e commerce was the biggest By far it was like Uh sixty, seventy percent e camer's thirty percent wholesale. Those two are kind of neck and neck now.

37:56 And then the event. Part of it is very low, very, very low. So it really is between e commerce and the wholesale retail. part are pretty neck and neck. And is and are the profitability of those channels pretty similar, or or do you see any Differences between them.

38:12 They actually do work out to be very similar. Um The wholesale Is

38:20 A little bit more profitable. Um and it's also A bit easier to fulfill. Um'cause it's hey, give me fifty pounds of coffee. All right, here's ten bags versus Here's fifty orders from individuals who want different grinds and that you know, so uh wholesale is absolutely where I have been

38:37 doing my best to focus on uh particularly this year to grow. Yeah, I think You know, it's this is like the age old question of what do you want to be when you grow up? Right. Where where where do you ultimately want to take this business? Because You're gonna be the best one to answer

38:53 how much you want to grow, when you want to grow, as far as taking on investment. Or not. And so I'd love to hear from you how you're thinking about that. Yeah, so the vision is Quite large.

39:05 Um actually very inspired by the Dutch Brothers episode of how I built this. Um I would love to eventually Um Have Shops.

39:19 all over the country. Um, whether that be a franchise model or whether that be, you know, kind of the corporate model that we're doing that. But I love Um marrying Quality And efficiency. I think as you know, Brett, like

39:34 Fast casual did that where they took something where there was only fast food and it's now like, Hey, you can get really good food and you can get it fast. But it's you're not sacrificing that quality to do so. And that's like my big big dream. I've really been like, Hey, how do we get there? How do we do this in the next like five or so years? It's really a matter of like We need the revenue?

39:55 to fund things in order for me to be able to kind of put off like all right, wholesale is now managed by this person, et cetera, et cetera. Can you give us a rough sense of what what your ballpark revenue is? Are you under Three a year. W w roughly where are you?

40:12 We are Actually under a million. Okay. Yep. Um we've seen really great growth though. Um

40:19 In our first year We did just about a quarter million and then we did a sixty five percent year over year growth. Wow. And then last year we had thirty five percent year over year growth. Well. Brett, there's some parallels to where you guys were when you joined Kava. Um I mean small, you know, business um and just still at the beginning of its journey. Um but with potential.

40:41 Well I think it there's a lot of interesting parallels here. I love your vertical integration. We have our our dips and spreads production facilities to supply our restaurants as well as Uh, we sell uh in whole foods markets and other grocery stores across the country and You've got your roastry and you're you're leveraging it through a few different channels and One of the things we we quickly realized early on is that We were gonna focus raising capital

41:07 To grow the restaurant channel. And we've kept the uh consumer packaged goods channel growing slowly, but we've focused our efforts on the restaurants because

41:20 We found it very challenging to grow multiple channels at once. And so we tried to lean into where we thought the greatest opportunity was to bring this food. to people across the country. And I think it also presented a clear story for investors. It gave them a clear understanding of what we were gonna do with this capital and connect those dots clearly to the return. Cause ultimately

41:43 When you're raising money from investors We're all ultimately stewards of their capital. We're good stewards of capital. We'll continue to attract capital, but that allows us to do what we love to do. Right, and build our brand and bring this great food. Uh to to folks across the country. So How are you gonna do that? How are you gonna focus that? And you know, I think it goes back to the question I posed to you earlier.

42:05 Um, what do you want to be when you grow up, right? What pace do you want to grow at? And that's gonna determine how much money you raise'cause Um, I I like to say scaling restaurants is not like scaling SaaS software. It takes people. It takes process. It's building physical restaurants. You're building physical roasteries. So that takes capital and it's hard to scale these things. So being able to afford the

42:29 capabilities, the talent, the infrastructure before the business necessarily affords it for you through your profits. um allows you to scale faster and grow faster and do it Sustainably and successfully. Yeah. Absolutely.

42:43 Амі, ми авісати Would be And you may have done this already. But to think about finding a consultant on a on a just a uh a short term basis. I mean that's bre that's how the these guys found bread, right? It was and it was serendipitous because it was like Ted's cousin said, Hey, this guy bread, and he came out as a c consultant. So I wouldn't j jump in and just hire somebody right away. I I'd look for somebody who could maybe do some consulting. I would look out Especially'cause you're in the Midwest, I I my I would really look for somebody who has experience

43:13 in the food and beverage industry in the Midwest, who understands what your values are where you come from, how you think about what you're trying to do. I mean, maybe there are some retired executives who are on LinkedIn. Who might be willing to do some consulting for you that you could find. That's

43:31 That's actually a really great idea, I think that What I found with people who have been in business for a very long time is they Uh

43:39 Love giving back. Um love working with smaller businesses and Yeah, exactly. And um Yeah, that's that's a great idea. I actually I do have a question for Brett, if I could. Yeah. Brett, um, how did you focus

43:54 uh, Kava, when you had all of those channels and you know you decided on the restaurants w that was gonna be the growth. Um My fear is that I I'm like okay if I want to do

44:06 coffee shops, am I gonna neglect my wholesale or my e commerce? Or did you just kinda bring people into manage those things and let them have their natural growth. Like how did that work? Well, yeah, I mean if you think about it there The channels operate very differently, right? Dealing with grocery stores or wholesale dist distributors is a different

44:27 channel and value chain then A retail shop. And different than DTC. So you would often need different capabilities which would then be something that you'd have to hire more people for.

44:39 Right. trying to stay nimble and agile at a at a small stage and be cost effective and capital efficient. Um hiring folks that can do everything you need in the channel you're trying to grow.

44:52 is how we thought about it and how we looked at it. Um, and even today, you know, we we opened our new production facility, so we we have capacity now to get more intentional about growing the the consumer packaged goods business. But we've talked about if if we're gonna do that. We n' really hire a focus. dedicated team that's fully integrated with our larger team because it operates very differently than our restaurants do and that whole distribution channel. Um so I think it's trying to to

45:21 You know, w we like to try and do fewer things better. It's hard. It's hard to pick and choose. But having that focus helped us have the energy to really make it What it is today. Mm-hmm. And

45:33 Other things I see a lot of small companies leverage is there's more and more uh folks who used to be executives at Private. or public companies that have gone on to become now fractional CFOs or fractional COOs that can bring that experience to you and not have the necessarily uh the commitment on your end. And sometimes those folks go into full time roles if they find an opportunity that they really hit it off with a founder or entrepreneur with and it also gives you a chance to leverage their experience and leverage in a a bit of an asset light way.

46:06 Yeah, that's It's great. Sean Murray, Rootless Coffee Company and Flint. Thanks so much for calling in. Good luck. Thank you so much for having me, Brett and Guy. I really appreciate it. And um

46:17 Yeah, I I love the show and Brett, I love what you guys are doing at Cava, so thanks again. Awesome. Brett, we are coming to the end of our time together again. And hopefully hopefully we can we can see each other and eat some tzitsiki or I mean y you might be sick of of the food that you make. I don't know, but maybe not. We can have like some lamb kebabs and tzeky and

46:39 Some spiked root beer. Some spiked root beer. Throw back some coffee. Yeah. Before I let you go. Tell me this is a question that I I'm I'm asking a lot of founders who come back on the show, which We may have touched on when you were originally on the show. But but knowing now what you know about the world you're in. And you talked earlier about the stress of expanding, you know, when when you guys uh acquire Zoe's What do you

47:04 You know, what do you wish you knew when you first got into this business that would have been helpful for you? And maybe caused Maybe Just a few few fewer sleepless nights. Um

47:16 Two things come to mind. One is right people, right roles is a mantra. I say a lot these days. It's um You know, it's understanding what kind of capabilities and what kind of people you need at every stage of growth. And I think sometimes

47:33 I wanted to believe certain things to be true that weren't necessarily true and Wouldn't Really force myself to see it as soon as I should have.

47:45 Um And I think that The other thing was prioritization. Um, you know, what I said earlier about what you don't do is often more important than what you do do. And

47:57 That really helped us. Turn the tide in the challenges of Zoe's is when I Finally figured that out. And we simplified and focused. And did fewer things a lot better. And that helped us get out of the challenging situation we were in. And then

48:12 Again, uh bringing in people with the capabilities that were needed at that stage of the business because you can't do it yourself. and being able to find people and bring in that you can lean on. and that could be a a force multiplier of you. Uh really. Helped us get to where we

48:29 We are today. Awesome. Brecht Shulman, thanks so much for coming back onto the show. Thanks, guy. Appreciate it.

48:36 And by the way, if you haven't heard Uh Brett's episode The Story of Kava. and how they turned it into this incredible chain. Um go back and check it out. It's an incredible story. Look for it wherever you listen to podcasts, just type in uh Kava and how I built this or just just go to the link in in the podcast description. on your phone. Um and thank you for listening to the show this week. If

48:56 You are working on a business and you would like to be on the show. Send us a one-minute message. Uh tell us about your business, tell us about the issues or questions that you'd like help with, and hopefully we can help you. Um and make sure to tell us how to reach you, please. You can send us a voice memo at HIBT at ID.wonder.com or give us a call one eight hundred four three three one two nine eight. and leave a message there and we'll put all this information in the podcast description as well.

49:23 And thanks so much for listening to the show this week. This episode was produced by Carla Esteves with music composed by Ramtina Rabli. It was edited by Jonas Velop, and our audio engineer was James Willis. Our production staff also includes Alex Chung, Elaine Coates, Neva Grant, JC Howard, Chris Massini, Sam Paulsen, Devin Schwartz, Catherine Cypher and Carrie Thompson. I'm Guy Raz, and you've been listening to how I built this.

What you see above is a preview of the first minutes. One unlock costs 10 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.