Advice Line with Mark Ramadan of Sir Kensington's (June 2024)

Summary

How I Built This with Guy Raz
Episode: Advice Line with Mark Ramadan of Sir Kensington's
Release Date: June 5, 2025

In this enlightening episode of "How I Built This with Guy Raz," host Guy Raz engages with Mark Ramadan, co-founder of the renowned condiment brand Sir Kensington's, in a unique format dubbed the "Advice Line." This segment offers budding entrepreneurs the opportunity to seek guidance on their business challenges, drawing from Mark's extensive experience in building a successful brand from the ground up.

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Introduction to the Advice Line

[03:17] Guy Raz: "This is the place where we help try to solve your business challenges."

Mark Ramadan introduces the concept, explaining that each week, he teams up with legendary founders to address real-world business issues faced by listeners. Entrepreneurs are encouraged to call in with their questions, providing a platform for personalized advice and actionable insights.

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Guest Spotlight: Mark Ramadan of Sir Kensington's

[04:15] Guy Raz: "My guest today is Mark Ramadan, the co-founder of Sir Kensington's."

Mark Ramadan shares the inspiring story of Sir Kensington's, a brand he co-founded with his college friend Scott. Starting without prior experience in the food or business industries, they took on industry giants like Heinz by initially producing small batches of ketchup in their apartments. The conversation delves into the evolution of their product line, highlighting their strategic pivot from ketchup to mayonnaise and other condiments, which ultimately led to their success.

Notable Quote:

• [05:34] Mark Ramadan: "You don't know what your best-selling product is going to be until after you make it."

This insight underscores the importance of flexibility and responsiveness in product development, emphasizing that initial expectations may not always align with market success.

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Caller 1: Pat Early of Dripsy

[08:22] Pat Early: "We've just surpassed our one millionth happy sink that has been supplied with the Dripsy."

Pat Early, co-founder of Dripsy, a kitchen sink strainer company, seeks advice on expanding into retail stores. Despite strong sales online and on platforms like QVC, Pat faces challenges in connecting with corporate buyers at larger retailers like Ace Hardware and True Value.

Key Discussion Points:

• Product Differentiation: Pat explains how Dripsy's sink strainer stands out by preventing clogging and fitting snugly beneath the sink rim, a feature lacking in conventional strainers.

• Retail Challenges: The difficulty in moving beyond regional buyers to secure deals with major retailers is a significant hurdle.

Advice from Mark Ramadan:

• [15:01] Mark Ramadan: "Don't just come out with 10 things and be like a slightly more expensive Oxo."

Mark advises Pat to stay true to his brand's core values and focus on offering superior products rather than diluting the brand by adding commonplace items. Emphasizing the importance of understanding retailer business models, Mark suggests negotiating payment terms and exploring smaller retailers to build momentum.

Notable Quote:

• [10:15] Pat Early: "It fits inside the drain nice and snug. Nothing sneaks past it."

This highlights the quality and thoughtfulness behind Dripsy's product design, reinforcing the brand's commitment to solving real consumer problems.

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Caller 2: Lucas Manteca of Taco Shop

[21:40] Beth Benneke: "Our concern really is having a competitor as Chipotle coming into town."

Lucas Manteca, owner of Taco Shop in Cape May Courthouse, New Jersey, grapples with the imminent arrival of Chipotle— a formidable competitor—located a mere 150 feet from his establishment. Lucas seeks strategies to maintain his local business's edge against this industry giant.

Key Discussion Points:

• Unique Offerings: Lucas differentiates Taco Shop by offering diverse taco varieties like fish tacos, fried chicken tacos, Mexican ramen, and poke, catering to niche tastes that Chipotle doesn't currently provide.

• Community Focus: Emphasizing a local, community-centric atmosphere to create an emotional connection with customers.

Advice from Mark Ramadan:

• [27:13] Mark Ramadan: "Don't compete with Chipotle doing what Chipotle does. Chipotle is going to out Chipotle you 10 days out of 10."

Mark encourages Lucas to leverage Taco Shop's unique strengths, such as personalized customer experiences and distinctive menu items, rather than trying to match Chipotle's standardized operations.

Notable Quote:

• [32:09] Lucas Manteca: "How do you create something that's emotional, that's cathartic for people. That's the beauty of local small businesses."

This emphasizes the importance of emotional engagement and creating a unique identity that resonates with the local community.

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Caller 3: Beth Benneke of Busy Baby

[43:02] Beth Benneke: "In the five years we've been in business now, we've done just over $14 million in sales."

Beth Benneke, founder of Busy Baby, introduces her innovative product: interchangeable, food-grade placemats with tethers designed to keep baby items within reach and off the floor. With substantial sales yet facing challenges in cash flow and scaling, Beth seeks guidance on navigating the "messy middle" phase of her business growth.

Key Discussion Points:

• Rapid Growth and Scaling: Busy Baby experienced explosive growth during the pandemic, leading to increased operating expenses and cash flow issues as the business expanded.

• Retail Expansion Challenges: Transitioning from online sales to large retailers like Target and Walmart presents new financial and operational complexities.

Advice from Mark Ramadan and Lucas Manteca:

• Financial Management: Emphasizing the importance of managing operating expenses (OPEX) and adjusting strategies based on current revenue streams.

• Retail Strategy: Suggesting negotiation tactics with retailers for better payment terms and focusing on cost-effective marketing to balance expansion with financial stability.

• [55:42] Mark Sisson: "It's very hard, but it's often the thing that you must do to get through to that next phase of business in conjunction with other things."

Mark and Lucas provide Beth with actionable strategies to manage her company's growth challenges, stressing the need for adaptability and prudent financial planning.

Notable Quote:

• [37:39] Mark Sisson: "It feels good to know I'm not failing; that it is something that companies go through."

This reflects the emotional resilience required in entrepreneurship and the reassurance that challenges are a common part of the business journey.

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Key Takeaways and Insights

1. Flexibility in Product Development: Being open to pivoting and expanding product lines based on market feedback can lead to unexpected success, as seen with Sir Kensington's shift from ketchup to mayonnaise.

2. Understanding Retail Dynamics: Navigating large retail systems requires strategic negotiation and a clear value proposition that aligns with retailer expectations and business models.

3. Leveraging Local Strengths: Small businesses can thrive by fostering strong community ties and offering unique, personalized experiences that larger chains cannot replicate.

4. Managing Growth Challenges: Rapid expansion necessitates careful financial management and strategic adjustments to maintain sustainability and continue scaling effectively.

5. Emotional Resilience: Entrepreneurs must navigate through periods of doubt and setbacks, recognizing that challenges are integral to the growth process.

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Conclusion

This episode of "How I Built This with Guy Raz" offers a wealth of practical advice tailored to diverse entrepreneurial challenges. Mark Ramadan's insights, combined with real-world examples from callers like Pat, Lucas, and Beth, provide invaluable lessons on building, scaling, and sustaining successful businesses. From product innovation to managing growth and competing with industry giants, listeners gain a deeper understanding of the multifaceted nature of entrepreneurship.

Mark Ramadan's participation in the Advice Line underscores the importance of community, adaptability, and resilience in the entrepreneurial journey, making this episode a must-listen for aspiring and established business owners alike.

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Notable Quotes:

• Mark Ramadan [05:34]: "You don't know what your best-selling product is going to be until after you make it."

• Lucas Manteca [32:09]: "How do you create something that's emotional, that's cathartic for people. That's the beauty of local small businesses."

• Mark Sisson [37:39]: "It feels good to know I'm not failing; that it is something that companies go through."

Transcript

[Guy Raz]

Wondery subscribers can listen to How I built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. Thank you to our sponsor, American Express. Being a business owner means you are in control of your destiny and you get to be your own boss. With Amex Business Platinum you can get a flexible spending limit that adapts with your business. Not all purchases will be approved. Plus you can earn 1.5 times Membership Rewards points on select business purchases. Points cap applies. That's the powerful backing of American Express. Terms apply.

[Mark Ramadan]

Learn [e-mail] AmExBusiness thank you to our sponsor, Amazon Prime.

[Guy Raz]

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[Mark Ramadan]

And of course I'm talking about Amazon Prime. Whenever you need something, whether it's delivered in hours or just a couple of days, prime just makes it happen.

[Guy Raz]

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[Mark Ramadan]

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[Guy Raz]

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[Mark Ramadan]

I ordered it and I was back to my routine the next day. It's almost like when you think of it, Amazon does the rest.

[Guy Raz]

But here's what's fascinating. Prime isn't just about shipping. It's about having access to an entire ecosystem of services, from award winning shows on Prime Video to millions of songs and podcasts on Amazon Music, to exclusive deals that honestly make you wonder how they do it. Visit Amazon.comprime to get more out of whatever you're into. And now a quick vital break. A little more from our sponsor, Vital Proteins. Have you heard of Vital Proteins? Collagen Peptides. It's a supplement that has four benefits all in one helping support healthy hair, skin, nails, bones and joints. After 30, our body's natural collagen production can start to decline by 1% per year, which may lead to the appearance.

[Mark Ramadan]

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[Guy Raz]

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[Mark Ramadan]

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[Guy Raz]

To www.vitalproteins.com and promo code BILT at checkout. These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease. If you are pregnant, nursing or have a medical condition, consult your physician before use.

[Mark Ramadan]

Hey everyone. Just want to let you know that.

[Guy Raz]

This week our team is taking a much needed break. So we chose one of our favorite.

[Mark Ramadan]

Episodes from from the archives.

[Guy Raz]

Here it is and hope you enjoy it. Hello and welcome to the advice line on how I built this lab.

[Mark Ramadan]

I'm Guy Raz.

[Guy Raz]

This is the place where we help try to solve your business challenges.

[Mark Ramadan]

Each week I'm joined by a legendary.

[Guy Raz]

Founder, a former guest on the show, who will attempt with me to help you. And if you're building something and you need advice, give us a call. And you just might be the next guest on the show. Our number is 1-804-.

[Mark Ramadan]

Send us a.

[Guy Raz]

One minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice [e-mail] and make sure to tell us.

[Mark Ramadan]

How to reach you. And also, don't forget to sign up for my newsletter.

[Guy Raz]

It's full of insights and ideas from the world's greatest entrepreneurs.

[Mark Ramadan]

You can sign up for [e-mail] and.

[Guy Raz]

We'Ll put all this info in the podcast description. All right, let's get to it. My guest today is Mark Ramadan, the co founder of Sir Kensington's.

[Mark Ramadan]

It's a condiment brand that he launched.

[Guy Raz]

With a college buddy.

[Mark Ramadan]

And with no prior food or business experience, they took on the giants of the food industry like Heinz.

[Guy Raz]

Marc, welcome to the advice line.

[Lucas Manteca]

Thank you, Guy. Great to be here and it's great.

[Mark Ramadan]

To have you back on the show. We had you on the show back in the fall of 2023 and you and your co founder Scott told the awesome story of how when you were.

[Guy Raz]

College at Brown, you decided to invent.

[Mark Ramadan]

A fake British aristocrat. You called him Sir Kensington and you.

[Guy Raz]

Made him the face of your ketchup brand. And you basically started making small batches.

[Mark Ramadan]

Of ketchup in your apartment for friends. For college friends, right?

[Lucas Manteca]

Absolutely. He started as a fake character, but he became very real to us. It was quite the journey.

[Mark Ramadan]

Yeah. And you know, I remember Sir Kensington started out as a specialty ketchup. Right. But actually the business didn't really start.

[Guy Raz]

To take off until you went, you.

[Mark Ramadan]

Branched out, you went to mayonnaise and then a bunch of other condiments.

[Guy Raz]

And actually crazily enough, I mean, the ketchup was eventually discontinued in 2023 because.

[Mark Ramadan]

The mayonnaise and the other condiments were doing better. What kind of lesson did you learn from that sort of being willing to pivot or to really branch out from the original product?

[Lucas Manteca]

Yeah, we spent three hard years doing nothing but making and selling ketchup. And there were many times where we felt like the business would, would die that way because the traction on the ketchup was not as fast as we wanted it to be or the adoption was not where we expected. And getting into mayonnaise was partly because we felt like we had to do something to try and pivot and save the company. Also because we were getting requests from it from retailers. And as soon as we launched it, it really took off on its own. I mean, we were selling more mayonnaise within six months than we were selling after three years of selling ketchup. And one of the things that I think we learned from that is maybe the most obvious lesson. You don't know what your best selling product is going to be until after you make it.

[Mark Ramadan]

Yeah, it's such a good point. I mean, especially with something like mayonnaise. You know, we had Mark Sisson on of Primal Kitchen and they were making.

[Guy Raz]

A competitive, competing product and they also.

[Mark Ramadan]

Had a lot of success with mayonnaise. Right. And you guys were using avocado oils and really like you were making a product that wasn't available. I mean, it's just, I mean, mayonnaise was.

[Guy Raz]

But not the kind of mayonnaise you were making.

[Lucas Manteca]

Yeah, and I think the other thing is you sort of form opinions about the category and about the competitors in the category that are sometimes informed by fact, but often they're informed by emotion. So for example, we had this expectation that people were more just as or more brand loyal to Hellman's and Best Foods mayo as they are to Heinz, simply because it's just as dominant from a market share position. But it turns out that wasn't the case, that people were not as emotionally connected to mayonnaise as they were to ketchup. Ketchup is associated with all of these childhood memories for people, whereas mayonnaise is just not. And so that was just a big learning that we had, which is really forget about all the assumptions that you formed in the category. And Price was a big one too. Avocado oil mayonnaise, like you're talking about, ended up becoming ours and Primal Kitchens and others biggest products. But that was 10, 11, $12 a jar, which would have been unheard of at the time that we started the company. So you just, you know, you never really know what boundaries you're able to push and what's gonna resonate with your consumers?

[Guy Raz]

I know that you're not gonna hold.

[Mark Ramadan]

This against me because you're not part of the company anymore, but, you know, I have a. I think you know this.

[Guy Raz]

I have this thing about buying mayonnaise.

[Mark Ramadan]

I think everyone should just make it. Just get the food processor and just, you know, pour the oil into the egg, go in with the processor.

[Lucas Manteca]

I'm with you, guy. I mean, for those who have the courage and the time, you should do it.

[Mark Ramadan]

It's so delicious. I can eat it. I know this is gonna sound disgusting. I can eat my homemade mayonnaise by the spoonful.

[Guy Raz]

It's delicious.

[Lucas Manteca]

Oh, I've done it. I've been there.

[Mark Ramadan]

It's delicious. Yeah.

[Lucas Manteca]

Yeah.

[Mark Ramadan]

I just made some the other day.

[Lucas Manteca]

You would have been a welcome guest at the Sir Kensington's mayo tasting parties, of which we had.

[Mark Ramadan]

I would have loved to have gone. I would have brought artichokes with me. Yeah, just dipped artichokes in there. Mark, I am so excited and happy that you're here because we've got some really, I think, complex questions heading our way. Let's take. Should we take the first call?

[Lucas Manteca]

Would love to.

[Mark Ramadan]

All right, caller, you are on the line. Hello, is that Pat?

[Lucas Manteca]

Hello?

[Pat Early]

Yeah, Pat early in Helena, Montana.

[Mark Ramadan]

Pat, welcome. Tell us a little bit about your business.

[Pat Early]

Yeah, so my business is Dripsy, llc. We manufacture the Dripsy kitchen sink strainer. I'm the co founder and inventor of that product, and we feel it works significantly better than pretty much any other sink strainer on the market. I don't know if many businesses have put a lot of thought into sink strainers in the past, and I put a heck of a lot of thought into it. So, yeah, we sell mostly online and also on qvc, and we actually just surpassed our one millionth happy sink that has been supplied with the Dripsy.

[Guy Raz]

Yeah.

[Mark Ramadan]

And what. And what's your question?

[Pat Early]

So, my question is, you know, we've had good success online and on QVC and those platforms, but we have, you know, we've been trying our hardest to get into retailers for some time now, and we have gotten into quite a few smaller, you know, mom and pop, Ace Hardware, True Value, that kind of store. Pretty much every buyer we talk to, you know, at the store level, that kind of buyer, they like our product, but they say, you know, you have to pass it through the regional buyer or it has to get on the Ace truck. Right. So they don't want to have to order from us. They want to be able to order it out of the catalog. And whenever we reach out to those higher levels, corporate buyers, you know, they. They don't really give us the time of day. And I don't know if that's something that I'm doing on my end or if it's something about our brand. And I guess I'm just looking for advice on how we could have some more success with buyers to get into retail stores.

[Mark Ramadan]

All right, so we'll get to your question a moment. What. What's different about your product than. Than the metal strainer that comes with the garbage disposal?

[Pat Early]

Yeah, so this all started, you know, to take it back a little bit, I guess. I was in a house that was on septic, so we didn't have a garbage disposal.

[Mark Ramadan]

Right.

[Pat Early]

We had a metal strainer that broke, and I had to go to the store to get a new one, and it was nine or ten bucks and it broke after two weeks. And I got, you know, I guess it annoyed me enough that I decided to, you know, I was like, I think I could probably do a better job at this. But, you know, my idea behind the design to get to your question was I wanted it to fit below the rim of the sink so food and things don't get caught or go under it. And I wanted it to not clog so you don't have to empty it out five times while you're doing the dishes. And we, yeah, we achieved that. It fits inside the drain nice and snug. Nothing sneaks past it. And it actually, you know, it can fill up completely because the hollow central stem drains water if the basket's full. And it just, it just keeps rocking, man. And it's nonstick, so it empties into the trash can, no problem. And it's significantly different than any other strainer. I don't know of any fully flexible sink strainers out there.

[Beth Benneke]

Yeah.

[Mark Ramadan]

And are you, are you like an industrial designer? Is that how did you design it?

[Pat Early]

No, I'm an emergency medicine pa. I have no experience with anything.

[Mark Ramadan]

You're a physician's assistant even now, to this day. So this is not your fault. This is your side hustle.

[Pat Early]

Yeah, no, I wish it was my full time job, but no, I just learned how to use 3D design software over the course of, you know, six months. And we prototyped it and then found a manufacturer here in the US to make it for us.

[Lucas Manteca]

Are there. I think this is maybe related to your bigger question, but do you have other products in your innovation pipeline that you're working on, like, other problems in the kitchen you're trying to solve or not right now?

[Pat Early]

No, we do. And that's. That's part of the feedback we've heard from buyers is that they want somebody that has a line. They don't want to just have to pick one product to bring into their store. They want somebody to come in that has 20 products that they can just hang on their shelves and it works out, and we don't have that. And I, you know, I've gone through it in my head and thought maybe I should just bring out products that are, you know, status quo. They're not anything special, but they're just more products to have in a line. But I don't know if that.

[Mark Ramadan]

I don't.

[Pat Early]

I don't know if I want to branch out into being a, you know, kitchen utensil brand. Right. I think we want to be an innovative kitchen and plumbing brand. So I'm designing right now a hair catcher for a bathroom sink. We do have a stopper. And, yeah, I mean, I've. Gosh, it's hard because I don't want to dilute our brand, because I think what makes this so special is that the product is actually better. You know, it's a better mousetrap, if you will. And I don't want to come out with a spatula that's the same as every other spatula, because I feel like it doesn't, you know, it's not really what our brand is about, but maybe that's what we have to do to be able to break into retailers.

[Lucas Manteca]

Well, take a quick step back. If you think about how do retailers make money? What's the retail business model, and why might they be frustrated with a single SKU brand? Ultimately, they're not really in the business of solving consumer problems. They're in the business of making money. And so for every vendor that they work with, there is some amount of fixed costs associated with that. Right. Communication time, invoicing, chargebacks, and so on. And so the easiest thing for Ace or for True Hardware to have is, like, three vendors to only work with OXO and two other ones. Right. A good, better best model. Which is why, if you take the ketchup category circa 15 years ago, there was a good, better best brand. That's it. There was the value brand. There was Heinz, and maybe an expensive one, because the fewer brands you have in the same amount of space, the less work it is to manage your shelf and to make money from your shelf. So from a retailer's perspective, it's always easier to have fewer, bigger providers. So that's probably why you're getting pushed in that direction for your specific brand. I mean, I looked at it online. I think it's beautiful. I love that you're solving a specific problem in a different way. So it's not obvious to me that there's anything wrong with your brand. And I would strongly recommend you don't breach your own brand values there. I'm 100% in agreement with you that if your brand is about solving problems in a way no one solved it before, then you have to stay true to that brand commitment that you've made. And not to make it all about condiments, but when we launched mayonnaise, it would have been really easy to just say, well, let's just launch a mayonnaise that looks like every mayonnaise in Whole Foods. But we didn't. It took us a long time to say, well, how would Sir Kensington's make a mayonnaise in keeping with the quality of the ketchup? And that was by creating a supply chain for certified humane free range eggs. We were the first company in the country to use free range eggs. And that took longer. It was harder, but it was a unique solution that suited us. So I think the equivalent here is true. Don't just come out with 10 things and be like a slightly more expensive Oxo, because they already have Oxo.

[Mark Ramadan]

Right.

[Lucas Manteca]

As you're thinking about product development, one encouragement I would have for you is as much as you are focused on solving a real problem, and that should be your starting point. There's lots of different sizes of categories and the general store that you're playing in. Right. And I don't know what the relative size of a sink catcher is versus a hair catcher for the bathroom versus XYZ products that I could go buy from ace. But as much as you can figure out, what are the category sizes, what is the depth of competition, what is the churn rate on these items? What's the margin that the manufacturers and or the retailers are making? Those should all be factors as you're going through the process of figuring out what do we make next. And you know, Sir Kensington's was no less brutal and ruthless about going through that qualification. There's a million things we could make. We ended up in mayonnaise for lots of reasons. Not just because it seemed like an obvious adjacency, but also because it was bigger than ketchup and the turn rate was faster and the margin structure was Better and our co packers could make it. And so I would go through that same check, create the checklist. And if you don't have any money to buy data, which I assume you wouldn't necessarily be buying data here, you can go to your local stores. Whoever you're selling Dripsy to today, just bag borrow, plead with the store managers and say, help me out what sells well, what do you think your customers would be excited to see a new version of and cross reference that with your own problem solving interests and that should land you somewhere that is both a good idea and is a good business.

[Pat Early]

Yeah, that's great advice.

[Mark Ramadan]

I want to see that. I want to see a commercial, an advertisement of the garbage disposal guy, repair guy, just bored, swatting flies, waiting for.

[Guy Raz]

The phone to ring.

[Mark Ramadan]

And then, you know, Tripsy, keeping your drain clog free. Since 2019, we're the company that makes water flow.

[Pat Early]

You make the water flow?

[Mark Ramadan]

Yeah, you make the water flow.

[Lucas Manteca]

I like that. That's it.

[Pat Early]

I like it too.

[Lucas Manteca]

We just did.

[Pat Early]

This has been a think group. I like it.

[Mark Ramadan]

All right, cool. Pat Earley. The brand is called Dripsy.

[Guy Raz]

Good luck.

[Mark Ramadan]

Thanks for calling in.

[Pat Early]

Thank you so much. All right, take care.

[Mark Ramadan]

Thanks.

[Lucas Manteca]

Bye.

[Mark Ramadan]

Cool.

[Lucas Manteca]

I like that you're nailing the slogans.

[Mark Ramadan]

Yeah, right. I mean you've had to call a plumber before.

[Lucas Manteca]

Yeah, I have had that exact issue. I've had a bad sink catch.

[Mark Ramadan]

Yeah, yeah.

[Lucas Manteca]

I'm the one. I don't do the cooking in the house. So therefore I do all the dishes in the house. And I've definitely. I'm the one who's cleaning out that sink trap three times during a wash. And I have.

[Mark Ramadan]

It's not. This is not about.

[Guy Raz]

I love plumbing. My grandfather was a plumber, so I love plumbers.

[Mark Ramadan]

And I want to give you guys business, but I'm just saying it's the call, it's the wait. It's being at the house between noon and 8pm and then you're like, I'm.

[Guy Raz]

At the house from noon until 8.

[Mark Ramadan]

And then it's 7:45. And then he arrives and he's like, yeah, I gave you an eight hour window. And you're like, are you kidding me?

[Lucas Manteca]

And you're like, I'm in the middle of making my mayonnaise. I can't stop.

[Guy Raz]

I've been waiting for you since noon.

[Mark Ramadan]

So I'm just saying all I had.

[Guy Raz]

To do was put in the dripsy and that would never have happened.

[Lucas Manteca]

I see a short form video. It's not just an ad. This is a whole series of content.

[Mark Ramadan]

It's a whole bunch of content. All right.

[Guy Raz]

Okay, Mark, we're gonna take a quick.

[Mark Ramadan]

Break, but when we come back, a taco shop owner who's about to get.

[Guy Raz]

A very competitive neighbor.

[Mark Ramadan]

Chipotle Stay with us. I'm Guy Raz, and you're listening to the advice line right here on How.

[Guy Raz]

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[Mark Ramadan]

As a business owner myself, I love.

[Guy Raz]

The idea of having this much clarity and control. Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com built the guide is free to you at netsuite.com built netsuite.com built welcome back to the advice line on how I built this lab. My guest today is Mark Ramadan, co founder of Sir Kensington's.

[Mark Ramadan]

So, Mark, let's go ahead and take another call.

[Lucas Manteca]

Yeah.

[Guy Raz]

Hello.

[Mark Ramadan]

Hello, Lucas. Welcome.

[Beth Benneke]

Hello, Mark. Guy. I'm honestly honored to be here. I've been listening to your podcast for like ever.

[Mark Ramadan]

Thank you so much. Tell me what, where are you calling from and your business? What's the name of your business?

[Beth Benneke]

So my name is Lucas Manteca. I'm originally from Argentina. I've been living in KMA Courthouse, South Jersey and a small seashore community right by the beach. As a chef and entrepreneur, I'm the proud owner of Taco Shop, the quick service restaurant with focus on made from scratch tacos and plus.

[Mark Ramadan]

Got it. Okay, and tell me what question you brought for us today.

[Beth Benneke]

So what are your thoughts on tackling Chipotle as a competitor? Like, should I try to attract some investors to scale my business to piggyback on Chipotle's strategy to establish locations that capitalize on their customer base and market influence?

[Mark Ramadan]

Got it. Okay, we're get your question in a minute. So right now you've got one taco.

[Guy Raz]

Location, one taco shop which is in.

[Mark Ramadan]

Cape May Courthouse, New Jersey, is that right?

[Beth Benneke]

Correct. That's correct.

[Mark Ramadan]

And you opened this in 2022 from what I understand. And tell me about how it came about, how that restaurant came about.

[Beth Benneke]

So I've been in the food industry for about 30 years, pretty much. I've been a chef, I opened multiple restaurants, I started hot dog stands, I own a sea salt farm. So I'm a naturally entrepreneur and chef. Right. So after the pandemic, we kind of shrink our businesses, keep the things that they made sense for us financially and concept wise. And we decided to put all our gains pretty much into one concept. That that was Taco Shop. So we opened this concept as you know, the idea of a QSR quick service restaurant. And we are doing great. We serve in a small community, a very seasonal community because Cape May is.

[Mark Ramadan]

Right on the Jersey shore there.

[Beth Benneke]

Cape May is right. Yeah, we're about five minutes from Cape May. And our concern with the price increase in food and restaurant industry, as tough as it is right now, our concern really is having a competitor as Chipotle coming into town.

[Guy Raz]

Is Chipotle in town?

[Mark Ramadan]

Are they near you?

[Beth Benneke]

They are about 150ft. They're supposed to open this summer, about 150ft for us.

[Guy Raz]

Wow.

[Mark Ramadan]

Okay, so you've got a taco shop. It's a one off and Chipotle is about to open up there. And so what besides tacos? It means tacos, burritos, just, you know, what you would find similar to what you would find at Chipotle.

[Beth Benneke]

So, you know, from a starting point, me being a chef, I did like a huge market study before I started this concept. And I wanted to differentiate ourselves from any competitor, including Chipotle. So we thought focusing on tacos was the smart thing to do. We don't have an assembly line. We do like kind of a cook to order, but we're really fast. Right. So everything, it's been designed to be out within five minutes.

[Mark Ramadan]

And I'm looking at your website and so you do like quesobarias and you're doing fish tacos and fried chicken tacos. So you're really doing different kinds of tacos here. I mean, things that Chipotle would not offer.

[Beth Benneke]

Correct. And as well, you know, I'm so passionate about food that I keep up with the trend. So ramen, it's pretty big right now within the market. So we have a Mexican ramen and the same with poke. So we have a variety of items to add on to our mix of tacos. And as well, what the other competitors, you know, they do.

[Mark Ramadan]

Mark, you faced a giant competitor, Heinz, with your ketchup with Sir Kensington's. And of course, Lucas is facing the impending arrival of Chipotle 150ft from his taco shop, which is a obviously a massive multi billion dollar empire. Any initial thoughts before we dive into his question?

[Lucas Manteca]

Well, first of all, I'm happy to hear that you made it out of the pandemic and you have a concept that's working. So congratulations, because a lot of restaurateurs and chefs did not. So you should feel at least proud of where you've gotten to. I think at the highest level, competing with a monolith, like any major company, you just have to recognize there are some things that they do very well and some things that they would just never do. And the things that they do very well are systems, routine, predictability, dependability, and usually cost and price. That means they're very good. Chipotle is an excellent example of a restaurant that has managed to maintain the expected level of quality at significant scale. But no one would call it their local taco spot. Right. I mean, what Chipotle is not good at is they're not good at Creating a local, integrated, community feel in any of their stores. And so, you know, my initial instinct is don't compete with Chipotle doing what Chipotle does. Chipotle is going to out Chipotle you 10 days out of 10.

[Mark Ramadan]

Right.

[Lucas Manteca]

They've built the machine to do that. But when you go into a local restaurant, you expect to have a local feel there, whether that's local performers or musicians, local additions to the menu, or even a little local market there. These are just random examples of how do you make your store not feel like a competitor to the chain restaurant next door, but actually its own completely new thing? And one part of that equation is you. It's the personalities behind the counter. Right. It's the people. Because what is a hospitality experience if not people? And then the second is the environment. I mean, the food. Maybe you both serve tacos, but that's almost incidental to the emotional experience you're delivering.

[Beth Benneke]

Right? Right. And to be honest, the idea behind taco shop as well, it's like trust the chef behind the scene that is going to offer you the best experience that we can and fast. And going back to the atmosphere is my wife. She's a designer. And we take a lot of pride as well about the atmosphere. It's like we make sure that we didn't copy absolutely anything that it was already within our competitors or marketplace. We created a very, very unique concept.

[Mark Ramadan]

Lucas, I'm looking at your website and you just mentioned this idea that, hey, trust a chef and all this stuff. I know this because I was looking at your bio. It's just not on your website or it's not easy to find. You're a nominee, you're a James Beard nominee. You have this incredible pedigree. And I wonder why on the website it doesn't say tacos from a James Beard nominee or, you know, or chef driven. I mean, Steve Ells, who started Chipotle.

[Guy Raz]

Was a trained chef.

[Mark Ramadan]

He did go to culinary school and his dream, we did him on the show many years ago. His dream was to build a Michelin three star restaurant. That's why he started Chipotle, to finance it. He never built a Michelin restaurant, but Chipotle was a result. But it was chef driven. I feel like just from the entry point, you know, whether it's a website or coming into the restaurant, you need to tell me. This is driven by a chef, a James Beer nominee.

[Beth Benneke]

Right, right. And you're correct. I just, you know, it's really hard. The perception of tacos is always going to be. Tacos are cheap food. Correct. So the fact that I'm a chef, I'm always afraid that we're going to scare people away thinking that, you know, we're too upscale or even our decor, you know, we made it as simple as we can because we are concerned that, you know, people are not going to be feel comfortable when they walk in the door and feeling like they're going to pay a higher price that they can right around the corner. And, you know, we stand behind our quality. But the first perception really for a guest to walk in through the door is so important that it's tough. It's all these elements that we try to balance to make sure that we can cater to everyone.

[Lucas Manteca]

This is maybe a contrarian opinion, but I think that the word to focus on in terms of your guess is maybe less price or cost and more value. Value is like price meets expectations. That's just one definition. But you could raise your price and also raise the experience that you're delivering or raise the ante on expectation and people may well be willing to pay that. My fear for you, again, I haven't been to your restaurant, so, you know, I don't know if this is the case, but my fear is if you engage in a price war with Chipotle, you will definitely lose. You will never have the cheapest, most profitable tacos. Right? Correct. And so that's a losing fight from day one. What you really want to do is figure out what is the community center that your guests are looking for during this summer season in Cape May. Right, right. And I can think of so many little beautiful seasonal shops out in the north fork of Long island or in the Hamptons or all the beach communities around the US and they're all sort of like multi factor places. They serve coffee in the mornings and then they have delightful sandwiches in the afternoon. And there's also a bookstore, and maybe they also sell toys for kids because. Because people want to buy toys in the summer and there's probably also ice cream in the afternoon. And I'm not saying you should do any of those necessarily, but if you shift your thinking from we are a taco restaurant competing with Chipotle to we are a community destination for summers in Cape May serving great food, which happens to be Mexican food, I think you can really change the value expectation people have of your restaurant. If I go in and I'm faced with beautiful design objects and you have comfy chairs and there's a James Baird nominee behind the counter and you say, well, the tacos aren't 8 bucks, they're 12 bucks or 13 bucks maybe. It's a very different story.

[Beth Benneke]

Right, right, right.

[Mark Ramadan]

For sure. Mark, I think that you're onto something really important here, which is because I know, Lucas, you're wondering, should I bring on investors? How do I grow this? Because ultimately your idea is to grow.

[Guy Raz]

This and to scale this.

[Mark Ramadan]

Right. But initially, the immediate threat is this Chipotle coming. And let's be honest, Chipotle is a great chain. It makes high quality food. But here's where Chipotle underperforms, and here's where I think, Mark, you're exactly right about the community thing. Here's where you can really differentiate, and that is hot sauce. If you go to Chipotle, there's Tabasco and there's Tabasco. Chipotle, you could create. You could just get a wall. Like right now, you could just have a wall of 200 hot sauces at taco shop. Right? I mean, there's gotta be people in.

[Guy Raz]

New Jersey making hot sauce.

[Mark Ramadan]

I know there are people all over the country.

[Beth Benneke]

Well, that's me, guy. We have four different sauces. We have holy camole, chimichimi, Jesus, Mary's hot, jmj. We actually make our own hot sauces. And that's. That's the only hot sauce that we serve at the restaurant. You know, it's. You know, and again, it's. We. We never thought that we were going to be put on the field to compete in such a big league, and we didn't choose this. It happened. And now Chipotle coming in place, you know, we know that they're going to take 30% of our bottom margin. You know, and that is our concern, because being a seasonal business where our summer months are incredible and our winter months are a disaster, 20% will really damage the business. So we're in front of a situation that we need to take action, and that's our concern.

[Lucas Manteca]

I would just say on the fundraising side, I would not recommend raising funds until you have a concept that you feel confident in that is working. Not only because I think it puts you in a position where you now are suddenly owing people money and you don't necessarily have the Runway ahead of you to pay them back, either through scaling or through selling the business. But I think it distracts you from what should be your core mission now, which is how do you deliver something that's valuable to your community rather than how do you pay back your debt facility or pay back your investors. I work with a lot of Restaurants and those that are loaded up with debt can't focus on operations. And those loaded up with equity investors also are distracted from finding opportunities with their operations. So I would definitely focus on, I mean, I'm not saying don't raise money in the future, but typically you would want to wait to do that until you have the concept that's humming and buzzing and you feel like I can't help but open a second location. And I think you get there by creating a cult following. Chipotle scaled, sweetgreen, scaled, all of these businesses scaled because they first had a home base that had a cult following. Yours will look different than Chipotle's. But again, not to repeat myself, but I'd encourage you to really think about how do you deliver a service that is not tacos to your guests? You may serve tacos, but what's the service? What is the environment they're walking into? Why are they coming there? And if the answer is because your tacos are better, I don't think that's a long term sustainable differentiation from Chipotle. Not to say yours aren't delicious, but it's tenuous if they're 100ft away. But how do you create something that's more, that's emotional, that's cathartic for people. That's the beauty of local small businesses. And I think you can do that through products. Like Guy was saying with the hot sauce, I think you can do it through menu integrations. Whatever's fresh from the farmer's market, Chipotle will never do that. And I think you can do it in ways that are cheaper, free to you. Like I mentioned this earlier, but invite a local musician to perform every Thursday.

[Guy Raz]

Have a band there, a local band. You go in there to hear great.

[Mark Ramadan]

Music and have great food.

[Beth Benneke]

That's a great idea.

[Lucas Manteca]

Chipotle is never going to compete with that, ever.

[Beth Benneke]

Right.

[Guy Raz]

And the other thing is the quality.

[Mark Ramadan]

Of what you're producing, the quality of your ingredients, your pedigree. You're making the hot sauces.

[Guy Raz]

I didn't know that until you told me that.

[Beth Benneke]

Yeah, we make our hot sauces. We make fresh tortillas every morning in house.

[Mark Ramadan]

I mean, this is not. I don't see this on your website. Maybe you're advertising at the restaurant, but, man, I mean, I feel like as part of your brand bible, we make everything in house. You make your tortillas, I'm eating that. You make your hot sauce. Like you steep the chilies and vinegar and you're making it. I want to Try that. But you have to tell me that.

[Beth Benneke]

Yeah, that's a good point.

[Mark Ramadan]

Mark, any final words of wisdom for Lucas?

[Lucas Manteca]

I guess I would only say do whatever you can to keep track of the community that you're building and stay in touch with them. Whether you have a newsletter which costs you nothing, or even just some sort of way to keep track of who's coming in and out, to actually stay in touch, to let them know the events that are coming up, to let them know what kind of specials you're doing. Again, these are the super low cost ways to stay close to that community and remind them that you're still there.

[Beth Benneke]

Right? Right.

[Mark Ramadan]

All right, Lucas, thank you so much for calling in.

[Beth Benneke]

Thank you so much, guys. I appreciate it.

[Mark Ramadan]

It's taco shop. Good luck.

[Beth Benneke]

Thank you so much.

[Mark Ramadan]

I mean, homemade hot sauce sounds great. And four different kinds. You know that one of those is going to be really fiery. And I'm like the one who's. I'm always like, I'm going from the mild to all the crazy dragon fire breathing one. Cause I just. He's making it.

[Lucas Manteca]

You know, though, your idea of the wall of hot sauces was great. There used to be a restaurant in Hudson, New York, in the Hudson Valley. It was a Mexican restaurant and they had like literally a hundred hot sauces that you could pick from. And it was so fun because every meal was completely different.

[Mark Ramadan]

I remember there's a barbecue joint in Washington, D.C. that has the same thing. And it's so fun.

[Lucas Manteca]

Yeah.

[Mark Ramadan]

Mark, you launched, of course, into this incredibly competitive space.

[Guy Raz]

Not crowded, because ketchup's not crowded. But it's very competitive.

[Mark Ramadan]

Obviously dominated by and mayonnaise too, by big multinational brands. How did you guys think about competing with those brands? Or did you think that we're not even competing with them at all?

[Guy Raz]

We're not going after the same customer.

[Lucas Manteca]

We definitely recognized that there was competition, but I don't think we saw Heinz as the big scary competitor, if that makes sense. If anything, we saw inertia as the competitor. People are on. They're not impulse buying different ketchups every week. And so the real competitor was habit. And so we thought about how do we break a habit rather than how do we switch people away from Heinz. And so most of what we did at the very beginning was get in front of people so they could taste it. So that was doing demos in stores, most of which at the beginning, Scott and I did ourselves. Or we would be on restaurant tables or hotel room service trays because those are opportunities for people to actually taste it. Because at the end of the day, what we were really trying to build was an emotional taste experience. And if it's just sitting on a shelf and it's one jar out of 50 and people are on autopilot anyway, that's no way to get someone's attention. We really had to cut through the noise. And so everything we did was about how do we cut through the noise?

[Mark Ramadan]

All right, Mark, we're going to go.

[Guy Raz]

Ahead and take another quick break, but.

[Mark Ramadan]

When we come back, how to keep your baby from freaking out at dinner. A new kind of placemat. Stay with us. I'm Guy Raz, and you're listening to the advice line right here on How.

[Guy Raz]

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[Mark Ramadan]

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[Guy Raz]

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[Mark Ramadan]

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[Guy Raz]

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[Mark Ramadan]

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[Mark Ramadan]

Today I'm taking calls with Sir Kensington's co founder Mark Ramadan. Let's take our next caller. Is that Beth?

[Mark Sisson]

I'm here, I'm here. And oh my gosh, I've been a fan of the show since the very first week I had my business.

[Mark Ramadan]

Welcome. Thank you for listening to the show. Beth, tell us where you're calling from and just a little bit about your business.

[Mark Sisson]

Yeah, my name is Beth Benneke. I am from a little town outside of Rochester, Minnesota. And my business is busy baby. We have the first ever interchangeable system of food grade placemats, tethers and accessories that keep babies things within reach and off the floor, at home and on the go.

[Mark Ramadan]

All right, so tell me the question you brought for us.

[Mark Sisson]

What guidance would you have to offer a company that's navigating the messy middle phase where you're outgrown the startup tactics but you're not quite ready for, you know, big brand strategies yet?

[Mark Ramadan]

All right, cool. I believe, Beth, you were on how you built that this segment that we.

[Guy Raz]

Used to do back in the day.

[Mark Ramadan]

Where we would have, you know, two minutes about a small brand. You were on our show back in the day, right. Busy baby. Was.

[Mark Sisson]

I was, I was.

[Mark Ramadan]

Tell us a little bit. It's like a placemat that you put on like a high chair, right. For a baby, but it's got a bunch of strings or things that you attach to baby toys.

[Mark Sisson]

Yeah, it's really simple. It's a silicone placemat with suction cups on the bottom so you can stick it to any smooth, clean surface. And then it has a tether system of silicone kind of bungees, we call them toy straps, tethers that you can hook to the mat and then you can loop them through or around pretty much any toy you've already got for your baby.

[Mark Ramadan]

All right. I can only imagine how this started as I, because I remember even though I've got a 15 and a 13 year old, but I remember losing my mind when they just throw things off the high Chair like carrots and banana peels now that you can't tether. But everything like the rattles and the.

[Guy Raz]

Bottle and it was just all over the place.

[Mark Ramadan]

It used to drive me nuts. I eventually learned how to cope with it. I have to imagine that's how it started for you.

[Mark Sisson]

Yeah, I mean, it starts out innocent enough. It's a lack of fine motor skills. Babies just can't hold onto things. They drop them. But then when they learn quickly, it could be a very fun game of fetch with mom and dad.

[Mark Ramadan]

And is this what was going on with you? You were a parent and you saw this happening?

[Mark Sisson]

Yeah, kind of. I had my first child when I was 40, so I was a little bit later in life and I was working a corporate job. And when I went back to work after maternity leave, I went out to lunch with a couple of my stay at home mom friends and they brought their daughters with them. And while they were super cute, they were very disappoint, distracting, and we couldn't honestly finish a conversation. So while we were sitting at the table, I went on Amazon to buy something so that when my son was big enough, he wouldn't be that distraction at the table.

[Mark Ramadan]

And there was nothing.

[Mark Sisson]

Nothing. There was, you know, there's pacifier clips. There's always been, you can hook a pacifier to their shirt. But there needed to be a place to put food and a way to keep the toys off the ground.

[Mark Ramadan]

Okay, so now you're at a point where you're not a startup, but you're not massive. Do you mind sharing roughly what your revenue is?

[Mark Sisson]

Yeah, I mean, in the five years we've been in business now we've done just over $14 million in sales.

[Guy Raz]

Wow.

[Mark Ramadan]

So this is pretty great. And are you still growing or has.

[Guy Raz]

The growth slowed down?

[Mark Sisson]

Well, that's kind of the sticky spot right now is, you know, along the road. I grew very fast. I was on Shark Tank in my third year. And also during the pandemic, we saw a ton of growth because everybody, you know, I. That's when I started marketing on Facebook and Google and everybody was stuck at home and everyone needed something to keep the baby busy while they were homeschooling the other kids or taking a zoom call for their job. So anything that was like keeping the baby occupied, even just for 20 minutes so you could get through these things, it just blew up. And so at the time, I was still working my full time job. I didn't have many expenses other than the inventory, really. And then the Facebook ads. So at that time I convinced my brother to quit his very stable full time job to join me in this very unstable rollercoaster of entrepreneurship. And it took on his salary and then I ended up quitting my job and took on my salary. And then we needed health benefits. So the company paid for health benefits and before I knew it, operating expenses just kept creeping up and up. And the more you sell, the more general liability insurance costs and the more all these other things cost. Cash flow was never an issue in the first few years and so I didn't pay close enough attention and now cash flow is an issue. But we have several large opportunities this year. We just launched on target.com and we are onboarding right now with Walmart. And Walmart really loves our products and they love our innovation and it's an amazing opportunity that's going to cost a lot of money and just scares me to death. So that's another big part of the story. That is where I'm kind of stuck in this messy middle.

[Lucas Manteca]

Yeah. So getting to the messy middle is still an accomplishment by the way. So congratulations. 14 million of sales means there's a real product market fit. There are families that love this. So that is an important part to not get lost in the question. One sort of high level point is that retail is a blessing and a curse. It can be a blessing because large customers can mean large orders and large orders can give you certainty and predictability. It can give you leverage with a bank facility, which I'll get to. But the downside is that they are more expensive to work with and you get your cash much less quickly. So when someone buys online, you get the credit card payment right away. When Walmart buys, It might be 30, 60, 90, 120 days until you get paid. And you often don't get paid for 100% of what you ship because in retail there's all sorts of markdowns and deductions. So one thing to just keep in mind is almost inevitably if you launch in retail, things will get messier before they get better. In terms of your cash and inventory position, one question I had is do you have. I heard that you have a home equity line of credit separately for inventory financing? Have you ever spoken with a local bank or debt provider to help finance your inventory?

[Mark Sisson]

Yes, we have actually a fantastic hometown bank. So I've since closed the home equity line of credit and we've opened inventory lines of credit with the hometown bank. They're currently maxed out. Last year Q1 was the biggest quarter we ever had. And so we ordered a lot of inventory to support that growth for the rest of the year. And then Facebook and Google Ads started underperforming and the year kind of fell apart. And so we ended up being stuck with a lot of inventory and not being able to pay down those lines of credit yet.

[Lucas Manteca]

Understood. And your inventory doesn't have a shelf life to it, Right? Right. Okay. And then another question is, from a gross margin perspective, do you feel like you are covering in a normal world, is your gross margin high enough to cover your costs on an ongoing basis?

[Mark Sisson]

Yes. In a normal world, our gross margins are fantastic. I think we took a lot of missteps with marketing in the last year. That helped put us in this position. We're correcting that this year. And that's kind of how I'm looking at the retail opportunities is not only is it maybe some bigger orders, but we're getting in front of more faces because people are going back to stores. And the online marketing is not working as well as it used to. So I also look at Walmart and Target as just sitting there on the shelf or being in the baby section. Is marketing.

[Lucas Manteca]

Certainly true. It's marketing. And obviously it broadens your exposure to a huge audience. What about all of the little retailers in between online and Walmart and Target? Have you spoken to, like, local retailers? I don't know who your big one would be and where you live, but what about all the smaller ones?

[Mark Sisson]

We're in about 400 independent retailers right now, and that's just mom and pop shops that have reached out to us saying, you know, we love your products, we'd love to sell them in our shop. I'm actually sitting right now in a VRBO in Vegas because we're at the Baby Expo. It's the big retail event of the year for baby stores.

[Lucas Manteca]

Great. Well, so I would say there's no silver bullet, because what you're describing, it's a very common issue. If you're growing quickly and you don't have a pile of investor capital, then financing your inventory growth will always be a challenge that you face. Unless your gross margins are 70, 80, 90%. And even then, depending on how quickly you're growing, you're always going to have needs that outstrip your current cash. There's no silver bullet answer. I would say that one thing that you can explore depending on how excited the buyers are for your products at these various stores is negotiate an agreement so that you can get your first few payments sooner than normal. So if you have set payment terms of net 30 or net 60, whatever it might be. You could ask for exceptions for the first couple of payments to finance the large initial order. That's one thing you could do. You could negotiate some of the discounts. They take a little bit more aggressively. I'd also say almost every brand that I work with, including the ones I used to run, dramatically reduced investment in E Commerce, Meta and others. Because the problem you're facing is the same problem everyone's facing. It's just not efficient. And so a lot of people have moved those funds out of online into point of sale marketing. So making sure that people are aware that it's in Walmart, for example, or Target, when you get into those stores, really focusing on services like instacart, I've seen that have a much higher, I'm talking like two to three times higher ROI than spending on Meta.

[Guy Raz]

Wow.

[Lucas Manteca]

Yeah. So not just maintaining your dollars, but actually shifting your dollars into more profitable retail marketing.

[Mark Ramadan]

I'm seeing a commercial. I know on your website you've got a video of a baby just kind of playing with it. But I have this vision of like a row of babies of like 10 babies. And some of them are just quietly playing and some of them are screaming and crying and freaking out and throwing things and some of them are doing other things. It's just like a line of babies in high chairs and that's just a static shot of. It's like just watching babies play with this and just chaos.

[Mark Sisson]

I invite you to go to that photo shoot and last more than 20 minutes.

[Mark Ramadan]

It just sounds so funny. It's like a bunch of monkeys at the zoo just looking at babies for. You know, it just, it would be.

[Mark Sisson]

Anyway, maybe I can find a daycare center that'll let me come and do that.

[Mark Ramadan]

Yeah, yeah, absolutely. You know, promise the parents a free mat, you know.

[Mark Sisson]

Yeah. Lifetime supply of busy baby products.

[Lucas Manteca]

Let me.

[Guy Raz]

Do you think.

[Mark Ramadan]

Have you thought of also making. I know you sell accessories, but also making the toys, you know, the tactile things. I know you make a couple things like a spoon and a. But other things like noise makers or things that you guys make that you would attach to the tray.

[Mark Sisson]

Yeah, I mean, we've done some teethers, we've done our training spoon is like really, really popular with the feeding specialist. One thing we've learned is the safety considerations when you're making baby products are just really pain. And so we want to stay away from moving parts and magnets and too much of that stuff while we are still so small. But we were hoping to find some new items at this event we're at that we could maybe just private label find something that already exists, that complements our product line that we can just put our brand on.

[Lucas Manteca]

Yeah, one other. This is maybe just going back to the OPEX for a second. I just wanted to share perspective on this, which is just that, that in the messy process of building a business, sometimes you have to invest before growth and sometimes you invest too much before growth. And in both businesses I've run multiple times, have we been faced with the reality that we have invested too much in anticipation of sales that never came or came, but came much later. And I've been through incredibly painful moments where we've had to let members of the team go because my fault in hiring too quickly or putting too much fixed costs on the business. It's not always people, sometimes it's software and services, whatever, and we had to retrench. And in a world where money is limited and you aren't taking investor capital and debt is scary because you have covenants and you have restrictions, something's got to give. And so I would just make sure, you know, it's something that everyone's had to go through in. Right. Sizing opex as revenue catches up. And it's hard, but it's often the thing that you must do to get through to that next phase of business in conjunction with other things. So it's often not, let's cut OPEX and lose people and therefore everything will be saved, or let's invest over here and we won't have to cut people. Sometimes it's both and sometimes it's not about cutting. It's about reducing the raises or reducing the healthcare. There's all sorts of, you can do this with a fine tooth comb. And it's very hard and it's very depressing, but it is very normal.

[Mark Sisson]

Thank you for saying that because it is very hard. And that's a lot of the things we're doing right now. And it is very depressing. And it feels like I should be such a success story right now with the numbers that we have and the journey we've been on. But it doesn't feel that way in this moment. And so I'm hoping that all the efforts we're making right now will soon come out on the other side of that. And it feels good to know I'm not failing that it is something that companies go through.

[Mark Ramadan]

I mean, I know it seems scary, but you've come a long way and it's awesome to see the progress that you've achieved so far. Beth Benneke, bz Baby, congrats. We're going to be following you.

[Mark Sisson]

Thank you guys.

[Lucas Manteca]

Good to meet you.

[Mark Ramadan]

Thank you.

[Mark Sisson]

Bye.

[Mark Ramadan]

Wow, Mark. I mean, some serious weighty questions, you know, big ones.

[Lucas Manteca]

I mean, all of these are classic business issues, right? How do you compete with the incumbent? How do you make it through a period of high cost? How do you think about product development and innovation? How do you get retailers to listen to you? How do you build awareness for something that's brand new? These are all the challenges of virtually every business worth building. So, yeah, absolutely. It all felt. All the categories were different, but all the problems were very familiar. I forget who said this, but someone more famous than me said every time your business doubles, it breaks. And so running into these issues is something that everyone has to deal with. And being open and vulnerable to talk about it and get feedback is also okay. I felt like I was constantly putting on some sort of suit of armor every day, like pretending things were great, pretending that everything was going well, including with investors, even when they could have helped. And so I think being aware that problems are constant and that people are desperate to help you if you ask for help, that would have been helpful to me.

[Mark Ramadan]

Yeah, for sure. Makes a lot of sense. Mark Ramadan, thank you so much for coming onto the advice line. Coming back onto how I built this.

[Lucas Manteca]

Thanks guy. This was great.

[Mark Ramadan]

And by the way, if you haven't heard Mark's episode of how he and Scott Built Sir Kensington's, go back and check it out. It's an incredible story. You can find it in the podcast queue. We'll also put a link in the podcast description. And also don't forget to sign up for my newsletter. At GuyRaz.com we put a lot of great ideas and advice from the world's greatest entrepreneurs who put a lot of work into it. It's really, really worth your time. If you are working on a business and you would like to be on this show, send us a one minute message that tells us about your business and the issues or questions that you'd like help with.

[Guy Raz]

And please make sure to tell us how to reach you.

[Mark Ramadan]

You can send us a voice memo at Hibtid or call 1-800-433-1298 and leave a message there and we will put all of this in the podcast description on your smartphone. Thanks again. We'll see you next week.

[Guy Raz]

This episode was produced by Sam Paulson with music composed by Ramtin Arablouei it was edited by John Isabella and our audio engineer was Sina Lofredo. Our production team at How I Built.

[Mark Ramadan]

This also includes Alex Chung, Carla Estevez.

[Guy Raz]

Casey Herman, Chris masini, Elaine Coates, J.C. howard, Katherine Cipher, Kerry Thompson, and Neva Grant. I'm Guy Raz and you've been listening to the advice line on How I Built this Lab. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short [e-mail] survey.

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