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#12: Marc Nathan on Mindfully Scaling Your Biz & Building Community

Podcast cover image with Springdale Venture Principal
UMAI social circle cpg podcast

#12: Marc Nathan on Mindfully Scaling Your Biz & Building Community

☎️ What if Walmart called you today…*ringgg*

Them: Hello, it’s us. Wallyworld!
You: Wow! I mean, one can dream – but, I didn’t realize this big day for my humble biz would come so soon…
Them: I’d like 1 thousand barrels of your finest pickles. 🥒🥒🥒 And, could we have them by EOD tomorrow?
No one: –
Literally no one, ever: –
You: I’ll have those pickles on your desk by dawn!

Us after interviewing Marc Nathan: NoOoOo! 🥵

When a huge retailer wants your product, it’s a good sign – sure! But, Nathan points out how the pressures of these kinds of partnerships can hurt your biz more than they help it. Plus, how monthly coffee shop hangs are keeping Austin’s CPG network (and beyond) connected in a time when we need it more than ever.

Let us break it down for you…

[1:00] Introducing, Marc Nathan! From university to the venture capital biz. At 21 yo, in the thick of building presentations and meeting investors. Formed his own marketing company to support + problem solve for startups.

[5:40] Now, are you working in tech as well as CPG these days? Yes! A word on people in the chocolate biz.

[10:29] Now, a cautionary tale about the pickles that couldn’t grow fast enough for Walmart. Downward pressure on suppliers.

[12:48] The partnerships you establish should mirror one another in size – agencies, businesses, and retailers. Know when to say no and check your contracts.

[16:24] Unlike tech entrepreneurs, CPG entrepreneurs overall – as well as CPG entrepreneurs in Austin, Texas – are lacking the resources they need – the right education. From ingredient sourcing to co-packaging, every brand has been doing it on their own.

[21:00] So, what does the community of CPG entrepreneurs in Austin, Texas mean to you? Lava hot market. Sophistication. Money!!!

[28:30] And, what’s a common pain point for CPG entrepreneurs in Austin, Texas?

Bootstrap. Know your customers. Then, get the money you need to move forward.

[31:00] Alright, what can CPG entrepreneurs in Austin, Texas and across the U.S. do to better understand their buyers? Facebook, Instagram, and TikTok deep dives. What’s the vibe?

[33:05] Finally, tell us more about your firm! Egan Nelson. Law firm serving early-stage startups.

[36:50] And, when should a CPG brand seek legal assistance?

[40:30] Next, tell us about T-Squared!

[46:28] Okay, what makes a good or bad pitch? It comes from the head and the heart! Is the squeeze worth the juice?

[51:00] How about, what would be your best advice for a small, emerging business owner trying to figure all of this out?

[57:00] Last but not least, what’re some of your favorite CPG entrepreneurs in Austin, Texas (brands)?

Read – #12: Marc Nathan on Mindfully Scaling Your Biz & Building Community 

 

Narrator:
Calling all consumer goods, business owners, and marketing professionals. Does planning content ahead of time stress you out? Do you want to run Instagram and Facebook ads, but just aren’t sure where to start? If your answer is yes, and yes, then our mini course was made for you. It’s 100% free and packed with essential tactics that you can implement as soon as today. To join in, visit our website at umaimarketing.com/minicourse. All right. Let’s get on with the pod.

Karin Samelson:
Welcome to the UMAI Social Circle, where we talk consumer goods marketing tips to help business owners and marketers grow. We’re Karen and Alison, co-founders of UMAI. And, we’re being joined by Marc Nathan, VP of client strategy at Egan Nelson, helping to connect CPG startups with funding and legal support. Plus, founder of T-Squared Agency, a specialized strategic consulting firm, and the creator of Texas-Boxed, a monthly digest email for CPG brands in Texas. Thank you so much for joining us, Marc.

Marc Nathan:
Thanks for having me. Appreciate it.

Karin Samelson:
Awesome. Well, that is a lengthy resume.

Marc Nathan:
A mouthful.

Karin Samelson:
We’d love to start with your background. So, you have a degree in radio television film, is that correct?

Marc Nathan:
I do. Yes. From UT, that’s right.

Karin Samelson:
And then, straight into venture capital. Can you help us fill in the blanks there?

Marc Nathan:
Yeah. It wasn’t so much a blank. It was more of a dash. Well, here’s how it worked, very simply, really wanted to go into TV when I was younger. I thought it was the coolest thing in the world. Everything was great about TV. Films were a little bit more big. Whereas, I think TV was a lot more interesting and present. And went through three years of UT RTF, which I really enjoyed.

Marc Nathan:
And, in the summer of my junior year, going into my senior year, I was visiting my dad back in Houston. My dad was a lawyer back in Houston. And, there was a guy in his office, and the guy looked like a perfect casting for a CEO. Three-piece suit, the vest, the tie tack, the monogram shirt, everything. And he looked at me like I had three heads because I walked in, in shorts and sandals like a college kid.

Marc Nathan:
We got to talking, and he told me what he was working on. I was in the telecommunication space. He’s making set top boxes, and fiber optic, all this really cool tech stuff. And, I was very much a nerd. So, I was really into it. He went into my dad’s office, he came out an hour later, shook my hand, “Nice to meet you, son.” And, walked out.

Marc Nathan:
As I walked into my dad’s office, he looked at me and said, “What the hell did you say to that guy?” And, I said, “I don’t know. I was just talking to him.” And he said, “Well, he thought you’re pretty sharp, and he wants to hire you.” And I said, “Great. I need an internship. I’m happy to do it. Yes, I’m in.” And, he laughed. He said, “Marc, if you’re so damn smart, you’re going to work for me.”

Marc Nathan:
And, that’s true. So, I ended up interning for my dad as he was an attorney, as I mentioned, and he basically put me on helping this client who was actually raising money for the telecommunications business back in Houston. Then, at 21 years old, 20, 21 years old, I was in the thick of building presentations, and meeting investors, and figuring out all the processes that you needed to do to raise money.

Marc Nathan:
And I said, “I like this.” So, by spring break of that year, which is only a couple, three months later, after the fall semester started, I ended up forming a company called Bulldog Financial. My dad, he was the lawyer, obviously. I was doing essentially marketing, but specifically in very, very niche marketing for early-stage technology companies, trying to get them money.

Marc Nathan:
And, I basically did that little job for eight years, until my dad retired. So, I said it was time for me to take a break. Then, I ended up working for a bunch of other tech startup things. Plus, I was very, very active and frankly, still am very active in the startup community in Houston, even though I live here in Austin. Really, I just loved it. It just was one of those things that I fell backwards into, and never looked back. Never worked today a TV in my life.

Karin Samelson:
Unbelievable, that is a dash.

Alison Smith:
Yes, it’s a dash.

Marc Nathan:
Yeah, that was

Alison Smith:
I do love that you did say that he was the perfect casting for a CEO. So, you still have the lingo.

Marc Nathan:
Oh, yeah, no, yeah, that’s true. You’re right. I do. That’s right. Well, I came to realize, and this is something that took me a while to figure out that running a startup, and doing a film, or a television project are basically the same thing. Business plan is a script. You’ve got your CEO as the director, and the producers are the money people. There’s a lot of very similar things that.

Marc Nathan:
I’ve actually run very similarly, in that a startup, I don’t care if you’re CPG, or technology, or even biotech. They all have a problem trying to solve. In the case of a film, you’re trying to sell a story or tell a story. Whereas, the same is true in the marketing business, so you both know this. The same is true for a company. A company is constant telling their story. That’s what they’re doing.

Marc Nathan:
They first, the founder is always telling their story to a co-founder, so they can join them. The people that are then the founders are then selling their story to their employees, to entice them to come onboard. The group then turns around, and sells their entire story, really their vision to the market. And, they have to keep doing it because they have to keep selling.

Marc Nathan:
And so, there’s actually a lot of parallels to the film, and television business, and startups that it only took somebody with my very wacky, unique background to figure that out.

Karin Samelson:
I like that. I like the connecting of the dots there. That’s very interesting.

Marc Nathan:
So, it’s a lot of fun.

Karin Samelson:
And, you were focused in on tech. Really, now, are you working both in tech with CPG entrepreneurs in Austin Texas? 

Like where-

Marc Nathan:
I am.

Karin Samelson:
Okay.

Marc Nathan:
That’s right. So, in 2005, which feels like ancient times, we actually had a fairly sizable investment in a chocolate company. And this was a crazy industrial chocolate company out of Vancouver, Canada. They were selling chocolates all across Canada and then North America. We were the premier chocolate seller to Walgreens at the time that they were trying to compete with.

Marc Nathan:
Russell Stover, you know the big yellow box you always get for Valentine’s Day? Well, Walgreens thought that Russell Stover has had too much power over that particular category. So, they bought one of the brands that my company was selling, and they made it into their house brand. And that was an interesting thing to watch. And we did that for a while.

Marc Nathan:
And that meant I get to go to all the things, like the fancy food show, and expo, and all that. So, if you’ll pardon the pun, got a taste of the CPG business. And, I really enjoyed it. And, this has really become true. Most CPG entrepreneurs in Austin Texas that I’ve met are fantastic. I really, really like them. They’re warm, they’re friendly, they’re sweet. They really and truly want to put a smile on your face.

Marc Nathan:
That’s why they got in the business for the most part. Except, for chocolate people. Chocolate people that I found, and maybe it was just me, I found them to be very, very, closed off, and almost paranoid. And I think it’s because a lot of chocolate people come from Eastern European backgrounds, and they’re just very nervous around people that purport out money.

Marc Nathan:
And, they always think someone is going to steal something from them. It was a really shocking that every single chocolate person I met was a little standoffish, whereas CPG entrepreneurs in Austin Texas has been fantastic.

Alison Smith:
That’s so funny.

Karin Samelson:
That is so interesting. Be aware of chocolate people.

Alison Smith:
Yeah.

Marc Nathan:
Well, you just have to treat them with kid gloves. They’re like introverts, you got to really coax them out of their shell.

Alison Smith:
So, do you see that a lot? You’ve been in the industry for a long time where a retail store sees that monopoly, and then buys, or creates their own brand of-

Marc Nathan:
Occasionally.

Alison Smith:
Yeah.

Marc Nathan:
Awesome, that’s a good question. Yes, I do. The fact is, is just that, and you can even see this extrapolate even to Amazon. If Amazon sees a product that’s doing extraordinary well-

Alison Smith:
I’ve seen a lot in Amazon.

Marc Nathan:
And, it’s predatory. Yes. If they see something that’s selling really, really well, Amazon or some of these retail stores. What’s a house brand at a grocery store? It’s the same thing. And they can do it faster, cheaper, better, and without any of the headaches of dealing with vendors, so they do it. And so, yes, I think it’s a major thing.

Alison Smith:
Do you know what happened to Russell Stover? With their sales, or should CPG entrepreneurs in Austin Texas be scared to get that big, or I mean-

Marc Nathan:
No. No, no, no. Russell Stover is doing just fine. They’re going to be just fine at Valentine’s Day. A matter of fact, we were the ones that created, our company ended up not doing so well. We had some management issues. And what happened was basically, the brand it was called Truffelino’s at the time, went away.

Marc Nathan:
We couldn’t produce and Walgreens couldn’t get our products on the shelf. So, they’re basically saying, “You know what, we surrender.” Now, Russell Stover is what you see when you walk in the door on Valentine’s Day and Mother’s Day.

Karin Samelson:
Yeah. And, that’s such a good note. I feel like there is a little bit of a fear with some past companies that we’ve worked with, where it’s like, getting into a retailer is the biggest thing. But if you have a really interesting product, and the store has an opportunity to create their own house brand, it’s just like, you’re dancing on this line of sharing too much with them, and then being able to run with it, and create their own.

Marc Nathan:
And that’s the biggest fear of working with Walmart. And everybody knows that. Walmart in particular has been doing this for years, decades, is that they will basically dangle a huge contract in front of these little CPG entrepreneurs in Austin Texas. It makes their day. Those CPG companies are popping champagne when they get that purchase order from Walmart.

Marc Nathan:
And the very next day, Walmart turns around, and says we need to knock your price down by 25%. So, we’re going to knock your price down by 25% every single year. Then, if you don’t do what we say, you’re off the shelf, and then all of a sudden, the CPG brands that these CPG entrepreneurs in Austin Texas have ramped up, they’ve bought new capacity, they’ve bought new packaging, they’ve pushed all of their focus into this one giant retailer because it really can’t make or break a brand.

Marc Nathan:
But oftentimes, that brand cannot handle the volume and overextend themselves. And they ended up going belly up because of it. We’ve seen this many, many times. There was an old story, and I don’t remember. I think it was Vlasic Pickles. I want to say it was that brand, where Walmart basically says, “We need a tub of pickles. We need a gallon-sized jar of pickles, and you’re going to make it for us. And this is what it’s going to cost.”

Marc Nathan:
And so, basically, the whole company geared their entire supply chain to supplying these huge vats of pickles. All of a sudden, they realized they were losing money every single time they sold one of these jars, and they took them off the shelf and Walmart said, “Listen, we want cheap pickles, and our players want cheap pickles. So, that’s the way it is. But, if you can’t supply it, we’re just going to cancel out completely.” Then, they did. So, that company ended up going bankrupt because of it.

Alison Smith:
Oh, wow.

Marc Nathan:
Yeah. And that’s a fairly well-known story. I’m not giving all the details correctly, because I wasn’t obviously living in that pickle world. But it was definitely a very cautionary tale for dealing with giant company like Walmart.

Alison Smith:
So, is the moral of the story outlined something like that in your contract, or just don’t work with Walmart?

Marc Nathan:
No, no, you have to work with Walmart, you have to work with the whole foods of the world, the Amazon of the world, you have to work with retail, you must. It’s not going to work otherwise. What you do is you gently push back, and you have to say no. Don’t say yes to everything that the giant company demands, because it will turn you inside out.

Marc Nathan:
I’ve seen it many, many times. There was another company, a local company in Austin that got into Walmart, and it was in the energy bar space. And all of a sudden, it was the best day and the worst day of the guy’s life. Because they simply could not profitably supply Walmart with their downward pressure demands. And that happens over, and over, and over again.

Marc Nathan:
Walmart’s entire ethos is we have the cheapest prices. That’s what they do. That’s what it’s known for. And that’s why they’re the largest retail on the planet. One thing that amazes me about Walmart, I always like to say this, Walmart is the single largest private employer in the United States, second only to the US government. So, they can do whatever they want. And they do it. And when we go there, and we buy a cart full of cheap stuff, we do it because that’s what we’re trying to do.

Alison Smith:
Yeah. We have the buying power to keep them alive. But I don’t know the exact percentage, but don’t put all your eggs in one basket. I don’t know if it’s 50% of your business, or more shouldn’t be via one retailer or one means of income.

Marc Nathan:
But it’s like your business. I always say this to a lot of my startup friends, you never want to be somebody’s biggest or smallest client. If they’re your smallest client, they’re not going to pay attention. If they’re your biggest client, then they can basically dictate the terms. So, you want to have that baby bear just right fit. And that’s true on agency side. And that’s true on company side.

Marc Nathan:
You want to make sure that the company you hire, the agency you hire is the right fit for the stage that you’re in. And they say that the number one single killer of startups is expanding too quickly, is essentially building out infrastructure prematurely. And that can be also said about hiring bigger firms that they can afford to get to where they want to go. But they don’t know that they have to be in the same section, the same stage, as the agencies are working with. I see it often.

Alison Smith:
Yeah. So, to mitigate that, I guess, just learn how to say no to things too.

Marc Nathan:
It’s hard. It’s hard. If somebody dangling a big contract in front of you, it’s really hard to say no, until you start doing the math, and making sure you can actually make money on the contract. Signing a contract is one thing. Actually, getting paid on it is another issue.

Alison Smith:
Very true. We’ve dealt with that.

Marc Nathan:
So, you have and that is the dirty secret about running any business in the entire world, whether it’s an agency, whether it’s a retailer, whether it’s a manufacturer. Your clients, your vendors dictate your returns by how fast they can pay you. And cash flow is the lifeblood of any business. And Walmart, and I keep dunking on Walmart.

Marc Nathan:
But, Walmart has done a lot of great things for this country, and they’re not going away anytime soon, whether I like them or not. In truth, I’m really impressed with the way they’ve been able to handle supply chain, and management, and distribution, everything else. But, they are notorious for slow-paying vendors.

Alison Smith:
Because they can.

Marc Nathan:
They can.

Alison Smith:
Yeah.

Marc Nathan:
Most companies do Net 30 terms. You give them something, they pay in 30 days. Walmart has Net 90, and you know they? Yeah. And you know what they say if you don’t like it? Tough.

Alison Smith:
Yeah, not negotiable.

Marc Nathan:
Yeah, hit the bricks.

Karin Samelson:
That’s 90?

Alison Smith:
Yeah.

Karin Samelson:
Oh, my gosh.

Alison Smith:
I’m sure they’re asking for huge orders too. It’s just how’s that… yeah.

Marc Nathan:
And so, in the last few years, a lot of these brands have learned these stories, and heard these things. And hopefully, by listening to podcasts like this, they can hear them some more. You have to, like you said originally, Alison, you’ve got to check the contracts. Because Net 90 is a killer, especially on super thin margin CPG brands.

Alison Smith:
You better have big money bags-

Marc Nathan:
That’s right.

Alison Smith:
… behind your brand if you even are considering a retailer of that size.

Marc Nathan:
That’s exactly right. Walmart is not your savior. You are getting a whole new kettle of fish when you’re dealing with a giant company like that. And the same can be said of Amazon and anybody else. Anybody can dictate your terms. They’re going to because they can. And that’s how the rich people stay rich, they don’t give their money away.

Karin Samelson:
We want to get CBG honors a piece of that pie.

Marc Nathan:
That’s right, and they deserve it. Totally agree. So, that’s Walmart. But I’ve been very fortunate, I’ve got to see a lot of really interesting brands, a lot of things coming up that are more informed and more sophisticated. The one thing that coming from the tech world and now being very much in the CPG world, I only gotten to CPG about three or four years ago, officially.

Marc Nathan:
And what I found, and like I said earlier, CPG entrepreneurs in Austin Texas are generally very sweet and very nice. Really, they want to put a smile on your face. So, this is a blanket statement. It’s certainly not true for everybody. But, I’ve also found that CPG entrepreneurs in Austin Texas are less sophisticated than tech people, but only because they don’t have a playbook. There’re thousands of blogs, and hundreds of podcasts, and all kinds of workshops, and books, and everything else about running a tech startup.

Marc Nathan:
But very, very few about CPG entrepreneurs in Austin Texas. And the CPG startup books out there are typically autobiographical. Here’s how I built this, or here’s what I did for this. And it’s about their individual story and their journey. But it’s not a blueprint of actually, how to run a brand. And so, CPG people, well, I find them a lot nicer in general than tech people. The tech people have a lot more information to go on.

Alison Smith:
And why do you think that is? Why do you think there isn’t a blue book or a playbook?

Marc Nathan:
There should be, and I’m sure there are out there, I just haven’t read it. I’m sure there’s something out there. But I think mostly, because, and I’m sure you both have dealt with this yourself. When you go and start a tech company, it’s typically the old story, it’s the old stereotype. It’s two young guys in a hoodie, and two hoodies in a garage, building some software piece that ultimately gets sold to Microsoft, or Google, or something like that, or Facebook.

Marc Nathan:
Whereas, CPG, the road is a lot more rocky. It’s a lot more obscure. Nobody really knows exactly what the path is. And I think it’s because they’re so individualistic. Every single brand is different. And every single brand has such a different vibe to any other brand, even the one right before them. Whereas, tech companies, the pattern is there.

Marc Nathan:
And it’s been essentially, the same pattern for the last 25 years. Whereas, CPG, the modern world, obviously, CPG has been around since the stone age. We know what a CPG is, we know what a brand is. We know what food is, and beverage, and accessories, all that. Whereas, I don’t think that they’ve had the forethought to really write it down and teach others.

Marc Nathan:
Because, frankly, most CPG entrepreneurs in Austin Texas out there – after creating their first brand, are one and done. You built a huge brand, you sell it, you may do another one. But most of the people retire because it takes them 20 years through the overnight success and selling it.

Karin Samelson:
So, when can we expect that playbook from you?

Marc Nathan:
Yeah. I have you guys write it. You people write it. I don’t know, it’s a lot. And I don’t know nearly enough to even put an outline together. But there are a lot of really smart people that do.

Alison Smith:
I find CVG to be the most, so many factors go in. So, you have to find your individual co-packer, or you can go the retail route, you can go the eCommerce route, you can go both routes. It’s just there’s so much going on.

Marc Nathan:
Right. That’s exactly right.

Alison Smith:
That I think that’s why there is no singular path. Maybe someone could create the most profitable path, but-

Marc Nathan:
There are people that are trying. I have seen it. I’m actually pretty impressed with what things are going. But what I found is that a lot of these newer CPG entrepreneurs in Austin Texas, especially the DTC, the direct to consumers are taking pages out of the tech playbook. And we’re starting to see a lot more consolidation in the market. And I’m sure you’ve had clients that asked you questions like, where do I find a co-packer?

Marc Nathan:
Or how do I find a packager? Somebody who can actually do the packaging. What about picking place, and shipping, and all that? These are questions that are still very much in the stone age. There’s no website you can go to. Well, I’m sure there are quite a few websites you go to, but none of them are for your brand or for your location. And the real problem is that it’s still very much a trial-and-error business.

Marc Nathan:
The same is true for the actual taste of whatever you’re trying to make. How do you find the right ingredients? Next, how do you find the right mixologist? Then, how do you find the right food scientist to tell you that whatever you’ve cooked up in your kitchen is going to be able to be produced in mass with the right ingredients that are healthy, and organic, and all that? That adds a whole other layer.

Marc Nathan:
But the fact is, is that there is such a fragment in business that people have been doing this for 100 years, that there’s no real modern way of really deciding what your brand should be, and how your particular food item should taste. And then, you have to turn around, and go, and sell it once again, either eCommerce or through retailers. So, the entire CPG market really is very trial and error.

Karin Samelson:
And I think a lot of it is word of mouth too, just as many word of mouth recommendations you can get. And that brings us to another question about community, and how important it is to build community to grow your own brand. So, what does the Austin CPG community mean to you?

Marc Nathan:
Everything. It’s a great question. I love this town for CPG, and for other reasons. But the CPG market in Austin, and I can say to you while we’re recording this in the end of 2020, which has been a great year for everybody as everybody will admit, I’m kidding, of course. It’s been horrible for everybody. Except for CPG. The CPG market in Austin is absolutely white hot.

Marc Nathan:
It’s lava hot. It is lots of people, and brands, and people moving here, and sophistication, and money. Lots of venture capitalists are coming here with CPG in mind. There is this huge groundswell of activity. That’s really only happened in the last few years. And I’m very proud to be a part of it. I certainly wasn’t the catalyst. But I saw the trend. And I said, “This is something that we need to focus on.”

Marc Nathan:
And the way I did it about three years ago is as I was talking to a friend of mine, a guy that everybody in the CPG market in Austin should know, a guy named Felipe Vega with IronClad. He was just the greatest guy in the world. We met one day through one of the lawyers in my office, and shook hands, and looked at each other and said, “We’re going to be friends,” and we had been.

Marc Nathan:
And so, we ended up about three or four weeks later, ended up throwing a pretty big happy hour together. And we brought a bunch of brands in. It was a lot of fun. There were a lot of people there. I thought maybe 20, 25 people would show up. We’re 150 people there. It’s fantastic. And it was hot, in the summer at a brewery, and sweating.

Marc Nathan:
But, it didn’t matter because we were having a great time. And, it made me realize that there was a need for regular community meetups. So, that’s when I started a very, very simple coffee meetup that I called wakeup coffee. But, we ended up just very simply, I put an invite out to a bunch of people and said, “Come to this coffee shop.” At the time, it was Houndstooth.

Marc Nathan:
But we immediately switched it to a place called Cosmic Coffee down in South Austin, with a great patio, and great coffee, and good vibes, and good people. And we’ve been doing essentially, an open coffee every single month for the last three years. And it’s just a very casual, very easy way for people to come, and say hello before work. I love happy hours. I realized to go do those kinds of things.

Marc Nathan:
Obviously, not now during COVID. But I figured there was a lot of happy hours out there and they were great. The problem with happy hours is twofold. Number one, you don’t get a lot of work done because you’re too busy drinking. Fine. That’s what they’re there for. But number two, and really, for me, they’re always too loud. You can probably tell I’m a talker.

Marc Nathan:
And when I go to those happy hours, I’m usually yelling, and I can’t hear anything because the music is loud, people are loud. But a coffee is actually a lot easier. And it’s before work. I usually do it around 8:30 in the morning. So, people can be a little late for work because they are technically working. But it’s a lot calmer and a lot more interesting because the people that wake up early are the people that really want to go.

Marc Nathan:
Most people will show at the happy hour just want to go to happy hour, doesn’t matter who’s throwing it. And I’ve also found, and this is just a personal thing, happy hours are great when you don’t have kids. They are, they are a lot of fun. But kids take up a lot of time, and they’re great. They’re wonderful. And I’m very proud father and all that. But they’re a time suck.

Marc Nathan:
And so, it’s very easy to go to an open coffee, or a morning meeting when kids are either at school, or now during COVID times, working from home. And it’s very easy to actually get that stuff done because older people, people who are a little bit further in their career can actually do them. Whereas, happy hours are usually off limits. That’s just a lesson I learned over doing this for many years.

Alison Smith:
Yeah. I’ve been, and it makes you very excited, and energized to continue your work, and you’re in it together with a bunch of other CPG entrepreneurs in Austin Texas or so. Truly, I think it’s great.

Marc Nathan:
I think that’s very true Austin. Austin in general, and I found this, I’ve only been in Austin for six years, and I’m from Houston originally, and Houston is great. I used to come up here all the time, even after I went to school here. But Austin has a very, very collaborative vibe. We love helping each other, and we love seeing each other succeed. There’re never any sharp elbows.

Marc Nathan:
There’s never any you do well, so I’m doing poorly. It’s never a zero-sum game here in Austin. I found Austin entrepreneurs, especially CPG entrepreneurs in Austin Texas are really, really open and very, very free with their time. If somebody has a question, they’ll always answer it. If there’s ever a hiccup or a problem, there’s always somebody to shoulder to cry on. But there’s a very collaborative vibe here in Austin. And I think that’s really what makes Austin special.

Karin Samelson:
Yeah. We completely agree. Even getting to talk to you, and it’s interesting, you mentioned Felipe, I had no idea that he was connected in that way. But Felipe is one of two people that really got us our start.

Marc Nathan:
He is the greatest. He really is.

Karin Samelson:
And a very busy, very successful person that is willing to help others in this industry, just offering his time. You don’t want to take advantage, but it’s so true that this community is so strong, and we want to see each other succeed. I love it so much.

Marc Nathan:
And it’s a lot of fun too. And people like Felipe and a few others that are just there, they’re present, they’re open with their time. That’s the only reason I felt like I was even close to being a legit my toe in the water of being a supporter and a helper of the community. Because I saw other people doing it, and I just thought that I might be helpful in a certain way.

Marc Nathan:
So, I enjoy doing these happy hours. They’re all online now. They’re all through Zoom, and everything else. So, it’s a very different vibe. But we are trying. We’re doing our very best. And hopefully soon, we’ll be back into the real world, face to face, buying actual coffee and drinking it with each other vibe, soon, we’ll see.

Karin Samelson:
It’s so impressive that, I mean, just this last one that I was on, there are so many people on. You have built a very strong morning wake up with these folks. It’s really inspirational, honestly.

Marc Nathan:
Well, thank you. Thank you. That’s very kind of you. I enjoy it. Look forward to it. A lot of people will say they’re introvert. They don’t like networking. I’m the exact opposite. I’m an extrovert-extrovert. I like networking. For me, I enjoy meeting people. I enjoy learning about what they’re working on, and really who they are, and what their personalities are. So, to me, it’s great.

Marc Nathan:
And I will tell you that we were doing these things in real life when we were doing at the coffee shop, really, easily have 40 to 60 people there happily. That was an average time for us. Now, online, people have webinared out, they’re Zoomed out, they’re just tired, they don’t want to do anything. They don’t want to wake up early anymore.

Marc Nathan:
One of the greatest things about COVID is that you can basically roll out of bed and be in front of work five minutes later. And that’s something I don’t think it’s going to go away too soon. But our numbers are gone slightly down. And it’s not about numbers, it’s about the connections, and about the people. And the core group of people that show up are really great.

Marc Nathan:
But I will tell you, another advantage of doing these all online is that we had quite a few people from other cities that are joining us. We have a number of people from LA, San Francisco, Chicago, New York. And it’s awesome. That’s a really, really good thing because the more people that know about the Austin community, the more people, like you said, word of mouth, can talk about the Austin Community.

Karin Samelson:
Absolutely. And since you’re talking to all these CPG entrepreneurs in Austin Texas, what is a common factor, a common pain point that you hear with a lot of them?

Marc Nathan:
This is true, not just for CPG entrepreneurs in Austin Texas, this is true for startups across the board. The very first thing every startup will tell you is all they need is money to make it. I just need an investor., I just need a big customer. I just need a bank loan. Whatever that might be. The very, very first thing that a company should be thinking about, really, the deciding factor where they’re going to make it or not, is if they truly understand who their customer is.

Marc Nathan:
Who is your buyer? How do you get your buyer? Because if you know that, that piece of knowledge will help you get money. And a lot of people especially newbies in the startup world, they just think that you have an idea. You run out, you find some investors, or the proverbial VC that will stroke a check for you like a gift from God. AND then, all of a sudden, everything is easy street.

Marc Nathan:
And the opposite is true. Most investors will only give you money if you’re already successful, or getting to be successful. And therefore, to be successful, the very best way, and this is very much an Austin thing is Austin loves bootstrappers. We love to say, let’s find our customers, let’s get them to pay us, and let’s let them fund our services. And then, we can turn around and get money.

Marc Nathan:
And so, in the case of CPG entrepreneurs in Austin Texas, it’s know your customers, know their profile, understand what their needs are, understand their price points, and figure out how to get to them in any way you can. Most people start with friends and family. And cottage industry laws have changed, so you could start selling cottage industry type products. Farmers markets are huge.

Marc Nathan:
We all know that. That’s how a lot of brands get started. Once you get past the farmers market stage, then it’s really time to think about eCommerce, specifically around direct to consumer. And only then is when you should really start thinking about retail because you have, once again, the buying power to actually make those contracts stick when some of the bigger retailers say this is what we want.

Marc Nathan:
So, things have changed dramatically because of the internet. And frankly, because of COVID a little bit. But I think a lot of people are putting the eCommerce step before the retail step, which I think is smart.

Alison Smith:
I love that you said that because Karin and I are pretty big on ecom first, just to prove your product, understand your buyer, hone in on your messaging before you start. It’s a lot of infrastructure. It’s a lot of money when you get into retail. To me, it’s archaic side of the industry still. So, I love that you said that.

Marc Nathan:
Yeah. I’m a big believer in that. And the model has proven out. There’s a lot of companies out there, and just think about the amount of inventory money that has to sit on store shelves, or in warehouses, or on trucks to really serve that retail market, where you don’t have to worry about that at all in eCommerce. And the most important thing is if somebody buys your product at an H-E-B, you have no idea why they bought it, what they bought it for, how they bought it, what they put in their cart before that. Whereas-

Alison Smith:
Right. You can’t track marketing. It’s tough. So, with that being said, what can CPG entrepreneurs in Austin Texas brands do to really understand their buyer?

Marc Nathan:
So, talk to your buyer first, obviously, figure out who your customer is by either doing focus groups at the high end, but really at the low end, really understanding the digital marketing, whether that’s and obviously, UMAI does. So, I know that you have a lot more opinions than I do about this. But understanding who your buyer is by profiling them with exact matches on Facebook.

Marc Nathan:
Understand what they’re doing on Instagram, and TikTok, and every other system that’s going to come out that we don’t even know about yet. But really questioning the customer, why they have this brand, look alike brands, why are they buying this brand, except for, or because of another brand? How do you view adjacent markets? How do you do opposite markets?

Marc Nathan:
So, non-adjacent markets. I don’t think, and this is my favorite example. You don’t often see a yoga studio next to a gun store. There’re different vibes. The customers are not going to be going from one store to another. They are not doing that. Now, smoothie shop next to a yoga store. Sure, I get that. No problem.

Marc Nathan:
The fact is that you have to know where your customers are going, what their motivations are, and why they’re doing the certain things they’re doing, even if they don’t know themselves. That’s your job to figure out. But really understanding what that profile is, and building those personas I think are really critical.

Alison Smith:
Definitely. I would love to hear more about your firm, Egan Nelson, where you provide funding and legal support. So, how can CPG brands work with you? Do they pitch you? How does that work?

Marc Nathan:
Well, I’ll make this as easy as I can. And this is the easiest sales pitch I can ever make. Egan Nelson is a law firm, period, the end. Law firm is a law firm is a law firm. We offer a bunch of different services for a particular niche. In our case, Egan Nelson was founded in Austin. We have offices in Dallas, Seattle, New York, Denver, DC, and we’re thinking about a Boston office.

Marc Nathan:
And the fact is, is that we’re a boutique shop, and all we focus on is early-stage startups. We’re about 70%, 75% consumer tech, and B2B tech, so still in the startup tech phase. But in the last few years, we’ve really grown our CPG market quite a bit. We just hired a lawyer who came from Starbucks in Seattle, which is great. And we’ve got a lot of CPG experience.

Marc Nathan:
And we’re really focused on building up that early stage, that zero to one, and one to two style startup where they’re going from the initial friends and family round of funding to the Series A and Series B. So, the funny side of what we do is really me. They hired me, and essentially, acquired my consulting firm about five years ago, specifically so I can be a value add to our clients, which is helping them navigate all the different pitfalls of raising capital.

Marc Nathan:
My network of investors, whether that’s VCs, angels, Angel networks, high net worth individuals, family offices, banks, alternative funders. I know a lot of those folks, and I try to introduce my clients to them at the proper time. So, while we’re a normal, standard, everyday garden variety law firm, the one somewhat unique aspect of us is they have somebody like me who’s doing not just business development, and marketing, and events.

Marc Nathan:
But also working directly with the clients almost in the capacity of an investment bank, even though we don’t take any extra fees, or anything with that. We’re simply a value add. And our job is to make sure they have the very best legal service. And they have at least some guidance around the navigation of running a startup. So, they found me through my newsletter, which I was very proud of.

Marc Nathan:
And I can, with 100% confidence, say that newsletters work because it means I have the job I have now. So, it made a lot of sense to them to have a marketing guy who knew the market. Really, it made a lot of sense for them to have a business development person who knew business development. Then, I really do like the firm, they’re really good people.

Marc Nathan:
They’re not just good people, for lawyers, they’re good people, period. And, I enjoy the work. Plus, it sells itself because we do very, very good legal work for less than the cost of most law firms out there. So, you got me. So, what’s the loose?

Alison Smith:
That’s amazing. So, it’s just a value add, there’s no-

Marc Nathan:
That’s all it is.

Alison Smith:
… equity or any thoughts like that.

Marc Nathan:
Nothing.

Alison Smith:
Okay.

Marc Nathan:
No success fees, no equity, no hidden fees. It’s just I am there specifically to facilitate capital. And the reason we do that, A, is because clients need it, number one, it’s a market need. Number two, we have to make sure our clients have money so they can pay us. So, it’s a selfish need as well. But at the same time, it really does put us a little bit above, it edges us out a little bit above some of the smaller and equally good law firms out there.

Marc Nathan:
And it also hedges our vets against some of the giant law firms out there that would love to work with startups who are simply too big. So, we’re that in between middle market gap. And I really enjoy it. I think very progressive, very forward-thinking law firm, and we do very good work. And like I said, we do good work, very personal. And it’s less expensive and responsive than some of the bigger firms out there. So, it’s a win-win for everybody.

Alison Smith:
I think you said it, but I guess looking at financials, when should a CPG brand say, “Okay, I need legal help?” Is that when they’re looking at contracts with retailers or is that-

Marc Nathan:
[crosstalk 00:37:08].

Alison Smith:
Okay.

Marc Nathan:
So, the easy answer is you should get a lawyer the minute you want to start incorporating your business. The minute it becomes, “A real business,” you should have a lawyer. Nine times out of 10, that lowers your brother-in-law, or the divorce lawyer down the street, or somebody else. But the minute you want to get real with your business, you really should have a good attorney.

Marc Nathan:
All of these online services, and their best exemplified by something like LegalZoom, they’re fine at the very beginning just to incorporate, if there’s nothing complicated about it. But just a single LLC or a single-member organization, those are fine. The minute you get anything close to a complication, you want a good solid lawyer to look at it, and somebody who understands the startup space.

Marc Nathan:
So, our world is really just past that stage. We certainly do all the incorporation work, we certainly can convert you from the proverbial Texas LLC to a Delaware C-Corp to receive funding. Typically, that’s a company that’s been around for six to 12 months. And that’s where we really get involved. But our real goal is to work with a company from that year one to about your seven or eight and hopefully beyond.

Marc Nathan:
That’s the whole point. We get in very early so we can stick with these companies until there’s an exit, whether that’s through a merger and acquisition, an IPO, something like that. But ultimately, I think that as a law firm, we’re best served in that just after traction, you’ve figured out your brand new, you figured out your model, you are starting to look at contracts, you’re dealing with whether it’s distribution contracts, co-packing contracts, retailer contracts.

Marc Nathan:
That’s when you want to bring on a lawyer that’s going to really defend your interests against all the people that have been doing this for a million years. Personally, I do a lot of mentoring and a lot of support work for early-stage companies. So, back in the napkin idea, I hear all kinds of crazy ideas all the time, which I personally love. But from a client perspective, we’re looking for just a little bit later stage.

Karin Samelson:
Awesome. So, please-

Marc Nathan:
Karin, I was just going to say the best way to put it, and my favorite way of putting it is that while we’re looking for startups, and this is true of every service provider out there, whether it’s UMAI, or Egan Nelson, or Felipe’s go IronClad, we’re all looking for funded startups. We love dealing with early-stage baby startups that have an idea, and a lot of pluck, and they just want to make it.

Marc Nathan:
But we also want to make sure they can pay us. So, funded startups, I don’t care if it’s your own credit card, or your trust fund, or whatever it might be, or outside funding. As long as you could pay your service provider, that’s really what we target, those types of companies.

Karin Samelson:
That’s an important note.

Alison Smith:
Yeah, that’s smart.

Marc Nathan:
Critical. There are lots and lots of places for these baby companies to go, and I try to be one of them. But in order to engage a professional service and like I said, marketing, legal, accounting, insurance. All these companies, they are not targeting early-stage baby startups.

Marc Nathan:
They’re targeting growth emerging companies that are typically making enough money to A, pay the founders themselves. Because sometimes all these startups can’t, and B, pay other people, whether it’s employees, or service providers like us. So, that’s the sweet spot for any service provider, any company that we look at.

Karin Samelson:
So, can you tell us a little bit about T-Squared, and your consulting?

Marc Nathan:
Of course, absolutely. So, T-Squared Agency was something I started back in 2013. We had just moved from Houston, my family picked up, and moved to Baltimore because of my wife’s promotion to her job. And so, I’m sitting at home, I was a stay-at-home dad for a year with a consulting firm, helping a lot of clients from across the country, but mostly back in Texas with their capital strategy, and really, their digital strategy.

Marc Nathan:
And so, T-Squared was a small little company I built. Through T-Squared, I actually helped launch or I started to launch of the newsletter I mentioned, the Texas-Squared Startup Newsletter that I put out once a week, which is essentially a digest of all the major startup headlines in the tech world. About three years ago, I did an offshoot of that called Texas-Boxed, which is the same type of thing.

Marc Nathan:
It’s a digest for all of the relevant news for CPG entrepreneurs in Austin Texas that goes out on the first of the month. Because I had this newsletter, and because I continue to put in, there was a blogger, that I loved his stuff. I thought was very telling, very good, and very thoughtful. And I kept putting it in my newsletter. And he kept seeing traffic from my newsletter into his blog.

Marc Nathan:
So, he called me into his office one day, “Hey, Marc, come over, we’ll have lunch.” And I said, “Okay, sure.” And we had lunch, and I walked out of there with a job. It was the lawyer, it was Jose Ancer from Egan Nelson, and his blog, Silicon Hills Lawyer. And he said, “Look, we need somebody that knows this space. But we only target startups. We don’t really have connections or represent VC funds.

Marc Nathan:
So, we don’t like to make a lot of introductions. But Marc, can you do this and so forth?” And so, that’s what happened. T-Square was essentially acquired by the law firm, which is very, very rare. And I still use T-Squared is what I call my personal business. So, while I run my newsletters out of T-Squared, I do all of my events out of T-Squared.

Marc Nathan:
Occasionally, there’s a project like an advisory group, or something like that that I help startups that are not affected by the law firm. That’s what I use T-Squared for. So, T-Squared is my business persona. That’s not my actual work persona, if that makes sense.

Alison Smith:
Can you expand on what you mean by an advisory group? Is that like a mentor type?

Marc Nathan:
Yeah. So, you triggered something with me, so I’m just going to lean into it. Most accelerator incubator. So, think about the worlds of Y Combinator and Techstars, and here in Austin, Capital Factory. And obviously, we have skew here, which is a huge deal nationwide. And this is a semantic question. They call the people that work for them as advisors, they call them mentors.

Marc Nathan:
That’s just the name you come up with. I have a very serious problem with the word mentors. I believe very strongly that mentors help people in their careers, whereas advisors help companies. So, all of that class of people should be called advisors. And I know it’s a silly thing. And I know it’s interchangeable. A lot of people interchange the word accelerator and incubator, the same way people interchange mentor and advisor.

Marc Nathan:
But advisors are really consultants that are doing it for the love of helping, they’re not doing it for money. But mentors are doing it for the love of the person and the individual. So, I feel that most incubator and accelerator programs have advisors, not mentors. But the truth is, I am an active mentor and advisor every major incubator accelerator across Texas.

Marc Nathan:
And it’s something I really enjoy. But occasionally, a company will need a little bit more help, a little bit more time for me. And so, I’m working with roughly I would say, seven or eight different companies that I advise, where they will grant me some equity as an advisor, and we have regular meetings, and we grow the business from there. So, that’s what-

Alison Smith:
Well, just to play devil’s advocate here. With mentorship, you could say that the CEO or founder is the business in CPG.

Marc Nathan:
I get the point. I’ll buy that. It’s not exactly the same, and I’ll tell you why. You put me on the spot. So, I’m fighting back here. Yes. Nine times out of 10, the CEO is the heart and soul of the business. But they’re not the entire business because they have co-founders, and vendors, and a lot of cases, investors. And so, while they’re the nexus of everything, they’re not the only thing.

Marc Nathan:
And a business needs support and all kinds of different aspects. And sometimes a CEO can’t handle everything. So, they bring in advisors, or consultants, or mentors to help them or her with any specific issue, because that company really should be bigger than the individual. And so, that’s why I will push back a little bit on that.

Alison Smith:
Definitely. I’m definitely going to go to dictionary.com after this, and-

Marc Nathan:
Yeah, please do. And let me know.

Alison Smith:
… do a side by side.

Marc Nathan:
Let me know if I’m right or wrong.

Alison Smith:
I like that. No, I know, I’m sure you’re right. I like that distinction.

Marc Nathan:
Yeah. And if you really want to dive into it, basically, there’s two columns. There’s the mentor column, where they’re helping people. So, they have mentors. At the lowest end of mentors, you have a coach, somebody who’s helping with a very specific thing. Whereas, in the investment world, you’ve got advisors, and they’re helping the company, and then you have paid advisors, which are consultants, then you have advisors that actually pay you, which are called angels.

Marc Nathan:
And so, if you start balancing these things out, you’ll realize that there’s all kinds of different people, individuals helping companies, but they do it for different motivations. Most of the time, on the personal side, people are motivated by what I call psychological profit. They’re doing it to see a smile on your face. They’re doing it to feel better about themselves. Whereas, if you’re doing it from a professional standpoint, you’re doing it to get paid. It’s as simple as that. But whether you get paid in cash or equity, it doesn’t really matter, but you’re doing it for profit.

Alison Smith:
Definitely. So, when you do advice, do these companies pitch to you? Can you tell us more what is good pitch or bad pitch?

Marc Nathan:
Well, the best pitch in the world is something that’s passionate, something that people actually believe in. And I say this to everybody, whether you’re pitching needs and advise, or introduction to an investor, the best pitch is one that comes from the heart and the head. It’s something that really is focused on… and the best entrepreneurs out there are the ones that observe a problem, and know how to exploit it profitably.

Marc Nathan:
There’s lots of problems out there you can’t make any money on. And those are called nonprofits. And there is a place for those. That’s not where I live. Entrepreneurs that pitch me, I had one yesterday, actually. The guy has very passionate about nutrition, and about solving world hunger, and solving behavioral issues. And he is very, very qualified to do that.

Marc Nathan:
It’s just not for me. Not my space. It’s not what I do. And I told him so. He asked me to be an advisor. And I said, “I can be an informal one. But I don’t think I’m going to be able to help get you over the hump, just by my name alone.” And so, I’ve seen a lot of really, really good companies that I can’t help. And I’ve seen a lot of really bad companies that I want to help, and just don’t see that there’s a reason to do so because they’re not in the right mindset.

Marc Nathan:
They’re thinking about a problem in the incorrect way. So, ultimately, the best companies, which means the best pitches are ones that see an achievable goal. And one that, and I like to call it, is the squeeze worth the juice? Is all the effort, and time, and money, and headache that you’re going to spend running this business worth it? Does it make you money?

Marc Nathan:
And there’s a huge difference between what we call lifestyle business, a company that can make you individually money that you can have a roof over your head, and food on your table, and vacation two weeks out of the year. That’s the lifestyle business. Then, there’s the growth business, the venture business, the entrepreneurial style business, where it’s scalable.

Marc Nathan:
And that’s really, the differentiator. Can it scale to the point where it’s bigger than an individual, and an investor can make money on it? I tend to work with scalable startup businesses, not lifestyle businesses. That’s just the way I operate. There’s nothing wrong or bad about either one of them. They’re just very different. And so, to get back to your question, the very best pitch is one that is an addressable problem that has a unique and special solution.

Marc Nathan:
There’s always unique selling proposition, always something that is either a insight to the market that nobody else has, or technology, or in this case, CPG entrepreneurs in Austin Texas creating a brand that doesn’t fit the market, or there’s a gap in the market they’re filling. Those are the ones I love. Those are a lot of fun.

Karin Samelson:
And the ones that have proven themselves with the ecom element.

Marc Nathan:
That’s right. That’s right. I’ll even dive into one right now, one that I love right here in Austin.

Karin Samelson:
Oh, please.

Marc Nathan:
So, she’s not a client personally, but she’s a friend. Her name is Dee Dee Bryant, and the company is now called Boozy Bites.

Alison Smith:
Yup, I’ve had those.

Marc Nathan:
I can honestly say I’m not the target market. Boozy Bites, for those that don’t know, is a vegan, algae-based Jell-O shot that comes in a patented Dee Dee cup that pops up like a blow pop, or a pop-up thing. So, it pops right in your mouth. Well, I don’t remember the last time I had a Jell-O shot. It’s been decades. But people still drink them or use them.

Marc Nathan:
And Dee Dee has come up with a brand and a product that I think is absolutely brilliant. It’s unique in the market. Nobody else is doing this. The way she’s doing it. It has a very specific target. Obviously, her market is not middle-aged white guys. It’s usually focused on younger women, typically sorority girls, and that’s perfectly okay. Sorority girls and bachelorette parties.

Marc Nathan:
And she’ll tell you that her brand is actually bigger than that. There’s tailgating, and a bunch of other things. But let’s face it, that’s who she’s going after. And I think she’s just done a brilliant job building this brand, building the formulation, and making it work right here in Austin, Texas.

Karin Samelson:
Yeah. Kendra Scott did it with that same niche. So, Dee Dee has got it.

Marc Nathan:
Absolutely. And Kendra Scott, I’m not saying that she made all her money at my house. But there’s a lot of Kendra Scott jewelry in my home right now. Because I have teenagers.

Karin Samelson:
Yeah. How interesting. So, what would be your best advice for small, emerging CPG entrepreneurs in Austin Texas that’re just getting their legs and trying to figure this all out?

Marc Nathan:
Okay. So, I’m going to give you the answer. But first, I’m going to qualify the question. I don’t know anything. So, I am not qualified to give advice to anybody under any circumstances. Really, I learned this a long time ago from a personal mentor of mine. Once again, mentor is somebody who cares about you and not the business.

Marc Nathan:
So, this guy told me years ago that nobody cares about your advice, because everybody ignores advice. So, I can only tell you what my opinion is. And if you value my opinion, you’ll listen. If you don’t value it, okay, no big deal. So, my opinion about what’s the one thing a CPG entrepreneurs in Austin Texas and beyond can do, it’s there’s so many, but I think the number one thing, we said earlier, is know your customer.

Marc Nathan:
Really understand what they need, what they expect, what their taste profile is, what they expect in a packaging, what they expect on pricing. And if you’re going to change their expectations, you better have a good reason for it. You can’t just do it, because you think it’s cool, or you think it’s fun. You’ve got to really play with their expectations, and make sure that they fit with what they want, or what they’re willing to pay for, is a better way to say that.

Marc Nathan:
And also, and this is the very best thing about working with CPG entrepreneurs in Austin Texas, especially in food and bev, and you’ll understand this, make sure it tastes good. I can’t tell you how many great brands, great companies, great packaging I’ve seen, and the product itself tastes like garbage. And it’s the most disappointing thing in the entire world. And it’s super subjective, obviously, your taste and my taste are very, very different.

Marc Nathan:
Your tastes might be different from one afternoon to the next. But there has been a few instances where I’ve actually opened up a really cool package. And I think it’s awesome, I love the name, I love everything about it, and I opened it up, and I taste it, and it just taste terrible. To me, that is the number one, and frankly, the best part about working for CPG entrepreneurs in Austin Texas.

Marc Nathan:
Because it’s very binary, you either like it or you don’t. It’s that simple. With technology and software, you don’t have to love it, you don’t have to be a user of it to realize you can make a lot of money. Whereas, consumer food and bev, you really do have to like it to really be passionate about selling it, in my opinion.

Alison Smith:
And that’s another thing why CPG can be pretty difficult for CPG entrepreneurs in Austin Texas in particular, not only need to solve a problem, every other business needs to do, you also have to make it taste good. So, it’s another additional.

Marc Nathan:
And, there’s all kinds of things where everybody wants to be in a category now. They want to be keto. Also, they want to be organic. They want to be all these different things. And, those are all very noble causes, and they’re great. But starting a company from an ideal and not a taste, I think is a big mistake, personally. Make sure it tastes good first, then make it healthy.

Marc Nathan:
Instead of making it healthy, and then making it taste good. I can’t tell you how many times, and once again, this is super subjective to me. And I’m not writing a lot of checks for CPG companies. So, I’m not the best person to ask. But I see this all the time. And, I hear this from a lot of my friends – CPG entrepreneurs in Austin Texas – that say, at the end of the day, the dogs have to eat the dog food. Really, it’s as simple as that.

Alison Smith:
I like it. So, that’s another step one for step two, I think that’s really helpful.

Marc Nathan:
Yeah. And, this is the hard part. When you are starting to taste and test a product, you’re giving it to your friends and family. They’re not going to tell you to your face that your baby is ugly. So, you have to make sure that you’re getting an honest reaction from people. We went to the farmers market, I guess it’s about six months ago, it was really early on in COVID.

Marc Nathan:
And so, I’m at Lakeline farmers market, and I’m walking around, and the best part about me going to farmers market, I was actually, know people that are vendors there, so great. Hey, how are you? Good to see you, all that. So, I went to another vendor, and they had a package. I’ve never seen it before. And I said, “What’s this?” They said it’s a new snack brand, and it’s local.

Marc Nathan:
I said, “I’m in, I’ll buy it right now.” So, I bought two bags, took them home without trying it because during COVID, you can’t taste anything. I’m not going to say what the brand is because I opened it up. And at first, it was cool. It was like a puff. I tasted it. It was great. And then, three seconds later, the aftertaste was so awful, that I literally spit it out. And I never do that. It was like a cartoon.

Marc Nathan:
So, I thought maybe I’m crazy. Maybe I ate something wrong. So, I bring my kids in, and all of a sudden, in a row one, two, three, four, spit it out, spit it out, spit it out. And, half of that pack is still sitting in my pantry. But it’ll never get eaten because… and it’s just one of those things. You really have to understand what the taste is. And it’s really, really hard.

Marc Nathan:
Because you need a lot of people to tell you. Yes, no, or maybe so. And that’s really hard, especially now, we can’t really go out and do things like that. So, another challenge-

Karin Samelson:
Yeah. It’s so important to not only… I feel like so many founders that we know, we’ve worked with, we haven’t worked with, where they make the product just for themselves, when you got to make it for others.

Marc Nathan:
Absolutely, absolutely. I see that all the time. And, it’s something that I will tell you a huge perk about working for CPG, and both of you know this. This is not true in software I can promise you. I get a package two or three times a week, UPS, Amazon.

Karin Samelson:
My favorite part.

Marc Nathan:
It’s the best. And that box, whatever that box is, I don’t care if it’s a big box, small box, you open it, and you’re so happy because it’s somebody’s baby, you get to try and taste. And so, we are very, very fortunate that those boxes have not stopped.

Karin Samelson:
The magic of consumer goods.

Marc Nathan:
It’s the greatest.

Karin Samelson:
All right. Alison, I saw you lingering on this last question. So, last but not least, Marc.

Marc Nathan:
I like the hard ones, go for it.

Karin Samelson:
Yeah. Who are some CPG entrepreneurs in Austin Texas that inspire you that we should… other consumer goods people can look at?

Marc Nathan:
Absolutely. I’m glad you didn’t say who are your favorites because it’s like picking which kid is your favorite. I have one, but I can’t tell anybody. I’m kidding. The bottom line, some inspirational brand, and I’m going to go local. And, I’m just going to name them because they’re friends, they’re people that I really like. And, I really like [Cristiano Pardo 00:57:30]. He’s got a Brazilian cheese bread.

Marc Nathan:
And, I think it’s phenomenal. I think it’s great. I really like Morgan Potts with Granarly, which is a whiskey baked granola, who I just adore her, and I love the brand. Then, I think that Kevin Newsum with Steamm, and his cacao sweeten espresso shot is a phenomenal brand. Next, I absolutely adore Chantal Piet with stroopwafel or Stroop Club. She’s the greatest. There are a lot of local awesome brands that are achieving what I call escape velocity.

Marc Nathan:
They’re getting beyond Austin, getting beyond the local. I know I said four or five. And I’m probably missing 100, which is a shame because I love them all. But there are certain brands, and certain people here that you just like to see succeed. You like to see help. There are so many of them. It’s really hard to pick any, but these are inspirational people because they’re getting into national retail in a lot of cases.

Marc Nathan:
Hema Reddy with her Wundernuggets is getting into national retail, which I think is great. I think that there’s a lot of people that want to see those companies succeed. And frankly, and here’s the best part, we’re seeing a lot of companies moving to Austin for a variety of reasons. Look, people are landing in Austin now with their brands. It’s not just food and bev.

Marc Nathan:
I’ve seen a lot of apparel, specifically shoes. I’m seeing a lot of shoe brands coming here. And I’m seeing a lot of those places because born in Austin, made in Austin is actually a brand unto itself. It matters. If it was born in Idaho, unless you’re a potato, who cares? But I think that the made in Austin brand is really valuable. We touched on Kendra Scott.

Marc Nathan:
One of the biggest consumer brands in the entire world right now is YETI right here in Austin. We’ve got things like Tecovas boots here that are doing Superbowl ads. It’s just a phenomenal place to be.

Alison Smith:
It’s exciting. And we ask this question because Karin and I really don’t want to make it harder for people. We don’t think that you have to reinvent the wheel. Definitely, and check out these people, and model, and see what they’re doing for your brand.

Marc Nathan:
Right, right. And here’s the best part, you can absolutely do that, you can see what they’re doing on the public side through, once again, there’s Facebook and Instagrams. You can see what they’re doing on the private side by meeting them because they’re very, very vocal, and they come to these events, they show up. I will make a plug for naturallyaustin.org.

Marc Nathan:
It’s a great organization for a lot of people. The current, how should I say this? The woman who’s phenomenal, Emily Keeley, who’s running, it is now the director of marketing for her parent group. So, I’m not exactly sure who they’re going to bring in. I’m sure they’ll be announced shortly. But that’s another great group. In Dallas, you’ve got DFW CPG, which is a similar organization, which I think is doing phenomenally well.

Marc Nathan:
I’m a sponsor and a very active member of a Slack group called Startup CPG, which I think is great. There’s a Facebook group that I’m actually meeting with somebody on New Year’s Day on Friday, who I met through another Facebook group called OMGCPG. And, I think that’s a really good one. I see a lot of Austin names pop up on that one occasionally.

Marc Nathan:
But there’s really not a lot of national organizations for CPG support, that are not themselves events, like fancy food show, or naturally expo, or all those things. So, we’re starting to see some of those organizations pop up.

Karin Samelson:
Yeah. So, join some, mingle-

Marc Nathan:
Show up.

Karin Samelson:
Connect.

Alison Smith:
It’s all about community. Yeah.

Karin Samelson:
Yeah.

Marc Nathan:
Absolutely. Just showing up is really, really critical. And, it’s so easy to do that now online. There’s a brand that I love out of California that I met here in Austin a few months ago. And now, I see it online. It’s a ginger beer. And it’s an Aussie ginger beer. It’s fantastic. And I see her all the time, Donna Katz. It’s called Hard G’s. And, it’s just a great group.

Marc Nathan:
There’s actually one in Houston doing something very similar. That’s Erin Holt Simpson, with her brand Thirdborn. I find them to be plucky, and fun, and interesting. And like I said, and I’m going to be very direct right here, I’m going to be very blunt. This is just my personal experience, it’s not true for everybody. I have found that most of the brands we’ve discussed are run by women.

Marc Nathan:
And I find that these women are typically, and I’ve actually specialized in working with female entrepreneurs for many years. Long before I had a lot of girls, and kids, and all that, I like dealing with female entrepreneurs for one reason. I’m not playing to my audience here. I’m telling you the truth. I find that women are typically a lot more coachable than men.

Marc Nathan:
And I find that women are much, much better at synthesizing a lot of disparate data. Whereas, most guys that I talk to, especially those proverbial two 20-year-olds in hoodies, building software companies, they just listen to the last blog post they read. And, they just go do whatever that is without really thinking about it.

Marc Nathan:
But I find that women also tend to want to be more not motherly, but want to put a smile in your face. So, they really do care what you think about their brand, they’re not just looking to sell it. Whereas, male-dominated brands, this is not true in Austin, of course, but male-dominated brands are really just about self and velocity. It’s a financial aspect to it less than the taste, and the brand, and how it makes you feel.

Karin Samelson:
Not playing to your audience, eh.

Marc Nathan:
No, I’m trying not to. I would never pander.

Karin Samelson:
Well, Marc, it’s really such a pleasure. You’ve provided so much value to our listeners, and we’re so excited to have you on, and to get to know you a little bit better. Would you like to leave the audience with anything, a link, a call to action?

Marc Nathan:
Yes. Well, first of all, thank you both very, very much for inviting me. I feel very honored that I mean, in the same sentence, as a lot of the people you’ve already had in your podcast, I really appreciate it. The fact is, is that I never expected to be in any leadership role of any CPG ever – let alone one for CPG entrepreneurs in Austin Texas. And now that I am somewhat thrust into that position, through my own making, of course, I got to tell you, I really, really enjoy it.

Marc Nathan:
I find it so fascinating, and so fun, and so interesting. And it’s because of people like you who are building this, and actually doing the professional things that these brands need on the marketing side to make them work, that this whole thing keeps turning. So, I think it’s really, really a testament to what you’re doing in such a short amount of time to build your brand.

Marc Nathan:
So, I really appreciative that you invited me in the first place. That said, the only thing I can say is, gosh, I have so many things I like to plug, and my favorite subject is myself, which you’ve given me an hour to talk about. So, I appreciate that. Obviously, the law firm, egannelson.com. That’s obvious. If you want to connect with me online, very best way to do this through LinkedIn.

Marc Nathan:
And, I’m easy to find. Actually, I’m easy to find anywhere on LinkedIn or on the internet. It’s marc1919, marc1919 is my very first high school email address that I basically kept through many, many years of online personas. So, marc1919 is nine times out of 10 me on any platform you can imagine. But LinkedIn, Twitter, Facebook, you name it.

Marc Nathan:
And also, please, please, please attend the Wake Up! CPG Meetup (amazing for CPG entrepreneurs in Austin Texas and beyond), which we hold on the fourth Thursday of every month. So, the next one coming up won’t matter because it’ll be online. The meetup is the Austin consumer Products meetup, if you want to find it there, or on Facebook Wake Up! CPG.

Alison Smith:
Wonderful.

Karin Samelson:
Yup. We’ll be there too. So, you’ll say hi.

Alison Smith:
Yeah.

Marc Nathan:
Good. It won’t be a party without you.

Alison Smith:
Well, Marc, thank you again. This is a lot of fun.

Marc Nathan:
I enjoyed this very, very much. I really appreciate letting me talk. Thank you.

Karin Samelson:
Thanks, Marc. Enjoy being with all the kiddos.

Alison Smith:
Yeah.

Marc Nathan:
Good way to put it. Let’s try and enjoy.

Narrator:
UMAI Social Circle is a CPG agency-driven podcast based out of Austin, Texas – the ideal pod for CPG entrepreneurs in Austin Texas and beyond. We’re excited to share more behind the scene insights, chats with industry leaders, or whatever else we learn along the way. Follow us on Instagram at UMAI marketing, or check out our website, umaimarketing.com. Catch you back here soon.

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#11: Why The Best Biz Owners Stay Humble & Scrappy, Words of Wisdom From SKU’s Chief Operating Officer

Podcast cover image with Springdale Venture Principal
UMAI social circle cpg podcast

#11: The Best Biz Owners Stay Humble & Scrappy, Words of Wisdom From SKU’s Chief Operating Officer

Michelle Breyer is a Chief Operating Officer at SKU’s accelerator program as well as one of the original founders of NaturallyCurly.com – a leading resource for the natural and textured hair community!

To quote Breyer’s LinkedIn: “Don’t tell me something can’t be done. Let’s work to make it a reality.” We love it!!

Her advice for small-biz CPG owners? See a need in the market – fill it! Stay flexible as your ability to pivot is a HUGE advantage that you have over big-guy Coca-Cola.

There are many more tips where that came from! This episode is loaded with industry experience and insights for accelerating your brand’s growth.

Let us break it down for you…

[0:44] Introduction. Meet Michelle Breyer of SKU’s accelerator program.

[1:27] Michelle’s background and start in journalism. She never expected to become a founder.

[2:03] What’s a founder story that’s stuck with you? John Mackey and Whole Foods. Herb Kelleher and Southwest Airlines.

[4:00] UMAI and fond memories of CPG conventions, like Expo West.

[4:53] What drew you to Austin? She moved to San Antonio first and fell in love with the town and people!

[6:14] Tell us about Naturally Curly. A hobby turned into a magazine. The importances of seeing a need and fulfilling it. People want brands with a story. Join the trends, but offer something unique!

[9:32] Where’s Naturally Curly now? Still operating +20 years later. It has passed hands, but they will connect when Breyer’s advice is needed.

[11:46] Note on Dove’s curly hair care line. A beautiful campaign with real women. But, the actual product line was just a miss. An example of misspent money and a lack of research. You can’t market yourself out of a bad product.

[14:28] What has your team done to maintain that community over a 22-year span? From an SEO perspective, Naturally Curly is always ranking. Content is evergreen education that is always helpful.

[15:37] What led you to SKU’s accelerator program? She sold Naturally Curly in 2018 and started mentoring others as a category expert in beauty. In 2019, she was offered a full-time mentorship position with SKU (current title: Chief Operating Officer at SKU). There’s an upcoming collaboration with Naturally Austin.

[19:45] A note on inclusivity in Austin, Texas as of now in relation to incubator groups and SKU’s accelerator program.

[21:50] Tell us more about SKU’s accelerator program and their core mission. CPG was exploding in Austin. “Why don’t we create something that can accelerate emerging brands?” For example, EPIC bar – eventually sold to General Mills.

They expanded in Fall 2019 to include a New York branch. SKU DFW (Dallas, Fort Worth) has now emerged.

Mentorship is the most special aspect of SKU’s accelerator program. New brands are able to network and receive basically unparalleled guidance.

[26:40] What kind of brands should apply to SKU’s accelerator program? At least 200K to 1 million in sales. A great story. Founders enjoy learning and receiving mentorship. Magic! There’s a gut feeling to it.

[27:50] Do prospective brands go through an interview process when applying to SKU’s accelerator program?

Yes! They pitch their brand and share their story. It’s important to see how they respond to questions – do they know what they know and are they receptive to feedback?

[28:56] What do you see most brands that are a part of SKU’s accelerator program struggling with? Marketing? Branding? It’s never the same thing. It could be an operational error or major marketing issues (such as not knowing your demographic).

[30:00] Is there a recurring theme between the brands that SKU’s accelerator program takes on? They are coachable and receptive to feedback. Be humble.

Some founders choose not to listen – those founders aren’t a good fit for SKU’s accelerator program. Relax and let go of rigidity – it’s tough, but it’s the best way to learn.

[31:37] How many people apply to SKU’s accelerator program? Roughly, 100 per cycle. Our 9th cohort is launching soon. Companies do give up some equity when they join – but that encourages everyone involved to really dig in.

[33:07] A note on COVID. Some brands are doing better as they were able to pivot back in March – they leaned into eCommerce. Small brands can be more agile.

[34:08] To quote Breyer’s LinkedIn: “Don’t tell me something can’t be done. Let’s work to make it a reality.” What are some recurring roadblocks you see businesses struggling with?

If you don’t have the coin to spend, think scrappy! Figure it out one your own. Leverage interns (paid!!!) before you hire a professional team.

[35:35] How big are the teams you’re working with? 1-2 people! Founders end up doing SO much. Especially, in the beginning.

[37:40] Don’t raise money too early on. You won’t know what to do with it! This happened to Breyer herself at Naturally Curly – the team got “fat.” You should have to justify every dollar spent and hire made. Sometimes, outsourcing is better.

In some cases, you do not need to hire a “full head count.” You could bleed money. Payroll can become a company’s biggest cost. Justify ROI on everything. Every person should generate revenue or traffic.

[40:00] What’re some of your favorite CPG brands as of late? Briogeo® Hair Care.

[41:00] Follow SKU on social to learn more about Breyer’s favorite emerging brands!! Out now.

[42:18] Who are some CPG entrepreneurs that inspire you?

  • Paul Nardone CEO of BFY Brands, Inc. Their career in the better-for-you CPG space began in 1993 at Annie’s Homegrown.
  • Scott Jensen – President and CEO of Rhythm Superfoods. 
  • Clayton Christopher, previously at Cavu Venture Partners, once behind the brands Sweet Leaf Tea and Deep Eddy Vodka – now on the board of SKU’s accelerator program.
  • Jason Karp, Hu Kitchen Founder. Their newest project: HumanCo.

[44:02] In your opinion, what are a couple of things that smaller consumer goods brands should focus on to accelerate their growth? 

  1. Know who your core audience is – be open to who it is and if it changes.
  2. Make sure you stay scrappy – every penny should have an ROI (USE those KPIs, right out of the gate to measure your success + pull the RIGHT levers). “Why did our sales go up?” Be ready to say why.

[47:30] Stay tuned for SKU’s accelerator program announcements by following SKU and UMAI Marketing on Instagram.

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Read – #11: The Best Biz Owners Stay Humble & Scrappy, Words of Wisdom From SKU’s Chief Operating Officer

 

Narrator:

Calling all consumer goods business owners and marketing professionals, does planning content ahead of time stress you out? 

Do you want to run Instagram and Facebook ads but just aren’t sure where to start? If your answer is yes and yes, then our mini course was made for you. 

It’s 100% free and packed with essential tactics that you can implement as soon as today. To join in, visit our website at https://umaimarketing.com/consumer-goods-mini-course/. Alright, let’s get on with the pod.

Alison Smith:
All right everyone, welcome to the UMAI Social Circle where we talk consumer goods marketing tips to help business owners and marketers grow. 

I’m Alison and that’s Karen, we are co-founders of UMAI and we’re here being joined by Michelle Breyer, who is the chief operating officer at SKU’s accelerator program, the consumer products accelerator that calls Austin home. Welcome, Michelle.

Michelle Breyer:
Thank you. Thank you so much for having me.

Alison Smith:
We’re excited to be talking to you.

Michelle Breyer:
I love what you guys do, and I love what you do for companies in this space, and we’re all one big happy family here in Austin.

Alison Smith:
That’s right. So, I think we really wanted to dive into your background first.

Michelle Breyer:
Oh, boy.

Alison Smith:
Because, it was really interesting. So, you got your start in journalism?

Michelle Breyer:
Yes. Yes. Yeah, and I thought I was always going to be a reporter. I loved being a reporter. I loved writing about entrepreneurs. 

It was probably the feature stories on founders were my favorite thing. Never expected to be a founder, never expected to have an amazing job where I get to work with founders, but yeah, I loved being a business reporter.

Karin Samelson:
Was there a founder story that you can think of now that you just… will always stay with you, that was just super inspiring?

Michelle Breyer:
Well, I actually followed John Mackey from Whole Foods around for year. I had covered Whole Foods when they were a tiny company… or not totally tiny, but much tinier, like 12 stores. 

Which really ages me, but oh well. I was really kind of amazed, one day I turned around, and they were a billion dollar company and it’s like, how did they get here? 

They used to be this tiny, little, regional grocery chain. So, I did a year long project where I basically followed John Mackey around for a year, went to store openings, just got to know him really well, and I think that was my most memorable. 

It was a series of articles that all ran on a Sunday, but definitely my most memorable.

Michelle Breyer:
I’d say second to that was Herb Kelleher from Southwest Airlines. It was a two hour interview where he must have smoked two packs of cigarettes during that time, but he is the most charismatic, amazing, amazing entrepreneur you’ve ever met. 

I know he’s passed away since then, but you would have followed him anywhere. you would have invested any amount of money because he was that-

Karin Samelson:
I have to look into him. I don’t know anything about him. But John Mackey, following… that’s experience to take with you to SKU’s accelerator program. That’s incredible.

Michelle Breyer:
Yeah, it really was an amazing experience because I spent a lot of time in stores. And, stores in Boulder, in Beverly Hills, in New York. 

And the brands we work with, these are the brands that you see in a Whole Foods store and they’re really the reason I think that Whole Foods is so successful, because they have all these emerging brands and they were probably, maybe one of the first chains that focused on those type of brands.

Karin Samelson:
Yeah, very cool. My fondest memories of CPG are going to those conventions, and I don’t know if you know who Scott Price is, but he was-

Michelle Breyer:
Oh, yeah.

Karin Samelson:
… I say this really fondly and lovingly, we would refer to them as the OG Whole Foods hippies because they’re this group of the coolest folks that started at Whole Foods, right when it was starting.

Michelle Breyer:
Yeah. We had a guy at Statesman, when I worked there, who was one of their first investors. And, he was a hippie, kind of groovy guy, and then one day he retired. 

I think he was probably in his 50s and had… I mean, I can’t even imagine what he was worth, you would never have known it because he was such a down to earth guy. 

But I think there was this whole group of them, that just they were in it for really the right reasons. Well, I don’t think there’s a wrong reason for investing in a company, but they just really were having fun with it. They had fun being a part of this growing company.

Karin Samelson:
So, you grew up in California, is that correct?

Michelle Breyer:
Yes. Yes.

Karin Samelson:
And, what drew you to Austin? Was the Statesman the first newspaper job you had?

Michelle Breyer:
No, I actually took a job in San Antonio first. I was living in San Diego and I was just ready for a change. And, I was getting a couple of job offers. 

I had sent out a whole bunch of clips, you send out newspaper clips, and had gotten job offers in Tennessee and Southern California, other papers in Southern California, and Great Falls, Montana. 

And then the San Antonio Light flew me out there for… so I worked on the paper for a week, because you had what they called try outs, and it was Christmastime, almost exactly this time of year, and I just fell in love with it. 

I fell in love with the people at the paper, with the town. I was ready to do something really radical, so I was in my 20s, and I’m like, “I’m moving to Texas, whoo.” And, it was the best thing that I ever did.

Karin Samelson:
So, so glad you ended up here. It’s great.

Michelle Breyer:
I am too. Can’t even imagine if I hadn’t because of all the… 

Thinking of all the friends and just the things that have happened here, starting a company, everything happened that probably wouldn’t have happened had I not moved here. Who knows what would have replaced it, but it’s been a pretty good run.

Alison Smith:
Working with the Statesman, and then San Antonio, then you started NaturallyCurly, is that the right order of events?

Michelle Breyer:
Yeah.

Alison Smith:
And, was that a blog or a community first, or how’d that go?

Michelle Breyer:
It really was a total hobby. I had some curly friends at the paper and we would complain about our hair all the time and… 

moving from California where I had a whole routine, straightening it, and then putting hot curlers in, and then plastering it with hairspray. That just wasn’t going to work here. 

And, so I had to come to peace with my hair for the first time in my life and I-

Alison Smith:
Because of humidity?

Michelle Breyer:
Yeah, the heat and humidity were… I just couldn’t fight it anymore. 

And, I had some friends who worked at the paper with me and we had this similar issues and so we were complaining about our hair at a party and someone overheard us. 

“There must be other people like you who complain about your hair, you should start a magazine or a website.” And we did, as a hobby. 

Totally as a hobby. No intentions of it being a business, making any money. But, we tapped into something. And, I think that’s also been something that I’ve taken with me to SKU’s accelerator program is a sense of being on the front of a trend.

Michelle Breyer:
Because, we were at the very front of a trend. There was no curly hair industry, and we helped create that industry. 

We proved to brands, there’s more than half the population that has curly hair. We spend a lot of money, we spend more money than people with straight hair, so maybe you need to take this seriously. 

But, it was really all of these emerging brands, like one person entrepreneurs, one person companies, female founders largely, primarily women of color, and they were creating products in their kitchens and they were showing the L’Oréals and the Unilevers of the world that this was a market. 

I mean, they were the leaders.

Michelle Breyer:
And it was an an amazing thing to watch, and I’m seeing the same thing now in food and beverage and all these other consumer product companies. 

People want brands with a story, they want people who are passionate about what they do, and that they are doing this because they are filling a need in their own lives. And, that was 100% the way it was happening in curly hair.

Alison Smith:
So, I’m guessing with SKU’s accelerator program, that’s something that you really look at, getting in front a trend?

Michelle Breyer:
Oh yeah, yeah. Or, if you are a part of a trend that’s already big, you want to offer something unique in that trend. 

What we’re starting to see in curly hair specifically, it was really easy to get a big audience, community, customer base, at the beginning… 

because, it was unusual for anyone to offer a product for curly hair, and now there’s so many of them you better be offering something revolutionary, different ingredients, different way of applying, different… 

it’s a cream, gel, dry spray or something. You can’t just be a me too anymore, and I think that we see that in food and bev and really everything.

Alison Smith:
So, where is NaturallyCurly now? Are you still working on it? What’s-

Michelle Breyer:
Well, actually, they still call me up on a regular basis when there are things happening where they need advice or help. 22 years later it’s still operating. It’s kind of amazing. 

I mean, it makes me really happy. It’s undergone a lot of changes over the years, but there’s still some people who were there almost from the beginning. 

Not the founders but just people who joined the company, a lot of them were people who discovered it when they were dealing with their own hair issues, so they came to it with a sense of it was theirs, too. Which I love. They were a part of this company.

Karin Samelson:
22 years-

Alison Smith:
Yeah, I know.

Karin Samelson:
… of community building is insane.

Michelle Breyer:
It is insane.

Alison Smith:
And, now what you’re saying, why was not a need being met 22 years ago? It’s so wild.

Michelle Breyer:
It makes me angry. 

Sometimes, I still get angry about it because it was this perception that everybody wanted to look a certain way, and that if you didn’t fit this very defined, little box of what was considered okay, then, “We don’t even want to mess with you. 

Our marketing department at this huge consumer product company, you’re not on our radar, so we’re going to ignore you.” 

And, what they ended up doing was missing the boat. I mean, I don’t know how many times Pantene has relaunched a curly line. Because they just never got it right and even if they did get it right, there’s still a lot of people who it’s like, “You don’t care about this. You’re only-“

Alison Smith:
Just trying to hit the market?

Michelle Breyer:
I’m going to go to the brand where I know the woman who started it, and I know she did it because she authentically wanted to help her own curls, and she understands the ingredients. 

I don’t trust this bigger company who ignored me for decades. I love Pantene, don’t get me wrong, this is not throwing shade on Pantene.

Alison Smith:
Don’t come for her.

Michelle Breyer:
Yeah, I can see that happening.

Alison Smith:
But it’s so crazy, you’re saying they still get it wrong.

Michelle Breyer:
Yeah, in a lot of cases. I remember a very well-known company… I mean, I’ll just say it, come on. It was Dove. 

And, Dove came out with a curly line and it was a big deal because they had put all this money behind a campaign that was the most beautiful campaign. 

They do that better than anybody, like the real woman and made you cry, and they were telling their curly hair stories and-

Alison Smith:
Yeah, I’ve definitely cried on Dove commercials.

Michelle Breyer:
Oh, yeah. And, it was that typical thing, “I didn’t feel good about myself and I hated my hair,” and then the actual product line was so horrible. 

It was like one shampoo, one conditioner, and one styling product for every kind of curly hair. And I was like, “So, you spent all this money over here, but you never even did your research, your homework-“

Alison Smith:
Mm-hmm (affirmative). It’s not one box again. Yeah.

Michelle Breyer:
Yeah, marketing cannot… let’s see, you can’t market yourself out of a bad product, I guess is what I’m saying.

Karin Samelson:
Absolutely. What’s that lifetime value? You can get somebody to buy the product-

Michelle Breyer:
Yeah, one time.

Karin Samelson:
Yeah.

Michelle Breyer:
And, they’re never going to purchase it again. And, they’re going to tell all their friends it’s a bad product.

Karin Samelson:
Mm-hmm (affirmative). That’s right.

Michelle Breyer:
So, just take some of that beautiful filming, marketing money and spend the time on the product.

Alison Smith:
Yeah, I actually learned a lot from your site. I learned I need to do a test with my hair to see how porous it is.

Michelle Breyer:
Did it float?

Alison Smith:
And, I learned that if it floats or sinks. And, then I learned I’m like an L1 wave or something. It’s like, man, [crosstalk 00:13:20]-

Karin Samelson:
So, educational.

Alison Smith:
Yeah.

Michelle Breyer:
It is, it is. It’s kind of mind boggling and only curly girls really understand this, and you can walk up to any curly girl in the street and you can get into a half hour conversation and they will understand everything. 

They will talk about their porosity, they will talk about all this, and someone walking by without curly hair will think you’re crazy. But we don’t care.

Alison Smith:
No.

Karin Samelson:
I love how you branded them curly girls. You say that and I think that’s so fun. I’ve never called myself a straight hair girl, and it’s not cool, I’m never going to do that. Curly girls are [crosstalk 00:14:01]-

Michelle Breyer:
Well, you could. It’s just like being a… we even say just a curly, being a curly because you’ve had to probably come to peace with it and it’s been something that you probably didn’t always love, there was a… 

I don’t know, there’s just something unique about how it impacts your life.

Karin Samelson:
That’s awesome. So, 22 years of community, what are some things that you, your team, everybody there, has done to really keep that community alive over that long of a course?

Michelle Breyer:
Influencers come and go. And, you probably see that, you know this. 

There’s a lifespan on influencers, which I feel bad about, but they are their brand, and there’s always somebody right behind them who is ready to take their place. 

But the website has all of these voices, and it has 22 years of content and it is evergreen content a lot of it, and from an SEO standpoint, you can’t come close. 

You type curly hair in, NaturallyCurly will come up day in, day out. That’s just the way it is. People pass it down to each other. 

Hair stylists pass it down to each other. There’s this just constant new generation of people who go there to get their information, and I think that’s why it continues to live on.

Karin Samelson:
That’s awesome. Well, inspirational, first of all. But what led you to SKU’s accelerator program?

Michelle Breyer:
Well, we sold the company in 2018 and I was still consulting but I was doing a lot of… I had started to do some mentoring before then. 

I really love mentoring, and had mentored for DivInc and MassChallenge, and was recruited to SKU’s accelerator program by one of the board members. They were really looking for mentors with some beauty background and personal care background to… 

I mean, there were people there, but just to really increase the number of people who could help brands that had that… that were in that category. 

Because, they like to have category experts. And, I just fell in love with it. I mean, my company that I mentored for was a company called Lamik Beauty, and she is this amazing force of nature. And, she had actually done my eyebrows at an event years ago, where I was speaking at an event. 

So, I already knew her and really liked her and I just liked the whole community. I mean, it’s an amazing community. It really is like a who’s who. I mean, you know, it’s like rock stars.

Michelle Breyer:
And, they came to me in the fall of 2019 and said that there was a position and they wanted me to consider taking it. 

And, I had said to people before that, when they asked, “What kinds of jobs would you want to do from now on?” I thought, “Well, I want to be a mentor, and I just need to find a way to make that my full time job.” 

So, I did it. I did it. I feel lucky every day that it worked out that way, because SKU’s accelerator program has been so much fun. It’s been such an exciting time to be a part of it too, because we’ve been expanding, and for SKU’s accelerator program 9th cohort we have companies who applied from all over the country, so many strong companies… 

Sorry, I’m shaking my computer so you’re probably like, “Whoo.”

Karin Samelson:
I’m on a ride.

Michelle Breyer:
And, it’s an incredible time to be a part of CPG in general, but definitely to be a part of SKU’s accelerator program where you have this impact on people’s companies and you can help them realize their potential. 

And, we’re launching a diversity and inclusion track with Naturally Austin in the late spring, early summer. 

So, that’s really exciting and that was something that I’ve been really… Emily Kealey and I came up with the idea for doing this over a couple of cocktails, which is how NaturallyCurly started too. 

But, just this sense that we needed to do better as a community in terms of making sure we have diversity. And, CPG is not as diverse as it needs to be, so why isn’t it, and what is that bridge that we can help create to make it a much more inclusive community? 

So, we’re really excited about it, it’s called MO, and I just can’t wait. So, many amazing mentors want to get involved, people of color. 

Companies have just jumped on board, Amplify Snacks, and Gathered Foods, and [Egan Nelson 00:19:09], everybody wants to get involved because they want to… everybody sees this as something so important. It’s exciting.

Karin Samelson:
So exciting. I saw that in the newsletter today, and I was just pumped. Emily’s been talking about it. Well, not divulging any of the details, but just mentioning it, and I just cannot wait to hear the details.

Michelle Breyer:
Yeah, yeah. And, we’ll probably try to recruit as many people from the community as we can to get involved with it, subject matter experts, because we just want to create the best possible program. I don’t know. I can’t say enough good things about it.

Karin Samelson:
That’s exciting. Yeah, one of my biggest-

Alison Smith:
So, exciting.

Karin Samelson:
… complaints with Austin is it’s just not diverse. And, the same to say with CPG, it’s just not as inclusive as you want to see it. And so, I’m glad that there are things being put into place by our leaders in the industry to help be more inclusive. I think it’s exciting.

Michelle Breyer:
Well, and it’s interesting for me specifically because the industry I came from, specifically textured hair, was so the opposite. 

I mean, it was kind of the rule rather than the exception that the company was founded by a person of color. I mean, I’d say probably 80% of the companies that had been founded, and there were so many companies founded, were founded by women of color. 

So, that was just something that became the norm and I wasn’t seeing that necessarily in the greater CPG community.

Karin Samelson:
Exciting for you to take that knowledge and bring it here and share it.

Michelle Breyer:
Yeah, hopefully. We were talking about it today, we have an amazing woman named… her name is Bianca. 

She is this incredible instructor of personal finance at Rice University, and she is the fractional CFO for a company that was in out DFW track, this amazing 17 year old sauce boss, Tyla-Simone Crayton. 

So, Bianca worked with Tyla-Simone and she’s getting involved with this, and she’s as excited as anybody. She’s like, “Oh my God, this is…” 

Everyone is taking it so much in this wonderful way, this ownership of it. “I love this, what can I do to make this successful?” And we were on the phone today, and it was just so many great ideas and so much passion and energy. It was amazing.

Alison Smith:
Definitely. So, for people that don’t know SKU, which everyone one should check it out, tell us a little bit more about it, what’s SKU’s core mission?

Michelle Breyer:
We were founded in 2011 by a group of local CPG entrepreneurs, Shari Wynne Ressler and Clayton Christopher and Scott Jensen, Joe Ross, Dan Graham. 

It really got founded… awareness that the same kind of support and resources that existed for the tech industry, which is very entrepreneurial here in Austin, did not exist for CPG. 

And CPG was exploding in Austin, or just starting to get to the point where it was a major force. So, there was a sense like, “Why don’t we create something that can help accelerate emerging brands?” 

And it had some initial big successes, which kind of proved that this can be something… it could be a force. Epic was a huge success. Sold to General Mills for $100 million.

Michelle Breyer:
So, the first track had four companies and it has progressively… we’re up to seven to eight companies per track. 

We expanded into New York in the fall of 2019, a partnership with BeyondBrands, which is a marketing company for CPG, and expanded into the Twin Cities this last summer, with a partnership with a purpose driven accelerator, and it’s aimed at incubating and accelerating purpose driven CPGs. 

It’s called Impact SKU. And then we were recruited up to Dallas, kind of unexpectedly. If you had told me this time last year we would have expanded into DFW, that wasn’t even on the radar. 

But one of our amazing mentors, Richard Riccardi, they were trying to build a more robust CPG community in DFW, he’s like, “We need SKU up here. Would you guys be up for it?” And so, in the course of three months we put together SKU DFW and it was amazing.

Michelle Breyer:
The common thread with all of the programs is that through super engaged mentorship and curriculum, you can really help these startups grow much quicker. 

And the mentorship is really, I think, the special thing about SKU’s accelerator program. It’s all these incredibly seasoned, successful CPG leaders and investors, who are giving their time and their expertise and their network to help these emerging brands. 

And it’s just an incredible thing to watch, when you see the CEO of Deep Eddy working with a beverage company to help figure out how to get where they want to be, quicker. 

Because if you’re working with someone who’s already done it before, they can really help you in so many ways.

Michelle Breyer:
Pretty incredible, one of the companies that was a part of DFW, it was a plant-based jerky company, and on that team we had the founder of… 

no, the VP of Frito-Lays, the baked division and SmartPop!, and then we had the VP of marketing for Amplify Snacks, so SkinnyPop and Pirate’s Booty, and we had the head of innovation of Converse shoes, and we had an operations expert and a branding expert. 

And, it was just amazing to see how it took that founder literally from here to here. 

He says to me, I must talk to him once a week, “I can’t believe how lucky I am. I didn’t even know what I didn’t know.” And, now he has this amazing group of advisors, who have just taken him under their wing and are really helping him potentially become the next generation of success stories. 

So, that to me, is really kind of the essence of SKU. That nurturing, mentoring, educating this next generation of CPG companies.

Alison Smith:
And gosh, you cannot put a price on that type of mentorship, like just-

Michelle Breyer:
No, you can’t. You can’t. And, just to have people who just enjoy and are passionate about doing it. The Scott Jensen’s of the world, who will just give their time and their knowledge and just love it. That’s an incredible thing. It’s like gold.

Alison Smith:
Definitely. So, what type of brands should apply to SKU? What type of brands do you look for, for your programs?

Michelle Breyer:
It’s kind of a combination of things. It’s number one a product that has something unique about it and it’s in a hot category, and they have some traction. 

We like our companies, like in Austin track, to have about at least 200,000 in sales. So, between 200,000 and a million is the sweet spot. 

We want founders who have a really great story and who are really passionate about what they do, and who enjoy learning, they know what they know and they know what they don’t know and they are wiling to be surrounded by mentors and to learn and listen and grow. 

And then there’s a little bit of the magic behind it where you just have a gut feeling about a company, where it’s like, I just really like them, I think that they have a real chance of being a big success if we can just plug in some of these key things, we can really help them.

Alison Smith:
So, do you go through a few rounds of interview phases, where that’s where you get to see their charisma or things like that?

Michelle Breyer:
Yeah, and they ultimately have to do a pitch interview to a group of mentors. And, you learn a lot then. You’ve tasted their products by then, or smelled them, or whatever…

because there’s not just food and beverage companies, there’s personal care and clothing and all kinds of things. So, you’ve had that chance to touch and feel and taste, but then when you see the founder pitch, it really gives you a window into who they are. 

If they’re asked questions do they get super defensive? How do they respond to questions? How well do they know their market? 

In talking to them, do they have a clear idea of what they think they can get out of SKU? Because if it’s just, “I want to raise money,” and that’s the only thing, then that’s not a really good candidate, because SKU is really about the whole process of becoming… 

figuring out who you are as a company and really developing your strategy.

Alison Smith:
Well, that being said, what do you see most brands struggle with when they come on to your accelerator program? Is it the financing aspect? Is it marketing messaging? What’s the biggest pain point, I guess, for brands and how can they_

Michelle Breyer:
It’s never one thing. With one brand it might be that because they have the wrong co-packer, their margins are much lower than they should be. 

So, there may be operations issues. And in another case, there may be major marketing issues, like they don’t know who their market is, or they’re going after a market who is not the market that’s actually going to be buying their products. 

So, you never see just one thing that is the biggest issue that every company faces.

Alison Smith:
Mm-hmm (affirmative).

Michelle Breyer:
Some have one thing really down, like they know their branding is beautiful, they don’t need to make any changes to that, but then their margins are so low that they’re never going to make any money.

Karin Samelson:
Is there a recurring theme with some of the most successful brands that have come through the program? Is there something that you see in all of them that’s similar?

Michelle Breyer:
They’re really coachable. They really want to learn. 

They are sponges and they know how to take the information from their mentors and some of it may be… how to synthesize it to make their company a better company. 

And you’d think that everybody who goes through an accelerator has those attributes, but that’s not the case. 

Some people just… they think they know it all. I’d say most of the time with SKU founders, they are coachable. But I’ve seen throughout the various accelerators I’ve been a part of and incubators, there are just founders who don’t want to listen. 

They really think that they know their market, they know their product, they know it all. It’s like, then why are you in this program? 

I mean, you can’t listen to everything that everybody says and you have to have some sense that you know a little bit about what you’re doing, but you can’t be so rigid that you’re not listening to people who may know more than you do.

Karin Samelson:
Mm-hmm (affirmative). I think that’s so tough sometimes, especially with people whose heart and soul is in this product that they’ve worked so hard on and they think they know what’s best. And, sometimes you just got to take that mentorship and learn from it.

Michelle Breyer:
Yeah, totally. Yeah. Exactly.

Karin Samelson:
Very cool. Well, how many people usually apply to SKU’s accelerator program?

Michelle Breyer:
A couple hundred.

Karin Samelson:
Oh, wow.

Michelle Breyer:
And, they’re really from all over the country. And then we narrow it down to about 15 for the interview process, and then we’ll be announcing our ninth cohort in January.

Karin Samelson:
Exciting.

Alison Smith:
Exciting.

Michelle Breyer:
We have some really, really, really amazing companies. I’m so excited.

Alison Smith:
That’s so exciting. So, it is like an equity… do they give equity?

Michelle Breyer:
They do.

Alison Smith:
Okay.

Michelle Breyer:
[crosstalk 00:32:06] unique. It’s kind of a Shark Tank type of approach, but because of that, because the companies are giving up a little bit of equity and the mentors all have fractional equity in all the companies in a track, there’s a little bit of… there’s skin in the game. 

So, there’s a seriousness to it, and maybe a little bit more willingness to open up your Rolodex and dig in a little bit more. 

But, I have to say the reason that most of our mentors get involved is not for the equity. They get involved because they love it, and they love… it excites them to work with founders. They love working with other mentors, they love this community. 

And if it was only for the money, I don’t think they’d be the right mentors.

Alison Smith:
Right. I mean, it sounds like a lot of fun to help build really cool CPG [inaudible 00:33:00].

Michelle Breyer:
Oh, it’s so much fun. Yeah, yeah, it’s amazing.

Karin Samelson:
That’s why we love it.

Alison Smith:
Never a dull moment.

Michelle Breyer:
Yeah, that’s for sure. And COVID was never a dull moment in every possible way, but-

Alison Smith:
Oh, my gosh.

Michelle Breyer:
… we’ve got some of these companies, some are doing so much better than they even projected pre-COVID. 

They just were able to pivot to D-to-C and maybe that’s what they should have been all along, but they didn’t know it. And so, one of them, Esker Beauty, her sales are double digits higher than what she projected.

Alison Smith:
Wow.

Michelle Breyer:
So, that’s kind of exciting. It’s like the silver lining of all this craziness that we’ve been going through this year.

Alison Smith:
And, a great thing for smaller brands that can pivot and pivot quickly.

Michelle Breyer:
Totally.

Alison Smith:
Yeah.

Michelle Breyer:
Yeah, exactly. Maybe, they’re a little bit more flexible.

Alison Smith:
Mm-hmm (affirmative).

Karin Samelson:
Mm-hmm (affirmative), yeah, those March humps in sales were just incredible for a lot of our brands that we work with. Just thankful to be in this business, right?

Michelle Breyer:
Yeah, really.

Karin Samelson:
Yeah, well, I love in your LinkedIn bio it says, “Don’t tell me something can’t be done, let’s work to make it a reality.” 

And I love that, because I feel like sometimes there are just these roadblocks that people don’t know how to get over by themselves. 

So, what are some recurring roadblocks you see with these small business owners that you work with?

Michelle Breyer:
A lot of it has to do with how to do… if they don’t have the money to do the things they need to do to make the money, they need to get more customers, but to get more customers costs money. So, I’d say that’s a big recurring theme. 

So, we try to teach them how to do things scrappy. Like, how to do things on their own until they can afford to pay for them. 

And, I think you guys have been helpful in spreading the word about some of the things that you can do from a social marketing perspective before you can afford to… 

At some point, you want someone doing that for you, but in the beginning you may have to learn to do that yourself. But, it is like a chicken/egg thing. 

So, I think that’s one of those where you just have to figure out some things on your own or leverage UT and interns and things like that, till you can get to that point where you can hire a professional team.

Alison Smith:
Yeah, so how big generally are the teams, the teams of the brands that you work with?

Michelle Breyer:
One to two people.

Alison Smith:
That’s what I figured. I mean, that’s what we see all the time. There’s so many facets of CPG, there’s so many moving parts and I’m just consistently impressed with how much founders do.

Michelle Breyer:
Yeah. It’s funny, I was boxing up a whole bunch of things for mentors. It was interesting. We had these special boxes that were made and it’s like a puzzle to put them together. 

So, I was sitting on my living room floor putting the together, packing them up, taping up the boxes, putting on the UPS stickers… 

but that’s what I used to do all the time at NaturallyCurly, before we got to 50 people, I was packing up 500 goodie bags or whatever. You have to be willing to do that. If you are not willing to do that, then you shouldn’t be a founder. 

You should know how to do every single job and you should never think that a job is below you.

Karin Samelson:
I love that advice. I mean some people get really surprised with… 

An example, Hima of Tin Star Foods Ghee, they have, what, 50,000 followers on Instagram? She does everything. And, people are so surprised by that. I remember we would run their social campaigns or giveaways, they had always worked with Hima, directly with Hima. 

It was just incredible that they thought that it was a team of 10 or so. And, we’ve worked on different brands like that, where the founder has been running the social for so long, and everything else, and people are just really surprised by that. 

And, I think that that’s just a note for founders now that might think they need other people right now, but they’re just not at that stage yet, they just to grind.

Michelle Breyer:
And the most dangerous thing that can happen is raise money too quickly almost, where you have all this money and you aren’t going to make smart decisions with it. 

I think that’s another common theme. And it may seem like, “Wow, what a great problem to have,” it’s not a good problem to have because if you raise money, you should be as scrappy as you ever were and that’s when you can make some really bad decisions.

Alison Smith:
Gosh, I love that. Any vague case story that you have about that?

Michelle Breyer:
My own company. It’s crazy, at one point we had so many people. I had to tell this story all the time. We were so fat. We were so fat and you can… 

You should have to justify every single dollar you spend and every single hire. If you don’t need to hire a full head count, sometimes it’s better to outsource. 

I’m a big fan now of outsourcing because that can be much more efficient and even though I’m proud of the fact that we hired so many people and for a lot of people we were the reason they were able to buy their first house and everything. 

I think that, in some cases you do not need to hire a full head count. There are people out there that do a really good job, like you guys, and they might be able to do a better job for less money than having a full head count.

Alison Smith:
So, is the main reason to have too many employees because you’re maybe bleeding money? Or, is it do you think smaller teams sometimes just work-

Michelle Breyer:
All of the above.

Alison Smith:
… better.

Michelle Breyer:
Payroll is the biggest cost for a lot of companies and then also you aren’t maybe thinking smartly. You should justify everything. 

You should be looking at the ROI on everything. Is this make sense, these marketing dollars that we’re spending over here? 

Or in a way, we should have been thinking every single person needs to either be generating revenue or generating traffic, like eyeballs. And if they’re not doing that, how are they at least supporting those two initiatives? And, if you can’t really figure that out, then why are they here?

Alison Smith:
I love that. I’m a big fan of small teams.

Michelle Breyer:
Yeah.

Alison Smith:
I’m into that.

Karin Samelson:
So, what are some of your favorite CPG brands right now? Ones that you’ve worked with, or ones that you admire?

Michelle Breyer:
Oh my gosh. I have some beauty ones, and some of them are owned by friends, but I just love them. Briogeo is a haircare brand that I just love. 

And I love the founder who’s a friend of mine, but I think they’re really creative and their packaging is great. Oh my God, that’s such a hard… it’s like Sophie’s Choice [crosstalk 00:40:30]-

Karin Samelson:
I know.

Michelle Breyer:
… child.

Alison Smith:
[inaudible 00:40:34] some brands that we should be looking at to inspire-

Karin Samelson:
Yeah, maybe not favorite.

Michelle Breyer:
I’m not going to tell you who’s in this next track, but there’s one in particular that I think is amazing. They’re all amazing, but this one, I’m just addicted to.

Karin Samelson:
Is it in food an bev? Can you tell us that?

Michelle Breyer:
It is in food and bev. Stay tuned.

Karin Samelson:
Ugh, I cannot wait.

Alison Smith:
So, can people follow along with progress? Would they just need to follow each individual brand?

Michelle Breyer:
Yeah, follow our social. We have something today just like stay tuned, we will be announcing. We will-

Alison Smith:
This is like Shark Tank Austin local [crosstalk 00:41:12]-

Michelle Breyer:
Yes, it is. But better.

Alison Smith:
But, better.

Karin Samelson:
How fun is that. So, do you post updates on your Instagram for SKU’s Instagram on how the track’s going?

Michelle Breyer:
Yeah, we do.

Karin Samelson:
Cool.

Michelle Breyer:
And we try to feature our mentors, our companies, words of wisdom from them, and then… That, to me, is who SKU is. SKU is not me, it’s not… SKU is our founders and our mentors and the products. So, we try to put those front and center on our social.

Karin Samelson:
Very cool. When are you announcing?

Michelle Breyer:
The first week in January.

Karin Samelson:
First week. Can’t wait.

Michelle Breyer:
Yes, we’ll let you know, so you can yell it to the world.

Karin Samelson:
Yeah, we’ll shout it out, for sure.

Michelle Breyer:
Okay.

Karin Samelson:
Awesome. Well, I think that this one is one that we always like asking because we want to be inspired too, and we always love hearing about new, innovative, inspirational people. So, who are some CPG entrepreneurs that really inspire you?

Michelle Breyer:
Hmm. Oh, gosh. There’s a guy who I met this year who’s with Pepsi, his name is Paul Nardone, I think he’s amazing. 

He was the CEO of Annie’s, the pasta sauce, but he’s also founded a couple of companies and he just… his whole perspective on why you create new products and how you create new products is just fascinating and wonderful. 

I mean, I love Scott Jensen, I think he’s amazing. He just gives so much of his time and when he talks about how he created his company and this whole new category, I think that’s really inspiring.

Karin Samelson:
That’s Rhythm Superfoods, right?

Michelle Breyer:
Yeah. And then of course, Clayton Christopher, because just everything he touches turns to gold.

Karin Samelson:
How is that?

Michelle Breyer:
I don’t know, I’m just glad he’s a part of…. that he’s involved with SKU because he’s amazing. It’s like Waterloo Sparkling Water, oh yeah, Clayton was involved. 

Cavu, Clayton was involved, he was a founder. It’s pretty amazing. Just those people who have that potential. Jason Karp, founder of Hu Kitchen, who just started HumanCo and… Just these serial entrepreneurs are amazing to me.

Karin Samelson:
Yeah, super inspirational, and I just wonder when they sleep.

Michelle Breyer:
They don’t. They hang upside down in their caves because they’re bats and they don’t sleep.

Karin Samelson:
That’s awesome. Well, a final question for you, in your opinion what are three small things, or maybe big things, that small consumer goods brands should focus on to experience growth?

Michelle Breyer:
Let’s see, well, know who your core audience is. Really, really know. And, it may be totally different than who you think it is, so be very open to having your… 

We had a company who thought that their market was Millennials and it was really moms of young kids. 

And their marketing had to be completely different for one versus the other, but had they focused on the one, they would have been completely missing out on who their market really was and may not have succeeded.

Michelle Breyer:
Let’s see, what I said about make sure that you stay scrappy. 

Really every penny should have an ROI to it, so have metrics, have score cards, KPIs, as much as you can, be measuring things. 

Try to get disciplined right out of the gate, so that you can measure everything that you’re doing and then you can pull the levers. 

But if you don’t know why something is affecting… “Oh, our sales jumped up, but we don’t know why,” then you can’t replicate it. So, really get granular about your metrics. And, then what else? Do I have to have three?

Karin Samelson:
No, you don’t. I love those two.

Michelle Breyer:
Okay.

Karin Samelson:
That’s perfect.

Michelle Breyer:
Let’s keep it at two.

Karin Samelson:
Yeah. And, we talked to Emily Kealey and I think that was the first thing she said, “Know your core audience. Know who you’re talking to and selling to.”

Michelle Breyer:
Yeah. Everything you do affects that.

Karin Samelson:
Yeah.

Michelle Breyer:
Yeah, and that may be the hardest thing. And, that’s the hardest thing to change your mindset around too, because sometimes you just really are set [crosstalk 00:46:03]-

Karin Samelson:
You want it to be.

Michelle Breyer:
… I remember having this conversation with John Paul DeJoria, who was actually one of our investors, the pony tail Paul Mitchell guy?

Karin Samelson:
Yep.

Michelle Breyer:
He said, “You know, we don’t really have curly hair products.” I’m like, “You do. Your sculpting foam. Every curly girl I know uses the sculpting foam.” 

“But it’s not for curly hair.” “But they’re using it, and I bet if you do an analysis, they’re the ones that are spending the most money.” 

They were the ones who were buying the sculpting foam. So, it’s like, you think it’s here, but it’s these women, and they are buying a can every two weeks. So-

Alison Smith:
And, you’re not speaking to them at all.

Michelle Breyer:
Yes, exactly. So, it was kind of almost a comical conversation. 

I’m like, “You do have products. I use your products.” We had a woman who wrote a poem on NaturallyCurly about one of their products, a foaming pomade. It was a poem. It was the craziest thing, because she loved it so much.

Karin Samelson:
Oh, my gosh.

Michelle Breyer:
Like, you have curly products.

Alison Smith:
I got to find that poem.

Karin Samelson:
Missed opportunities, for sure.

Michelle Breyer:
Yeah.

Karin Samelson:
Know your audience, stay scrappy, I think those are great pieces of advice to leave CPG owners and marketers with. I think that’s wonderful. Well, thank you so much for joining us, Michelle.

Michelle Breyer:
Thank you, this has been so fun. I really appreciate it. Yeah. Thank you for having me.

Karin Samelson:
Yeah, definitely. Is there anything you want to leave the audience with?

Michelle Breyer:
[inaudible 00:47:30]-

Karin Samelson:
A call to action?

Michelle Breyer:
Yeah, well stay tuned for the MO track, because we’re super excited about that. And, then for the track nine company announcement.

Karin Samelson:
Yeah. Can’t wait. We’ll have it. We’ll have it ready to share.

Michelle Breyer:
Okay, wonderful. Well, thanks guys, have a great rest of your day.

Alison Smith:
Thanks, Michelle.

Karin Samelson:
Thanks, Michelle.

Michelle Breyer:
Bye.

Narrator:
UMAI Social Circle is a CPG agency driven podcast based out of Austin, Texas. 

We’re excited to share more behind the scene insights, chats with industry leaders, and whatever else we learn along the way. Follow us on Instagram @umaimarketing, or check out our website umaimarketing.com. 

Catch you back here soon, bye!

 

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#9: Accelerator Programs, Mentorship, & 2020 Trends with Alyssa Padron of The Ronin Society

umai social circle podcast cover photo

#9: Behind an Accelerator Program, Mentorship, & 2020 Trends with Alyssa Padron of The Ronin Society

Years ago, Alyssa Padron got her start at SKU – and, man! Their accelerator program has seen a TON of growth since then.

Just look at alumni brands Siete Foods and Epic Bar!

Today, the very same can be said for Padron who has continued her journey onward to grow into a new role at The Ronin Society.

Together, we unpack what’s really going on behind the scenes within an accelerator program, 2020 trends leading into 2021, and the value of mentorships of all kinds.

Let us break it down for you…

[0:45] Introducing, Alyssa Padron!

[1:17] Alright, so how did Padron get her start in the CPG industry. Perhaps, Mad Men might’ve played a tiny part. 😉

[1:51] SKU explained: an originally Austin-based accelerator program. And, what brands have been a part of this program in the past?

[2:58] Did you notice any similarities between the brands or programs that succeeded in that accelerator program?

[4:16] Walk us through SKU’s accelerator program application process.

[5:42] Okay, so what are brands expected to have when applying to SKU’s accelerator program? Revenue minimums? Perhaps, a social media following?

[8:26] The importance of social proof and actively building a community.

[8:55] Now, if you could give any advice to a CPG founder applying to SKU’s accelerator program, what would that be? More on mentorship.

More on The Ronin Society

[11:15] Tell us more about The Ronin Society! Financial strategy with small-market business programs.

[12:40] Please, explain more about the value in a brand truly understanding their financials across the board and when applying to an accelerator program. A real-life example!

[15:30] Through this accelerator program experience, have you seen a trend between CPG founders – that there’s often that missing piece when it comes to operational proficiency?

[16:55] Okay, let’s talk about the value of mentorship + leadership. Specifically, how valuable is that piece for CPG owners? It’s a two-way street – and, there’s value in connecting with Gen Z, too.

[21:30] To sum it up, some more clarification on The Ronin Society.

2020 Trends

[22:08] Any current product or marketing trends that you’re seeing? A push for consumer transparency.

[25:50] What’s your best advice for small-to-medium business owners, generally speaking?

[27:40] Next, free resources for business owners.

[29:28] So, are there any CPG entrepreneurs that you keep tabs on?

[31:25] Are you seeing a trend in inclusivity, specifically in Austin?

[34:00] How can we eventually get there, increasing inclusivity?

[38:08] Kind words for MARYJAE!

[39:27] Any other CPG entrepreneurs that inspire you? Let’s talk about Gardenio.

[44:11] In conclusion, how can YOU connect with Padron?

Mentions from this episode: 

Stay in touch:

Join Umai’s Facebook Group: CORE 

Read – #9: Behind an Accelerator Program, Mentorship, & 2020 Trends with Alyssa Padron of The Ronin Society

Narrator:
Calling all consumer goods, business owners and marketing professionals. Does planning content ahead of time, stress you out? 

Do you want to run Instagram and Facebook ads, but just aren’t sure where to start? 

If your answer is yes and yes, then our mini course was made for you. 

It’s 100% free and packed with essential tactics that you can implement as soon as today. 

To join in, visit our website at umaimarketing.com/mini-course. Alright, let’s get on with the pod.

Karin Samelson:
Well, welcome to the Umai Social Circle, where we talk consumer goods marketing tips to help business owners and marketers alike grow. 

We’re Karin and Alison, co-founders of Umai Marketing.

And, we’re being joined by Alyssa Padron, Campaign Manager at The Ronin Society and former Program Manager at SKU. 

Thanks for joining us, Alyssa.

Alyssa Padron:
Absolutely. Thanks for having me.

Karin Samelson:
Very cool. Well, to start out, we just want to learn a little bit more about you.

Did you always have an interest in CPG? How did you get your start?

Alyssa Padron:
Yeah, I feel like I had about as much interest in CPG as maybe the average consumer, which means I watched a couple of episodes of Mad Men and was like, “Oh, okay. There’s some stuff happening behind the scenes here.” 

But prior to SKU, I did not have a ton of experience in CPG. It was really, SKU was definitely diving headfirst into the CPG world here in Austin, which was a really exciting opportunity.

Introduction to SKU

Karin Samelson:
So, for somebody listening that has no idea what SKU is. Can you give us just a brief overview on what it is?

Alyssa Padron:
So, SKU – the word itself. SKU stands for Stock Keeping Unit. 

But, it’s also the name of a CPG accelerator here in Austin. So, it’s been running here in Austin for going on nine years now. And, then within the last couple of years, that I was with SKU, we expanded up to Dallas, New York, and Minneapolis.

Alison Smith:
Okay, cool.

Karin Samelson:
Wow, that’s such fast growth.

Alison Smith:
Yeah, really. 

Can you name any brands that went through y ‘all’s accelerator program that people would know?

Alyssa Padron:
Our big, golden child is Epic Bar who ended up selling to General Mills several years back for something like $100,000,000. They never quite disclosed, but it was somewhere around those nice numbers for General Mills.

Alison Smith:
Wow.

Karin Samelson:
That’s enough.

Alison Smith:
Those are some big brands, yeah.

Alyssa Padron:
Definitely.

Alison Smith:
So, we’re curious if you noticed similarities in the brands that succeeded through you all’s accelerator program?

SKU’s Accelerator Program

Alyssa Padron:
Yeah. When I think about that, it’s less about the brands and more about the founders and their success with the program. So, there’s a lot of things that can help a brand succeed. 

But, the thing that I saw really consistently, specifically within SKU, is that the founders that were willing to show up, asking for the extra meetings with the mentors and were just really hungry for that knowledge and coachable at the same time, I feel like that’s probably the most important thing, those tended to succeed. 

And then of course, for the brand itself, it’s like. Alright, cool. Now, is it unique? Or, is it innovative? Because, it can’t just be a me-too product. 

In the world of food, the first thing that anyone will tell you is it has to taste good. 

Of course, you can have all of the marketing in the world and nobody will buy it if it doesn’t taste good.

Karin Samelson:
Yeah, so true. And, I think that’s such a good note for founders is to be flexible. Really, I think that it’s really hard sometimes to take advice and really take it in and try and implement it and not get caught up in your own ideas of what works and what doesn’t work. So, I think that’s awesome.

Alyssa Padron:
Yes, definitely.

Alison Smith:
Yeah, agreed. So, how do people apply and what’s the process for getting into SKU?

Behind The Scenes at SKU

Alyssa Padron:
Yeah, it’s a pretty intense process. At first, I was a bit blown away my first year coming into SKU. Because, we had something like 400 applications to go through. 

So, you’ll go through a pretty basic online application asking you about your product market fit, any financials that you can provide, just letting us get to know a little bit more about you as a founder in the brand. Then, we’ll pull all of that together, and we’ll have about 25 in-person interviews. 

And, that’s when you’ll come in and actually pitch your full deck to SKU. And, we’ll get to try out your products at that point and then from there we’ll narrow it down even further.

Alyssa Padron:
So, it’s definitely an in depth process. Truly, there’s a lot of information that we ended up asking for from the founders, but it’s a lot of fun. 

I tell people all the time now I work in CPG for the samples, because the best part of that was like, I’m getting everyone’s product in and getting to try stuff and sample things with all the mentors. 

So, it’s a bit of an intense process, but always ends up working out really nicely.

Karin Samelson:
400 different samples, wow. I love it. So, how many meetings, did you say 25?

Alyssa Padron:
25, yeah. Typically.

Karin Samelson:
Wow.

Alyssa Padron:
That will do over two days or so. Believe me, it’s a fun thing to schedule.

Alison Smith:
So, what kind of questions are you asking? And, what can someone expect or what should they be looking to do before they apply to SKU?

What to Expect When Applying to SKU

Alyssa Padron:
Yeah, okay. So, for specifically with SKU, because we end up taking an equity stake in each of the companies that’s involved, a lot of the questions that you’ll get asked are basically anything that an investor would ask you. 

Things related to your margins: your customer acquisition costs, lifetime value, basically them figuring out the house sustainable this businesses, if there’s some product market fit and if that’s already been market validated. 

And, a lot of the questions that you’ll see in the pitch are not just like, okay, cool, you have this like shiny gold product. 

It’s really getting into more of like, “Cool, you have this shiny product. Does this business have legs? Does this founder know what they’re doing? 

Or, at least have a team that can help them or is open to mentorship in whatever areas they need help in.”

Alison Smith:
And, is there minimums that you require?

Alyssa Padron:
For the equity stake, or for-

Alison Smith:
For revenue minimums, or anything?

Alyssa Padron:
Yeah. So, we typically look for about $100,000 in annual revenue. And, that’s kind of our minimum threshold. So, we’ll still take other things into consideration. 

If for some reason you just blew that number out of the water increase sales or if you have a ton of social media following, that’s also something that we’re looking at. 

Just different things that are indicators of market validation. And, the only program that differs is our DFW program. That one, we’re looking at a minimum of a million in revenue. 

So, these are definitely later stage companies that don’t need as much hand-holding, but definitely still needs some of the resources and tools that we can offer to help get them to the next level.

Alison Smith:
Very cool. So, younger brands should still try and apply?

Alyssa Padron:
Absolutely, everyone because people always will reach out and they’re like, “[inaudible 00:07:43] is too small. We’re doing maybe 25K.” 

I’m like, “Apply anyway. Absolutely the best thing that you can do.” In my opinion, the CPG scene in Austin is so small. Really, the best thing you can do is just put your name out there, get your brand in front of the people at SKU, in front of the mentors and investors there. 

And then, maybe 2021 isn’t year, but you come back and apply the year after that. 

And, we have some really tangible ways to measure your growth from one year to the next. More than anything else, that’s a great opportunity for us to continue to learn more about you as a brand.

Alison Smith:
Very cool. And, something in particular that you just said beyond revenue growth and beyond the capabilities of a founder or their team is the social proof and having a good social following and an avid following that shows that you have built community. 

I think that, that’s a really good note that even if your revenue isn’t quite there, as long as you are pulling levers and building community, that, that’s almost just as important.

Alyssa Padron:
Absolutely, we just want to see that there are consumers out there that are hungry for whatever it is you have, even if it’s not food. Yeah.

Karin Samelson:
Yes, totally. 

Now, if you could give any piece of advice to a CPG founder looking to apply for that program, what would it be?

Alyssa Padron:
Okay, keep an open mind? Definitely keep an open mind. I think the worst thing that you can project as an accelerator is trying to make it seem like you know it all. We definitely want founders that are confident in their business. 

We definitely want founders that know their stuff, but it seems like it’s a waste of the mentorship and all of the time and energy that we’re putting into a company. 

An accelerator that chooses a brand for their program is doing so because they believe in the product, believe in the founder. And, they think that the accelerator has something to offer that the founder or brand is missing.

Alyssa Padron:
It may be as simple as just like ooh, maybe you need some extra call-outs on your packaging and it would be a little bit more clear or maybe you’ve got everything else in place and just need the access to capital, that we can help you with. 

Whatever it is, just keep an open mind, know that we are here to help and just stay as coachable and humble as you can.

Karin Samelson:
Okay, cool. And with that mentorship, is it along every single facet of the business.

Alyssa Padron:
Really, it is. We put together a team of probably five or six mentors that have all different sorts of backgrounds. 

So, if our founder has a marketing background, we probably won’t end up putting a marketing person on their team, but we’ll make sure they have someone that’s really strong in finance, really strong in trade spend, really strong in supply chain and things like that. 

So, you really get a bit of an outsourced C-suite of people that can help you out with really every aspect of your business throughout the duration of the job.

Karin Samelson:
Oh, that’s so amazing. I think the work that SKU does is so impressive. So, thank you for being a part of that for so long.

Alyssa Padron:
Oh, my gosh. It was so fun.

I again, didn’t realize how quickly we’re going to grow, while I was there and then I turned around after two years and I was like, “We have 4X this program.” Okay, cool.

Karin Samelson:
That’s amazing. And, there was a team of what? Three?

Alyssa Padron:
Yeah, just the three of us.

More on The Ronin Society

Karin Samelson:
Wow, that’s so cool. I know that they’re most likely missing you. So, now that we’ve talked a little bit about SKU and your background there, um, we’d love to talk about your new venture. So, you are at The Ronin Society. Can you tell us a little bit about that?

Alyssa Padron:
Yeah, so The Ronin Society was actually a bit unknown to me until a couple months back. In the beginning, I saw that they had sponsored Naturally Austin and you always trying to be one to like, keep my pulse on the things in the CPG world. And, I was like, “Who are these guys? All right, let’s go see.” 

So, we work primarily in financial strategy, but they take a really unique approach to working with small market business owners, that really drew me to them. Well, I was poking around on their site and I was like, “It kind of looks like they’re running an accelerator. 

And, they are not truly running an accelerator.” But the way that they have the process tiered out, you go through a couple of months of financial visibility and then go on to professional management structure. 

And, then all of that kind of gets you to your growth story.

Alyssa Padron:
So, it’s really not just getting all of your financials in order. But, making sure that they can kind of like translate that data to the entrepreneurs in a way that they understand. 

In a way, that they can manipulate and deal with and work with on their own and using all of that data to help them make decisions that are the best for them as people and as business owners, which I thought was really unique. And, it’s been a really cool thing to be a part of.

Alison Smith:

Next, can you give us a real world example of when or how important that is for a brand to understand their financials?

Alyssa Padron:
Okay, yeah. So, I think one of the things that comes to mind is I… I’ve been kind of the shadowing client meetings the last couple of weeks, to get kind of onboarded and get a feel for everything. 

Today, I think one of the conversations that sticks out to me was a client that we had that has just experienced exponential growth. For her, she has just exploded beyond where she thought she was going to be. 

So, she’s hitting numbers at year three that she thought she wasn’t going to get to until year five. 

And, so while all of this growth is super exciting, she has some really nice systems in place to manage all of the new hiring that’s going on. 

Together, she was sitting there in this meeting and she was just like, “I don’t know, I just… All of these things are good.”

Alyssa Padron:
It just feels like a lot, all at once. I wonder if I’m ready to go ahead and step away from the business. Here are the things that I’m kind of looking for to be offloaded, things like that. 

I’m sitting there and I’m shadowing, I haven’t said anything, but…

In my mind, I’m just like, “It seems like she wants a COO and not a CEO. I feel like she still wants some creative control here.”

 And, the strategist that was working with her said exactly what I was thinking. And, and basically was like, “Yeah. I think there’s a lot of growth that’s been happening in the last couple of years. 

It’s been happening really quickly. I think you need a COO and not necessarily a CEO.” And that interaction was just such a cool thing to see, because it was definitely a really personal moment for her, thinking about her role in the business and how much she wanted to be involved, going forward.

Alyssa Padron:
But, all of that came from a place of being really confident in how everything was being run currently. 

She was confident enough in her business and where it was going, its growth, up to that point and moving forward that she felt like she could step away in that moment. 

Again, she still wanted a bit of creative control. So, maybe it wouldn’t be completely stepping away from the business. 

But, having the strategist there that has been working with her for two years now has seen all of this growth has crunched all the numbers, knows exactly what she can and can’t afford, seeing him walk her through that, was really cool and really meaningful. 

And, that was the thing that made me realize, I think, the most over the last couple of weeks, like, “Oh man, this is… What Ronin does is not necessarily just financial strategy. 

It’s not just like, here’s a model, it’s beautiful, good luck deciphering it and excel. It’s really teaching you, how to utilize these things, how to make it matter and make sense to you.”

Alison Smith:
That’s amazing. I’m just so curious if you have, with all your experience, if you see that trend with CPG founders, not being as great in operations, just I feel like operations people are just one of a kind, they’re like a gold mine.

Alyssa Padron:
I feel that. There’s a lot of, I don’t know. I felt this way when I was in SKU as well, that I felt like my like personal responsibility throughout the process is obviously yes, connect them to all these people, get their supply chain in order, make sure that they are a really successful brand. 

But, I think a lot of the thing that pulls me towards supporting founders and supporting entrepreneurs, is that a lot of these people don’t see themselves as CEOs. 

A lot of the smaller startups are just constantly grinding and just so stuck in that day-to-day. It’s really hard for them to see themselves in a position or leadership, in a position of control or not necessarily control, but in a position of leadership that they feel confident in. 

And, so part of the process of SKU and also the Ronin Society is making sure that people are able to feel really confident in what they know about their business to feel more of that C-suite vibes .

Alison Smith:
Yeah, so true. I feel like there, I mean, we wanted to actually ask you about how important mentorship is, and I think this is a good segue because it’s hard to understand that you are a leader and there should just be a course for you to take on how to be a good leader. 

I know you’re a big part of mentorship in the past two roles that you played.

So, how important is mentorship for CPG founders?

Alyssa Padron:
So important. I can’t shout it loud enough. I think even outside of CPG, mentorship is hugely important. It’s a big thing for someone to be able to step out of themselves and be like, “Okay, here’s what I’m doing. I know it’s not perfect. I know it could be better. How can I get there? 

Really it comes from a place of vulnerability, right? 

Being able to open yourself up to someone and say like, “Here’s all the nitty gritty of the business. Where can I improve? What would you do? What advice can you provide on these specific experiences? 

A lot of the value of the mentorship and I think a little bit more about SKU in the sense of, is a lot of these people have been in the industry for, I shouldn’t say longer than I have been alive, but a very long time.

Alyssa Padron:
Have been there, done that. 

Their purpose in their mentorship is basically to be like, “Okay, cool. Here’s all of the pitfalls that people fall into. 

Here’s how to make sure that you don’t make the same mistakes that maybe they did in their past or that others have as well. 

But, I think one of the things that I’m starting to see more and more, I got the opportunity to work with a lot of college students, a lot of UT students, through SKU and I was like, “I want to hang out with these guys. I want to learn more about how they think about the world, how they see the CPG market in a completely different way.” 

And so, I think there’s also kind of a flip side of mentorship is like, find mentors that have been there, done that have all of the experience.

Alyssa Padron:
So, you can kind of like get those little nuggets of wisdom from, but also have someone that you meet with that maybe isn’t as formal of a mentor-mentee relationship, but someone that you know is going to bring a bit of diversity of thought to your business and how you’re doing things. 

Maybe they’ll tell you what the heck is happening on TikTok. And, you can learn more about the digital space there. I think that, again…

So much of mentorship is not just the advice part of it, but just bringing diversity of thought to what you’re doing.

Alison Smith:
That’s very well said, I’ve never heard anyone extend mentorship in that way. And, I think that’s so true. And, if someone could come and teach me what TikTok is and how to use it, that would be awesome.

Karin Samelson:
Right?

Alison Smith:
Yeah.

Karin Samelson:
I think that’s such a good point. Now, I feel like I’m connecting that with another Umai Podcast guest. Her name was Emily Hoyle and she was an intern at Sweet Leaf Tea. 

And, she and her fellow interns were driving these marketing initiatives that I know were impressing, the marketing staff at Sweet Leaf. 

She was telling us, these young kids that come in with grand ideas and obviously not everything is going to hit, but I love that piece of advice to look to all sorts of people for feedback on your brand and what’s working and what’s not working and what they like and what they don’t like. 

So, very cool.

Alison Smith:
Agreed, yeah. And, even beyond mentorship, you’re saying with Sweat Leaf, hire young employees that know how to do field marketing and things better than you would ever know how to do. I’d say, that’s pretty cool.

Alyssa Padron:
Definitely, I had taken on a part-time role for another CPG in town doing a bit of admin, some operations, a bit of marketing. 

It’s just like super startup where I basically just got to have my hands in everything. 

I was stepping away as I was getting into my new role at Ronin and our one requirement was, we need to find someone that knows TikTok. So, we have started expanding on our TikTok influencer strategy. 

I was just like, yeah, it took me two days to figure out how to message someone on TikTok. I know there’s people out there that can do this much better and faster than I can.

Karin Samelson:
Yeah, including my 11 year old nephew, I’m sure.

Alison Smith:
I was going to say, there’s so many 11 year olds who have 3,000,000 followers. That’s amazing.

Alyssa Padron:
Crazy.

Alison Smith:
Amazing.

Karin Samelson:
So, moving into the CPG industry in particular.

So, correct me if I’m wrong, is the Ronin Society specifically for the consumer goods industry?

Alyssa Padron:
Correct, it’s a segment of the businesses they work with. So, they work with not just CPG, but also eCommerce and professional services, as well as a few retail stores, that will probably be a focus when retail is a thing again. But yeah, they focus… CPG is just part of what they focus on.

2020 Trends

Karin Samelson:
Cool, great. Well, you’re still in it. And, you still have your finger on the pulse in that industry. So, are there any current product or market trends that you’re seeing right now that you’d like to talk about?

Alyssa Padron:
Yeah. I just really need keto to go away. 

It is killing my holiday dinner vibes. I just wanted to make like a cool cornbread and there’s just not any good keto breads substitutes. I don’t know, maybe that’s my soapbox. Maybe, that’s the hill I die on. 

Also, I think there’s just healthier ways of dieting and relating to food, but that’s a whole separate issue. Yeah. So, there’s some of these like more faddish ones that I see coming in and out. 

I really like seeing CBD on the rise. 

I feel like we have finally hit a point where consumers are starting to understand the difference between a high quality CBD that can give you third-party lab testing and understanding of the terpene, versus just like a $20 bottle you buy on Amazon.

Alyssa Padron:

The biggest thing that I think about overall from a very macro level is just, push for consumer transparency. 

This goes all the way up to the policy level, with the changes to the nutrition labels, not too long ago. 

There’s something that Marissa Epstein, who’s the Director of the Nutrition Institute over at UT said in a SKU class that just like always sticks with me. It’s just like, 

“Consumers are only getting smarter… 

If there are things that you don’t want people to see in your ingredient list, do not put it in your product. There’s just no hiding anything anymore. 

People are always wanting to do more research, have more understanding of the products that they’re buying, not just what they’re putting in their body, but is it sourced ethically? 

…Is it sourced sustainably?” 

So, I have stopped buying any new clothes this year. And, I have sworn off fast fashion.

Alyssa Padron:
And so, I had planned to thrift a bit throughout the year and just ended up not meeting any new clubs this year, which worked out nicely. 

But, I think that kind of higher level of consciousness around the things that we consume is definitely not going anywhere. 

That’s definitely something that we’ll continue to try and kind of trickle down, throughout the rest of the market and to all consumers.

Alison Smith:
Wow. So true. Ha, I just have a quick antidote. 

I was at the store the other day and I was looking in the steak section and the steak said, keto on it. And, it was just kinda like, “Well, yeah. Well, yes, it’s just meat.”

Alyssa Padron:
When gluten-free became a thing, they were labeling grapes as gluten free and-

Alison Smith:
Yeah, I mean that’s marketing. Okay. But yeah, no, I would like to talk more about the consciousness of the consumer.

Karin Samelson:
Yeah, I think consumer transparency and especially when we’re in Austin and there’s so many better for you CPG brands, it’s really important to do your best. 

But, I also think that there is this conversation about inclusivity and price point really, and availability to the masses. 

I just feel so strongly when brands can acknowledge that and have systems in place that make their product more readily available to a very wide range of audiences in specialty and in conventional grocery stores. 

So, I think that, that’s something interesting that we can all really work towards and focus on in the future. So, what would be your best advice for a small to medium sized business owners, especially from what you learned from SKU, working with so many of them?

Alyssa Padron:
Yeah, okay. 

Ask for help. 

I think there’s a concept called, is it hustle core? Maybe it’s hustle another word, but it’s basically this concept that you just like have to be on your grind and always just tough it out and do the thing, working these 14 hour days. 

I just don’t think that’s glamorous at all or necessarily admirable. I think that, again, kind of going back to thinking about the founders and kind of having empathy for their emotional state throughout all of this, it’s very difficult to kind of find that inner strength and that inner confidence.

Alyssa Padron:

I think that one of the biggest things that you can do is just ask for help where you need it, especially here in Austin. 

There’s so many treasure troves of resources for budding entrepreneurs and not necessarily just practical resources, but looking for ways to connect with other entrepreneurs, specifically solo-preneurs are a big segment that I think about a lot. 

Just finding ways to connect with people over similar issues that you’re having, whether you are a SaaS company or a CPG, there’s definitely things to be learned on either side. 

So, connecting with founders that are kind of in your stage, no matter the industry, and then asking for help as far as utilizing your network to ask for more practical or tactical things. 

And then, that last key component is just mentorship and mentorship.

Karin Samelson:
Awesome, love it! 

So, what would be some free resources that you could think of,  whether it’s messaging somebody on LinkedIn or joining a Facebook group? 

And, what would be some of your advice to how to connect with those folks?

Alyssa Padron:
Yeah. So, for CPG here in Austin, there’s tons of groups. SKU, every so often will host an event that’s open to the public. Usually some sort of town hall that’ll take place once a month on any particular topic, as it relates to CPG. 

Naturally, Naturally Austin is obviously a huge player in our industry that has all sorts of really cool webinars and networking events. 

And, I also really just like Wake Up! CPG. 

It’s a networking group hosted by Mark Nathan that’s… I have always found it a really good place specifically to seek out other founders in this space.

Alyssa Padron:
In addition, I find that it’s one of the spaces where there’s a little bit less of the service providers and not that, that’s a bad thing, but it’s a really cool for people to connect there. Then, outside of Austin there’s… 

Naturally Austin is just kind of the Austin branch of the larger natural network. 

There’s also a site called Startup CPG that hosts all sorts of networking events, pitch competitions, they just hosted a virtual pitch competition the other day. And then again, just the larger industry publications, NOSH, BevNET, things like that, staying on top of all of those elevator talks.

Alison Smith:
So is that, I’m guessing that’s where you stay on top of your networking news. 

And, are there any certain CPG entrepreneurs that you follow and anyone in particular that mentors you that we should be checking out?

Alyssa Padron:
Yeah. I feel like all of the CPG entrepreneurs that I… I don’t know, I think I categorize them in a couple of different ways. There’s kind of the big ones here in Austin, which are obviously you’ve got our Kendra Scott and Clayton Christopher, and that’s kind of what we’re all aspiring to in the level of success. 

But, a lot of the ones that come to mind when I think about who’s doing some really cool stuff here in Austin are the founders that have a little bit smaller of companies, but are just doing something really cool and exciting.

Alyssa Padron:
Rebekah Jensen, with Sanara Skincare has put together this beautiful just small line of body care. 

She’s got bath bombs and bath oils. 

But the thing that super resonates with me about it is she is also Mexican-American and is using these Aztec indigenous herbs, just exactly things that my grandma would put into tea, she’s put in this beautiful bath bomb and it’s just got beautiful branding. 

And, this girl is a hustler. She has built this brand from the ground up, with no CPG experience, limited mentorship and she’s just gone on and created something really, really beautiful. 

I think that’s… When I think about the people that inspire me, the people that I want to learn from, that’s the kind of people that I think about.

Karin Samelson:
Incredible, I’ve heard of her skincare line but I need to learn a lot more about it, because I had no idea that they were… That she was using super authentic to her ancestry kind of ingredients in her products that you don’t usually see in a bath bomb. Right? 

You’re seeing glitter and all sorts of stuff and lavender, but that’s very cool. 

On that note. 

Are you seeing, are you seeing that kind of trends? 

I know a huge shakeup across the world this year has been really focused on inclusivity. And, are you seeing that in the CPG space? I know Austin isn’t the most diverse city in the world. It’s really not diverse at all. So, what are you seeing in Austin?

What’s Going on in Austin?

Alyssa Padron:
Yeah. So, in Austin there’s been a few initiatives that I think are pushing things in the right direction. I think about, obviously Beam coming together to support female entrepreneurs has been particularly exciting. 

When I think of the LatinX businesses that I want to support, obviously I have intentionally shifted my Instagram feed away from influencers, living in California whose lives I will never live to trying to support as many LatinX artists and makers as possible. 

They’re not all Austin-based. 

One LatinX-owned business that I super love to support here in Austin is actually, not necessarily in the CPG space, she’s in the retail, but her name is Mary Jae… 

and, it’s a LatinXo and quiero CBD store that has just created this just beautiful assortment and environment that’s super welcoming to everyone.

Alyssa Padron:
I think of that as like one of the most inclusive places, that you can shop at here in Austin. Unfortunately, this is part of the problem I think, is I wish that I could come up with more brands that felt this way. I think one of the bigger examples is obviously CFA. 

They’ve done an amazing job, staying really close to their roots as a family, staying really close to the Mexican heritage and being able to use that, all of those colors and patterns and kind of vibes, in their marketing and in their branding in a really wonderful way. 

But yeah, unfortunately I wish there were more, and I think that’s part of the problem to be solved.

Alison Smith:
Totally.

Karin Samelson:
Yeah.

Alison Smith:
And I totally agree. I’m so happy that, in the past year we’ve seen a change to more authentic influencers versus the other that you mentioned, but I did want to ask you… 

…how we, agencies, how CPG leaders, how other programs can work to ensure that inclusivity and equality.

Alyssa Padron:
Yeah. That’s a big one. I won’t get in to the slightly disappointing statistics. So just like how underfunded, BIPOC-

Alison Smith:
Actually, if you have them on you, we would love to hear them.

Alyssa Padron:
I unfortunately don’t. I would know. That the one that comes to mind is a little bit more specific when it comes to investing. 

It’s something that less than two percent of all investment comes from BIPOC investors. 

And so it’s a bit of this chicken and egg situation where it’s like, okay, well, people, we know that people have implicit bias, unconscious bias. People tend to invest in people like them. Right? 

So the lack of funding from underestimated founders comes from a lack of BIPOC and female investors.

Alyssa Padron:
Okay. Well, how do you get these people to be investors? They run a successful business. Then, exit. They want to give back. Well, how do they run a successful business? They need the funding. 

So, it just kind of goes on and on and back and forth. 

And yeah, I think that there’s… I hate to harp on Austin, but I think especially here, there’s a lot of feeling that we want to do good and it’s difficult to measure that action. 

Everyone knows intrinsically, they want to do something to help. 

Underestimated founders don’t need advice. They need funding. It’s so simple. I was listening to a panel the other day on underrepresented founders and how to get funding. 

And there’s all these investors and investors are like, “Oh, we’ll just give them some pro-bono time or just mentor them.” And I’m like, “Invest.”

Alison Smith:
Money.

Alyssa Padron:
“No, invest. That’s the answer.” I hated that’s the answer-

Alison Smith:
I love that you made that connection that’s yeah-

Brand Love for Golde + BLM Ripple Effect

Karin Samelson:
That completely brings to mind the founder of Golde, Trinity, she was in Vogue and I think Forbes as well, where she was talking about, she was denied investment so many times from so many people. 

And then the Black Lives Matter movement exploded this year. 

All of a sudden it was coming in hot, super hot. And it was just a really sad or reminder that we have so much further to go, but at the very least we’re moving in the right direction.

Alyssa Padron:
Absolutely. Yeah. And I think one of the things to remember is, if you are an investor consciously invest in people of color… If you’re not, if you’re a service provider, consider how accessible you are, consider how people are, how you’re able to give access to your resources, on either a pro bono basis. 

I know that y’all have put together this absolutely wonderful program that’s super accessible for people. I’ve been pushing people you all swipe, so I hope that turns out well for you all. Yeah. 

And then, if you’re a consumer just buy POC-owned products, think about the people that you are purchasing from – go and do that research. Learn more about the people that you are supporting when buying your products.

Alyssa Padron:
I think that there’s a fair amount of that going on and kind of the greater collective of boycotting brands. There’s a whole list of places that I don’t shop anymore, because I don’t love where they put their money. I don’t want my money going those places. 

So, shopping with your dollars as a consumer is definitely a way that you can help move all of us forward.

Karin Samelson:
Absolutely. That’s such great advice.

Alison Smith:
Yeah. It’s easy to forget how much power you have as a consumer. So I love that you said that and I would also like to get your list of places you no longer shop at.

Karin Samelson:
Yeah. I’ll take that list too. Bringing it back to… I know you mentioned it before and I didn’t say anything, but MaryJae, I have purchased so many things from that store and that woman, is her name Mary?

Alyssa Padron:
Her name, Mary is her mother. Her name is Jae.

Karin Samelson:
Doesn’t that work out beautifully for them? Oh my gosh. She is so nice. Oh my gosh. When they first opened, I was in the store a few times. 

We were at Black Sheep Lodge going in the store and she was just the most helpful, non-judgemental, especially…

When you go into shops like that, sometimes they can be a little bit holier than now, but the nicest person. 

So, Austinites go shop there. It’s the holidays.

Alyssa Padron:
Absolutely. I just went and did a little one-on-one sneak preview shopping session with just Jae and I in the store, which was amazing. 

Got this like super cute little goodie bag and I made this Instagram post about it. Because I was just like, “Go support this woman and she’s doing cool stuff.” 

And, then I wrote this whole thing out and I was like, “This looks super sponsored and it’s totally not, but I wish that it was.” But yeah, just a thing that I like felt really passionately about was supporting her and just everything that she stands for in that store.

Grow Gardenio

Karin Samelson:
Very cool. On that note, are there other CPG entrepreneurs that really inspire you similar to Jae?

Alyssa Padron:
It’s going to sound really lame and a little sappy, but my partner, I data founder in the scene and his commitment and ambition and drive and just seeing his bigger vision for not just what his company can do now, not just like cool, run it, get acquired in a couple years. 

He has such a passionate vision for where the business will take him and how it will impact the world. 

Honestly, dating him has been one of the things that’s made me realize in myself like, “Oh man, I have power to change these things. 

Even though I’m not an investor, I’m just a consumer. I can vote with my dollars to support the people that I want to. I can stand for systems that support food, justice and equality for all.”

Alyssa Padron:
He’s been really instrumental in kind of, not just learning about all of the unfortunate inequities of the world, but really helping me feel like I actually have a pretty powerful part in being able to make that change. Yeah.

Karin Samelson:
Wow. Well, what’s his name? What’s his business?

Alison Smith:
Yeah, plug him.

Alyssa Padron:
Roman Gonzalez, he’s the founder of Gardenio, which is a membership-based club. 

Okay, are you familiar?

Karin Samelson:
Yes.

Alison Smith:
Yeah, we saw him-

Karin Samelson:
We’ve had a call with him too.

Alison Smith:
Yeah, and we saw him pitch his brand. And, I think he won – he was amazing.

Karin Samelson:
Wait.

Alison Smith:
He did an elevator pitch.

Karin Samelson:
Do you remember it at the Naturally Austin event? Not the Pitch Slam where it was at Austin Eastciders?

Alison Smith:
Yes, yeah.

Karin Samelson:
Do you remember that? And it was like, Oh gosh, I’m so embarrassed to not remember his name who owns the Dallas Mavericks, Mark Cuban. It was one of Mark Cuban’s investor guys from work and he was there and they were like, “Who wants to pitch their brand?” 

And, he raised his hand out of nowhere and pitched his brand. We were just like-

Alison Smith:
Yeah. “Who was that? He did amazing.”

Karin Samelson:
He’s ready.

Alison Smith:
Yeah.

Karin Samelson:
Yeah, very cool.

Alison Smith:
We loved his concept and everything.

Alyssa Padron:
I don’t know if you can see it over here. I’ve got a whole bunch of plants in this window sill. Those are all my Gardenio plants. 

Admittedly, I’m much better at growing houseplants and it’s pretty embarrassing that my herbs don’t grow as well as they should considering I’m dating the founder of this guy that lets you grow your own herbs. But the fact that they are not dead is proof that anyone can do it, follow along with the herb, they got you.

Karin Samelson:
Tell us a little bit more about Gardenio.

Alyssa Padron:
Yeah. So, I have been lucky enough to kind of get such an inside view of the business, and kind of what they do. You sign up for your first box and you get three plants.

They send you everything you need, you get not just seeds, but a live plant, all of the soil, the pots, the right kind of mulch for your plant and the environment that it’s going to be in. 

You get a care guide for each of your plants and then you log them in the app.

Then, go and mend your plans different things, which I always find helpful. Because I’m like, “Oh no, I can’t kill Jenny. No man, I got to water her.”

The app is great and it helps you follow along. You’ll get little notifications. It’ll be like, “Hey, it’s going to freeze outside. You might want to bring your plants inside or put like some sort of plant jacket over it.” And, then every three months after that you’ll get an additional plant.

Alyssa Padron:
If your plant dies any time within the first three months that you get it, basically no questions asked other than, unless you just completely neglected it, I’ll send you a new plant, which is very exciting.

He studied philosophy at Brown. And, so, he has this whole concept of like reframing death and being able to do that through plants and just kind of being, “Yeah. It died. That happens sometimes it doesn’t mean give up, it means grow another one.”

Karin Samelson:
Whoa.

Alison Smith:
Man.

Karin Samelson:
That’s so cool.

Alison Smith:
Yeah. I feel like I would be his worst customer sending me new plants all the time.

Alyssa Padron:
That’s the thing. Those are the people that he loves.

Alison Smith:
Okay good.

Alyssa Padron:
He loves a good challenge.

Alison Smith:
So cool. Very cool.

Karin Samelson:
And, another Latinx-founded Austin CPG company. So check them out too.

Alyssa Padron:
Absolutely.

Karin Samelson:
Very cool.

Alison Smith:
Definitely. Well, Alyssa, this is a lot of fun.

Alyssa Padron:
Yeah.

Karin Samelson:
Thank you for joining us.

Alison Smith:
Yeah. Is there any way that anyone can reach out to you? Do you want to leave anyone with a link or your Instagram or anything?

Alyssa Padron:
Yeah, so I am super excited!

A lot of my role at SKU was not just kind of running the program, but also being able to build a nice little community around that.

So, I’m still working on building communities over at Ronin. We’re going to be hosting monthly workshops. We’re going to start an intro to finance for business owners, free workshop.

It’s going to run every month, starting in 2021. So, you can check out theroninsociety.com, head over to the workshop’s tab and yeah, feel free to drop me a line.

Because, I love chatting with new people. I’m so happy to share resources, to connect people with whatever it is they need. You can reach me at a.padron that’s P-A-D-R-O-N @theroninsociety.com.

Alison Smith:
Awesome. Thanks again, Alyssa.

Alyssa Padron:
Absolutely.

Alison Smith:
We’ll talk soon.

Karin Samelson:
Thanks Alyssa.

Alyssa Padron:
Thank you, all.

Narrator:
Umai Social Circle is a CPG agency driven podcast based out of Austin, Texas. We’re excited to share more behind the scene insights, chats with industry leaders or whatever else we learn along the way. 

Follow us on Instagram @umaimarketing or check out our website, umaimarketing.com. Catch you back here soon.

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