Advice Line with Steve Holmes of goba Sports Group

Transcript from https://podmenti.com/t/d56926c21e259d19

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.
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All right.
Let's get to it.
Joining me this week is Steve Holmes. He's the founder and chief activity officer of Spring Free Trampoline. Uh, Steve, it's great to have you back on the show.
Hey, it's great to be here. Thank you, guy.
So we first met, you came to San Francisco, uh we did an interview in person back in twenty nineteen, you and uh Keith Alexander, who was the inventor of the Spring Free Trampoline, and and and if you guys haven't heard that story, we'll put a link in the episode description. It's a great
episode about invention, about partnership, about building something of real
value. You realize it was such an amazing
invention when he came across it, and long story short, you ended up buying the patent from from him. You uh went on to to launch spring free trampolines around the world and
Here we are today.
Yeah, and and and we're still having fun. You know, our Goba Sports Group, uh we exist to inspire joyful moments. And you know, we have had so much fun over the years watching kids and families have joy in their backyard. So it's been a lot of fun. And I know a lot of people know these trampolines. Trampolines are they're like
It's one of those things that doesn't have a brand often attached to it, but Springfree really was one of the first where
There's a brand name attached to a trampoline. They're different because they're spring free. You don't you're not bouncing on springs that you can fall through. And I think your your research shows um
Dramatically fewer injuries.
Um the technology is so remarkable because it's made out of out of material basically
Glas a glass material that that allows it to really bend and and s and bounce like a
Like springs.
you've actually repurposed this technology
You're you're working on repurposing it.
For a completely different use case.
Yeah, amazingly. And we're having a ton of fun. We've built a a very, very large facility in North Carolina and focused on on Build America and uh Buy America. And uh we make rebar out of glass. So You make a rebar for buildings. Yeah, rebar for buildings, for driveways, for and it never rusts. It's
Twice as strong as steel, and it's one quarter the weight.
And it's available in every Lowe's store in America.
Uh it's called Green Bar Two X, and it is really uh revolutionizing the construction space.
Alright, Steve, I know that you are
Manufacturing this rebar.
in North Carolina
Um but of course some of your products spring free manufactured overseas.
Let's talk about tariffs now, because tariffs are

Challenge for
toy manufacturers, apparel companies, anybody
particularly is working and making products in China.
Tell me a little bit about what's going on right now for you guys.
So you go back to my phrase that I've got.
And I don't own the phrase, but I keep using it, which is nothing.
outside of my control get in my way. So the first thing is when the election was taking place in the US and there was talk of tariffs
We go back to some of the things that I've even shared with you in the past during Covid.
Generate cash.
preserve cash to invest cash. We had enough cash that we we loaded the US market with product.
Uh
So much. So we were bursting at the seams and everybody was saying to me, Are you nuts, J how much inventory we have? I said, We don't have enough. Keep shoving it in.
And and so we got a lot of product in the United States pre tariff.
W we still had a tariff, but it wasn't onerous. It was twelve percent or something like that. So um but we got it in and that was good. So now what we're doing, interestingly enough, is we're looking at all of our global channels in a new way.
How do we do that? We've made some significant investments in Europe. We've made some significant investments in other parts of the world. But in the meantime, I mean you can't o overnight
Create a
trampoline factory in North Carolina or in Germany or
No. Look, I I'm uh you you know we've invested so heavily
Um
And their family. Like I I'm not running away from China. It's not that easy. We've done too much. So we're we're really hopeful that there will be some um resolution.
Resolution, resolution, and simultaneously you can't just put your head under a pillow and think that this is going to go away. Now those people who don't have cash
And are unable to preserve cash.
We will see them as casualties in this marketplace. And that's a sad, sad statement. But but it is one of the things that's so hard. I mean, you and I both know, Guy, that one of the greatest gifts to America is they're entrepreneurs.
And I just hate it when I see young entrepreneurs who are so committed um facing some of these dilemmas that are preventing them from employing people and driving value.
Yeah.
Well, we will see how it all plays out. Um and it's interesting times, as they say. Well what I one last comment on the tariff th what I would say to your to the founders like me.
Get yourself connected to a group of like minded people, whether they're in the same industry, opposite industry, and continue to have a dialogue and and sound it out. It's absolutely is it's absolutely essential. Yes.
Cannot solve this alone.
Now actually is a great time for competitors to to
To come together.
Okay. Steve, let's um go ahead and take our first caller, bring in our first caller. Um Hello, welcome to the advice line. You are on with Steve Holmes from Springfield Trampoline. Please tell us your name.
uh where you're calling from and just a little bit about your business.
Hello, guys, Steve. My name is Ike Chuku Aguebu. I'm calling from Prince George's County, Maryland, and I'm the founder of Vay Apparel.
We're an activewear brand for the culture specializing in hybrid designs that merge fitness and fashion that help you look different, move different, and be the difference.
From the gym to your everyday life. Welcome to the show I K Chuku.
Yeah, you can call me Ike for sure. Ike thank you. Awesome. Um Thanks for calling in Ike. Welcome to the show. So so it's V V apparel?
Bay. V E I I. And this is a brand.
that you started. T uh tell me a little bit about a little bit more about the brand.
Yeah, for sure. So I started the brand in twenty nineteen, uh, when I was a student athlete at the University of Maryland. I actually started it after I met the founder of Under Armour, Kevin Plank. Um he's of uh an alumni of the school and he also played football. And he he came and spoke to my team one time and he was like twenty years ago, I was in the same seats at the same school playing the same sport. Um and
Like when he said that, when he started
the the brand he was in my same position. It kinda like lit a light bulb in me. And you know, none of my other teammates really paid attention to it. But like for me, I just kinda saw him as no different from me. And I knew on that day that I wanted to create a brand
Uh very similar to Under Armour, but that really represented and authentically um
spoke for people that come from similar experiences and backgrounds is mine. So
Got it. And it's it's interesting'cause Kevin Plank, like you
was a very good athlete because he was good enough to make the a division one football team, but probably already knew in his first year he was never gonna go pro.
Right. And probably like similar to you. Like you knew that
But the great advantage is you have all these guys who
that you're connected with some of whom will go pro,
And you might be able to get your product in their hands.
Exactly. Yeah, literally my best friend, um and my position mate. He uh now plays for the Buffalo Bills. His name is Ty Johnson and he was my first model when I started the brand and then he got drafted when I started the business and now he's like one of my you know my first investors and he wears the brand and gives it to his teammates and stuff. So it's a it's a great so you started this in twenty nineteen. It's it's performance appearance.
apparel and main shorts uh shirts and made from like
Yeah, exactly. Yeah. So we have a a multitude of products. Um mainly products that are blended, so um polyester, spandex, cotton blends. So like you can work out in them, but then you can also wear them in your day to day life as well. So And sold entirely D to C
Your website?
Um
Yeah, so a majority of our sales come from D to C, but we also have um partnerships with specifically gold's gyms here in the D C, Maryland, and Virginia area. And we're hoping to expand that across the
the region and then the country, um, because Gold Jim is a a great partnership for us.
So doing like branded stuff for them?
Yeah, honestly we kinda just we sell our apparel on consignment with the gyms. We work with uh the owners of the gyms and then we'll invoice them on a net thirty. I'm looking at your website and I notice
A very prominent lion logo, like a lion's mane, lion's head with a crown. Tell me about that logo.
Yeah, so when I was starting the brand, I was thinking of, you know, what really felt like representing me'cause I knew that the brand would come from my core. And I just felt like the line is a symbol of dominance and being a leader. Um, and just
you know, leading from the front. So I wanted to use that logo as a
Symbol for for the brand.
Um, all right. I tell us a little bit about your
Pain point, your challenges and the wool.
Probably have more questions for you. What's your question for us?
Yeah, for sure. So uh my main question is um
How do I continue to focus on my core audience, which is like primarily African American men and women without putting the brand into a box or unintentionally
Alienating other groups who want to support what we're building.
Um Steve Holmes
Let let me bring you in here. Um before we answer Ike's question, um, any questions for for him about about uh the brand?
Well, I too am on your website really quick. Looks fabulous. Thank you. Apparel's a tough game. How do you yeah, how do you how do you managing that inventory and that sizing and all of those issues? How are you how are you doing?
Honestly, it's just been uh trial and error. I'm actually uh like here in my warehouse now. We uh kinda just I've been using YouTube University and learning since I started the brand. So just trial and error is putting things in the market, seeing what people like and really getting feedback from our customers on a one to one basis from texting to calling them and emailing them.
Mm. What about what about um sales so far? Give me a sense of what you guys did did last year.
Yeah.
So last year we did a quarter million. Nearly a quarter million in sales. Yeah. So we've been pretty much growing um a hundred percent year over year since I started in twenty nineteen.
Now, on your website, I look really quickly here and and you are premium priced. So I mean I'm I so how how are you experiencing like the the golds gym is that the price point they sell at as well? Like the same price as the online is also the retail price.
Yeah, so I would say our we have different tiers of products that we sell. So um our hero items, our stealth hoodie and our infinity cargo joggers are our best sellers. Those are like very premium priced. And then we have our more entry level items like our uh graphic t shirts that people would wear in the gym.
Um and we bring those down to a price margin that people in the gym would be receptive to. They wear the brand, people give compliments to them and then they come back and purchase more higher tier items.
Ike I'm wondering about um I mean I'm looking at the cargo joggers, which are it's a great product. It looks very different from anything else.
out there on the market. And obviously look, athletic wear um you know athletic apparel is a is a competitive space, right? I don't believe in saturated markets. I believe in really good branding.
And so
You know, you're asking how do you make sure that you're still authentic to to black men and women, but also not sort of alienating other c consumers. Like if you were to guess um
like a competing brand or product that that lets us say black
men at gyms might prefer to use
I w what would it be? I mean, I I'm assuming like any consumer
They're still buying Viore, they're still buying Under Armour, Nike, Adidas.
Yeah, for sure. I would say like the underarmers, the Viore, even uh Gym Shark as well is taking a market share in the market. Yeah.
Those are the the brands. And so you're trying to figure out how to kinda thread that needle, and I think
to me the answer there is to f really focus on
values, right? Like the I'm looking at your
your website and and there's images of guys uh clearly just really into fitness doing crossfit. Um these are guys who are are strong but not like crazy Jack, just healthy
you know, lean and I feel like
The values that it speaks to are resilience, strength, excellence.
right empowerment and so
You're already using imagery well.
Right. But I think that you have an opportunity to use it even more effectively. Excellence and empowerment and strength. Like that that transcends
Uh
Uh
class, race, gender, like it's
It's just excellence, right? And I feel like
If you can start to think about those values.
It'll start to inform
How you
present the product, right? How you present it out into the world.
Yeah.
Hundred percent. That's a great insight. I appreciate that.
I I think you've gotta look and figure out w what are the other gym distribution opportunities, obviously within the scope of your your
abity to manage.
consignment inventory, which is a really tough which is a really painful financial like I I don't know how you do do that. I actually'cause I used to be in the apparel business. So I'd be careful is my advice on on consignment inventory. Sometimes you might be willing to give up some margin to eliminate the consignment.
'Cause it's it's a very tough place to be coming from. Do you by the way, your friend who's on the Bills, um, is he
Wearing the the clothing?
Yeah, so we actually ended up um adding like a sub brand underneath because he wanted to learn about apparel manufacturing as well. So he wears it to every um
Every walk out we make sure to have pictures taken. We do collaborations and and we're working with uh some partnerships up there in Buffalo to just expand the brand to that Die Hard Bills Mafia.
Demographic.
You give gotta get the Bills to win the Super Bowl. Yeah. And and by the way, you're talking about a real tribe. I mean, those fans are unlike it's not like LA Rams fans. You know, it's like these and not to disparage them, but I mean let's be honest, if you're a Buffalo Bills fan, like
You are die hard. You're like green right, you're like Green Bay Packers fans. Like you're it's all or nothing and
I feel like there's a real opportunity to lean into that committed group of people who who are gonna support
They're players.
Yeah, those fans go crazy. We've even done like anytime we'll do a pop up in Buffalo, like and we'll say the tie's gonna be there, just him being there will bring out uh wide crowds of people, and then some of his teammates are like, Hey, I'm chilling right now, let me come through as well, and that'll just bring even more people. So we're really gonna leverage that with more planning this um this off season going into the season to make sure that we can maximize that audience's uh love.

So I I'm gonna go back to what guy said earlier, go back to values, get those values right, get that existence right, and then look at and make sure you clearly identify your customer segments. So guys just identified a segment that I wouldn't have thought of.
You know, which is basically anybody who's a Bills fan in Buffalo. So look at those segments really, really carefully and then ask yourself two questions. Do I need a channel to get at that segment or can I build a direct relationship? So once again, you have a brand partner.
that actually has the ability to extend a relationship with a large customer segment, and that may be very powerful.
Ike, thanks so much for calling in Vay Apparel. Congrats. Good luck, man.
No problem. Thank you, appreciate you. And thank you as well for um having the podcast. I actually um
When I started the business I was uh listening to the Tope Awatona Callen Lee podcast tonight.
I emailed him um and he reached back out to me'cause we're both Nigeria, both were born in Atlanta and he's been a good mentor to me. So just uh the the work that you're doing doesn't doesn't go unnoticed. I really appreciate it. Thank you so much for for calling and I appreciate it. No problem.
Alrighty, take care.
You know, we did a story on the show, Steve, a couple of years ago about Zoomies, you know that Skateware brand uh shop in the mall.
And
The secret to the success of that store is uh inventory management.
They're just obsessive about inventory management and so it's like
Try to say like I don't say tricks but tricks like that.
can can make or break uh a an apparel b business, for sure.
Yeah, the the s the scary part for me there was the word consignment, you know, like'cause you can get a
a a sizing or an item that'll sit that'll sit on that shelf for a long, long time'cause there's nobody moving it and and you've got your cost stuck in there. I mean you can inventory manage could be at the smallest level and it can be at the biggest level. But if you ignore it
If you ignore it, it can be the detriment of you. Yeah, it's a it's an art. It is an art and a science. In fact. All right, we're gonna take a quick break, but we'll be right back with another collar and another round of advice. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab.
Welcome back to the advice line on how I built this lab. I'm Guy Raz, and my guest today is Steve Holmes, the founder of Spring Free Trampoline. Uh Steve, let's uh let's take another call.
Sure, that sounds like a great idea.
Hello, welcome to the advice line, you are on with Steve Holmes.
Founder of the
Uh Springfree Trampling, welcome. Please tell us your name.
where you're calling from, and uh just a little bit about your business.
Absolutely. Thanks for having me. My name is Cody Johnson and I'm the founder of Grand Tongo, which is the great smelling, powerful de alternative bug spray, which just launched in Target in one thousand one hundred and eighty stores. So I'm calling in from Las Vegas, Nevada, which is where I'm born and raised at. So it's a pleasure to be here with you. Cody, welcome to the show. Grand Tongo. This is a
Mosquito repellent
That is DEET free. DEET is that um
Harsh chemical.
very effective at keeping ticks and other bug off your body, but
A lot of people are nervous about using it because of, you know, its t potential toxicity. So what you have created or you you formulated a d a new DEET free repellent?
We created a new formulation, yes. And we utilized an active ingredient called the caridin, which is a bit more naturally derived, but um we really looked at the category holistically. We looked at all active ingredients that were available for repellency, including DEET, and seeing how we could reformulate them and just make the experience better. I am uh Cody, I'm super paranoid about
tics and Lyme disease. And even though I'm in California, it's less common and I do use that deet spray, but I hate it because I'm always like
It's just like this is not I'm not sure about this. And so
This is exciting. Tell me a little bit about how you
Got into the
Into the bug spray business. I'll tell you, you know, it really has been a journey. I went down the rabbit hole. You know, I travel cr uh very frequently to Costa Rica and I was having to use a deformulation and I would use it on my skin, and when I would use it, it would make my skin feel like radioactive. And then I just began to
Jump down the rabbit hole of like there's gotta be a better solution to this. There's gotta be other options. I've heard of the essential oils, but I've never really had great efficacy with those. Like like mint or or peppermint or different yeah.
Yeah, so I really just became an expert like in the space by digging and asking questions and looking in the EPA database of what was available, what other countries are using. Um I used something that they had used in Germany and I brought it here and used it in my formulation.
That's pic Pecaridin. Is that what it's called? Correct. Picaridin. Which comes from
Pepper, right? Black pepper.
Yeah, it's inspired. So it's not necessarily a biomolecule, but it is clear and it's odorless and it has a nice consumer feel and experience. And more than anything, it's got a long protection time. So it protects you for twelve hours.
Cody, what were you doing before
you launch this. I started out working in emergency rooms. I used to be an emergency room scribe and used to do trauma research, but most of my career was spent in pharmaceuticals and working in medical devices. So I just really became cognizant of, you know, the health factor and cognizant of what we put on our skin and the the ingredients and the chemicals that we use. So that's kind of like my niche is
In the health field.
Nice.
All right, so you um you've got this it's called Grand Tongo, really cool. I like the labels and and you're new, and just very briefly, what what kind of uh sales have you done so far? Any any data to share with us?
Yeah, if you I mean I will share. Um the first year, you know, we did really small. We only launched in a soft launch of just doing a thousand of each SKU, so like five thousand units. So that was itty bitty, teeny tiny. We really just validated the product on Amazon and became an Amazon's choice product because that's when we felt like we had like product market fit.
And then the second year we are capable of scaling up to like meet a more substantial MOQ. So we were right around a million dollars. And then this year we'll with Target, you know, we're projecting to be
quite a bit higher than that. Um, but of course, with this great opportunity of with Target comes a great responsibility. It's like when you have this partnership with a retailer, like you need to perform, you know, you're held to like units per store per week. So that's a lot of my focus is, you know, like I this just went into store and we're crossing this atmosphere going from digital
into big retail and it's just uncharted territory.
Um so Cody, before I bring Steve Holmes on, just t uh g w what's your pain point, what's your question for us?
Yeah, my question's really this is considering my product category, you know, that it's insect repellent, it's bug spray, how do I build a sustainable business with an effective advertising engine with a highly seasonal product? We see a super strong demand during the summer time frame and then the demand
Tips down, you know, towards September. Yeah.
Steve Holmes, I'm gonna bring you in. Canada is a mosquito heaven.
In the summertime. I've been there.
You know, it's uh so anyway, we can before we answer Cody's question, um, do you have questions uh for him?
Yeah, first congratulations. I love the brand. I'm I just jumped on the website really quick. I'd love to know one thing. Is there anybody else that uses that active ingredient? So are you having to compare yourself to anybody else or are you just really focused on the deep, deep, deep
Yeah, it's a good question. We're not exclusive the ones only using Pecaridin, but there is stratification in the category. I would say most of the category and probably eighty percent of products to date still use active ingredient D, and there's also a small segment it on the
opposite end of the spectrum, which is a lot of use the essential oils.
People who ha want great efficacy, but they like trade off toxicity to be able to use that. And then you also have the essential oils that kinda sorta work, but they also don't really work that well. And they don't have firm claims. So where we sit, even though Pecariton's not exclusive to us, there's still significant
room for us to run with and educate on this active ingredient, we kind of fit right in the middle. We've got the longest protection time at twelve hours on the market, but we've also got more of like a cleaner feel, better for you kind of story about the active ingredient.
I I guess my question for you, Cody, is
Why why does it need to be more than a seasonal product? I mean there's
Plenty of products that are kill it. And Halloween candy.
Uh snow gear. Um I mean there are uh pumpkin patches. I just did a whole thing about a very successful pumpkin patch in in N Nebraska. They're open one month to six weeks a year. I mean toys. I have a toy line for my kids uh company wow in the world.
And we make most of our money on those toys between Thanksgiving and, you know
couple of weeks before Christmas. So I guess my question is is there a world where you
You pl you you plan twelve months of the year for four months of profit.
We d yes. And that that's the environment we're currently living in, the second cycle moving into third, most certainly. You know, we're we do have that always on approach on Amazon. We just do see a significant uptick during that summer time frame.
But when you advertise for big retail, it's a whole nother complex scenario where you're advertising in Meta and Google and in these different channels. And oftentimes when the demand or the return on ad spend decreases so substantially, you gotta flip those ads off because you're running red. So
When you're doing big retail I'm just the what I'm finding, you know, and this is my question is like how do we do it to where it's just we can meet that demand, but always keep an always on approach so that the algorithms and those ads stay optimized so that you can s find the best consumer at that time that you need it.
what I would say to you is as you look at your ad spend that turn off, turn on, the only other alternative you may consider, and I know you probably have, but you've probably got limited resources, is what
Grand Tonga has a brand, you build that package, you build that shelf space. What is that next?
product that falls under Grand Tonga. I mean certainly yeah, citronella candles or soothing gels for bug bites.
I'm excited because I've got so much in Q to be able to produce and stuff that I just can't share just yet. You'll have to stay tuned. We've got a lot in Q. Well I would say it it's a wonderful thing if you look at Chris's Chris Zook uh wrote a book about a profit beyond your core. You've defined your core, you've got a core retail partner.
And then the other thing is looking at new products is always a good thing, but they need to come from your core. You know, what are the things that are really critical?'Cause I I I mean, I don't know what it takes to manufacture your your product, but you don't want to be diversifying manufacturing processes too much. Certainly.
You know, one of the things I mean you're you know, i is that the cycle, the sales cycle for this really starts
in January, February. I mean first of all, people are still
going to warm places in the wintertime in North America, they're going to the Caribbean and Mexico. So
i if there's a way to create some kind of campaign a around, you know, always have this in your suitcase or or, you know, when you're you know, in in in early spring
You start advertising on s Facebook, you know, beat the swarm.
You know, get p get protected before the mosquitoes hatch.
Or something like that, right? I I I as an extension of your comment there, Guy, I have no idea what I mean, you've now learned so much about retail. You might look really carefully,'cause they have high margins at retail in airports. Yeah. So it's that last minute thing. And typically when people go to those stores in airports
Um
You know.
They're they're not thinking price, so they're not as price sensitive. Um, but they are thinking, what did I forget?
I mean, how many times have we have you guys been in an airport and said, Jeez, where's my two? Three days ago, Advil. I bought a bottle of Advil. I didn't even look at the price'cause I needed it.
Right, exactly. So I would I don't know where that fits in your in your distribution channel. I can do that, no doubt. You know, I think if you look at the business model Canvas as another tool, there's two ways to get to your customers.
either a direct relationship or through channel partners. And you need to broaden your channel partners. And now that you've launched and got a target as a channel partner, that is always a great way to leverage
into other channel partners. You know, you can use that brand to say we're here.
This is what we're doing. We can help you and we can do this. And there are chains that now run so many of those airport
I don't even know them.
Relay or time. Yeah. Exactly.
Exactly. Uh and I'm and w ideas are easy. Guy and I implementation is a bit more difficult.
Cody Johnson, the brands call Grand Tongo. Good luck, man. Thanks for calling in. Yeah. Thank you so much. I appreciate it.
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 device line on how I built this lab. I'm Guy Roz, and today I'm taking your calls with Steve Holmes. Uh so Steve, let's let's get back into it and bring on our next caller.
Well, it's great. Let's do it.
Welcome to the advice line. You're on with Steve Holmes.
Please tell us your name, where you're calling from, and a little bit about your business.
Hi Steve. Hi uh hi Guy. My name is Kenisha. Um and I am the chocolatier and founder of One More Coco, a form made chocolate company based in Whitby, Ontario, Canada. Um our chocolates are inspired by our Jamaican heritage of uh nostalg flavors. We have creations like a Scotch Bond Honey and Caramel Popcorn.
Nice. Well welcome to the show, Kisha. From Whitby, Ontario. Where is that? Uh where Steve is. Just east of Toronto.
Yeah.
Um these are chocolate is chocolates inspired by
your Caribbean heritage with like you said Scotch bonnet. A Scotch bonnet chocolate, like really like a he'cause that's a spicy pepper.
Yeah, yes. It's one of our most popular. Uh so it has a a bit of honey and a dark chocolate and you have the cake from the scotch bonnet.
It was a slow burn at first, but it's now become one of the things that we're gonna do. That Scotch Bonnet So tell me about a and and so these are chocolate bars or do you make like um
Chocolate.
Bon bonds, tell me a little bit about the the products you have.
Um so we make chocolate bars, bon bons, hot chocolate, which was featured on Oprah's favorite things in twenty twenty three.
Um, it was a it was our trio set, it was our white milk and our Jamaican hot chocolate.
Um and then we have you know other seasonal products that we bring throughout the year.
Can you sh tell tell me a little bit about how this this started. Are you were you in in food and pastry? Is that is that the world you come from?
No, um I'm a trained counselor that went into travel insurance uh when COVID happened. So just as I got promoted uh to travel across Canada for my job, uh we were hip Covet, uh as I was booking my first flight. Um and so while at home
I just wanted to do something that I was like really passionate about. So uh chocolate is is it is a big part of my life. I love it. I will eat it anytime, anywhere. I've had it
For a whole day. Just that's it. Breakfast, lunch, and dinner. Uh, so I thought, Why not chocolate? I taught myself how to How did you how did you teach yourself? Like YouTube and stuff? YouTube, Google was my best friend scrolling through social media because
There was not much to do during that time. Uh and so I launched a one more cocoa in the basement of my parents' house.
Wow, congrats on that. And tell me a little bit about how the business is doing now. I mean it's I I I'm assuming it's mostly direct to consumer through your website. She I I I see she's got a retail schooler.
She do you have a retail store?
Yeah.
It it was a whirlwind of a year, so we launched May twenty twenty one. Then we opened our store September twenty twenty one because I outgrew my parents' basement really quickly.
Um, and we've been there now going on four years. Um Wow. So you have a store in Whitby.
Yes. Yeah. So you'll start in downtown Whitby. Uh so we do our retail, we do um online sales and we also do wholesale in a lot of corporate. So mostly corporate.
Awesome. And and and do you cook there too?
We make everything on site. Yes.
Wow. And and tell me a little bit about how the business is doing. I mean, are you guys
sustainable? Are you
Are you running into headwinds right now? Are things just seem pretty stable?
Um you know.
starting out this year was one of the best year for us. Um it's kind of strange with you know the chocolate
industry the way it's going, but
Um because prices are going way up, right?
a three hundred percent increase over the last eight months. Um but we've been very lucky it just I think more Canadians just wanna support more Canadian businesses. So we've seen um our best sales so far.
Uh y you know, usually after Christmas you s we see a major dip. We haven't
Uh so you know, now it's just trying to build capacity.
Uh
You know, I am a one man show.
So I do everything. So I'm the cashier, I'm the chocolate maker. Sometimes I am the delivery person.
Wow, you have no employees?
No employees, just family and friends that help out. Uh we are hiring the summer, finally. Uh so it it's been, you know
It's
been a roller coaster, but it's been a great roller coaster.
That's amazing. All right, before we get to Steve Holmes and bring him in, tell us what your question is or your pain point that you're trying to solve.
Um, so you know, one of the issues that we had after being on Oprah's Favorite Things is how do we convert uh you know a viral high profile moment into a sustainable marketing strategy. It's great to say I was on Oprah's Favorite Things, but what does that really mean for my business in the long term? How do I take this to convert those customers who only came that one time?
Um to keeping them as long term um customers who engage with our our products.
All right, so you were on Oprah's favorite things in twenty twenty three, and of course that was a viral moment, but how do you sustain that or
take that momentum and and turn it into a a long
term more sustainable marketing strategy.
I wanna bring you in a fellow Canadian here, Kanisha.
Making chocolates.
Not too far from you.
Yeah, absolutely.
But congratulations.
Um I love chocolate. It's probably an impulse purchase. It's it's how are you finding your customers? And then I'll come back to that the Oprah question, but how how are you finding your customers?
Um, so I'm very lucky in with a community that I'm in.
Um, so it you know, most people buy our products for gift, but we have those customers who come in every two weeks.
to buy just a habit home. Um so you know, it we're starting to lean more into trying to really showcase how giftable our product is.
Um and you know, it's strange. We we were pressed for everything in twenty twenty three, but we didn't see the traction until twenty twenty four, like late twenty twenty four. That's when people found out weirdly enough, almost a year later.
Wow.
Back in two thousand and seven, we were we were on the Ellen DeGeneres show and I'm gonna share with you
the number one thing you get out of a viral moment is joy.
But but you don't build your business off of it. You get joy and you get to always go back and look at it as a joyful moment.
But you still gotta stay really, really true to those roots and the foundation about how you're gonna build get your product, your chocolate into the channels that you want and into the customers' hands that you want, th whether through a direct relationship or or or whether it's through a channel partner.
Do you guys um
When you s when you sell, right,'cause a a viral moment, as Steve said, is all really ultimately it's it's really just about the joy and the moment and and you know, we we we've done stories where even big brands like
There's a brief spike, but
It passes. My question to you is do you
Have a way to capture email.
or telephone n cell phone numbers now when people buy the products.
Yes. So we don't have paper receipts in our store. You can only get a receipt through email. So that's uh been helpful. And on our website we do have um an option to sign up for our newsletter.
So but those are those are you've got to opt in and I wonder if there's a a way to make it almost
automatic. So on the website it's one thing because you're you're gonna put an email address to get the order. But when you buy it in store
It's a little harder f to get people to give their email addresses and and phone numbers these days is'cause people are more wary of it. But
Could you incentivise them like hey get five percent off?
if you give your email address or your phone number. And the reason why I say that is because
Uh
email and SMS capture is
That's the long game. That's where you can send the newsletter, remind people, give people opportunities to try you know
limited edition drops, um join the insider community, in s early access to new flavors.
Іноню плазер Інграм.
That's rent you're renting space, basically. They they kind of
own your audience, but when you've got your own email and or messages, phone numbers
You own it. You can communicate directly with your customers.
L let me let me give you a quick observation. I I'm looking at your packaging. It looks great. It's fabulous. Um
One of the questions I would ask is do you have any space in that packaging?
To be creative with
I'm gonna say
a a QR code for a moment. Oh. And the only reason the only reason I say it is this. In Canada we guy, you may not know this, but you've been to Winnipeg with hell. So you know this. There's a thing called roll up the rim to win.
Yeah.
And and I say to you, have a QR code that says melt in your mouth to win or something. You know, I think if you could figure out how to utilize the QR code in your packaging and tie it to a promotion that captured their SMS or captured their email as guys suggested, using that way.
I I remember we rolled out QR codes in two thousand and six and
They died kind of in America.
But
They didn't die.
in the rest of the world. They are really back. And I think that's an interesting idea because you could you could do whatever you want with that QR code. It could it could automatically launch your little you know you've got a video on your YouTube page on your page, a video that tells a story about this chocolate. Maybe you
you know, down the road you you you invest a little bit and you show like
the chocolate h being harvested or or the farm that you buy it from. If if that there is a story there. But
You know, with a QR code it can say, you know, si put a put your email and we'll send you ten percent off right away.
Um and and not everyone's gonna use that ten percent, but then you've got the email address and then you can you're you you're directly communicating with people. Uh and you mentioned you have a newsletter. Tell me a little bit about the newsletter.
How often are you are you updating it or writing something?
Usually it's around when we have a promotion happening or if there's a new product or any changes, uh, we do the newsletter. Uh the goal is to do them at least once a month because I'm one of those people who don't like newsletters that get annoyed if I get too many of them. So I thought, you know, once a month is more than enough.
Um and then we have we do see quite a bit of engagement when we do release a new uh newsletter.
So another comment I would make to you, just to be careful and and here's Guy and I don't want
you to think that we we want you to become lint chocolate.
I mean we'd love we to become the chocolate, but
Here I think you need to think about geo targeting. You don't want chocolates to be shipped and go bad and you get a bad
And get a bad review. So I think it's really critical to find that market segment within you. You're talking about people who come back to your store every two weeks to pick up chocolate. So there's a geo targeting strategy that I think is really, really critical in how you can
you know, figure out and maybe, to be honest, I I know in your area there's lots of Caribbean restaurants. Maybe maybe that Scotch bonnet should be sitting on the check out of a Caribbean restaurant. I I don't know about you guys, but if I walk out of a Caribbean restaurant, I would I'd probably buy a taco bar, right? Yeah.
Yeah, I I and to kinda double down on that, I mean, uh a lot of a lot of businesses, especially in the early stages.
focus too much on customer ac well, not too much. They focus on customer acquisition, which is the right thing to do.
But really as your business begins to mature, right, and you you're you're in a couple years in here now, right? You're about four years in.
It's really the repeat customers. It's doubling down on your existing customers.
Where you're gonna extract the most value.
It's it's you know, to to get new customers, they're gonna come into the store.
And over time you're gonna need
New customers, but
But making sure that that your existing customers are, as Steve said, buying more. Could you create a club?
Where every month
You know, not just a club, but these are your gonna be your call call'em your brain trust. These are the people
Who are gonna try your experiments. Maybe you come up with some super weird flavors, you know, like maybe you come up come up with like a
I meantains, all kinds of things right in there. You do plantains? Cool. We do not just soon and we've done like a truffle oil.
A chocolate bar. So you know I'm willing to throw anything in a chocolate bar and
Have a club that gets your newsletter that's committed to buying like a wine club where you're buying a case every quarter.
They're committed to buying it, but they also get
First dibs on these new
Unusual flavors.
'Cause you know, for our bon bonds we're also
Rolling out our
card where you could stamp and you'll have to 12 purchases, you'll get a free box. Um
Because most of the time our recurring customers are coming in for our bond bonds.
Um, so it's one of the things that we're rolling out, but I think they would really love a you know, box of the the quarter or month.
Club. Um
And trying all our new flavors,'cause that's how I test everything. When they walk in the store I'm like, Do you want to try something? Yeah. Yeah.
H here's here's my last piece of advice, okay. So you're doing it all alone.
So congratulations, but be take care of yourself.
You know, one of the hardest parts about being an entrepreneur is
And it it's about passion and it's about hard work and all of those things. But we've heard hundreds of guys guess and what I would say is
Make sure you
Don't forget to take care of yourself.
Crazy.
Kenisha Lewis, one more cocoa ink.
Congrats. Good luck. Thanks for calling in.
Thank you so much.
Right.
Five, thanks.
Um, Steve, you mentioned something I thought was really important, w which was to take care of yourself.
Um, and I would be remiss to say that you you have you're you're a a survivor of cancer. I mean you've been
battling it and and living with it for over a decade and
Going strong, you look great. How tell me a little bit about how your how you're feeling and how your health is these days.
Well, I I'm I'm I live with cancer. I have cancer. I have a number of active nodules. They are slow growing, but
They seem to be resistant to most other things and occasionally they're an imp
They impede behaviors and uh and uh so recently I had uh I had to have my a lobectomy and lost the top part of my right lung. But um so uh but otherwise I feel great. I do, I feel great and um I think I've shared with you many, many times, you know, today is the best day.

And this moment with these entrepreneurs has been a great joy. It it's been a really a good fun time for me. And so when you live in those moments, um, hey, it is we are all blessed.
We can find reasons to complain, but we are all blessed.
You've you've given some great advice today, really great advice about purpose and about the why. And I and and if you could go back and give the young
Steve Holmes.
Young entrepreneurs give home some advice now.
Knowing what you know.
What would have been helpful for you to know?

Well I'm gonna tell you two things. One is uh it took me about twenty years before I started keeping this black book and and the reason is that what I'm gonna tell you is
You may think you can remember everything you can't. Write everything you learn down.
That's number one.
Um,'cause you can't remember the things you've learned and you things you've experienced. So write it down. And keep it with you.
But the most important thing I would say to my young self
B
Honest with yourself.
And honest with others.
Редлосы консеквенція юмей персив.
because most of the time you perceive consequences truthfully that never materialize.
And you should've.
Actually just
Come clean to yourself and to others. I I'cause in entrepreneurs, you know, uh we've got young guys who, you know, they got an inventory issue and they don't really want to tell somebody else, but I'm just saying that, you know, the reality is make sure you're honest with yourself.
'Cause that's the only way you won't get yourself in trouble.
I love it.
I love it. That Springfree trampoline founder and chief activity officer Steve Holmes.
Steve, thanks so much uh for coming on the show.
Always a pleasure to be with you and thank you for all that you do for young entrepreneurs.
And and by the way, if you haven't heard Steve's original How I Built This Episode with Dr. Keith Alexander, uh you've got to go back and check it out. We will put a link to it in the podcast show notes. Uh, and here is one of my favorite moments from that interview.
I decided to invest in some fundamental research and I wanted to ask myself one question.
Did any retailer in America?
believe the trampolines were dangerous.
So dangerous that they wouldn't sell them.
The answer was yes, and that was Costco.
The CEO of Costco was a man named Jim Senegal, and Jim said, I will not sell trampolines.
Wow. And um so I made it my mission to try and sell Costco a trampoline.
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 guyroz.com or on Substack.
And of course, if you're 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 you are 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 1-800-433-1298. You can leave a message there and make sure to tell us how to reach you.
And by the way, we'll put all of this in the podcast description as well.
This episode was produced by Sam Paulson with music composed by Ramteen Arablui. It was edited by John Isabella, and our audio engineer was Gilly Moon.
Our production team at How I Built This also includes Alex Chung, Carla Esteves, Casey Herman, 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.