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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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Austin CPG Marketing Agency

image yellowbird sauce

We’ve put together a list of CPG entrepreneurs and brands we admire and that call Austin home!

In 2020, Austin, Texas is one of the best places in the U.S. to launch a food, beverage, or wellness brand (also referred to as a Consumer Packaged Goods brand)! And, we’re not just saying that because we love it here. 😉

New businesses are flocking here for a few reasons! 

It has been in large part due to the city’s flagship Whole Foods store and wealth of mentorship and funding opportunities (Inc. Magazine). A lower cost of living also continues to draw in entrepreneurs once based in New York and California (Crunchbase).

This on top of the presence of startup accelerator programs, like SKU and Naturally Austin – which we highly recommend checking out!

CPG Entrepreneurs & Brands Clearing The Way in Austin, Texas

Yellowbird
@yellowbirdsauce 

Fact: Yellowbird’s sauces hit differently. They’re always made from farm-fresh fruits and vegetables – no fillers needed – and that’s what we love about them.

CPG Entrepreneurs Erin Link and George Milton launched their brand with a clear mission in mind: “to nix the junk, get back to nature, harvest fresh and organic fruits and veggies, and create a pure, flavorful line of sauces in the process.”

Given its huge health-conscious demographic, Austin was a natural fit for their headquarters and product launch.

Favorite Product: Yellowbird Sauce Serrano Hot Sauce

image yellowbird sauce

Tito’s Vodka
@titosvodka

CPG Entrepreneur Tito Beveridge was born and raised in San Antonio – just a hop, skip, and a jump away from Austin! Around 1992, he was making flavored vodka and passing it out to friends at parties.

And, his liquor was such a hit that he started going to liquor stores and asking managers if they’d buy his flavored vodkas. But, flavored vodka just wasn’t selling. Instead, they said if he could, “make a vodka that was so smooth you could drink it straight.” Then, they might be interested.

So, Tito accepted the challenge and his final product was a hit. Already local to Austin, this is where he would stay and grow his brand’s reputation to this day.

Favorite Product: Well, Tito’s Vodka – of course.

cpg entrepreneurs image of titos vodka

SkinnyPop
@theskinnypop

SkinnyPop Popcorn was founded in 2010. Their mission is simple (just like their ingredients list): create snacks that not only taste delicious, but are good for you!

This brand has seen such banging success that their parent company (Amplify Snack Brands) was acquired by Hershey in 2017.

Hershey reported a boost in sales following the acquisition, but not much news has come out on this brand since 2018. We’ll eagerly be awaiting an update – and popping corn in the meantime.

Favorite Product: Microwave Popcorn

cpg entrepreneurs image of skinny pop popcorn

CLEAN Cause
@cleancause

CLEAN Cause is on a mission to support those in recovery from alcohol and drug addiction by, “creating a sustainable source of funding for recovery efforts.”

In fact, they funnel 50% of their profits to fund an in-house giveback initiative: CLEAN Kickstarts. This initiative funds sober living scholarships to support individuals coming out of rehab, homelessness, or incarceration.

Favorite Product: Blackberry Organic Sparkling Yerba Mate

cpg entrepreneurs image of clean cause

Stubb’s BBQ Sauce
@stubbsbbqsauce 

CPG Entrepreneur and Restaurateur C.B. Stubblefield, also known as “Stubb,” opened a BBQ joint in Lubbock, TX.

Later in life, he moved to Austin, Texas and was urged by friends to bottle his signature sauce. He started doing this by hand, reusing old whiskey bottles and jam jars!

50 years later, the Stubb’s brand still invests in quality ingredients and careful craftsmanship – and that shows in their wide availability in retailers across the U.S.

Favorite Product: Stubb’s® Sticky Sweet BBQ Sauce

cpg entrepreneurs image of stubbs bbq sauce

Cece’s Veggie Co
@cecesveggieco

How it started: for a little girl named Cece (founder Mason’s daughter) to get more veggies.

How it’s going: veggie (and non-veggie) lovers around the country packing their meals with even more nutrients with help from these traditional noodle and rice substitutes.

Not only do these pre-made veggie noodles make it easier for home cooks, Cece’s has a patented technology to create the highest quality rice and noodles that last longer on the shelf. 

Two carrots up for less waste and more nourishment!

Favorite Product: Organic Butternut Spirals

cpg entrepreneurs image of cece's veggie noodle co

Rhythm Superfoods
@rhythmsuperfoods

Plant-based snacks that are healthy and taste good – we’re here for it. 

For Rhythm Superfoods, it all started in a local juice bar’s kitchen where the founders first experimented with their beloved Kale Chips. People loved it, and the rest is snacking history.

Rhythm received another investment in mid-2020 with plans to drive growth with innovation and marketing. We can’t wait to see those plans in action because, well, we’re hungry for more.

Favorite Product: Organic Kale Chips Kool Ranch 

cpg entrepreneurs image of rhythm superfoods

EPIC Provisions
@epicbar

If you can believe it, this meat-centric brand was founded by former vegetarians.

After trialing vegetarian and vegan diets, founders Taylor and Katie found success in maximizing their athletic performance (endurance running!) when they tried the Paleo Diet and created a product that was lacking on the grocery store shelves: a 100% grass fed meat snack with added fruits and nuts that was perfect for on-the-go.

After only three years of making these meat snacks, General Mills purchased the company for $100 million.

Now they live their lives on the ranch a couple hours away raising bison and preaching the regenerative agriculture word as far and wide as they can.

Favorite Product: Duck Fat

cpg entrepreneurs image of epic bar duck fat

In short, that’s a look at some of our favorite CPG brands founded in Austin, Texas!

If you’re into this list, there’s a pretty good chance you’d dig our podcast: Umai Social Circle.

Now, check out our latest episodes here.

And, shoot us a DM on Instagram if there’s an Austin-based brand that you’d like to see featured on this list or the Circle!

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