Advice Line with Perry Chen of Kickstarter

Summary

Podcast Title: How I Built This with Guy Raz
Episode: Advice Line with Perry Chen of Kickstarter
Release Date: June 12, 2025

Host: Guy Raz
Guest: Perry Chen, Co-founder of Kickstarter

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Introduction

In this engaging episode of How I Built This with Guy Raz, host Guy Raz reconnects with Perry Chen, the visionary co-founder of Kickstarter. The episode centers around the "Advice Line," where Perry offers invaluable insights to entrepreneurs seeking guidance on scaling their businesses, raising capital, and navigating the challenges of growth.

Perry Chen’s Current Endeavors

[04:10] Perry Chen begins by updating listeners on his journey post-Kickstarter. After stepping down as CEO and later from the board, Perry ventured into the art world, collaborating with galleries and museums. However, his true passion led him back to music, where he is currently channeling his energy and creativity.

Perry Chen [04:27]: "And so as of about six months ago, I am now liberated... the music stuff is kind of still. It's under wraps, but it's been going really well."

The Intersection of AI and Creativity

[04:49] Guy Raz introduces a thought-provoking discussion on the impact of Artificial Intelligence on creative businesses. He raises concerns about the future of earning a living through creative endeavors, given the advancements in AI that blur the lines between human and machine-generated content.

Guy Raz [04:49]: "With AI, it's a completely new age... it’s going to be difficult to discern what is AI generated and what's human generated in certain creative spaces."

Perry Chen's Perspective:

[05:32] Perry acknowledges the instability in creative industries but remains optimistic. He emphasizes the importance of opportunities expanding rather than contracting, even amidst rapid technological changes.

Perry Chen [05:44]: "I don't think it's ever been really stable for people working in those spaces... as long as it continues to open up opportunity for people, I think then that's just normal change."

Raising Capital on Kickstarter

Perry Chen delves into the strategies behind successful Kickstarter projects, highlighting the significance of existing audiences and community engagement.

[06:23] Perry Chen: "There's people that have existing audiences that they can start the promotion on... you can go try to promote that in communities online where people gather around that topic."

Caller 1: Jesse Hodge of Modtub

Jesse Hodge introduces Modtub, a company that manufactures and sells cold plunges designed to keep water cold and clean without the need for ice.

Background and Growth:

[07:18] Jesse Hodge: "We started Modtub in February of 22... we saw the rise of cold plunge, and because of all I knew about hot tubs, we were able to make our own cold plunge out of my garage."

• Sales: Last year, Modtub achieved over $5 million in sales, doubling from the previous year.
• Product: Cold plunges priced at $3,000, with the latest version, Modtub 2.0, priced at $3,300. The company is profitable since launching the cold plunge.

Business Challenge:

[10:34] Jesse Hodge: "We've been approached by people interested in potentially buying Modtub or investing in Modtub, so looking for advice to know if and when is the right time to go down one of those paths."

Perry Chen's Advice:

Perry encourages Jesse to introspect on his vision and whether he is ready to scale or pass the torch to someone better suited for growth.

[11:07] Perry Chen: "What do you want? There's no better question than just keep asking yourself... [you may] want to let go of some control and get some more outside perspective."

Guy Raz's Input:

Guy suggests exploring options like hiring a professional CEO or selling a portion of equity to a partner who can drive growth, emphasizing the importance of strategic decision-making for scaling.

Notable Quote:

[15:23] Perry Chen: "It's not an easy question... some people got into their business and they're trying to really, they want to get in the optimal window for sale... Other people, you're just like... you're just into this."

Caller 2: Kathryn Kirbis of Hitch

Kathryn Kirbis shares her journey with Hitch, a chef-crafted hot sauce brand known for its flavorful sauces with manageable heat levels.

Background and Growth:

[24:17] Kathryn Kirbis: "We are known for our super flavorful hot sauces with slightly lower heat... sold in grocery stores around the northwest and in specialty stores around the country."

• Sales: Last year, Hitch achieved $157,000 in sales, up from just under $3,000 in their first year.
• Distribution: A 50/50 split between wholesale channels and direct-to-consumer sales.

Business Challenge:

[27:00] Kathryn Kirbis: "After nine years of building our business... we would love some advice on how to scale to successfully international retailers without getting significant outside investment."

Perry Chen's Advice:

Perry advises Kathryn to consider strategizing with set goals and possibly seeking aligned investors who share the brand's vision.

[28:35] Perry Chen: "Give yourself some time... figure out what it’s gonna take to get this in the position where it has the opportunity to get acquired."

Guy Raz's Input:

Guy emphasizes the importance of product demonstrations in scaling and suggests a strategic approach to reaching sales targets necessary for acquisition.

Notable Quote:

[32:47] Perry Chen: "You could always hire somebody if you feel like there needs to be an image of somebody standing there."

Caller 3: Joe Fontana of Fry the Coop

Joe Fontana discusses Fry the Coop, a rapidly expanding chicken sandwich shop in Chicago known for frying everything in beef tallow.

Background and Growth:

[37:15] Joe Fontana: "We finished last year at $12.9 million and we're already on track to do $14.5 million this year."

• Locations: Currently operating 10 locations with plans to expand to 75 within 10 years.
• Unique Selling Proposition: Uses beef tallow for frying, enhancing flavor and setting them apart in a competitive market.

Business Challenge:

[40:26] Joe Fontana: "We need to raise about $30 million to achieve our goal of 75 stores, but our company's not even worth $30 million."

Perry Chen's Advice:

Perry suggests Joe explore alternative financing methods, such as seeking minority equity investments from family offices or structured loans that align with Joe's vision.

[44:15] Perry Chen: "Give yourself some box, some constraint, some time box around, plan, you know, plan big... And then, okay, if that doesn't work out in this amount of time, then shift your mind."

Guy Raz's Input:

Guy offers practical solutions, including exploring franchising, selling properties to lease back, and enhancing operational efficiencies to support rapid expansion.

Notable Quote:

[50:50] Perry Chen: "What you really want is a plan B where you give yourself a safety valve... what do you really want?"

Closing Insights

As the episode wraps up, Perry Chen reflects on the emotional and psychological challenges entrepreneurs face, emphasizing the importance of aligning personal desires with business goals to maintain passion and prevent burnout.

Perry Chen [52:46]: "A lot of what I picked up... entrepreneurs statistically end up in that category. And it's not something that really gets talked about a lot."

Final Thoughts from Guy Raz and Perry Chen:

Guy praises Perry's invaluable contributions and underscores the importance of thoughtful decision-making in entrepreneurship. Perry adds a touch of humor, suggesting a tongue-in-cheek podcast idea to address the more challenging emotional aspects of running a business.

Perry Chen [53:02]: "I love that."

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Key Takeaways

1. Strategic Scaling: Entrepreneurs must carefully assess when and how to scale, considering options like bringing in a professional CEO or seeking aligned investors.
2. Community Engagement: Building and leveraging existing communities can significantly enhance the success of crowdfunding campaigns and product launches.
3. Balancing Passion and Growth: It's crucial to align business growth strategies with personal passions to sustain long-term commitment and prevent burnout.
4. Alternative Financing: Exploring diverse financing methods beyond traditional bank loans, such as minority equity investments or family office partnerships, can provide the necessary capital for expansion.
5. Operational Efficiency: Enhancing operational processes and investing in strategic marketing, like product demos, are essential for scaling successfully.

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Notable Quotes:

• Perry Chen [04:27]: "I am now liberated... the music stuff is kind of still. It's under wraps, but it's been going really well."
• Guy Raz [04:49]: "With AI, it's a completely new age... it’s going to be difficult to discern what is AI generated and what's human generated in certain creative spaces."
• Perry Chen [11:07]: "What do you want?... you could let go of some control and get some more outside perspective."
• Perry Chen [28:35]: "Give yourself some time... figure out what it’s gonna take to get this in the position where it has the opportunity to get acquired."
• Perry Chen [32:47]: "You could always hire somebody if you feel like there needs to be an image of somebody standing there."
• Perry Chen [44:15]: "Give yourself some box... plan big. And then, okay, if that doesn't work out in this amount of time, then shift your mind."
• Perry Chen [52:46]: "Entrepreneurs statistically end up in that category. And it's not something that really gets talked about a lot."

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This episode provides a treasure trove of insights for budding entrepreneurs and established business owners alike, emphasizing the delicate balance between growth, passion, and strategic decision-making.

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. Owning a business means you get to chart your own course and create a meaningful life for you and your family. With Amex Business Platinum, you can earn 1.5 times Membership Rewards points on select business purchases, plus stay refreshed on the go with access to more than 1400 lounges globally through the American Express Global Lounge Collection, including the Centurion Lounge. That's the powerful backing of American Express. Terms apply. Learn [e-mail] AmExBusiness thank you to our sponsor, Amazon Prime. You know, I've been thinking a lot about convenience lately and how one service has completely transformed the way we live our daily lives. 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. Just the other day I realized I needed a refill on my vitamins and I found it within seconds on Amazon. 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. 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. So here's something pretty cool to think about. Have you ever been lying in bed at night at an Airbnb? Maybe scrolling through your phone when you realize, wait a minute, could I do this too? That was the question Giovanni asked about his house in Florence, Italy. And guess what? I got to stay in that magical palazzo for a few nights because it was on Airbnb. Find out how much your place is [e-mail] host 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 need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a 1 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 how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for [e-mail] and we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Perry Chen. He's the co founder of Kickstarter. Perry, it's great to have you back on the show.

[Perry Chen]

Great to be here, guy.

[Guy Raz]

All right, so you were first on How I Built this back in 2017, and if you guys haven't heard that episode, of course we will put a link in the episode description. Perry got the idea for Kickstarter when he tried to put on a concert in New Orleans in the early 2000s, and he thought, hey, wouldn't it be great if we could fund this event in advance? Well, that idea never panned out, but after almost a decade of kind of refining it, Perry built a platform that today has funded more than a quarter of a million projects. Perry, it is such an awesome story. And before we get to our callers today, can you give us an update on what you're doing these days? I know the last time you were on the show, this was back during the pandemic. You were no longer the CEO of Kickstarter. You were the chairman of the board. Tell us a little bit about what's going on in your life right now.

[Perry Chen]

Yeah, it's great to be back. And, you know, I was chairman. Yeah. Last time I came. Now I am off the board completely. I went from CEO, stayed on as chairman for many years, then was just a board member, brought on a new chairman. And then really, as of about six months ago, I am now liberated.

[Guy Raz]

Yeah.

[Perry Chen]

And so after that, after I left as CEO, I went into the art world and, you know, I did some shows with some galleries and even a few things at museums, but I have since returned to music, my first love. And so the music stuff is kind of still. It's under wraps, but it's been going really well. And this is now. This is now where I put my energy.

[Guy Raz]

Perry, I think, okay, this is my sort of, you know, back of the envelope guy in the corner of the bars theory. But I think we are on the cusp of a different here, like the we're leaving the industrial age and we're entering, or maybe we've already entered it. But with AI, it's a completely new age. And I think that in the not too distant future, it's going to be difficult to discern what is AI generated and what's human generated in certain creative spaces. Music and books, even podcasts, even what I'm doing now. And so I want to get your take on building a business around being creative, because that's really what Kickstarter initially enabled people to do. Do you think that the future of earning a living by being creative is under threat?

[Perry Chen]

If you're thinking more in the creative arts spaces, you know, the music, the art, film, dance, theater, you know, I don't think it's ever been really stable.

[Guy Raz]

Yeah.

[Perry Chen]

For people working in those spaces.

[Guy Raz]

Fair point. Yes.

[Perry Chen]

You know, and so it's like each of these radical changes that we are going through, I think as long as it continues to open up opportunity for people and not just close up opportunity, I think then that's just normal change. We are just experiencing it in like such a condensed, rapid fashion.

[Guy Raz]

Yeah. Perry, before we get to the callers, I suspect that many, some today are going to have questions about raising money. Right. Just to fund a business. And I'm just curious, I mean, what are some of the projects that do really well on Kickstarter? Like what is the pitch that people make that attracts more capital?

[Perry Chen]

Well, one, there's people that have existing audiences that they can start the promotion on. If your audience is much smaller, you're trying to tap into things that have existing communities. If you're doing a documentary film on a subject, let's say on autism, you may not have a built in audience as a filmmaker or that may be limited, but you can go try to promote that in those in communities online where people gather around that topic. So whatever that is, in whatever area of what you're doing, I think that you're really trying to think, to try to understand how big is my audience here. You're probably trying to think of like what communities exist that I can go to and say, hey, I'm doing something that might already interest you.

[Guy Raz]

Yeah. All right, well, Perry, why don't we go ahead and take our first caller. You ready?

[Perry Chen]

Yeah.

[Guy Raz]

All right. Hello, caller. Welcome to the Advice line. You're on with Perry Chen, co founder of Kickstarter. Tell us your name, where you're calling from, and a little bit about your business.

[Jesse Hodge]

Hey, what's up, guy? And Perry, my name is Jesse Hodge from Dallas, Texas, and I'm the co founder of modtab, modtub manufactures and sells cold plunges direct to consumer. And these cold plunges keep the water cold and clean with no need for ice.

[Guy Raz]

Awesome. Jesse, welcome to the show. Thanks for calling in modtub. Okay, so these are like a round hot tub. Like what does it look like?

[Jesse Hodge]

So we started modifying a massive cooler, like a yeti style cooler. So it looks like a big tub, plastic tub.

[Guy Raz]

Okay. And basically that's connected to some device that cools the water inside.

[Jesse Hodge]

Exactly, yeah. So we modify that cooler to connect it to a pump, a filter, and a chiller, which is what brings the water down to temperature.

[Guy Raz]

Okay. Filled with water, there's an external device that cools the water to what temperatures?

[Jesse Hodge]

It can go as low as 39 degrees.

[Guy Raz]

Wow.

[Jesse Hodge]

But that is very, very cold. We Recommend Starting around 55.

[Guy Raz]

All right, let's talk about a little bit about how you started this business. Tell me the background, the quick background story.

[Jesse Hodge]

Yeah. So we launched Modtub in February of 22, and it started from this side business in my garage refurbishing used hot tubs. It was a random thing I got into. My wife and I bought our first house, and we wanted a hot tub, but we were poor. So we bought this junky old hot tub off Craigslist. And I just really enjoyed working on it. I enjoyed fixing it up and refurbishing it in my garage. So that led us to start modtub originally as a new hot tub company. So we would. We're a dealer essentially, selling new hot tubs. That business was very hard and we had a very tough year. But we saw the rise of cold plunge, and because of all I knew about hot tubs, we were able to make our own cold plunge out of my garage. And it kind of took off from there.

[Guy Raz]

Okay, so you switched from hot tubs to cold plunge, which makes a lot of sense because it's a hot trend and I think will become more than just a trend. Did you design these tubs? I mean, is it your original design?

[Jesse Hodge]

Yeah. That's one thing that makes us different from a lot of cold plunges out there today. A lot of them are bought and resold or drop shipped from overseas. But we make these ourselves. So we designed it. My brother and I would tinker in my garage every Friday, trying different fittings, different pumps, different tubs, and eventually landed on the design we have today.

[Guy Raz]

Where are they manufactured?

[Jesse Hodge]

The tubs are now made in Tennessee, so the components kind of come from all over, but final assembly is here in Dallas.

[Guy Raz]

Wow. So the actual Tubs. They're made in the U.S. correct?

[Jesse Hodge]

Yes.

[Guy Raz]

Wow. And do you have a patent on this design?

[Jesse Hodge]

So we actually just launched our Modtub 2.0. So this second version is our proprietary design. So we have a design patent on this new one.

[Guy Raz]

Tell me a little bit about the business. How were your sales last year?

[Jesse Hodge]

Yeah, so last year was really good. We did just over $5 million. That's doubling from the prior year. So.

[Guy Raz]

And, yeah, so we're at 5 million. So. And these are. How much do these go for? What's it cost?

[Jesse Hodge]

$3,000. Our new one's 3,300.

[Guy Raz]

And are you profitable yet?

[Jesse Hodge]

Yes, we've been profitable. Ever since we launched the cold plunge, we've been profitable. We lost a good chunk of money doing hot tubs, but then the cold plunges recouped most of that back.

[Guy Raz]

Amazing. Okay, lots of questions for you. But before we get to Perry, bring him in, tell me what your question is for us today.

[Jesse Hodge]

Yeah, so we're a little over three years in and have had a lot of fun building this. I get to do this with my brother. But lately we've been getting approached by people interested in potentially buying modtub or investing in modtub, so looking for advice to know if and when is the right time to go down one of those paths.

[Guy Raz]

All right, Perry, before we answer the question, do you have any questions of your own for Jesse?

[Perry Chen]

Oh, sure. I kind of want to ask what you want. You know, what's your vision? How you feeling about how things are going? Like, what do you. Yeah, yeah. What do you want?

[Jesse Hodge]

Yeah, it's a good question. I think I've felt a lot of maybe where I feel like I'm towards the edge of my rope or I've taken it as far as I can go, and now I feel just this pressure or maybe some imposter syndrome of, like, man, I'm not the face of this health and wellness company. I'm not sure if I can take it to the next step. It might be better in someone else's hands, and I'm kind of wrestling through some of that. Just insecurities I need to push through to keep growing the company, or is that indicative of, you know, maybe it really is a good time to let go of some control and get. Get some more outside perspective.

[Guy Raz]

Have you had any credible offers?

[Jesse Hodge]

Yeah, so we turned down a credible offer last year. At the time, we felt like it was too low. And I think as time's gone on, I've maybe realized the offer was better than I originally thought it's a tough industry. I mean, we essentially sell one SKU that people buy one time. So it's hard to sustain a business with that model. So, you know, we really need to launch new products or be a part of a catalog of other products who sell gym equipment and other kind of wellness modalities.

[Guy Raz]

It makes me think of two episodes, many episodes of the show. One is therabody. Theragun was their sort of hero product. And Jason Wurstland found somebody to partner with him who kind of became the CEO and they turned that into a sort of a lifestyle brand. Right. And then the other one that I think of is some of these brands like Solo Stove, again, very successful product. The co founders hit a certain level and they brought in a sort of a quote unquote professional CEO to really build the company with the idea of selling it, you know, in two or three years. So some interesting ideas. Quick question for you. How did you. I mean, you've got some great momentum and I should. We should mention that the benefits of cold plunging are well known on your metabolism.

[Jesse Hodge]

Yeah, I think that's one thing about it is that, you know, we love it. We love the community, we love the culture. It's a lot of people who care about their health who are willing to do the hard thing of cold plunging, which builds resilience. So we're still having a lot of fun with it, which is, you know, another factor that kind of plays into our decisions of to sell or to take on money or kind of what's next.

[Perry Chen]

I want to just like dive a little bit deeper into the kind of the. You were saying a little bit of as potential imposter syndrome. How much of that is that? You're just like, you want to do right by the business and you don't want to obviously start to get into areas where you're not. You may not be the right person for that. And how much of that might be that you're kind of getting a feeling that, like, look, that's not who I am or where I want to be spending my time. You're really like, I'd be happy to let somebody kind of come in here who knows what they're doing and you could focus on the things that you want to focus on.

[Jesse Hodge]

Yeah, I think there's two parts to that. One is the imposter syndrome part. I mean, I'm not the face of health and wellness. I love my beer and my pizza. So it's a, you know, I'm not this ultra biohacker kind of guy that most of the cold plunging community is. So there's some of that of just, you know, am I the right person to lead it when I don't know that I totally fit our target demographic perfectly. And then the other component is kind of what you're saying that I think starting Mata, pivoting to cold plunging, all of that was so fun. I think running the business, trying to scale it, kind of operating it, I've not enjoyed to the same level that I enjoy starting something. So I do kind of have an itch to go start something else entirely.

[Guy Raz]

You just have itchy feet. I mean, you've been doing this, it's been fun, but you'd rather move on. I mean, there are a couple of options. I mean, option one is again to sort of go the dollar shave club route or the halo top route is just to find a buyer. There are these, these websites where you can post your company as a, as a target for acquisition range, I think is one of them. The other is to find a professional or quote unquote, professional CEO, give them significant equity and say, look, here are the metrics. If you can get our business up to X dollars or X revenue and we can sell it for X, Y or Z based on these metrics, you get this, this, this or that. That could also be an interesting thing to do, which would, which would enable you to kind of step away from the day to day running the business. But of course you would give up some equity to somebody who you had confidence in.

[Jesse Hodge]

Yeah, I like that idea of finding a CEO to come in who maybe has done this before, is scaled kind of to the next level. Because I always feel like there's like some silver bullet that everyone knows that I don't. And I'm just out there trying to find it. And if we got the right person in there, they would, you know, triple our revenue overnight. And maybe that's true, maybe it isn't, but I do feel that there probably is someone better suited to take us there.

[Perry Chen]

Yeah, I think that it really has to come from what you want. There is no better question than just keep asking yourself. It's not an easy question. You know, some people got into their business and they're trying to really, they want to get in the optimal window for sale to sell it and they're willing to stay in the business as long as that takes because that's why they got into the business. Other people seems like yourself, you were just like, look, I'm into this. This seems like better than what I'm doing economically, and I'll just see where this takes me. And now you're kind of maybe. You seem to have success. You bootstrapped it, it sounds like. I'd say that, you know, for an imposter, you sure seem like you know what you're doing.

[Jesse Hodge]

Appreciate that.

[Perry Chen]

And, you know, I'm gonna make it hard on you. I think you gotta accept that a little bit also. You know, you could always hire somebody if you feel like there needs to be an image of somebody standing there. And also, you know, in an industry where everybody kind of looks like the same archetype, like, having a different vibe ends up often being, like, really powerful. Because as the market is expanding, it's not everybody who looks like, you know, like, they haven't had a carb in 20 years.

[Guy Raz]

Yeah. And no shade to Chip Wilson, the founder of Lululemon, who's no longer involved in the company. But he's a fit guy, but he certainly doesn't look like a Lululemon model. And I think if Chip was listening to this right now, you'd agree. So you don't necessarily have to look like. But I think. I do think, Jesse, you have answered Perry's question that you really want to move on. I mean, it sounds to me like you're ready for the next challenge. It sounds to me like you want to try something new. So I do think it's worth exploring either a sale or trying to find somebody willing to take a risk in exchange for significant ownership to see what they can do with this brand.

[Perry Chen]

And then with any of these cases, selling it in whole, maybe selling a controlling stake. And then you keep some stock, if a buyer is willing to do that, or bringing in somebody who kind of will lead operations and let you kind of like, slide down to what you want, and maybe you'll have a little space to work on what might be next for you. Like, imagine, like, those scenarios, like, what are you really going to need? What do you really want? And maybe that comes in a few forms. It could come in an acquisition form. It could come in the form of somebody who's coming on as more of a business partner.

[Guy Raz]

Yeah. And the beauty of that is that if you sold or gave away a significant amount of equity for a certain amount now, and that, you know, the next owner is able to really scale this brand. I mean, your tiny bit of equity that you have could be worth much more. All of these options are interesting options. I think they're worth exploring. Jesse Hodge. The brand is called Modtub thanks so much for calling in. Good luck.

[Jesse Hodge]

All right. Thanks guys.

[Perry Chen]

Thanks, Jesse.

[Guy Raz]

Thank you.

[Perry Chen]

You know, I'm kind of a one trick pony guy because in a way it's like there's two ways to handle a lot of these questions. Like one is just like from a business perspective, how could this business have like legs and be, you know, seize the best opportunity it might have in front of it and the other side, which is again, what does the entrepreneur want? Because at the end of the day, if there's a dissonance between what the entrepreneur wants and what they may realize is like a way of seizing the opportunity economically, that is going to really be a weight on the whole thing and can cause a lot of problems both for the business and then also for the person who's like, what have I been doing my life life.

[Guy Raz]

We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz and we're answering your business questions right here on the advice line on how I built this lab. My favorite vacations have been to towns and cities where I could also just enjoy living like a local, shopping in the markets, cooking in my own kitchen, or spending a a lazy afternoon looking out the window and reading a book. And all of this has been possible because I usually stay at Airbnbs. Maybe you're planning a trip for a long weekend or maybe you want to book a stay somewhere warm while you're away. You could Airbnb your home and make some extra money toward the trip. Whether you could use a little extra money to cover some bills or for something a little more fun, your home or spare room might be worth more than you think. Find out how [e-mail] host lately you may have been hearing about a serious but rare heart condition called attr, cardiac amyloidosis, or attrcm. Because symptoms can be similar to other heart conditions, it may take time to be diagnosed. But learning more about ATTRCM and a treatment called Atrube, also known as acharamitous, could be important for you or a loved one. Atrubi is a prescription medicine used to treat adults with ATM ATTRCM to reduce death and hospitalization due to heart issues. In a study, people taking Auby saw an impact on their health related quality of life and 50% fewer hospitalizations due to heart issues than people who didn't take Atruvy, giving you more chances to do what you love with who you love. Tell your doctor if you are pregnant plan to become pregnant or are breastfeeding and about the medications you take. The most common side effects were mild and included diarrhea and abdominal pain. If you have AttRCM, talk to your cardiologist about AttRuby or visit attruby.com that's ATT ruby.com to learn more at How I Built this we meet the people behind the businesses we admire and hear firsthand how they got where they are today. Because every small choice, connection and transaction can mean much more. Our sponsor, Mercury, understands just that, that it's more than a deposit into your bank account. It's landing your first fundraise. It's more than an invoice to a customer. It's your hard work becoming revenue. It's more than a wire, it's payroll for your crew. That's why Mercury offers banking that does more than hold money, so businesses of all stages and industries can do more. Businesses like Alma, a legal tech startup, use Mercury to simplify their financial work. Co founder Aizah Murat, a Kyrgyzstan born and Harvard educated attorney, founded Alma after receiving dubious immigration advice that put the brakes on her career. Now her team streamlines immigration for skilled professionals while empowering businesses to recruit and scale seamlessly with global talent. They use Mercury to create and send invoices right from their bank account or bogeybros, the E Commerce apparel brand for the golfer who doesn't take themselves too seriously. While Bogeybros are known for their sense of humor, co founder Ryan Rizzos doesn't joke about the company's finances. He chose Mercury to set up multiple checking accounts to implement the profit first method of accounting from day one and now uses Mercury's working capital as a cushion for big inventory purchases ahead of sales like Black Friday and Throne, who built a first of its kind device that monitors your gut health from your toilet. Co founder Scott Hickel raised two rounds of funding to bring Throne's vision to life. Now by investing their capital with Mercury Treasury, Scott can then invest more into engineering to get Throne just right. Visit mercury.com to see how Mercury brings together all the ways you use money into a single product. That feels extraordinary. To use Mercury Banking that does more. Mercury is a financial technology company, not a bank. Banking services provided through Choice Financial Group Column NA and Evolve bank and Trust Members FDIC Mercury treasury is offered by Mercury Advisory llc, an SEC registered investment advisor and wholly owned subsidiary of Mercury Technologies. Important information and [e-mail] Treasury welcome back to the advice line on how I built this Lab. I'm Guy Raz and my guest today is Perry Chen, co founder of Kickstarter. Perry, let's take another call.

[Perry Chen]

Great. Let's do it.

[Guy Raz]

Let's bring in our next caller. Hello, welcome to the advice line. You are on with Perry Chen, co founder of Kickstarter. Welcome. Tell us your name, where you're calling from, and just a little bit about your business.

[Kathryn Kirbis]

Hi, Guy and Perry. Thanks so much. My name is Kathryn Kirbis. I'm calling from Salem, Oregon and I'm the co founder along with my husband of Hitch. We're a chef crafted hot sauce brand. We are known for our super flavorful hot sauces with slightly lower heat. So we call it heat you can handle. And our sauces are sold in grocery stores around the northwest and in specialty stores around the country.

[Guy Raz]

Awesome. Thanks for calling in, Catherine, and welcome to the show. And so. All right, so Hitch is a. It's hot sauce, but it's not like gonna just burn your mouth and so that you can't taste anything, Right? That's the idea behind it.

[Kathryn Kirbis]

Exactly. Yeah. We were just tired of coming home with hot sauces that were way too hot for cooking and marinating and really enjoying. And so my husband's a chef and he was like, I'm gonna make us some hot sauces that are, you know, complex flavors, global, and that we can actually eat and enjoy.

[Guy Raz]

But how did you guys decide to turn this into a business?

[Kathryn Kirbis]

Oh, gosh. It's actually a funny story. We were living and working in Costa Rica at a retreat center and he was making a lot of sauces from scratch with peppers and vegetables out of the garden. And then we moved back to Oregon to kind of get real jobs again and we decided we'd love to return to Costa Rica. So why don't we come up with a business that we can start and then have passive income and within like two or three years, we'll be living back in Costa Rica. And he said, I'm going to make hot sauce. And then, then we'll get it into grocery stores and then we'll just have checks coming into our bank account and we can just be on the beach in Costa Rica. And we look back at that plan. Now we're almost 10 years in and like at first it was a two year plan and then it was a five year plan and now it's probably like a 20 year plan.

[Guy Raz]

Is it your primary source of income? Is this your primary job?

[Kathryn Kirbis]

No, no. We have tried to make it our primary job and we just couldn't make it like we're saving for retirement and stuff. Yeah. So we both have day jobs.

[Guy Raz]

What's your day job?

[Kathryn Kirbis]

I'm the marketing director for a vacation rentals company on the Oregon coast. And my husband Matt is a chef educator. So he teaches online for Escoffier Culinary School.

[Guy Raz]

Yep. And so give me a sense of what, what you guys did in sales.

[Kathryn Kirbis]

Like last year, for example, last year was like 157,000. So great for us. Our first year we did just under 3,000 in sales. So we feel like, you know, it's a lot of bottles of hot sauce.

[Guy Raz]

Soldiers and you're mainly in. I mean, you mainly sell through grocery or do you sell direct to consumer or do you sell like at farmer's markets?

[Kathryn Kirbis]

It's about a 50, 50 split between our wholesale channels and our direct to consumer. So we certainly started out just selling at farmers markets. And then within a couple years we got into our first wholesale retailers in the Portland, Oregon area. And now we are carried in all the regional chains around the Northwest. And we did break into some Kroger stores and did some trial runs and like Fred Meyer and King Soop. But it was really difficult as a tiny company with limited funds to support that kind of scale. So we really are to the point where we want to sustain the business without having to show up in person because we're really tired of setting up 10 foot canopies.

[Guy Raz]

All right, so tell us what your pain point is. What are you trying to solve for today? What's your question for us?

[Kathryn Kirbis]

Yeah. After nine years of building our business through farmers markets and selling into our regional grocery chains, we would love some advice on how to scale some successfully international retailers without getting significant outside investment. And ultimately we want to position our brand in the marketplace so we can sell to a larger company.

[Guy Raz]

Got it. Okay. Perry Chen, say hello to Catherine.

[Perry Chen]

Hi, Katherine.

[Kathryn Kirbis]

Hi, Perry.

[Perry Chen]

Wow. You know, for both of you having very busy schedules, full time jobs, it seems outside of this, how is that going? How much is that basically driving everything?

[Kathryn Kirbis]

Yeah, yeah. It's been so fun. We love this brand so much. And honestly, it's really fun to go to markets and events and hear people's reactions to our flavors. And so that part of it is very energizing. But I will say this year I kind of put my foot down because we've been working farmer's markets on the weekends for eight years and you know, we usually work like three to five markets a week. So we're splitting up hustling. And then when you have a day job, it's just like your life is taken over and then all summer long your friends are like, what are you guys doing this weekend? Oh, never mind. We know what you're doing all weekend. So we're just ready to step back and also not have our faces be such a, a huge part of the brand so that if we can sell it to another company, it's not so tied to mostly to Matt because he's the chef behind the brand.

[Perry Chen]

One thing I wanted to ask then is your question was like, how do you maybe make it attractive for an outside acquisition without taking an outside investment? And so that seems like a constraint that seems important to you.

[Kathryn Kirbis]

Yeah. So we have gotten a small angel fund investment. Like in 2020, we got $10,000 from a local ang and we used to do a lot of cooking classes online and in person. And we also like culinary retreats. So we were taking groups to Costa Rica and we did a trip to Italy as well. So we were a little hesitant to bring on investors because we didn't want them saying, like, hey, don't do all that fun stuff. Just focus on the bottom line with these hot sauce sales. But now that we're wrapping those parts up, I mean, honestly, we are open to outside investment now because we just want the company to, to be successful and to scale. And like I said, we did a trial run with Kahe and two national stores. And what we discovered was without brokerage teams to kind of supervise that rollout among all the stores and without demo teams to show up immediately in all those stores and move those bottles quickly, it's just really hard to support it with two people and a really limited marketing budget. So I feel like it's a turnkey brand. If we could get investment.

[Guy Raz]

Kathryn, the challenge, I'm just going to be straight up with you because I talked to multimillion dollar and even billion dollar companies and brands, it's a very hard time to raise money in consumer full stop. And you're still too small for any professional investors to really get involved. I think if you're looking for some funding, it's really worthwhile talking to people who know the brand in your area and region, who've used it, who love it. I mean, those are the people that are going to be the most likely to, you know, to write a check for $1,000 or $5,000 or maybe more. One of the questions I have for you is have you? I know. So it sounds to me like you've got it in regional grocery and how much demoing are you able to do in the stores?

[Kathryn Kirbis]

Oh, gosh, we did a lot before COVID when the business was newer and we had more energy. So we're currently not doing many demos. We do pay a professional occasionally to do demos, but now we're just not doing many. It's just take so much time and energy.

[Guy Raz]

It's worth thinking about taking a risk and cutting into some of the revenue here, the sales or profits, and using third party samplers to demo the product. Because for people to discover the brand, there's a lot of brands and there's a lot of hot sauce brands. There's a lot you have to demo it. People have to be made aware of it by trying it. And so that is where I think your biggest opportunity is. If you really want to, to position this for an ultimate acquisition. You might have to take a deep breath and really, you and your husband sit down and say, okay, let's think strategically about this. Because to be an acquisition target, you're going to need to hit 20 million or more in sales, right? And so to get there, you really have to be in grocery. And to be in grocery, you've got to demo the product and demo. And demo, and demo and demo.

[Perry Chen]

Yeah. You know where you're coming from is that you're like, look, the way we're doing it now isn't sustainable. And so, like, how do we find a way to where we're not putting in this much or even more work on this in perpetuity. And so that's really good. You can use that. And in a way, I think maybe as to what Guy's saying, you know, maybe you just have to come up with a number. You're like, look, let's give it another whatever year, two years, 18 months. And you're like, at the end of that, if we can't get it acquired, like, you know, we've had a good run. So you give yourself that emotional kind of like safety valve of like, that you're not gonna do it forever and never see friends again. But within that, you can work backwards to say, okay, if that's what we're trying to do, then what is it gonna take to get this in the position where it has the opportunity to get acquired? And so as Guy's saying, that releases you to maybe do things that like, over the years you've been hesitant to do because you're like, look, look, we don't want to raise money or we want to preserve capital because we don't know how long we're going to. And maybe it's like a Hail Mary. Go all in, figure out what does it really take, and take your shot. Even if it's just. Maybe it's a 1 in 5 chance it could work, but you know what you're working towards now you have a goal in mind that you've already decided on, and you just have to backward engineer from that.

[Kathryn Kirbis]

I do love that because sometimes it just feels like you don't know when it's going to end. Is it going to go on forever? And you're like, I can't keep going at this pace forever. But if you put a goal out there, I think you could sprint for the finish or something. Yeah, I love that.

[Perry Chen]

I think you have a real sense of what you're up against and. And it is a hard business, but, you know, some business is just hard.

[Kathryn Kirbis]

Yeah, yeah.

[Perry Chen]

So just take the shot. Like, don't be afraid. Like, you know, when it's like down to this end, like, just pull out all the stops to the things that you're like, let's just try it. So you know that you. You feel like you've given it the shot that. That you're going to feel proud of.

[Guy Raz]

Yep.

[Kathryn Kirbis]

I love that. Can I say one more thing for Perry? I just. We heard in your original interview with Guy that you started Kickstarter because you were trying to raise money for a show for Kruder and Dorfmeister. Is that right?

[Perry Chen]

Mm, that's right.

[Kathryn Kirbis]

Well, all right. They're coming to Portland, Oregon in September, so we wanted to invite you. If you're in the area, please feel free to. You know, we'll get you a ticket. You can stay.

[Perry Chen]

Amazing. I had no idea that they were still going, Perry.

[Guy Raz]

Still going, going strong. All those 90s kids are still listening to Kruderdorf Meister today.

[Perry Chen]

Amazing.

[Guy Raz]

Kathryn Kirbis. The brand is called Heat. You can handle. Good luck. Thanks for calling in.

[Kathryn Kirbis]

Thank you. Thank you.

[Perry Chen]

Bye.

[Kathryn Kirbis]

Bye. Bye.

[Guy Raz]

Stay with us because after the break, we'll talk to another founder working to take their business to the next level. I'm Guy Raz, and you're listening to the advice line right here on how I built this lab. How I built this is supported by Ring. With Ring, you can be there from anywhere with doorbells and cameras that help you see more to exciting features that help, you know, more to the app that lets you connect more, see more at the front door up high and down low with battery. Doorbell's head to toe video capture it all all day and all night and get smarter alerts that know the difference between a person and a package, right in the Ring app. I use Ring to check in on my dog when I'm out of the house or running errands just to make sure everything's okay. It's awesome because I can see her wherever she's in the house. With Ring, you can check in and be there from anywhere. Some features require a subscription and are available only on select Ring devices. Exclusions apply. Learn [e-mail] this episode of How I Built this is brought to you by Square. Recently, I collaborated with Square on a new series called the Way Up. In the Way Up, I sit down with six local businesses, the ones that make a neighborhood. And in each interview, we chart an entrepreneur's journey, the hurdles and the highs, and how Square played a part in helping the business grow. To hear all of these inspiring stories, visit square.com go built that's s q u a r e.com g o bilt and check out the story of Charles Gabriel, the award winning chef behind the legendary Charles Pan Fried Chicken in Harlem. And how he went from a childhood in rural North Carolina to culinary stardom in New York City. And along the way, turning his talent into a booming business. Hear the journeys of six rising American businesses. Visit square.comgobilt to learn more. That's s q u a r e.com go bilt learn how square can help your business on the way up. Welcome back to the advice line on how I built this lab. I'm Guy Raz and today I'm taking your calls with Perry Chen of Kickstarter. Perry, you ready for our next caller?

[Perry Chen]

Yeah, let's go.

[Guy Raz]

All right, let's bring in our final caller. Welcome to the advice line. You are on with Perry Chen. Please tell us your name, where you're calling from, and a little bit about your business.

[Joe Fontana]

Hey, guys, my name is Joe Fontana. I am the founder and owner of Fry the Coop. We are a chicken sandwich shop here in Chicago. We fry everything in beef tallow and right now we got 10 locations and a little shy of 200 employees.

[Guy Raz]

Wow. Joe, welcome to the show Fry the Coop. So you're growing like crazy. Before I ask you about the story, just what are your sales?

[Joe Fontana]

So last year we finished at 12.9 million and we're already on track to do 14.5 million coming up this year.

[Guy Raz]

How did you get into this business? Are you a chef?

[Joe Fontana]

I'm not a chef. Although I can come to your house and make you a great meal. I love food. I'm just a fat Italian guy who loves to eat. But I was. My wife and I moved to Temecula, California. We grew up in Chicago and I was working some corporate job that I just really disliked. So I did some soul searching, figured out that I love food and I wanted to open up a business in food. At the time, there's a little place in San Diego called the Crack Shack. And I was just obsessed with their chicken sandwiches. At the time, I was living down the street from an In n Out burger. So I kind of thought like, gosh, like a handcrafted double fried chicken sandwich, like just kind of styled with a really small menu, like in and out. I'm like, this will do well anywhere.

[Guy Raz]

But you figured you'd go back to where you're from, I guess.

[Joe Fontana]

Well, it wasn't actually that. It was. I was trying to raise money in Temecula because we had no plans of coming back to Chicago. However, I couldn't raise any money. I didn't have any money. So, I mean, I would see a Bentley on the side of the road and I would put my business plan, like in the windshield wiper, like with a note, call me, please.

[Perry Chen]

And did that work?

[Joe Fontana]

No. No, it didn't. It did not work. But my friend in Chicago, who's now my partner, he was a real estate guy and they had a building. There was kind of an over the counter service place that opened and closed within eight months and they had spent the money to all build it out. So he calls me up one day and he just said, hey, I have a small window for you to move back to Chicago and you can open up your fried chicken concept. And so my wife and I just had our first baby and just bought our first house. We had to sell that. I had to talk my wife into moving back across country and that's how we ended up back in Chicago.

[Guy Raz]

Wow, that's amazing. And this just proves that there is a lot of space in the chicken business. I mean, it's super popular. Obviously you've had in the last few years raising Cane's and Dave's Hot Fried Chicken and of course Chick Fil a is, you know, huge. But there is a lot of smaller regional chicken places. What are your sort of challenges right now? I mean, you're growing and that's amazing. You have 10 locations. I'm assuming you want to open more in the future.

[Joe Fontana]

Yeah. And really, like, separating ourselves as the best of the best frying and beef tallow has been a huge difference. Differentiator for us, we just put a lot of love into the quality of the product. We go around and train our team on hospitality. Like, touching tables is something that is kind of lost in the fast, casual space. Fast food, like, no, no. Managers are going out and touching tables.

[Guy Raz]

Nice. Very smart. And I think. And frying a beef tallow probably raises your cost too, right? It's more expensive than frying it in a seed oil, I guess.

[Joe Fontana]

Definitely. But the taste, it is, like, a million times better. And I think that's what makes us ignore the extra expense.

[Guy Raz]

That's awesome. Okay, so before we get dive into this, tell us what your question is or your challenge.

[Joe Fontana]

All right, so we have been funding all of our growth with our own cash flow, but I have an audacious goal to open up 75 stores over the next 10 years all around the Chicagoland area. We have a huge market, so I think it's something we can accomplish. And what I'm figuring out now is that, you know, we can afford to open maybe one to two stores on our own with our current cash flow, but we will not get to our 75 locations in 10 years.

[Guy Raz]

It'll take you 30 years.

[Joe Fontana]

It'll take us 30 years. Yeah. So we need to raise money about $30 million. Our company's not even worth 30 million. So how do we raise money? Or what? Vehicle and bank debt is not working to basically grow the company without selling off all of our equity or piecing it together and ending up with, like, 100 different investors.

[Guy Raz]

All right, big challenge before we get to that question. Perry Chan questions for Joe.

[Perry Chen]

Yeah, Joe, first of all, congratulations on all your success so far, But I would ask, you know, like, very specific plan. Like, I get it. Big hair, audacious goal. 75 locations. Why? How did you come to that?

[Joe Fontana]

And that is a very good question. So I started working backwards from what is a very attractive asset to purchase. And I kind of learned that if you want to take a company public, you need about 25 million in EBITDA. And so I thought, okay, so how do we get to 25 million in EBITDA? Well, if we're around 2 million per location, we're doing 15% profit. You know, we would need 75 locations to get to. And then also, there's a great brand that came out of Chicago called Potbelly. They're a publicly traded company. 400 locations. I just thought, I'll go. How many locations does Potbelly have in Chicago? And you don't see them everywhere. It's not like a Starbucks or Dunkin Donuts where you're bouncing into them. And I look around, and there's 77 Potbelly locations in the Chicagoland area.

[Guy Raz]

That's a magic number. And do you. A quick question for you right now. The 10 locations you have, do you own any of the property or do you lease the.

[Joe Fontana]

We do. We own four of the buildings that we're in. So it just. I love real estate, and I love commercial real estate. I would love to buy all of them. However, it kind of proved to be a little challenging, More time consuming.

[Guy Raz]

Yeah. Why have bank loans been a challenge? I mean, I'm thinking right away SBA loans, you've got. You've got assets to back them up. So why is that not an option?

[Joe Fontana]

Well, so the. We did use SBA loans to buy the real estate, and they have a big mortgage on each property, so it's not like we own the properties outright. And technically, when you get into the restaurant business, like as a restaurant brand group, we don't have any assets. We have a little bit, but it's nothing that, like, we don't have a lot of collateral to back up the lines of credit. So we did try that. We partnered with a local bank. They gave us a first line of credit for 300,000 that we opened a location. But it was really bizarre. After we got halfway through it, they called in the loan out of nowhere. Like, they were like, hey, you know, you guys only owe 180 grand and you still have cash in the bank. They were like, why don't you just pay it off? The bank acts like we're failing, you know, and as you try to grow, you become less profitable. And so then they really.

[Guy Raz]

Yes.

[Joe Fontana]

You know, they really dag you on that.

[Guy Raz]

Yeah.

[Perry Chen]

Is there something in the middle here? Like, you know, you're painting a picture maybe where you're saying, like, okay, if you feel to open up 75 locations in the period of time that you would hope to do it, I'm guessing that what you've estimated is that the capital you might need to do that, given your current revenue and assets and all that stuff, would put you in a position where, you know, your equity get watered down well beyond where you'd want. Is that an assumption or is that something that, like, you've stress tested? And so that's just how it is.

[Joe Fontana]

I think you're kind of hitting it where it is a little more of a paranoia. And let me paint you a picture that I think would be a perfect scenario is Possibly we brought on an investor or maybe a family Office, sell maybe 20% of the company to them, but then get almost a line of credit or a loan from them. But the catch would be that we would try to avoid principal and interest payments. So, like, say I need 30 million to grow these 75 stores. Like, they would say, all right, here's the 30 million over the 10 years. And we're not going to charge you principal and interest, but then we can accumulate it maybe on an Excel sheet, so to speak. And then when we exit the company in 10 years or set it up for an exit or to exit them, that's when they'll get their principal and interest on the loan of it.

[Guy Raz]

And there are plenty of family offices in the Chicago area. It's an interesting idea. I mean, it's essentially raising minority equity. Right. From aligned investors. I wonder, have you heard our episode on Dave's Hot Chicken or raising Cane's?

[Joe Fontana]

I have. I've listened to both of them.

[Guy Raz]

So you know how they went about it, both of them, in different ways. Dave's went the franchising model. And of course, here's the big F question. What's your view on that? Because that's a way to supercharge growth and it doesn't require a whole lot of upfront capital.

[Joe Fontana]

A year ago, I would have told you absolutely not, no franchising. Like, we want to own it, control it. But now I am starting to change my tone a little bit. I'm starting to think, well, hey, maybe, you know, through franchising, we could raise the capital to kind of accomplish our goals and then maybe franchise, like outside of Chicagoland area. I don't take it lightly, though. I've kind of learned that, you know, if you franchise, you have to be. It's almost like opening up a whole separate corporation and you really have to take it seriously. Yeah, I don't love being on planes all the time. I have three little kids at home. So, you know, I don't want to have to be living in hotels either, flying all around the country.

[Guy Raz]

No, that makes sense. I mean, look, franchising is. It's risky, right? There's a reason why every time you go to an in n Out, it's the same. It is consistent because they don't franchise. It's owned by the company. And it's the same with raising canes. And there are franchise models where you see inconsistency from location to location. So it's tricky, but it can also be. Be a great option.

[Perry Chen]

Exactly. Guy you know, I think it always comes back to that, Joe, which is, what do I want?

[Guy Raz]

Yeah.

[Perry Chen]

And it seems really important to you that the customers experience the business in this way. That is your vision seems like, obviously, that's why there's tension with franchising. And what it comes down to is, like, of all these things that you want to achieve and how you want to feel about them, which are more important than the other, do you.

[Joe Fontana]

Yeah, it's very true. I care deeply. I want everyone to be happy.

[Guy Raz]

Yep. I think you have got essentially three big options. It's either some kind of bank loan. Right. Which you've tried and maybe you can try. And there are other banks that actually have restaurant lending divisions. The other one is you could do franchising. Actually, there are four options. The other one is you find some aligned investors to get some minority equity and give you a loan. And then I think the fourth option, actually, there's five. I'm gonna give you two more. The fourth option is part two of option four. This is complex, but could you do, like, a sale of one of the properties that you own or two of them and lease back. Lease them back. So you get cash in hand and then use that cash to finance more locations? That's risky. And then the last one, which is, I mean, things like operational efficiency. Right. Can you centralize the food prep? Can you also negotiate better prices on supplies? I mean, anyway, there are five different things that you can do, and you're just going to have to choose one or more of those or a combination of those.

[Perry Chen]

What I would say is you got this big hair, audacious goal, and you've got clear reasons why you think that this is something that is worth going after. And I wonder if you kind of, like, you figure out more ways that that might be attainable, whether it's loans, whether it's investors, and you give yourself time, you know, whatever, nine months to like, really kind of like, build towards that, work towards that. And you also have, like a plan B. You're like, okay, if that doesn't happen, then I think that where I can get to. That's a step to that. And a goal I can now focus on is something in the middle. The reason I say that is with raising money, one of the big things is it's like, how long can you keep your mind in Fundraising brain versus operating brain. Brain. And fundraising brain is really, you know, it's really stressful and your eye isn't on the ball. And also, you know, you don't want to hear no all the time. You know, it's not how anybody wants to live. So give yourself. Give yourself some box, some constraint, some time box around, plan, you know, plan big. And then, okay, if that doesn't work out in this amount of time, I'm going to shift my mind.

[Joe Fontana]

I love that. Is it there because we did 1.5 million in EBITDA last year. Do you think we should wait till we're at 2 million or 3 million EBITDA, or is there like a number you think that I should then kind of switch over to that?

[Perry Chen]

You know, I'd almost defer to guy. Like, it's so industry specific. I think in a way, like with the Internet, it's not even real. Sometimes they're like, don't make any money. It's better if you have no revenue at all because you could always sell the dream of.

[Joe Fontana]

Yeah, the restaurant industry is not this different game.

[Guy Raz]

No, no. And. And you know, you've got to hit profit and growth to be a target for acquisition or to go public. I mean, that's really the name of the game now. It wasn't five years ago. Five years ago was growth, growth, growth. And so you had a lot of brands that did grow and didn't have to worry about staying profitable. Now it's different. So, you know, a slower approach, I don't think you either. It's either or. It's either a slow or a fast approach. I think there's a middle ground, which. Which is you might only be able to open up one or two locations for the next year or two while you are searching for the right partner who can help you really expand. Because there's a scenario where you open one or two in the next year or two, and then year three from now, you're opening 15 to 20 locations a year. Right. I mean, there's a realistic scenario where that can happen if you find the right partner or you find the right financing model.

[Joe Fontana]

Yeah, I would love that. And I'm okay with that if it takes a couple years and then we can really run. That sounds great.

[Guy Raz]

Yeah. Joe, I can't wait to try a sandwich at Fry the Coop. Thanks for calling in. Good luck.

[Joe Fontana]

Thank you, guys.

[Perry Chen]

Good luck.

[Joe Fontana]

Honored.

[Guy Raz]

Perry, before we let you go, a quick question that I like to ask all of our returning guests, which is if you could go back to the Perry Chen from when you were just starting this, you know, this idea when you were starting to really find people to support you to build Kickstarter, and you could go back to Them. Now, knowing what you know, what advice do you think would have been helpful?

[Perry Chen]

Oh, man, I don't know. I would say this. I'm dodging the question, but it's truth in it. The delusion that I had, and I think the delusion that we all have as entrepreneurs, if I cut through that delusion with some common sense from the future, to be honest, who knows if I would have gone through with that.

[Guy Raz]

Fair point. Fair enough. I don't think enough founders and entrepreneurs are honest about that. But I do think it's worth. It's a question worth asking yourself, which is like, in 10 years, don't want to look back and say, this was worth it. I think for the most part, the answer is yes for most people. I think it's still the answer for you because you built something of incredible value, cultural value.

[Perry Chen]

It was absolutely worth it for me. And I think a lot of what I picked up on this show, too, and kind of just in general engaging with entrepreneurs, is that there's a lot of interesting conversations to have around and, you know, like, should I keep going? I think so many entrepreneurs just drive themselves to not fail, not fail their employees, not fail their investors, not fail, you know, success. And will add years and years and years onto businesses that they're running 70, 80 hours a week that they really wish they could have back in the future. And the off ramp seems impossible to them. And I've talked to many entrepreneurs like that. Most entrepreneurs statistically end up in that category. And it's not something that really gets talked about a lot. And I think because of that, often when people in that situation, it's. It's really soul crushing.

[Guy Raz]

Yeah, but not for you.

[Perry Chen]

Not for you. Are people ready for the Soul Crushing Business podcast?

[Guy Raz]

I'm not sure anyone will listen to it.

[Perry Chen]

One star.

[Guy Raz]

That's Kickstarter co founder Perry Chen. Perry, thanks so much for coming back on the show.

[Perry Chen]

My pleasure. Pleasure.

[Guy Raz]

And by the way, if you haven't heard Perry's original How I Built this episode, you can find a link to it in the podcast description. Go back, check it out. It's a great episode. And here's one of my very favorite moments from that interview. Weren't you getting stressed out that somebody. Somebody else is going to beat you to the punch and do the same thing?

[Perry Chen]

I think that certainly comes to mind, but I think there's also, like, we couldn't have tried to go any faster. There was just not that much was in our control. We didn't have a lot of money. We didn't have a lot of influence, we didn't have a lot of connections, so we were moving as fast as we could and that's kind of as that's as much as you can do.

[Guy Raz]

Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for [e-mail] each week. It's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues or questions you'd like help with, and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo@hibtid wondery.com or call us us at 1-800-433-1298 and leave a message there and we'll put all this in the podcast description as well. This episode was produced by Alex Chung with music composed by Ramtin Arablouei. It was edited by Andrea Bruce. Our audio engineer was Neil Rauch. Our production staff also includes Chris masini, Carla Estevez, J.C. howard, Casey Herman, Sam Paulson, Kerry Thompson, Thompson, Katherine Cipher, John Isabella, Neva Grant, and Elaine Coates. 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 trip planner by Expedia. You were made to have strong opinions about sand. We were made to help you and your friends find a place on the beach with a pool and a marina and a waterfall and a soaking tub. Expedia Made to travel.