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- [00:00]
A
If you're a parent of a teen or have teens in your life, it can be hard to figure out the right way to approach social media and technology. Ultimately, if you feel like your teens are ready, there are tools to help. Instagram teen accounts have automatic protections for what your teens see and who can contact them. Plus time management tools like daily time limits and sleep mode. And Instagram will continue adding built in safety features to help create age appropriate experiences. Learn more about teen accounts and Instagram's ongoing work to protect teens online@instagram.com teenaccounts that's instagram.com teenaccounts. Hello and welcome to the advice line on How I Built this Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you needed, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it. Joining me today is Hernan Lopez, co founder of the podcast network Wondery, which also distributes this show. How I Built this. Hernan, welcome back to the show.
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B
Thank you so much for having me. Again.
- [01:30]
A
So we first had you on the show back in 2023 and as always, if you haven't heard that episode, it's a great story. It's really worth checking out. We'll put a link to it in the episode description. But basically the story is hernan was a TV executive and you left in 2016, inspired by this new thing called podcasting, to start a podcast network. You pitched it, you struggled with investors to get them on board, you almost ran out of cash, and then you had this really big hit in a show called Dirty John. And soon Wondery became the target of interest from acquirers and was eventually acquired by Amazon. And you're not part of it anymore. But that's an amazing story of how you built this brand into what it is today.
- [02:15]
B
Thank you. It was one of the most rewarding experiences my whole life. To see it go from 0 to 1, to see it become part of Amazon, and then to have the opportunity to advise other founders that after I started Wondery have had so many different versions of the challenges and opportunities that every founder has and this is one of the reasons why I love your show. I was a fan well before it became part of Wondery, and I'm still a huge fan.
- [02:45]
A
Thank you, Arnon. You know, we talked about this in the show and you ran into some challenges. You were, well, just. How do I put it in any other way? You were indicted by the US Government. The Justice Department had an investigation into bribery around, you know, World cup soccer and television rights, and you'd been an executive at Fox Sports, and you were implicated in this. This took up five or six years of your life. I won't go into all the details of the story. You can hear our conversation. But basically, you were first convicted and then acquitted, and then convicted again and then acquitted, and then the charges were eventually, finally dropped in 2025 and you were vindicated. You were basically cleared of this, like, long six year nightmare of trying to prove that you were not guilty. You were not involved in this. How does it feel now because it's just happened at the end of 2025. How does it feel to have that weight off your shoulders?
- [03:39]
B
It feels great in many respects to be able to tell people what I've been saying from day one. Not to the people who knew me, because everybody who knew me understood that this was a false accusation that stemmed from the actions of a former joint venture partner who himself was the one paying off soccer officials for his own benefit. And when he got caught, he falsely implicated me. But he does feel like a relief to really have the legal case behind me and be able to tell the story. But I'll tell you, guy, what I learned through the process is that I used to be like most people, very quick to judge and very quick to think that prosecutors always get it right. They're the good guys. And when they go after someone, they must know.
- [04:28]
A
Yeah, And I think a lot of us do, just our natural instinct. But when you went through it yourself, you realized that actually that's not right at all. They get it wrong. They have it wrong.
- [04:39]
B
They have it wrong. And I also realize how easy it's for them to convince a jury of something that really didn't happen. But that will be for another podcast episode.
- [04:51]
A
Hanan, you know, a lot of people, as you can. We've talked about this before. A lot of people will approach me and ask me for advice on starting a podcast. And a lot of people have different views of what this industry is and how successful they can be. And there's a lot of talk about all this money and podcasting and, you know, I don't think people, most people don't realize is that it's a very small number of podcasters and shows that actually, you know, primarily do this for their, their main, as their main source of income. What's your take on? I mean, podcasting is growing. More people are listening to it. How do you sort of see this industry spinning out over the next five years? I've been asked this question and I can't answer it because I think the X factor is artificial intelligence. And it's not clear to me what, how that's going to affect this industry. What's your take?
- [05:42]
B
I think we're going to see a new wave of growth driven by the video players, the streamers. Netflix just launched a collection of podcasts. So did Tubi. Hulu made an announcement recently. You're going to see more of the video players dig deeper into the podcast space and that will create more awareness. YouTube most famously has been the number one platform for video consumption of podcasts, and they had a Data point of 700 million viewing hours per month going to video podcasts. I don't see AI as a threat to the podcast creating community. I think AI will be used as a tool to help everybody produce better output, to save time and to improve their marketing materials. And ultimately, the people who are afraid that AI is going to create an influx of so many low quality and cheap alternatives to actual real voices, I think what they're not seeing is that in that environment, if that environment does happen, the value of our connection, the value of being a guy, Raz, the value of being Steve Bartlett only goes up. Consumers are going to gravitate towards the voices that they trust. And in this environment, trust is worth more than ever.
- [07:15]
A
Yeah, well, I certainly hope so for one. Ernan, what do you say? Let's take our first call.
- [07:21]
B
Yes, please.
- [07:22]
A
All right. Hello, caller. Welcome to the advice line. You're on with Ernan Lopez, founder of Wondery. Tell us your name, where you're calling from, and just a little bit about your business.
- [07:32]
C
Hi there, my name is Heather Sloan. I'm one of the co founders of Healy Medical. Healy makes products like kinesiology tapes and patches infused with natural ingredients with a core focus around magnesium.
- [07:45]
A
Got it. Okay, Heather, welcome to the show. Thanks for calling. Okay, so just explain, these are tape that you would use. How? Like this is tape for what?
- [07:53]
C
Kinesiology tape. So you'll use it for support. It's an elastic bandage that can wrap around your joints and allow you to go through a full range of motion. While you're walking, doing athletics, or even
- [08:04]
A
just recovering and resting for, like, pain relief. And I've never worn this before, and I mean, I exercise and I run, I do all these things, but I've never used sports tape. I see people using it. Somebody might put it on their, you know, on their knee or something. What does it do?
- [08:19]
C
So traditional kinesiology tape is there to support the joint while you go through natural range of motion and movement. So our tape is infused with magnesium and menthol. So prior to our invention, you were not able to use anything for pain relief because any creams or similar types of pain lotions would loosen the adhesive. So we wanted to solve that, and we were, as healthcare practitioners, very, very fond of magnesium and menthol and learned lots about the combination and infused it inside the tape.
- [08:52]
A
Cool.
- [08:52]
C
So it allows for pain relief, recovery, support, and style all in one option.
- [08:57]
A
Cool. All right, Exciting. All right, tell me a little bit about when was the business launched and how it's doing Great.
- [09:04]
C
Yeah. So we created our first invention, which was this infused kinesiology tape through Covid in 2020 and launched 2021 August. And within weeks, we actually won an award at a trade show, which was virtual. And that pretty much launched us immediately into big box. So we went right into CVS and Vitamin Shop.
- [09:26]
A
Wow. And so now you are. And is that your main sales channel in. In stores?
- [09:31]
C
Yeah, that is our only sales channel right now, so we're in 26,000 store doors across North America.
- [09:36]
A
Wow. So tell me a little bit about your. Your sales. How'd you guys do?
- [09:40]
C
Yeah, this year we're on track to do about 10 million.
- [09:43]
A
Wow. So you're really growing really, really fast. Okay. You're certainly big. 95% of the startups that come onto the show, but still obviously a small business, and clearly you've seen some traction. Tell us what your question is before we dive in further.
- [09:59]
C
Yeah. So as we're launching new products this year, we're moving into the infused patch space. So convergence, women's wellness headaches. And we're trying to build a community around it and drive people to our website and roll out our D2C arm, which we have not done yet. But we're also mindful of not spreading ourselves too thin or burning out our existing fan base. So from your experience, for both of you guys, Hernan and Guy, I'd love to know, how do you think about balancing both? Is our current pond big enough to grow the DTC arm while we're still supporting Our retail. And I guess if we go for it, what's the fastest way to build a bigger and engaged fan base to support this mission?
- [10:37]
A
Okay, so right now most, virtually all of your sales are in stores, retail, and now you're sort of wondering how do we push into DTC and should we and so on. Okay. And I want to bring you in any thoughts or questions. First of all, for Heather.
- [10:52]
B
First, my daughter needs to try your product because she was being taped yesterday for back pain. She plays soccer at school and she's been complaining about back pain over the last few days. So I would 100% run to your website and buy it if I can buy it. Have you raised money from venture capital, any kind of outside financing?
- [11:11]
C
We did a very small pre seed. The rest of it is mostly funded ourselves.
- [11:16]
B
That is great news. The only reason why I asked that question is that the path towards expanding into DTC usually requires you to be able to have access to capital. Once you have proved that the unit economics can work. How many of your products today are repeatable purchases versus one offs? Because I assume in any tape that deals with pain is something that you buy only when you have pain, but other products I assume that you're creating could have the potential for repeatable purchases.
- [11:58]
C
Yeah, I think I would say all our products are what we call consumable so that people would buy them on a repeat order because you could use it as a prevention or a support or a recovery tool, whether it's the tape or whether it's the patches.
- [12:11]
B
So I would say that establishing a direct connection with consumers so that you can build a lifetime value model is crucial to getting dtc. Right. A lot of the brands that want to go into DTC and find that acquiring customers is one of the most expensive and complex parts of the business, but they only have a one off or purchases that are not frequent find that the unit economics don't work. But when you have a product that people renew on a monthly cadence, then you can estimate the total margin that you have or your lifetime and divide it by the customer acquisition cost. And therefore typically when you are at three to one and you you being able to prove that to your investors, you're going to be able to raise money from investors in your next round to fund a much faster expansion that will allow you to acquire customers more quickly.
- [13:15]
C
Interesting.
- [13:16]
A
Yeah. Heather, a couple quick questions. Have you had any acquisition offers or anybody coming in sort of aggressively saying hey, you want to sell?
- [13:23]
C
Yeah, we've had a lot so far come at us I think our goal was to launch our new products which are like period pain patches and headache patches and really differentiate ourselves before we entertain those. Maybe next year.
- [13:36]
B
That's smart. That is smart.
- [13:38]
A
Yeah. I mean, you're still small, so you're early in your roadmap. Right. So you don't want to sell just because someone's calling. Another thing that I wonder about is Ernan alluded to this was customer acquisition costs. Right. When it comes to DTC, they're high. Right. You got to spend 50, 60, 70, $80 for acquisition. But what's interesting about your product is you are already in. You said 26,000 stores in North America.
- [14:07]
C
Yep.
- [14:08]
A
And are you. I mean, your packaging is like, could be your. That's really where you can acquire these customers. Right. Because it's a billboard. I mean, you're in the stores already, you've got ad space. Now. Can you put a QR code on your package as a scan here for 15% off your next order or scan here to join the community and then you sort of move people to the website.
- [14:31]
D
Right.
- [14:31]
C
That's a good idea, actually. Thank you. That's a really good idea to consider bringing them into the community through the box.
- [14:37]
A
Anyway, I was just spitballing here, but you know, it's right, because the D2C side and on the margins are going to be higher.
- [14:43]
B
Well, it's not only the margins, it's the lifetime connection with the customers. Right. It's the ability to essentially own those which, by the way, if you do entertain later on an acquisition offer for the company, they're going to value that list at a much higher multiple than your retail sales because the retail sales, they will always in the back of the head think that they are more constrained, they're more subject to competition, whereas direct sales typically are much more yours.
- [15:13]
A
Yeah.
- [15:13]
C
And you talked a lot about the acquisition side. Do you guys have any feelings around when the right time is and how you know, as a brand?
- [15:22]
A
This one's for you. Anan. I have thoughts which is you're too early. But you know, again, if someone's coming in and they're saying, hey, 10 million, what's your EBITDA? And they're going to offer you a boatload of cash. You know, it's up to you. But Ernan, you've been through this. What do you think?
- [15:36]
B
I don't think it is too early at all. I think you are at the right time because you don't need to be offering a whole catalog in order to, to be able to have a direct relationship with your consumers. In fact, there are people, if you look at hims and hers, right when they started, they had one product and they really zeroed in on that one product that they sold before they expanded to be a multiple category brand. And how, how, how big is your social media presence? Your Instagram and TikTok in particular?
- [16:10]
C
It's still growing. I would, I would say we're pretty small still.
- [16:14]
B
You'll find them that those are probably the channels that converted the most. And it's really difficult to do only organically. Right. You're always going to have to have a combination of organic and advertising. But I think that that's where your consumers are going to be. And I would encourage you. When are you going to launch the period patch?
- [16:37]
C
Yeah, both the period patches and the headache patches will go into the big box stores around May.
- [16:43]
B
Okay. And so there's no reason to wait too long before you put them at the center of your DTC offering, because those sound exactly like the products that consumers will definitely think they need to buy frequently. And investors will immediately associate with a product that has repeatable purchases and that can model a customer lifetime value that will allow you to raise money when you go to market. Next.
- [17:13]
A
One quick last thought about the acquisition side. What We've seen over 600, 700 interviews on the show is that oftentimes, I don't want to say smart, but lucky founders can take multiple bites of the apple. Right. You can sell a chunk of your business once and then oftentimes that sort of owner, or let's say they're a majority owner, will sell it again, and then you get another bite at the apple, and then occasionally they'll take it public, and then you get a third bite of the apple. And we've seen that with brands like Solo Stove. They got three bites of the apple and actually made their most money when it went public, even though they had the smallest ownership share at that point. I would strongly advise you to try and retain some significant shares if an acquirer comes calling.
- [18:07]
C
Okay. Amazing. Well, thank you so much. Huge, huge fan and beyond. Grateful to have this opportunity to meet you both and be on the show. Thank you.
- [18:15]
A
Thank you. Awesome product. Congrats.
- [18:16]
C
Thank you so much.
- [18:17]
A
What an amazing story. $10 million. Heather Sloan. The brand is called Healy Medical. Thanks for calling in.
- [18:21]
C
Thank you.
- [18:22]
B
Congratulations.
- [18:23]
A
Yeah, I mean, I would think that, you know, and you know this having worked with Amazon and on like a, a product like this. Right. You want to find, and especially when it comes to getting acquired. You want to find a big brand like a Unilever, right? Like somebody who really has experience in these channels, who can really bring incredible value, not just selling it to some random private equity. Although that could be interesting, too.
- [18:50]
B
Sometimes those private equity firms are ultimately the ones who then sell to o' Neill when they do aggregation of multiple products in the similar category. I think that you should definitely study what both hims and hers, the twin companies, did because I can see the roadmap being very parallel to what they built in the direct to consumer health space.
- [19:12]
A
All right, we're going to take a quick break, but we'll be right back with another collar and another round of advice. Stay with us. I'm Guy Raz and you're listening to the Advice line right here on How I Built this Lab. Welcome back to the Advice line on How I Built this Lab. I'm Guy Raz and my guest today is Ernan Lopez, founder of Wondery. And we're taking your calls. And Hernan, are you ready for another call?
- [19:50]
B
Ready.
- [19:50]
A
All right. Let's bring our next caller. Welcome to the Advice Line. You're on with Hernan Lopez, founder of Wondery. Tell us your name, where you're calling from and a little bit about your business.
- [19:59]
D
Hi, Guy. Hello, Hernan. My name is Noel Audi calling from Detroit, Michigan. I am the founder of Studious Monday where I built a reliable school uniform making system for Muslim families and schools.
- [20:12]
A
Awesome. Welcome to the show. Nual. So tell me about, so these are uniforms, school uniforms that you're selling.
- [20:18]
D
So they're modest school uniforms designed for the hijab between, you know, the 9 to 17 year old girl who wears the hijab. There was a gap in the market, you know, experienced by myself as a mom who has a daughter and also sons that go to Muslim schools. And there were no school uniforms for them. It was more about layering and creating and altering. And so I decided to create something for them.
- [20:49]
B
That's great.
- [20:49]
A
That's cool. Because school uniforms are, are awesome. I mean, it basically levels the playing field, right? Because no one is sort of bragging about their, you know, streetwear brands and they're expensive whatevers. They're all wearing the same thing. Tell me a little bit about, about the business. How is it, I'm assuming you're selling this mainly locally in around Michigan where you are based?
- [21:11]
D
Yep, exactly. So, so we are selling direct to consumer through the schools. So the schools are like, hey, this is the school uniform for the year. You need to buy this and that's how we get our customers. So I went from one school last year to four schools this upcoming back to school season.
- [21:33]
A
And where are you manufacturing clothing? Are you designing it, by the way?
- [21:37]
D
I am designing it. I manufactured it. It's been quite inspiring for me as a daughter of immigrants as well as my children, to reconcile identity and clothing and fashion. And, you know, manufacturing in the United States has been super rewarding.
- [21:58]
A
Yeah, for sure. Tell me a little bit about your sales. How are you doing? How's the business doing?
- [22:03]
D
So, yeah, our sales last year was 75,000 with one school, and now we'll be at four schools. So we're hoping to reach about $250,000 this upcoming back to school season.
- [22:18]
A
Awesome. And before we get into this further, tell us your question.
- [22:23]
D
So my hesitation has been around preserving the trust that I've built under the name Studious Monday, but many of the families I serve struggle to pronounce it. Many of my families are immigrant families, and I don't know whether to keep growing the name or. Or transition to something simpler or more accessible.
- [22:47]
A
So the question you're talking about, literally the name of your brand.
- [22:50]
D
My company name.
- [22:51]
E
Yep.
- [22:52]
D
Studious Monday.
- [22:53]
A
Yeah. Study us. Studious Monday.
- [22:54]
D
Yes. Study us.
- [22:55]
A
Yeah. And. And so that's. This is sort of what you're grappling with. All right, Ernan, I want to bring you in. First of all, thoughts or questions for Nawal.
- [23:03]
B
First of all, congratulations. Starting a business serving a community that you love and a very clear consumer need is one of the most rewarding parts of being an entrepreneur. And I want to ask you, how did you come up with a name? What does a name mean to you?
- [23:22]
D
So I was thinking about the girl. I was thinking about her and the kind of characteristics she would carry. And ultimately, she is studious, and she loves to wake up on Monday mornings and get dressed and go to school. So I put those two words together, and I created this name, and it became kind of like a verb. Like, you know, have a Studious Monday kind of thing. Or, you know, there was, like, a play on it, like, between me and my friends. We played around with it, and we're like, okay, we're just gonna call it this.
- [23:53]
B
I would say I thought a lot when I started wondering about the brand name and what it signifies and how people will perceive the name. And Wondery was the factory of wonder. And when I told people that's what it was. Half said, oh, that makes sense. And half said, oh, I did not appreciate that that's what it was, but it really was a name that connected the product in a very emotional level with what the consumers were experiencing. I had a number of bright lines for the brand, and one of them was, I wanted no more than four syllables. And that's advice that I've heard. I don't know from whom the first time, but when he told me studios Monday, the first thing that I heard in the back of my head was, maybe that's one syllable too many. And any brand name that needs explaining puts another barrier between you and the consumer that you don't necessarily want. So that's before you got into the fact that some of your families have trouble pronouncing it some of your clients. So if you're going to change the brand, I think now is the time to do it. So when the brand is young and I'll give you a book to read. It's called hello, My Name is Awesome. I think Alexandra Watkins is the author. And actually, after reading the book, that was the book that led me to come up with a brand Wondery. I'd given it to so many entrepreneurs.
- [25:41]
D
Thank you. That's so helpful. Thank you.
- [25:44]
A
So, Nawal, I'm curious. What is. When you sort of look out five years from now, what is the kind of the vision that you have for this, for this company?
- [25:53]
D
My vision is to be in every single Muslim school across the nation, so.
- [26:00]
A
And down the road, of course, you're gonna have to outsource manufacturing and build a sales team and things like that. You know, in terms of the name, I mean, I have a slightly different. I don't think it's a big deal either way. I think Study Us or Studious is kind of cool, but, you know, have you thought about maybe integrating the word somehow? Like modest. Not exactly that word, but the idea. Or maybe like, you know, modestly or something like that in the name.
- [26:29]
D
There's two areas of contention with me right now. Like, do I play into this trend of, like, modest fashion right now, you know, and incorporate modest into, you know, the brand name, or do I just let the clothes speak for themselves where people see it and know that it's modest without me actually saying it?
- [26:56]
A
Yeah. Interesting. I mean, I think it my view. And you might have a different view, my view is it's worth sort of building that in to the brand. Right. I mean, especially because that's what it is.
- [27:07]
D
Sure.
- [27:08]
B
The only limitation, if you feel in the future you would expand so far of that brand, that it will be limiting. That will be the only reason not to do it.
- [27:19]
A
Right. I mean, is there a chance you may make immodest clothing one day?
- [27:24]
D
Probably not.
- [27:26]
B
Probably not.
- [27:27]
D
Probably not.
- [27:29]
B
So today you do uniforms only for girls. But I can imagine that the parents have girls and boys.
- [27:36]
D
Yeah, no Fair question. So that's what it was. It started off as girls first, and then when I went to the schools, the schools are like, well, you know, I don't want my family going to two different shops to two different places. Yeah, two different places. So I incorporated boys wear into our collection and made it like a Muslim family thing.
- [27:56]
B
That makes sense.
- [27:56]
D
But I mean, yeah, those are all definitely things to consider, you know, I mean, again, it's.
- [28:02]
A
You know, we've had brands in the show like Parachute Home. I mean, Parachute Home is a big business, but has nothing to do with parachutes. Right. It's done very well. So we've had a lot of brands on the show that not aren't necessarily Warby Parker. What does it have to do with glasses? It's a great name, though. Yeah. And so Tom's Shoes. You know, I'm just. I'm spitballing, but I think that there, you could. You could experiment with different names, you
- [28:30]
D
know, so, okay, so who do I test this on? Like, where do I go to test, get this tested? Like, are there tools? Are there resources? Or is there, like, are there circles or spaces where I could, like, like you said, play around with this, you know, with a brand name, you know, and then trademarking it. But, like, who and where.
- [28:51]
A
I would just talk to the people that. That, you know, who are your potential customers. I mean, that. I don't think you need focus groups or. And frankly, I don't always trust focus groups. And I'm sure you went through focus groups on some of your shows where the people hated it and then the show was a hit. So I know that happened with this show.
- [29:07]
B
We did not actually. We didn't test. What we did do were internal listening sessions to edit, but not focus groups with potential listeners. But the book that I recommended has some resources about how to think about it. And that book was written before LLMs. So definitely, as you're ideating, talk to ChatGPT and to Claude. They will be great at giving you direction into how a consumer would respond. There are actually tools that do something called synthetic research where you can hire synthetic focus groups and they act quickly, they pretend to be people, and they give you answers that rate the brands that you give them from 1 to 10 and they tell you why they respond and not Respond to.
- [29:56]
A
Yeah.
- [29:56]
E
Wow. Okay.
- [29:58]
D
Wow.
- [29:58]
A
That's awesome advice, Noel. Thank you so much for calling in. The brand is called for now studious or study us Monday. Good luck, keep us posted.
- [30:06]
D
Thank you. Such a pleasure.
- [30:08]
B
Thank you.
- [30:10]
A
Yeah, I mean it's a, I'm conflicted over this idea of names because we do, you know, we have had major brands that have stupid names and even the founders admit they have stupid names, but they become multi billion dollar companies.
- [30:26]
B
They had to do so much more work at the beginning of their journeys to get people to remember what they are and what product to associate it with.
- [30:38]
A
Yeah, well, that's true, but I mean, again, there are all kinds of names that you just, you can imagine people would say, I don't know, what does that tell me about this product or this thing? And, and they do just fine, you know, just fine.
- [30:55]
B
Apple, right? Is Apple a logical name for Apple?
- [30:59]
A
Apple's a computer company.
- [31:00]
B
Right.
- [31:01]
A
It makes no sense. It's one of the biggest companies in the world. So there you go. Okay. Next up after the break, another caller with another business challenge. I'm Guy Raz and we're answering your business questions right here on the advice line on how I built this lab.
- [31:18]
B
Foreign.
- [31:37]
A
Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking your calls with Ernan Lopez, founder of Wondery. And let's bring in our next caller. Hello.
- [31:47]
E
Hi folks, my name is Casey o'. Leary. I'm the co founder and CEO of the Snake River Seed Cooperative which is headquartered in Boise, Idaho. We are a worker and farmer owned co op where we grow a wide variety of garden seeds. We put those into packets and we sell them on our website and in around 80 other stores in the Intermountain West.
- [32:07]
A
Nice. Welcome to show Casey. So it's a cooperative, so can you kind of explain briefly how it works?
- [32:14]
E
We are a seed company and we are co owned by a bunch of different farmers and also by the employees that work for the company. So it's a legal cooperative we have, we call it the seed rodeo and basically farmers sign up for stewardship of different seed crops and every time we need to grow them out, one of the farmers grows them out and harvest
- [32:36]
A
the seeds as well.
- [32:37]
E
Yep, they harvest the seeds, they clean the seeds and all of that. And then when they come into the co op, we germination test them, we put them into packets and then we distribute them through our sales.
- [32:47]
A
And tell me about where you sell your seeds.
- [32:51]
E
Yeah, we sell them, we have our. We have a web store and we sell them on our web store, and then we also sell them. We're in about 80 different retailers around the intermountain west region. So garden centers, hardware stores, natural food, grocery stores, stuff like that.
- [33:08]
A
And tell me a little bit about your sales. How'd you guys do? How are you doing?
- [33:13]
E
Yeah, we're about 400,000 a year in sales.
- [33:17]
A
That's pretty good. And is that $400,000 in sales? Does that cover all your costs? Does that pay salaries and everything?
- [33:23]
E
It does. I mean, seeds are. Yeah, it does. Barely.
- [33:29]
A
All right, before we dive in further, what is your challenge that you're. You'd like some help with?
- [33:34]
E
Yeah, I mean, I think this gets at it. I. You know, seeds are cheap, generally speaking. Right. I mean, this isn't. This is a.
- [33:41]
A
Right.
- [33:41]
E
We're competing with a multinational industry.
- [33:45]
A
Right. You can go into Home Depot and buy a 15 cent or whatever. A dollar.
- [33:50]
E
Yeah, exactly. Exactly. Right. And these are kind of. I don't know. I mean, I don't want to say garbage seeds, but they are. They're not being stewarded with care. They're not. And the people who are growing them are not making a living wage. Yeah, but, you know, margins are tight, like you said. I mean, this $400,000 is coming from selling something that's somewhere between 279 and 479 a packet. Right. So we struggle to cash flow. So my question for you all is. I'm trying. There's a huge, tremendous public benefit to having a regionally adapted seed supply, and we do a good job of telling that story in our bioregion. My question is, how can we leverage that public benefit in creative ways that could increase our revenue?
- [34:37]
A
Right. Okay. So I think, if I'm reading between the lines is how can. What are the things we can do to generate more cash for the business? Which is a great question. Erin Ann, I want to bring you in here. What do you think?
- [34:50]
B
First of all, congratulations on what you guys do. It's incredible that to hear a story of people who are creating a product passionately in the cooperative model that are getting through and competing against industrialized companies that really all they care about is volume and margin. Of the $400,000 today, how much is sold directly versus through retailers?
- [35:17]
E
It's about 40% of our sales come from our web store, and 60% are through our wholesale program.
- [35:23]
B
Oh, it's so significant already. And so I would think that you want to build that sales through your website to the highest level. That you can, because the retailers, by and large, they're always going to make you compete with other alternatives that they have. And you want to move your product away from the price sensitivity customers into the storytelling and passion and purpose clients.
- [35:52]
A
Yeah, yeah.
- [35:53]
E
And I think, you know, I think another thing that we bring to the table is we have this skill set and this knowledge that people want. And so we've gotten grant money to teach classes about how to grow seeds and how to save seeds and how to grow plants from seeds and things. And so we've done a lot of the educational kinds of stuff, but we've mostly done that through getting grants and then offering that education for free to the public. And so, you know, in some ways I feel like part of the, part of what we might be able to leverage is this, you know, being able to connect people somehow with this skill set that they want to learn about.
- [36:32]
A
You know, I, I mean, look, grants, as you, I'm sure would agree, are not a business model.
- [36:39]
D
Right.
- [36:39]
A
I mean, they're great, but, but you have to run a sustainable business. And I. There, there could be a world here, right, where essentially, Casey, you and your band of experts are essentially also consultants. You are charging per hour to help people figure out where to plant things, how to plan things, maybe even working with sort of, you know, creating a part of your business. And you may not like this idea, but it could be really interesting where you sort of identify high net worth folks in Boise who really want to have awesome things in their garden. I think that there could be an interesting opportunity with sort of creating classes that cost money or some consulting as well, and really going deeper with your best customers. I mean, are you guys doing subscriptions or anything? Have you tried experimenting with that?
- [37:37]
E
Yeah, we do a seed of the month club.
- [37:39]
A
Oh, nice.
- [37:40]
E
So people can sign up and they get a seed every month with a little newsletter about that particular variety that comes in the mail.
- [37:47]
B
And how many customers do you have on that seed of the month?
- [37:49]
E
Almost 200 now.
- [37:51]
B
Okay, so actually, the advice guy that I thought you were going to go was in another direction, which is to use the experts as influencers in a way. I know that's a charged word, but yeah, think of them, especially if each of them is tied to one specific seed and is the. The expert in that seed. Give them each one series of vertical videos. I'm saying vertical because that's how people now experience entertainment and education on mobile. And I'm talking about videos that are short in nature. No more than three minutes as short as 30 seconds. And by having a unified look and storytelling narrative and a way in which all of them speak about their association with that specific seed. And you can essentially start to build a community of people who come for the passion of learning how to plant seeds and eventually realize that they're never going to do it on their own. So they're probably going to end up buying them from you directly on your website. Your retail market is most likely capped. Your direct to consumer market will allow you to essentially grow into a direction where all you need to do is find more customers that will be less price sensitive and will develop a relationship with you that is passion based and not utility based. It might make sense.
- [39:25]
E
I love that. I love that. Because, yes, sometimes it seems like $4.79 for a packet of seeds compared to what you might be able to buy on the shelf at Home Depot. But when you think about what is inside of that packet of seeds, I mean, it's so much value in there. And so, yeah, finding the folks who really understand why it's important to have people in a region be skilled up to do this work and do it for the long term and be supported well to do it. I think you're right. Those are our people.
- [39:59]
A
Yeah. You know, there's a. And especially because when you're explaining that and your passion is clear, I mean, I'm sold here, but now you've got to get that the word out. There's a brand of beans, heirloom beans, I believe they're based here in California called Rancho Gordo and they distribute around the country. There's like a waiting list, actually, to get in their subscription of the month club or whatever it's called. They sell beans. Right. You can go to Safeway and buy pinto beans or lima beans or, you know, chickpeas, but they, you know, they sell these heirloom varieties and they grow them in a way that they claim and they argue that they taste better. I've had them. They're great. They have done really, really well. And it's an interesting case study to look at. I would really urge you to look at what they're doing at Rancho Gordo and see if you can sort of apply some of those, you know, those ideas.
- [40:56]
E
Yeah. Bean Club. I think I know several people who are involved in their Bean Club.
- [41:01]
A
Yeah. Yeah. Good luck to you, Kasey. The business is called the Snake River Seed Cooperative in Idaho. Thanks for calling in.
- [41:08]
E
Thank you so much.
- [41:10]
B
Congrats.
- [41:11]
A
Well, Arnon, it's been awesome to have you on and you know, I should mention, I mean, you do a lot of this, you're an investor and you work with all kinds of entrepreneurs. I mean, you are, because of your expertise in media, you of course do a lot of consulting with major companies around media, but you also do a lot of this sort of formal and informal advising.
- [41:32]
B
I do. I invest primarily through funds. I don't invest in companies directly. The funds are better at doing that that I am. It's really a full time job. But I always love talking to entrepreneurs about their challenges and their opportunities and, and in all of the companies that we talked to, all the founders that we talked to today, Narativ is a big part of how they get the product away from that competitive, margin based, utility based rut into a place where they can really build enterprise value.
- [42:10]
A
Arnan, before I let you go, question for you. If there was something that you now know that would have been helpful for you when you were launching, wondering, and when you're thinking about this in 2015, what advice could you have given yourself back then if you could go back in time?
- [42:25]
B
I wish I had started sooner. Obviously not that idea because Wondery was very timely, but I wish I had started as an entrepreneur sooner. Most people take too long to make the leap for a number of reasons. It's really difficult to go from 0 to 1, but the journey is so rewarding. And once you've got to the conviction that you want to come up with an idea and turn it into a product, it's really difficult to go back to wanting to not be an entrepreneur.
- [43:03]
A
Yeah, for sure. Well, Anand, thank you so much for coming back onto the show.
- [43:08]
B
Thank you for having me. It was so great to reconnect.
- [43:11]
A
It's great having you on. And if you missed Hernan's episode or you haven't heard it yet, we'll put a link to it in the show notes. It's a really, really good story. And here is one of my favorite moments from that interview.
- [43:22]
B
I remember looking at the P and L statement by the end of that month and we had maybe $10,000 in
- [43:31]
A
revenue and you had a staff of six.
- [43:34]
B
We had a staff of six and
- [43:35]
A
10,000 bucks and going to cover those costs.
- [43:38]
B
Nope. No, they wasn't. Like, even if we get to 10 times this, a hundred times, this is not going to be a big business of the scale that I thought that it would. And I remember thinking, oh my God, what did I do?
- [43:58]
A
Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free@guyraz.com or on substack. And of course, if you are working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions or issues that you're currently facing because we would love to try and help you solve them. You can send us a voice memo@hibtid.wondery.com or call us at 1-800-43- leave a message there and make sure to tell us how to reach you. And we'll put all of this information in the podcast description as well. This episode was produced by Kathryn Cipher with music composed by Ramtin Arablouei. It was edited by John Isabella and our audio engineer with Kwesi Lee. Our production staff also includes Alex Chung, Elaine Coates, Noor Gill, Neva Grant, Casey Herman, Chris Masini, Sam Paulson, Kerry Thompson, and Rommel Wood. I'm Guy Raz and you've been listening to the advice line on how I built this lab.