Advice Line with Andy Dunn of Bonobos

0:09 Hello and welcome to the advice line on how I built this lab. Guy Rage. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with.

0:42 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. Alright. Let's get to it. Joining me this week is Andy Dunn, the co-founder of the menswear company Bonobos, and the founder of a new social app called Pi, which is focused on bringing people together in real life. Uh Andy, welcome back to the show.

1:18 Thanks for having me. It's good to see you again. It's great to have you back. Um you were first on the show in January of twenty nineteen, um, telling the story of of building bonobos into a multimillion dollar apparel brand. And And if you guys haven't heard that episode, definitely go back and check it out. We'll put a link to it in the episode description. Um but the story basically is that you and Your co founder Brian Spaley, you launched Bonobos back in two thousand seven. You were both students at um Stanford's business school

1:44 Uh and then in twenty seventeen, the brand was acquired by Walmart. for around three hundred million dollars. Um But as we talked later on,'cause you came back onto the show. in the mi middle of all this, you were dealing with some some pretty significant mental health issues and and and eventually got diagnosed uh with bipolar disorder, which you

2:01 went on to seek treatment for and this has really become a a really important part of your sort of purpose in life, to talk about this and to be open about it and to help other entrepreneurs understand that There are a lot of mental health challenges that are involved in starting a business. Totally. And it's funny, I got to see Brian.

2:20 Two days ago in Austin. And after all we went through and some of the co founder divorce stuff, it was good to see that People can evolve and relationships can evolve. And I think that goes for my journey with mental health. My original relationship with mental health was to be in denial. Of

2:36 the condition that I had, which is bipolar type one. And because it is classified. As a severe mental illness, which sounds scary. Can sound scarier than it is. But

2:48 You have to deal with it. Yeah. So it was such a blessing that I got a wake up call in twenty sixteen. It did not feel like a blessing at the time. you know, in the site court at Bellevue for a week, discharged into handcuffs, charged with assault. Yeah. Got to detail a lot of that in my memoir, Burn Rate.

3:06 And then in retrospect Best thing that ever happened to me. Because it informed Not only My new life's work of talking about it openly and trying to help

3:16 other people on this journey. It also inspired my new company Pi. Because of the next mental health challenge that I Experience. I thought I was sort of sort it out on mental health after I got my bipolar under control. And then we move during the pandemic. You moved from New York to Chicago. I did after, you know, fifteen years, built bonobos up to six hundred people there. My whole world was there, all my friends.

3:38 got married there, had a kid there, and then all of a sudden we moved to Chicago during the pandemic. And then within about a year or two I was miserable. I had no guy friends for the first time ever. And I didn't belong to any tribe or community beyond the family I was a part of. And that led to the formation of this new company Pi.

3:55 And basically it's an app that's designed to help people form friendships is interesting because I think'cause we're about the same age and T'es days Men Sort of

4:06 Over forty. They often especially if they have a family, they tend to focus on their their their families, their kids and their partners and They may know a lot of other guys, but they don't actually develop Bonds with other guys. It's very common.

4:20 Totally. We could go so deep into this. We even at Pi had to introduce a series called Dudes Getting Pancakes. To create the lowest possible barrier to just meeting some new guys. Dudes getting pancakes. And it worked. And and it's been fun to reach outside of the people that I meet in the day to day and be more intentional about meeting new and different kinds of people. And reengaging in things that I used to love doing, but I just hadn't done in a long time. Like Playing basketball and chess and poker and things I like doing that just kinda went by the wayside. Yeah.

4:51 As I entered into fatherhood. It's really interesting. And I think there is a I think there really is a a an incredible business opportunity there, right? It's like men's groups, men's clubs kinda like faded away. And I do think we're in a moment where people are looking for a connection and community in in ways that feel Organic. Um, Andy, one of the things often comes up on on how I build this, and I try to address it the loneliness of being an entrepreneur. And you started this with Brian and then you guys had a falling out. But even so, I mean there, even when you have a partner, the stress.

5:23 The Uh anxiety, the sleepless nights. It it requires a lot of work to withstand it. And And I wonder now that you have been able to really figure out what was going on in your head

5:37 While you were running bonobos. If you could kinda give that person advice and say, Hey Here's what You want to think about when you're

5:45 taking care of yourself. Well w what are you what would you have done differently? I would get tactical. With my advice. I would say Stop glamorizing low sleep.

5:58 Yeah. I think that's table stakes for all of us is good rest. And it's hard. It's hard with a startup. And it's hard with family life and with both.

6:08 With both, I actually find it's easier. I remember meeting an entrepreneur who said, Look, I built three companies. She said I built one with young kids, one with older kids, and one with no kids. And that I she said, which do you think was the easiest to build? And I said, No kids and she said, Young kids. I said, What do you mean? She said well I knew I had These other beings to care for or they would die.

6:29 Yeah. And so I had a clear sense of perspective and I had a boundary and a barrier. Where I couldn't work all the time. Yeah. And then the other one that's been just super helpful has been quitting drinking. Giving that up was hard, but it's helped. Because

6:42 It just sort of uh it increases the quality of sleep. So I w I would say take these tactical steps. And I found building pie is much easier for me than bonobos because my mental fitness regime is in a much better place and I have a lot more perspective. And I have the benefit of having a wind under my belt. So I don't have the same

7:02 Existential identity thing happening, which is like oh if this company fails, I'm a failure. And so, you know, pie, I feel like can it can enhance how I feel about myself, but it's not the end all be all. Yeah. No, it's a it's a really, really important perspective. I think a perspective that a lot of founders just don't get a chance to hear. Um and

7:22 And and we should we should talk about that more on the show. We will, I promise. Um So In that spirit, why don't we why don't we take some calls. Can't wait. I'm so psyched for this guy. I am too. I can't wait. So let's bring our first caller. Um Welcome to the Advice Line. You are on with uh me and Andy Dunn, co founder of Bonobos. Please tell us your name, where you're calling from, and just a little bit about your business. Hi Guy. Hi Andy. Hello. Thanks for having me. Uh my name is Michelle Cosantino and I'm from Westport, Connecticut. I'm the founder of Top Banana.

7:53 We make vintage inspired tennis apparel for women. Cool. All right, well welcome to the show, Michelle. Thanks for calling. So Westport, Connecticut. And you make tennis apparel, like is it athletic apparel, like to play tennis, or is it sort of tennis Clot. A lot of people do purchase it that don't play tennis. And you just ask me if they can walk their dog in it. But um it it actually is made to play tennis. It's made out of sport fabric that has stretch, moisture management, uh, sun protection. You can go play a three hour match in it. But you can also just wear it and kinda look cool and and it's as you say, uh it's a kind of a retro look. Like I tell me a little bit about the story. How did you start this this business?

8:35 Well I started this business during Covid and my children were being home schooled at the time and I was following the state curriculum. And there were many more hours in the day, so I took a few hours and I decided to teach them what I knew something about. And I am a serial entrepreneur. I was a graphic designer and then I went to grad school for fashion design. So I started teaching them how to start a brand.

9:04 And then How to start. An apparel line. Wow. So you started this brand It came out of Covid.

9:11 And I would g I guess I would describe it as sort of like a like a kind of a country club look a little bit. Not not in a di just to kind of That's the first thing that comes to mind, like somebody kinda hanging out in Nantucket in the summer, Bar Harbor or like Martha's Vineyard. I think that It

9:26 The country club look is very popular right now, but it didn't Start that way for me. When I was a kid, you could just go to the park and play tennis. There was no barrier for tennis, so I didn't really want to make it elite. And during Covet Everybody came out to play tennis and

9:43 and all levels kind of played together. There was something really magical about the way community came together during the pandemic. And that was sort of the impetus for the brand, rather than make it exclusive, make it fancy. It's kinda for everyone. All right, Michelle, before we get to more questions, tell us what your question is for us today.

10:03 So I originally started my target audience was someone like myself. I'm a Gen Xer and I had just left New York City and I moved to the suburbs and I was Picking up a new hobby. Now I'm expanding my target audience to Gen Y because Gen X ends at like 45. Now I wanna go down to 30. And I find they're very different crew to market to.

10:27 So Uh my question is Out of all the options Uh, what is best for John W.

10:36 Is it? influencers is it collaborations is it Google ads Is it Instagram? Or is it TikTok?

10:44 Jedi Xers? I don't know. I don't know, we're not really on TikTok. Yeah. All right, all right, we'll get to your question. I wanna bring in Andy Dunn because think you know a little bit about apparel, Andy. Um, so first of all, uh w would any thoughts on on what Michelle's is building? Yeah, first of all

11:00 I was just checking out the brand on Instagram and on the site. I love the brand name. Oh thanks. And I love the vibe, the aesthetic, the colors, that sort of firecracker red. I would right off the bat encourage you to be clear that this is an elite brand just based on the price point. And I think I used to I agree. I used to be delusional about this at Bonobos where I thought, oh We are disintermediating the brick and mortar channel and then You know, it's a hundred dollar pair of pants and when I got we you know, it was sort of counterintuitive, we sold the brand to Walmart.

11:30 When I got to Walmart, I realized oh if something like seventy five percent of American men would never pay more than forty dollars for a pair of chinos. And I had this light bulb moment of I've lived most of my adult life in the Bay Area or New York City. And I'm so proximate to people of means that I think of a hundred dollars as a reasonable price for a pair of pants. So I would just embrace what Guy said around like the the appeal

11:55 And just jumping to your question. I think it's all about Instagram for the evolution you're making because Gen X is there and Gen Y is there in droves. I wouldn't worry about TikTok yet. And I would find maybe fifty or a hundred ambassadors or more and just gift them product if you could afford to. And see if you can ten X your Instagram following because the quality of the brand and the aesthetic

12:17 is way under penetrated on Instagram in terms of what I'm seeing of like likes followership and engagement. Right. Okay, I like that idea. Yeah, Andy, I think that's exactly right. I mean Bonobos was and you know, is a premium brand, right? Like you know that you're gonna pay a little bit more for something, uh and you're gonna get more. I'm looking at your website and it is I mean, first of all, now that I've dug digging into it a bit,

12:41 Your products are made in New York. They're made in the United States. You're using uh high quality fabrics. That is not clear. I mean if you were just looking at the site, some of these dresses are like two hundred and twenty five dollars. Some people might think, uh that's a lot, but You're not just making this in a giant

12:59 factory in China. They're made here in the United States. Um I love the aesthetic. I love that retro. It looks almost like a Like a airline flight attendance, you know. Yeah, it's like flight of the Concords. It's like It's like a jet age kinda look. It's dope. This is a dope looking brand, Michelle. It has so much potential as a lifestyle brand because of the way you named it. Top banana, you know, it's that It's that woman who's like

13:25 You know. The alpha female who's having fun looks good and I think it It has so much potential if you can kinda Cross the Rubicon to Gen Y Feel I'm excited for you.

13:36 I I like the idea of embracing the the price point. It is expensive'cause it is made in New York and the fabrics are really nice. And Michelle, what about, you know, in terms of of resources, like Do you have some money or any money to spend, for example, on

13:52 Maybe help with a PR agency. or a branding agency. Or An influence for marketing. Agency. Yeah, that is definitely something I'm looking into. Originally I went out and I went I aimed a little high. I contacted

14:07 Do you know Morgan Riddle? Morgan Riddle is uh Taylor Fritz's girlfriend who sits on the sideline of every tennis match. And she just blew up and She has one of my dresses and I was like oh this is amazing and then The next week she was in the New York Times as like the most influential woman in men's tennis. And I was like, ooh, that does Wow. So her price went

14:32 Straight up. Like to do one post? Oh yes. Mm-hmm. And so I think I aimed a little too high. I think I need to find influencers and marketers that are kind of A little more affordable. 'Cause I'm a small brand.

14:44 Yeah. You know, in this regard, I'm a I'm an investor, angel investor in a brand called Caraway. It's Pots and pans and kitchenware. And what what he did that I thought thought was so smart is he actually built an army of something like three thousand

15:00 Instagram partners. It was just value exchange for free product. So I think The move is don't pay people. Send them product.

15:11 It'll take some work to figure out who those folks are. I wanted to ask you a question. What about Pickle? What about Pickle? What about Paddell? So My first uh my first line was all white. 'cause the requirements for the tennis and I had so many people requesting color for pickle and paddle that um I moved into colours and I'm sort of changing the brand now to be like racket sports instead of just tennis apparel.

15:37 Pickle's on fire. I don't know if you've been playing, but There's so much growth in that category. I mean, tennis is cool and I can tell it's an in sport. I love to play tennis. But I've jumped on the pickle wagon and I feel like uh there's a lot of potential with that as well. On the note of uh Taylor's girlfriend. Yeah. I would actually encourage you to think about whether it's her or someone else, giving between ten and forty percent of the company. to someone like that

16:02 Oh Because that's the difference between building a fifty million dollar brand and a five million dollar brand. And so there's not really any brand this day and age that gets big that isn't carried to market. by someone like that without raising a ton of money and giving it to Mark Zuckerberg. So if you can find someone brand aligned and

16:21 And it's probably someone who at some point like you send the product to and loves it. Okay. And and you just give them a big chunk of the company to lean in with you because that can that can be the thing that You don't tend to a hundred X is the value. And if I could go back and do bonobos again, I wish I understood how much better it is to dilute your brand by giving the equity to someone like that.

16:42 than running Instagram ads. Really? Oh, a hundred percent. I mean Andy I wanna and we'll just push back for a sec. I think that that that there is an argument to be made. But there's also a risk there, right? That that if that influen or that brand ambassador goes south, right? Like it's it's it's gonna kill your brand too, right? It could also be a problem. Not to say it's not worth taking that risk. It's just

17:05 You you know, you mentioned that you want to keep this as a a direct to consumer brand. But I wonder whether it might be worthwhile at least trying to get the product into some boutiques. I mean, we've done so many stories like this. Aviator uh nation is a great example. Tom's, you know, b Blake Mykowski started selling'em in boutiques in Venice. To me there there's an opportunity. You're in Westport, Connecticut. I mean there's some great boutiques in in on Martha's Vineyard and Nantucket or in Connecticut. I would look at

17:36 Places like that where people go especially go on vacation in the summer And I try to identify some cool boutiques where you could You know, put these there on consignment. I don't Andy, what do you think? Yeah, totally agree. I mean, I'll just share with you

17:53 Michelle, I I spent thirteen years building something that I think in retrospect is an impossible business model. Which is D to C apparel. Like I don't I don't actually think it works. I don't think it works. Like the math doesn't work on it'cause it's too expensive to acquire Acquire customers, right? It's it's so um it's a cartel that controls the digital highway, right? It's Bezos and Zuckerberg and Apple. So I love the idea. You're not wrong. Yeah, leveraging wholesale and celebrity and influencer. I mean, if just think about what we've done at Monica and Andy and my sister's brand the last few years. We did a partnership with Paris Hilton and we launched Walmart. And now all of a sudden the business

18:32 Looks looks good. Whereas when it was a peer play D to C it was challenging. Now look, it's hard to get wholesale accounts going. They don't pay on time. It's a time intensive sell in. But I I like the idea, guy. Yeah. I like that too.

18:47 I mean everything that you guys said about the wholesale to retail model I was avoiding initially because I was still Building out this product. It's has to be useful for I wanted to learn as much as I could about the actual product. And all the things you said about chasing the money and all that, I knew.

19:05 But I do think I'm at a phase right now where I could go to a trade show and sell to like the four seasons gift shops. Yeah, I think Because the women I know, when I go on vacation, that's when I buy things. I'm like excited. I have time. You're a little freer with your money, like you're in you know, on vacation. Right, exactly. Four seasons gift shops is a great idea. Yeah. Okay. That kind of an account. Cause it also can scale, right? That the thing that that's hard about boutiques is like it's good for the brand, but it can't scale beyond N of one sometimes.

19:38 Which is why sometimes distribution is cool. But if you have something like that where you if it works, you can then go out to fifty doors. That's cool. So that's what I'm looking at next. I'm looking at hotels who have resorts that are that have tennis and grabbing them, trying to get them excited. And pickable. Yeah. All all that. I mean Let's get out let's get out of the just the tennis mindset. And no, it's bad.

20:00 Rack it, right? That's it's gonna help you because like For example, I was just down in South Carolina with my family at You know, there were there's fifteen clay tennis courts, right? Empty. And then there were ten

20:13 Pickleball courts. Packed. Pact. Totally packed. I I agree.

20:18 I'm I'm on it. Brackets. Racket sports. Um Michelle Cosantino, the brand is called Tapanana. Uh thanks for calling and good luck. Thank you very much, guys.

20:27 So impressed with what you've done. Bye bye. Congrats. Thanks. How was that trip to South Carolina? It was cool. Yeah. Yeah, I was gonna say South Carolina, like Kioa Island, like again, you wanna hit up these sort of tennis kinda

20:40 Golf and tennis kind of places, right? Yeah, that was the thing I thought was most interesting about her was she wasn't She wasn't uh in a reality based relationship with who her customer was. Right. Or at least at the beginning of our conversation. And I think it's so important to know who your customer is, so you can just really sled at that. It's$200 dress, right? This is this is a discretionary purchase. And that's a that that affluent customer is a great customer, so yeah, you know, go going after it. I think she can build something big. Stay with us, because after the break we'll talk to another founder working to take their business to the next level. That's after the break. I'm Guy Roz and you're listening to the Advice Line.

21:19 Right here on how I built this lab. Welcome back to the advice line on how I built this lab. I'm Guy Roz, and my guest today is Andy Dunn, co founder of Bonobos, and a new social app called Pi. Um Andy, what do you say? Should we take another call? Let's do it. I can't wait. Hello, welcome to the Advice Line, you're on with Andy Dunn. From Bonobos, tell us your name, where you're calling from, and a little bit about your business.

21:56 Hey guys, how you doing? Uh my name is Alex Supak. I'm from Glenview, Illinois, which is just outside of Chicago. Uh So hi Andy. What's up, Alex? I'm the co founder of Broda Beverage Company, which is an alcohol brand that uses real ingredients and high quality production methods. Focused on transparency. So we offer truly unique and fresh flavors while providing a better for you experience. All right. Let's talk about this. W thanks for calling, Alec. Um tell me what is the beverage you make?

22:23 Yeah, so uh our Trojan horse in the market is the traditional lemon honey and ginger vodka. It's a Polish alcohol. Um, and the way we make it is we zest the lemons, peel the ginger, infuse it into the vodka, filter it out, juice the lemons, add in a raw honey that we we're getting from Michigan, um, blend it, age it, bottle it. So no preservatives. None of the weird stuff.

22:46 And so tell me a little bit about how you w where this idea came from. I'm assum I'm assuming based on your last name, maybe there's like a family connection here? Yes, yeah, my last name is very Polish. Both of my parents came from Poland. Um, and this is my uncle's recipe. Um, and so his nickname was Broda, which means beard in Polish. That's the Name of our company. Uh it's'cause his wife and kids never saw him without a beard, so everyone called him that. Um but yeah, it's uh it he he got the recipe from from his father, from his father before him, and uh he taught my brother, who is twelve years uh my senior And then I kinda got messing around with it and I've always had a little bit of an entrepreneurial bug and and here we are a couple years later.

23:26 If you don't mind me asking, how old are you? Twenty four. Twenty four. So you are this is this your f this I'm assuming this is your first company, right? Yes, sir. Yeah. Congrats. And and tell me a little bit about how you how you got off the ground. There's there's a lot of roadblocks with alcohol, but um it started off

23:43 kinda my sophomore junior year of college, just trying to figure out if this is a viable product for the market. joined an incubator program at my college SMU in Dallas. uh won a couple of pitch competitions that gave me some confidence um and then just kind of studying up figuring you know, what licensing you need. find a correct co packer which took forever because no one wants to use real real fruits and and raw honey and they want the easiest way

24:08 to make it. Definitely no aging processes because that that takes up time and and resources. So Yeah, there was a steep learning curve and that's it took about two years before we could actually um get onto shelves. Um, so our Kopacker um is uh local to Chicago. So they buy a vodka from from a big guy and then they distill it one more time. But then they let us come in and do all the fruit processing ourselves. So me, my mom, my dad, my friends, girlfriend, everyone's coming in and we're we call it a lemon party. And uh yeah, just juice juice a lot of stuff. Got it.

24:41 Give me a sense of where you guys are right now. You say you launched it about a year ago. in this all direct to consumer, are you selling it in stores? And if so, what are you What what kind of revenue are you you looking at in your first year? We're Mainly um in stores. So at um in Chicago, the Chicago area?

24:57 Chicago, yeah, that's where that's where we're launching right now. Um, so we're in stores like grocery chains, also mom and pop liquor stores. We're in a couple liquor chains as well. Uh and then restaurants and bars'cause that kinda helps build up the uh brand name. Yeah, we we do have online sales to forty four states. And our revenue is around in 95 K right now. Ninety five K, the first year pre-game. That's great. Yeah um and tell us what what your pain point is. What what's your question for us?

25:23 Yeah, so our question is I'm not sure if you're familiar, but the alcohol industry is one of hidden ingredients. So we want to know how we can effectively educate consumers about this issue while positioning our product as both a better for you, transparent, and more delicious alternative. Okay, I want to bring Andy in. I've got a lot of thoughts about that. Andy, I know you don't drink anymore. I still drink. I I wanna drink now after hearing Alla talk about this. And I'm gonna try this, so I will give you my feedback as a somebody who does enjoy a drink.

25:54 Andy, first to you thoughts about what about Broda. First, I love the brand identity. And while Guy was talking, I was I was looking at your Instagram and your site, the branding, the story. You're doing a pretty good job. I feel like you're kinda good at this, like building in public. Storytelling about the ingredients Your your followerships are lower than I would guess. It's a it's a nice looking grid.

26:18 I'm curious, like why do you need help with the storytelling? It looks like you're good at it. Yeah, I mean, um, it's because when I'm doing tastings, I do at least two to three tastings every weekend just to try to get it out there and um, you know, repeating the pitch over and over, everyone seems to be shocked with the fact that Oh, there's an ingredient list on the back of this bottle because you're just not trained Um and the problem is a lot of people are trying to be healthier during the week.

26:45 But when it comes to the weekend, I call it informed unwinding, you know, trying to understand what's in your drink, but nobody knows all these hidden things because they're not required to share them. So that's kind of what I wanna get at because obviously our flavor is different. But how do we also explain that the actual contents are different as well? Interesting.'Cause I sort of my instinctive reaction is to say

27:09 I'm not convinced that people who are going for a drink Are that worried about? The health implications even if they might be healthy and they might work out and they might go to the gym every day. There's all kinds of, you know, swirling, conflicting information about alcohol in general that's been coming out of the last few years. To me, the idea of trying to make the case that this is a better option than

27:31 Another cocktail because the ingredients are healthier or cleaner or whatever words you use to me, I'm not sure that's That's gonna be the best. argument to make because I think at the end of the day people are Consuming based on what they like, on the taste. Right. Um and and that to me is your strongest argument. Right. Can I give a counterpoint on that, guy?

27:52 'Cause I think actually if I hear you make that argument Like here's the deal. The problem with vodka is it's so competitive. Very competitive. Right. It's so competitive. And so if you're gonna stand out What if it is the case that for you know the Gen Z demo that Alec is in 'Cause I don't think you're gonna switch older people who are, you know, stuck on you know, now Gray Goose is what absolute used to be for you know, your your the grandfather generation. Yes. Given that it's a generation that is

28:24 more plant based and more sober curious and all that. for the component of that group that wants to go out and have some vodka on a Friday night or have a couple of nice cocktails with dinner. Maybe this is a differentiator. So maybe part of the way to break through the noise here Is to go on this really difficult journey of getting the consumer who is predisposed to care about ingredients

28:47 To care about ingredients in this category, which I agree with you guys, a category where normally Hey, you're putting ETOH poison in your body, who cares what else is going into it? Well, maybe maybe that can evolve. I don't know, Alec, does that resonate with you or how are you thinking about it? And I'd like to say that I think both of you guys are right in a certain way. So the reason that we we don't put the ingredient label on the front, like RX Bar, for example, is because we still want to have that fun, you know, sexiness within an alcohol brand. It's more of like to to Guy's point, it's it's not the most important. Obviously flavor's most important, but what's really part of our backbone is the ingredients. And I've I've talked to many people that

29:25 when they hear oh raw honey like wow like you know If I don't drink often, but if I do, like I would love to have that, or it's just Kind of We're we're trying to Make them ask the question themselves like

29:37 Do you actually want to know? what it is that you are drinking. So Guys, I'm all in on this. I'm all in on the ingredients. You know, so for example, I was just looking up here on Claude AI. What's raw honey good for? It's soothing for coughs. What's ginger good for? It's good for digestion in the stomach. Maybe it's not on the packaging, but I would encourage you that maybe it is on the front. I don't think if you if you're gonna be known for something, be known for it.

30:02 Be loud and proud. Put it. Everywhere communicate those benefits. I think it's kinda fun. You know, I just had a thought here, and this is like a wild kind of Just

30:13 Just a throwing spaghetti at the wall here, but it might actually stick,'cause You mentioned this idea. Andy that's You know, lemon and and ginger is great for digestion and honey for the throat and like, you know, w and and so what if you m took a risk here?

30:28 And try to think of your competitors not as the cocktail that people are gonna have at the bar, but as like Jagermeister or Fournet, you know, one of these sort of Um D Gestifs, right? And and you kind of Create a broda shot. Culture.

30:44 Like do a shot of broda and you go to and maybe you're doing this already, but you you go to the bar and you pour shots, you're like, you know, prost, what do they say in Polish? Nazdrowia, right? And you boom and you shoot that at the bar and everyone's going, Nazdrow'ia. Totally. And it means for your health in Polish, but the the one thing is that with with alcohol you have to be very careful with Um, you know, saying healthy versus that's why we say better for you because at the end of the day. Don't put on the label, you could just say it when you're at the bar. Yeah. Yeah. And one of our best accounts is actually a a a bar in in um Lincoln Park that does now is doing three dollar shots. It used to be seven, but it's been doing so well that they're They're you know, trying they're making it their special. So and in Polish culture, that is also how you drink it. You don't mix it, you don't dilute it. It's Oh, this is amazing. There's a million alcohols to compete with, but in the shot culture, there's like five. Yeah, right? Right. That's what you want to do.

31:41 Roda shots. Okay. I guess I guess the Polish people haven't haven't had it wrong since the sixteenth century. No. No. And that's a part of the story, which is so cool. And gotta be careful, right? Obviously this is a heavily regulated industry. Very much so. uh and all kinds of Surgeon General's warnings coming out about alcohol in recent but but I think that Look.

32:02 Uh human beings have been fermenting and distilling grains and fruits for thousands of years and consuming it and it is part of uh you know, human behavior in general, most parts of the world. And so I think that that focusing on the traditional side of it, how it's consumed, it's a very much about community. It's very much about being together and

32:26 You're selling an experience, you're not selling a product. Right. That's what I think you gotta focus on. Yeah. A hundred percent. Uh Alec Nastrovia. Nastrovia. Proto Beverage Company. Congrats, man. Good luck.

32:39 Thanks so much. I appreciate it, guys. Nice to meet you. Great to meet you. Keep going. I'm sor I know that it's very wise that you gave up, Booze, and I I will say I have Massively reduced. My consumption to maybe like a glass of wine a week now, really. And uh and it is I sleep much better.

32:57 And now maybe Broda Shots. I know, Broda Shot and I but Andy, you know, and I don't are you fifty? You're not fifty yet, right? Forty six. Yeah. Once you're I just turn fifty. And even forty six, at that point, your body is just like nah, I can't I cannot do these things. Oh, it's different. No, my doctor's told me I'm gonna die in five different ways. You know, you have that uh appointment. And it's like

33:22 Oh wow, I'm not gonna live forever. How do I prolong? The beauty is you can turn it all around your forty. So if you are under 45 when you're listening, you can abuse your body, but then it just has to end. It must end. It must. All good things come to an end. Alright, we're gonna take another quick break, but we'll be right back with another caller. 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 today I'm taking your calls with Andy Dunn so Andy, let's let's bring on our next caller. Let's dive in.

34:19 Hello, welcome to the advice line. You're on with Andy Dunn, Co-founder Bonobos. Please tell us your name, where you're calling from, and a little bit about your business. Hey, hey Andy, my name is Sabrina Nass. I'm the founder of House of Buscadi, based in Philadelphia, PA. We're a Bascadi company that's obsessed with reinventing the Biscadi. So no more sad looking biscottis in glass jars near the counter that look untouched and unloved at House of Bascotti were all about fun flavors, fun packaging, and a very tasty biscotti to pair with your morning coffee. I love it. Sabrina, welcome to the show. Thank you, House of Biscotti. Okay, so it's a great idea. Tell me how this came about. How d are you a are you a baker? Did you have a is this your did you have a business before? Tell me about it.

35:00 No, no, no, no, none of the above. My background is actually in tech. I used to write code for a living, now I'm an engineering leader focusing on the AI space. And the reason why that's so relevant to this story is because during the pandemic, I desperately just wanted to do something in between meetings and I realized uh walking to get a cup of coffee was a great new habit, like fantastic new habitual act. But very expensive. Quite expensive indeed, especially if you purchase a croissant or a Danish. Which then led me to the decision that maybe a croissant every day is not the healthiest. Um and this is where I decided it's time to reinvent the Bascadi. It's the perfect treat. You can dunk it. Um, you can save it for later. It won't go stale like a croissant. And then to point back to my tech experiences, I've worked on a lot of great engineering teams that included studying how customers engage with their favorite products.

35:51 And what I learned from those experiences is that people love habits. People love romanticising those habits and what better habit to elevate than pairing your morning coffee with a biscottti. Okay. Um and so y this is is this your full time job now? No. No, you're still a coder, you're still doing this work. Okay. This is your side hustle. Yes, I I enjoy health insurance. Yes. Okay. So so and and tell me how so are you making this in like a commercial kitchen space that you're renting space out and and and so you're making them all yourself? Yep, yep, Scotty's are are the weekend.

36:26 Baking, fulfilling, manufacturing, sending invoices. Cold calling, all of that good stuff. Awesome. And where are you selling right now? So we're available in over twenty distinct stores and coffee shops across the US. Wow. Um, we've definitely not scaled to a big box retailer as You could assume.

36:44 I would like to make like a few key decisions before approaching that route. And there are reorders, which is another, you know, good signal. Um, but this might be the perfect segue to my question. Yes, please. Please ask your question. Okay. Super. What I'd like your all's help with is figuring out first discovery of eatbiscotti.com, which is the website. And then second, how in the world, once the customer's actually on the website, how do I increase sales? My sales on the website are Pennies. Got it. Okay.

37:15 Andy Dunn, come on in. Mm. Here's a hot take, Sabrina. And this is so cool because it's a category everyone knows, but no one owns, which is so intriguing, right? Like you don't usually have a category. Where there's just no one's Buscati. No one owns Buscot.

37:31 That's gonna be Sabrina. Yeah. So here's my hot take. You can't increase sales on the website and you shouldn't try. Okay. I'm I'm being a little bit cheeky'cause I think over time you can. What I would probably do is just focus on subscription. Because the unit economics of non subscription

37:49 I mean, by the way, no one's gonna subscribe. But given that you're talking about it as a habit, I think what you should aim for is subscription. By the way, later if the company's really big, it's gonna be an Amazon subscription, right? Or in a Walmart subscription. But I would put all my energy into wholesale if I were you. Okay. Let's go get Whole Foods. What's the skew that Whole Foods wants that's maybe exclusive? Let's get Walmart, let's get Amazon, let's get Albertsons, let's get Target. Let's go after all of that. And most importantly, let's get you working on this full time. Because we can't build a big brand if you're not full time. So what would it take?

38:23 for you to be able to go all in on this. Mm-hmm. Is that is that something you want to do? And what would it take to do that? What kind of revenue or what would the step be? Yeah. That's a good question. It is something I'd want to pivot towards full time. The milestone that I wanted to hit this year was and this is

38:42 The mouse that I wanted to hit was sales on websites so that when I have my pitch deck or when I go to v to get external funding or investors, I have a beautiful slide that says like I was able to unlock some minimal traction online. Um that's been like my focus this year because I put so much focus on just building and bootstrapping and launching last year. Is there a number that you would need to hit before you would

39:10 'Cause I'm assuming that you're you probably have I mean, given your your credentials and what you do, you're probably paid well. You probably have a good benefits package. Mm-hmm. Like that's hard to leave. It is. Do you have savings? I do have a lot. I'm I'm so grateful for making the decision. As a nineteen year old to go the tech route. So I do have savings. I guess I'm I'm thinking a lot

39:33 'a lot of I'm I'm kind of an intrapreneur as well at work. Like I do pitch some of the harder products to ship. And um I I always think of the pitch deck and I'm The thing that's been blocking in my mind is

39:47 When I go into those meetings to pitch or even a cold call email, I I just I feel like they're gonna ask about online sales. And if I say it's just been like my parents. Oh no no just say you no say you don't disclose. Oh, I don't disclose. Say we've got a lot of momentum. We don't disclose our numbers. Okay. Love that. That means I'm not doing any sales. I hear that all the time. Thank you, Andy. Don't disclose. But what I would do is do enough that it's growing. So you could say we're growing twenty percent. We don't just grow those numbers, but we're growing twenty two percent month on month. One thing you should do is like

40:24 look at pricing a little bit because price matters online. And a lot of times entrepreneurs price to the margin rather than the market. Because they say we need this margin. But sometimes that doesn't matter if the market doesn't emerge. So you need a price that's compelling, even if you take it on the chin on the margin in the near term. I see. When you build a lot of demand, you'll get that back. So it's okay if your unity economic

40:50 negative or break even now to establish the market and you will need to win on price later. I don't care what else your story is, you will need to win on price to be compelling in the grocery channel. Yeah. No one's gonna be like, Oh, it's premium Biscotti, I'll pay eighty percent more. Yeah. You've gotta be like head to head. Uh in fact, I would want you to be the least expensive biscotti on the market with the best brand.

41:13 Mm-hmm. If you think about why why did something like Warby Parker work or Harry's work, it's because they price disrupted Lixotica. And Gillette respectively. So it's this weird thing where you've got to be cooler and better and cheaper. If you want to break through and build something that's not just a niche brand. Yeah. And as I thought you've got a price problem. So you've got I'm just checking your website. It's fourteen bucks for eight point two five ounces. It's a bit expensive. And la la dolce vita classic Italian almond biscotti with a kind of a cool container. Although my wife would point out it's still you know.

41:47 Singles plastics. Forty ounces for thirteen eighty two. So I think you've got a dream bigger on what this would look like at scale and be willing You know.

41:59 Do all the work to figure out your chin. Yeah, big time. Yep, no, I wrote down that sentence least expensive Biscotti with the best brand. Yeah. I think that's a great idea. I would also and I'm sure you know about this, Sabrina, I would look at That you know, that famous biscotta you get from it sell all over Italy. It's called Antonio Mattai Matte. It has the it's like this it looks almost like a bag of coffee, but because it's so

42:25 Pa it's like perfectly stacked with biscotti. It's like it might even be cheaper than the packaging you're using now. And I like that guy, like the packaging not being plastic. So there might be some wiggle room in there To win on Packaging. And product. Anyways, this is cool. Yeah. That's really helpful. So ditch ditch e commerce. Great. Ditch e commerce. Ditch it.

42:47 It's stupid. No one wants to invest in it either. All the money is going into profitable wholesale led brands now, not into D to C brands. So you're you'll raise more capital on better terms if you want to over time if you get the omni kind of wholesale led equation working, especially in CPG. Yes. This was really helpful. Thank you so much. Sabrina, thank you for calling in. House of Biscotty. Good luck. We're gonna we'll we're cheering you on. Quit your job. Resign tomorrow.

43:13 Okay. Thanks. Phew, that's advice you're gonna give. I'm not gonna give a d tech you know, Mogul that advice. She's she's like a coder. She'll be probably she's she's she's earning uh hundreds of thousands of dollars a year. Yeah, she could her next shit.

43:34 You know. when like the water level on that goes up and on the other side starts to go down and you jump you jump ship. All right. Half built house of a Scotty. I can get behind that. Yeah. Uh, Andy

43:45 I mean Hopefully. We didn't just like destroy a bunch of businesses today. Ha I think we did okay. I mean, it's so fun seeing these folks. They actually all of these have interesting potential.

43:58 Yeah. Well I I think that if In the end. They uh make it. Hopefully they'll be able to You know, they'll remember this moment.

44:06 Mm-hmm. Andy, before I let you go. You know, now knowing what you know about business now and having all this experience if you could go back and give yourself advice, not uh not necessarily around the mental health challenges, but just about like you know, operational advice or or

44:23 you know, or decision making advice. What do you think would have been helpful for you or in the early days that you wish you kinda knew? Yeah, I think it is that Just to worry a lot less about what other people think. I I think for a long time I want it to be liked So badly.

44:43 That I was not able to make the tough organizational decisions. Fast enough that I needed to make. Right. Like Ipanobo's We didn't do a layoff until our twelfth year. The truth is capitalism

44:57 At times requires layoffs. It just does. You hire more people and Good times, things change. You gotta be surgical and the company emerges better for it. So I

45:08 I feel so free Two worry less because I know These things pass. I think the other thing that goes side by side with that is just telling people the truth earlier.

45:20 So in a non defensive way, saying things like, Gosh, I got that work and it just wasn't good. Yeah. Like that was bad work product. And just saying what I think. Without being mean. Uh, you know, without ad hominem attacks, which some entrepreneurs get into. It takes a lot of work.

45:39 And focus to say I'm just gonna do what's right for the company and I'm gonna say say what's on my mind. And gosh, like That is saving me a lot of cycles compared to Bonobos. We did a lot of spin. uh for you know f for me wanting for those characteristics of candor

45:55 And courage. Yeah. Makes a lot of sense. Andy Dunn, co founder of Bonobos and also Pi, an app that helps users find and organize live social events and develop new friendships. Andy, thanks so much for for for joining us. Thanks for having me, Guy.

46:11 Um, and by the way, if you haven't heard Andy's original How I Built This Episode about how he built Bonobos, you've gotta go back and give it a listen. It's a great episode. We'll put a link to it in the podcast description. And here's one of my favorite moments. from that interview. How were you able to kinda stay optimistic? I mean, were you just looking at projections and saying This is gonna be fine. Stay optimistic. What makes you think That I was optimistic. I was

46:36 I was defiant in the face of A terrifying reality. Companies don't die. because the companies fail, they die because the entrepreneur gives up. And that was the approach. Just keep the lights on. Keep growing.

46:51 And that's what we did. Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at gyros.com. Each week it's packed with tons of insights from entrepreneurs and my own observations and experiences, interviewing some of the greatest entrepreneurs ever. And 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 about your business, the issues, or questions you'd like help with. and hopefully we can help you with them. And make sure to tell us how to reach you.

47:25 You can send us a voice memo at Hibt at ID.wondery.com or call us at 1800-433-1298. and leave a message there, and we'll put all this in the podcast description as well. This episode was produced by Katherine Cypher with music composed by Ramtina Rablui. It was edited by John Isabella and our audio engineer was Cena Lefredo. Our production staff also includes Alex Chung, Elaine Coates, Casey Herman, JC Howard, Iman Maani, Chris Massini, Carrie Thompson, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

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