The Ins & Outs of Selling DTC Mushrooms

The Ins & Outs of Selling DTC Mushrooms Speaker 1: What is up guys? Welcome to another episode of Chew on This. My name is Ankit Patel. I will be your host today. Sitting down with us today is Tero. He is the founder and CEO of Four Sigmatic, the brand that helped bring mushroom coffee and functional wellness into everyday routines. Tero, thank you for joining us. Speaker 2: Thanks for having me on. I'm excited. Speaker 1: I'm excited too, especially being in the functional supplement space myself with some of our in-house brands. Mushrooms has always been something that I've been intrigued with. I've definitely had your guys's coffee. It's amazing. Let me know a little bit about yourself. How did you start this idea? What is your background? We'd love to know. Speaker 2: Yeah, I am from Finland. I grew up on a farm that our family has had for 400 years at least. So it's 13 generation now. And I grew up learning about natural products from early age. So my mom taught physiology and anatomy. So I learned about the human body, nutrition. I went to her classes and then my dad was an agronomist. I learned about land in the forest and our family has a long history with mushrooms, but also berries and herbalism. Our neighbor is maybe the most famous herbalist in the Nordic countries and being in the Boy Scouts with her kids and all that stuff, I learned a lot. I went to an environmental school that my great-granddad started. I learned a lot about that. I didn't want to be part of it. I thought it was like a hippie thing. I wanted to be a pro soccer player. I was never good enough, but my friends were. But through them, I started coaching them on nutrition at a very early age, just because I knew a lot. I went to study chemistry and nutrition myself, but I was interested in optimal human performance. The theme of mushrooms kept coming back over and over again, so I joked that I didn't choose mushrooms, they chose me. I just knew about their healing powers and not just mushrooms, but also adaptogens and other natural products, quote unquote superfoods, which is an overused term. This is like nobody was doing it. I was buying them from obscure websites in Germany and I kind of wanted to scratch my own itch at first and create products that I could buy and give to my friends. But that's kind of my background in brief. Speaker 3: Before we get started, a quick word about today's sponsor, Instant. As a brand, you know you're spending real money to drive traffic to your site. Problem is, 90% of the traffic is anonymous. You don't know who they are, and once they leave, it's pretty much impossible to get them back. That's where Instant comes in. It identifies up to 10 times more of those lost shoppers, so you can send more abandonment emails, build stronger retargeting audiences, and actually win back that lost revenue. Liquid IV, 3rd Love, Truly Beauty, these massive brands use Instant to get an average ROI of 21.7X and Instant guarantees you a 4X ROI or your money back. That's right, 4X ROI. With the start of Q4, there's no time to waste. Triple your email sales and lock in smarter retention today. Just go to instant.one slash chew to claim 50% off your first 60 days before this offer expires. That's instant.one slash chew. Now, let's get back to the episode. Speaker 1: So what problems were you trying to solve and how did you know the market wanted this? Speaker 2: Yeah, it's a process. I often see founders that come talk to me and they want to build something. They want to go from A to R. Or S right out of the ways, but you gotta do the ABCs, right? So early on there was no mushroom market, actually for many years after launching there was no real mushroom market in the US. So you gotta solve kind of like step by step. So obviously some people start in a big category that's crowded and they're trying to innovate within a niche audience or other approaches. I created or helped create a new category, which is a little bit different. But initially it was just the availability of high quality ingredients. It was not commonly available. If you bought them, you didn't know if they were good. Actually, still today, 74% of these reishi supplements in the U.S. don't contain any reishi mushrooms. So it's still today a common thing, particularly in the U.S., that you buy a product and it doesn't contain it. This is also true for olive oils, creatines. You know, like right now, creatine gummies are everywhere. Most of those products don't contain any creatine or very little. So it's pretty common. So creating a high quality product was first, but very quickly after being on the market, the super fans loved it. But then the flavor of our products that have a flavor, their beverages, kind of, you know, coffees and teas was not good. And people are like, oh, I feel the benefits, but they taste horrific. So then it was like a flavor. So those are the two main ones is make products that work and then spend years making it taste good. Speaker 1: Yeah Mushrooms, I think you guys started in 2012 or 2013 It definitely wasn't mainstream back then Probably trying to come in like you said probably trying to convince the consumer to have this Was the toughest part the consumer education? And then obviously the flavoring part of it. So what gave you? What gave you kind of the conviction to pursue it anyway? because it seemed like an uphill battle from there and. Speaker 2: I was young and stupid probably. Same thing as I meet founders and they're like how to do this and I think age and life situation matters a lot or maybe let's put the age away because like it's more the situational awareness like where are you in life and how much crap are you willing to eat. I'm out of the gates. I didn't know any. I was naive, self-taught in business. I later got myself an MBA. I don't know if I learned anything there either. I didn't know anything and I was not even living in the US. At the time of launch, I was My first small business had failed. I'd moved to Switzerland. I was working for a big tech company so I could do trail running on the weekends and earn a lot of money with very little taxes during the weekdays to save up for, you know, I was broke so I needed to save money. So I was working for a couple years there. It was basically like I didn't know any better. That being said, I knew mushrooms worked. I never had a lack of conviction of a thing like that way. I knew enough about nutrition, human body. I had given it to hundreds of pro athletes. I'd seen these transformation stories. Then because I didn't have any money to start the business, it was basically like bootstrapped. I did a lot of demos and demos are like sampling like in-person stuff because it's like the only thing you got because you can't afford ads or anything else. Marketing, so I would just had a lot of reps. And domain knowledge. And I didn't know packaging and delivery and other things, but I knew they worked. So I have this blind, almost religious belief, which is why I think a lot of best businesses are start by people who like lived it, whatever it is. The widget or gadget, you know, it's like if you're a mountain biker and you constantly have this issue with mountain biking shoes or gels and then you build a business around it, like you intimately know what the problem is and how to solve it. And that was somewhat similar with my case. Speaker 1: How do you maintain credibility? In wellness marketing when the space is so crowded and there's probably a lot of misinformation out there around mushrooms in general. Speaker 2: Yeah, it's a challenge, but it's like a good challenge, I would say, a net positive. It's not all good. Let's put it this way. So yeah, when we started, there was some mushroom brands that were selling capsules for immunity that have been around for maybe even decades. We were the first mushroom coffee, so we were first ones to create these Kind of beverages in mushroom format, so both teas and coffees. But now today, mushroom coffee is over $2 billion category globally. So it's grown a lot in 10 years. So we launched the coffee in 2015, 2014, 2015. And yeah, it's grown a lot. A lot of the growth is coming from multi-level marketing and like TikTok shop and like online ads. So particularly those players have very strong health claims and they get people excited and get they're really good at conversion, which is good for awareness and trial. But a lot of people come out disappointed. We've just been launching at Costco. And at Costco, when you launch, you do these like sampling events, you got demos and roadshows, and you get to talk to really like thousands of people. And Costco is a funny one, because it's like all walks of life. Like you get really rich people, really not so rich people, old, young, it's like a weird segment of everyone, right? And it's crazy how many people know mushroom coffee now. It's mind blowing to me. And they consistently have found it online, tried it and tasted horrible. It was the common experience. And then we give them our product to try and they're like sold. But Honestly, how to have credibility is actually do good work. That's one. I mean, we've done our fair share of mistakes and trying to scale is hard. It gets messy. You got to crack a few eggs to make an omelet, but do good products that people like to rebuy. And then I think the influencer world used to be a very powerful way to validate is But in today's world, everyone can pretty much get bought. So I think honestly, word of mouth and referral is like the ultimate goal is that your regular customers tell their neighbors that it's a good thing. Because it's like there's no one paid. We were one of the first podcast advertisers with the Joe Rogan and Tim Ferriss's but not necessarily those guys but a lot of big names can be just bought straight up money and that's why I respect the very few that Are not willing to advertise just about anything. Speaker 1: So, um, that's very cool. Um, now when you guys, I want to take a step back here. When you guys started selling the mushroom coffee, were you doing direct to consumer market or did you go straight to retail? Uh, what was the, what was the game plan there as far as getting those early sales going? Speaker 2: Yeah, this was our biggest mistake and probably right now our biggest strength is we were omnichannel from day one. Omnichannel meaning we were sold in retail, DTC and Amazon. So originally when I launched it in Europe, Europe you kind of because of language stuff, you had to sell to these food distributors that then would sell to retail. So when I got to the US, I signed up with Whole Foods. It's a funny story. I flew to LA, never been to LA really. I drove to like the suburbs where the regional office was. The buyer said he's not gonna give me time, but I had a friend push me in. And then at the beginning of the meeting says like, nobody's gonna buy these mushroom drinks, you know that, right? And I'm like, oh, they will, because they're great. And I convinced her and then she said at the end is like, honestly, You're so good at explaining this that people only buy if you will sell these so I will bring it in as a test. If you move to LA and sample these at all stores yourself, so I moved to LA in the US. So we were in retail and very quickly we realized that retail buyers don't know what mushrooms are. They don't even track mushroom sales at that point. And I realized I had to build this on DTC because it was easier to convince consumers to buy it than the industry. But why I say it was our biggest mistake was that early on, I think you should be one customer avatar, one product, one channel. And we had three channels and eight products and three avatars. We had biohackers that were paleo and we have vegans that didn't eat meat and all these kind of different people. And it makes it unnecessarily hard to grow a business. But then now most of our competitors are online only and they're finicky with their paid ads and a lot of them struggle making money and we have distribution at like Whole Foods, Sprouts, Target, now even some Costco stores. So it now serves the purpose, but I would say that until you hit, depending on the category, let's say 10 million, just try to be one product or you can have different flavors and sizes of packaging and stuff, but like you sell one thing to one type of person at one channel because it's so much more work to handle the complexity early on. Speaker 1: It's really interesting because you see so many brand founders doing this wrong where you're saying stick to one product, one channel, one avatar and then you have brands who kind of latch on to every trend that comes out. So, you know, take a supplement company. Hey, creatine is trending. Oh, we don't do creatine, but we do now. You know, protein is trending. We don't do protein, but we do now. And you can see so many people kind of spreading themselves thin. You know, we've been kind of the guinea pig of this as well as where, you know, we've done that where we've launched a ton of products and then you realize the consumer is now confused as far as who you are. You know, you might make a little bit of short-term money but is it really worth kind of giving up the perception of your brand for a little bit of short-term win? And I think we've made that mistake before and we've pulled back and done a little bit of skew rationalization as well. So really well said there as far as just kind of sticking to your core mission. I'd love to talk a little bit about retention because I think retention is one thing. Everyone talks about acquisition, but retention is what's going to keep you in business. Your customers aren't just buying coffee, they're buying into a daily ritual that improves their wellness. That loyalty shows up in retention and repeat purchases. What do you think drives repeat behavior for a wellness product like yours? Speaker 2: Yeah, this is something we've been good at, but it's something that like any strength of yours can be overused. So in our case, over 90% of our customers have re-bought, right? So it's kind of crazy. But we were never good. I guess still today, we're not good at acquiring people at a high clip. So sometimes like Again, you got to break some eggs to make an omelette, right? So we were like so obsessed with retention and making everyone happy, but you can't make everyone happy. And I can talk about the tactics how to make them happy, but I just want to acknowledge that everything has a, you know, no matter how thin you slice it, there's two sides. In our case, what I've learned the most is like, it's the offer is like where it really starts. And it's so hard to fix certain stuff downstream. It's like the first positioning and framing is either like conducive or not conducive to that. Because we've had some offers that have kind of gone viral, but they have horrible retention. And it's just so hard to fix later. So I anecdotally, I would say it's like being a chef. If you start with good ingredients, good product, good positioning, it's so much easier to make a good meal. But if you start with a bad positioning, it's so much harder to fix that later. So I guess like the high level thing is acquisition and retention tend to be siloed and the people in them kind of like Not always like each other or think the same way. It's the support people are very different than the growth people. But it's so important that those two are hand in hand because they just amplify. For example, growth people, if they realize that, hey, if I have a really high LTV, I can afford to spend a CAC to, let's say, $100. But if I have crap cohorts, then very quickly my CAC is suppressed to, let's say, $50, just to use round numbers. But yeah, I would say what's really important is a human customer service to figure out where the gaps are in either the product quality. Flavor, pricing, packaging, shipping, and then try to be honest about those knowing that some of them you can fix, some of them you can't fix. Being upfront and honest about your flaws and your human tendencies can actually help a lot. The other one is pretty generous on the way out. I've heard this few people mention Planet Fitness. I once joined up for Planet Fitness because it was like the only gym near where I was and it was like 10 bucks a month or something. I was like, how do these people make money? And then you realize two things. First of all, they sign everyone and they don't come to the gym. But the other one is it's so easy to unsubscribe slash cancel the membership versus from when I was a member at Equinox. It was like a whole process. And even Lifetime, it was like hard to get a read, but like Equinox was the worst. And at Planet Fitness, they were like, cool, come back. Speaker 1: Yeah. Speaker 2: And I was like, oh, wow, that was easy. They didn't care. But then I'm probably more likely to say is like, hey, Planet Fitness, sign up there because it's easy to get rid of it too, right? So if somebody's unhappy, like, be generous on cancellations and things like that. And knowing that some people will still be unhappy, but like, you know, work the math on your favor, I think is huge. Speaker 1: Absolutely. So would you say most of your business is subscription? Speaker 2: Yeah, we were a little late on the DTC subscription. We were for a long time. We thought it was scammy. So we would only do one time and would say we will not do subscription because I felt it was like a lot of people came disappointed. But consumer behavior has changed now where, yeah, now where Heck, DTC is 80% and Amazon is 50% recurring revenue, give or take a month, depending if there's a promo or whatever, but it's mostly recurring revenue. But in DTC, we're a little behind just because, and this is kind of a flaw, I was too nice for American business culture. I was like, you know, at initially people did not know what subscription was and they would subscribe byproducts not knowing subscription happened. And yeah, in a way, that's kind of the only way to do business now and direct a consumer. Many categories is to have some sort of an autofill thing, but I still try to be more honest than some of the other companies. Speaker 1: No, absolutely. I think to your point, I think, you know, if you look back 10 years ago, I think subscription was very scammy at that point because, you know, it was auto-checked. People didn't realize and then they're, you know, on this subscription for months and months and months and not even realizing that they're on this subscription and whether they're taking the product or not is obsolete. I almost feel like things have changed so much where the consumer wants to be on a subscription with the rise of health and wellness because you almost want somebody else to remind you to take your supplements or whatever you're taking rather than you having to remember that yourself. So, no, it's a good point. Speaker 3: Quick break to talk more about today's sponsor, Instant. Are your abandonment flows making at least 20% of your site's revenue? If not, you're in trouble. Most retention tools have bad short-term memory and even worse opt-in rates. If you don't catch an email opt-in within hours, that data's gone forever. So why pay for someone to be on your list if your abandoned emails never fire when they come back? Instant fixes that. It captures those emails, remembers them forever, and then sends shoppers the exact messages they need to come back and buy. It takes minutes to go live, there are no contracts, and they even have a 4X ROI guarantee. Or simply, your money back. Try it now at instant.one slash Chew and receive 50% off your first 60 days for a limited time only. That's instant.one slash Chew. Now, let's get back to the episode. Speaker 1: How do you approach evolving your customer experience over time without losing that original magic? Speaker 2: Honestly, it's been a journey. Initially, our customer journey was honestly the best in the world. We have all US customer service, in-house people that care deeply for the brand. We gave gifts on every order. But there was a point when shipping became so expensive. During COVID particularly and like cost of maintaining this like we were negative on every order on DTC and it became crazy. It's like Amazon and Wholesale were very profitable but DTC like almost every customer was losing money. And we had to rebuild it from the ground up. And we outsourced customer service, still humans, but had to figure out how to make it cost efficient. And we started charging for shipping. We didn't charge for shipping if you had a $30 order. And it took us a while to figure out how to make it profitable. And I guess as a backdrop, most of our business was coffee. And during this time period, coffee prices doubled. So the cost of the product for us More than doubled. And then acquisitions was like every year a little more expensive if we wanted to get new people. So we had to rebuild it and think like the 80-20, like not being able to be world class in every area. And again, that was like a flaw, like someone smarter than me would have probably figured out how to make it work. But I was so focused on growing the retail business at that point that I didn't know how to. And we had to rethink like what matters the most. And it's actually interesting is like people want free gifts and they want this stuff. But at the core of it, they kind of want a good product delivered quickly at a fair price and things to be easy. And like understanding those after a few trials and errors, like I think became the key is like, for example, customer service, like we would give these detailed long answers, but people don't have time to read them, even though they kind of like the idea that somebody gives you those. At the end of the day, they care is like, where's my shipment? You know, like when is it arriving? Can I cancel? Speaker 1: Yeah. Speaker 2: Can I pause? Or where do I find this information or whatever it is? And knowing that like 95% of customer support is stuff like that and they just want it like immediately. Speaker 1: So when you were kind of comparing your channels like you had your direct-to-consumer, you had your retail channels. Now we kind of, for us, we got into a very messy situation where we launched into Walmart nationwide and I'm sure you know Walmart has their EDLPs so they're always gonna have the lowest price. And that took a big hit on our direct-to-consumer channel because, you know, why would I come to you guys when I can just go to Walmart? And it took about a year, year and a half of us crafting our online offer and you have to get really creative with it. It's not just a price thing. Maybe it's a free gift or something like that. Some sort of incentive that has them coming back. How did you guys deal with that? And I know you guys launched kind of omni-channel right away. So was it something that you felt early on as far as, oh, why would I, you know, buy from your direct-to-consumer channels when I can just go to retail and get it myself? Was that something you guys had to tackle? Speaker 2: Oh, 100%. And it's underrated. Like a lot of people have this thing that it's super easy. And it can be easy if you know what you're doing, but very few people know what you're doing. At the time, there was no really omnichannel experts. So I made the mistake of hiring retail experts and e-commerce experts, but neither understood the other channel. Today's world is a little easier. There are like, for example, consultants and advisors and mentors that have done it. There are certain problems like kind of like one time problems where you should just pay the best person you can find, maybe comparably high hourly or project rate, but it's one time and it's not recurring. And price pack architecture is one of these things where it's just worth to pay someone Quite a bit of money for very little work because it compounds over time. So what I recommend if you have some success and you're ready to go to retail or expand to other channels is find somebody at like a VP, SVP level of a much bigger company successful. There's probably no way how you can hire them because you can't afford their salary and they're not looking to leave a great employer, but they might be open to A short consulting project where they get very high hourly rates, but the total dollars for you is some few thousand dollars. But then a pro will like put this price pack architecture in place. And to your point, it's not just price, it's pack sizes and gifts and other benefits to make sure there's like channel discipline and then force everyone to kind of follow that architecture. And also, you need to, yourself, as a founder or operator, learn why is each channel existing, because it's kind of different. Because there is an overlap with the Walmart consumer, for sure, but there's also a different consumer shop in DTC than Walmart, and finding the Venn diagram and the purpose of each channel, so they kind of amplify the other. So for example, for us, when acquisition got really costly, slash our ads became very inefficient online after iOS 14, we really leaned into secondary placements in retail. So these are kind of like, you kind of pay a small fee to have like a mini billboard within the store, either there's shippers and end caps and different things. And we use that to drive awareness and trial. And you just kind of move funds. And that way, Retail supported also online discovery. That's just the long-winded way to say is that It can be very confusing and there are certain problems in business where you should not be cheap and find the best person or people in the world to help solve those one-off problems and then you go execute them in a more cost-efficient way. Speaker 1: I love how you said that about the price pack architecture. I don't know if I've heard anybody use that term but it makes so much sense because You know, this is just a small thing. You may have to pay for it, but it's going to help you so much. You don't have to do the whole year and a half of fiddling around with your offer and your pricing and things like that when you can have somebody who's done this before for much bigger brands just come in and maybe you have to pay them a high hourly rate, but you're going to save yourself a lot of headaches. So I think that is amazing advice. So you've grown Four Sigmatic into a $300 million plus business while staying disciplined with outside investment. How do you decide when to raise capital versus sticking to organic growth? I think this is something that brand founders who listen to our pod are always asking. Should I take capital? Should I not take capital? Should I work with VC, private equity or some high net worth individual? How do you stay disciplined from taking all that money? Speaker 2: Well, first of all, my experience is people who ask it, it's just a distraction to actually building the business. So they keep themselves busy with a shiny object. And a lot of people who asked me that question could not raise money even if they tried. They just don't know it yet. And I say this because I was one of those people. So for my next business, for Hero, we've raised many, many millions very quickly without any revenue at very high valuations. So once you know what you're doing, it gets easier. But a lot of people who ask me that question, if they would get in front of investors, I don't think they could raise money. So it's that problem solved there. It's like, you can't, so don't try. But all jokes aside, I think there's a lot of factors and I think both sides are very aggressively promoting their own views. Right now it's super trendy if you go on like LinkedIn or whatever business conference to people to talk about bootstrapping and how cool it is and I think it's a reflection for the fact that like cost of capital is really high overall in the world and a lot of people can raise money. So hence they're promoting the fact that like you should not take VC monies because VCs are awful or whatever. But the answer I think depends. And neither of them is the right or wrong answer. It depends on a lot of factors. First of all, like, how is your category? Like my wife just launched a protein gummy, and protein is really hot. Gummies are really hot. And the team building that business with her is really seasoned, experienced, like just killers. And because the category is hot, but there's a lot of competition, they kind of needed to raise money to scale Faster, okay? Versus when I launched Mushrooms, there was no competitors for the first six, seven years, maybe 10 real competitors, so that didn't really matter. More money didn't solve the problem. So where's the category? Where are you? So me launching Four Sigmatic, I made nothing for the first two years, and the next three years made under livable wage, and I was living off of my savings working in Switzerland. And not everybody can do it. Now I have three young kids. Our family couldn't do that right now. So if I would start a new company, I guess luckily I have savings again from business success, but it's not really normally attainable for everyone to not have a livable wage, even if it's minimum wage type of thing. So that impacts the situation. So those are factors. Where's the category? Where are you? And then on top of that is, can the business support the valuation and proposition that you're doing? Because people complain about losing control with VCs or investors, or they complain about control provisions or liquidation preferences. It's like, yeah, but liquidation preference, if that screws you over, it just means you raised too much money at a too high valuation. Those are mostly, in most normal cases, with obviously famous exceptions, they're downside protections. So like they only come to play if your business did not perform. So a lot of the founders telling these horror stories are because they sucked and they didn't take accountability for the fact that they sucked. Or maybe they didn't suck but they just didn't work out. Sometimes great founders fail and that's fine. I failed. So yeah, I think people love to make it very black and white and I think that's not correct. It's very situational and category and individually oriented. And even like, can you raise money? What I would say after bootstrapping is that you will build debt. It just might not be financial debt. You'll build like management debt, you'll build like system debt, like stuff that you will have to fix later if you don't have capital. You'll make these mistakes like the price pack architecture and whatever. So like, you'll pay the piper one way or the other. It's just where and how you'll pay it. Speaker 1: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host It's very, very hard to raise money. We bootstrapped for the first three, four years until we actually had to raise money and that was because of a retail nationwide launch that we needed cash for. But I'm so glad that we stayed disciplined up until that point because people were trying to offer us money year one and had we taken that, I don't know if we'd still be in business right now. So I think that's great advice. So Sigmatic and Hero show that meaningful innovation comes from solving real problems, not just chasing trends. How do you evaluate new product or business ideas to ensure they're both impactful and commercially viable? Speaker 2: Yeah, that's a great question. I think there is like two kinds of founders, very broadly speaking, I'm generalizing, but there are very mission-oriented founders that are doing the business because they believe in XYZ. Let's say it's animal rights and they're creating a vegan leather company or whatever, but they're deeply believing in that mission and the financial success is secondary or commercial success is secondary. Obviously, they hope for it. And then there are people that are really commercially focused and they're trying to find commercial success. You know, at any category and you just got to know who you are. Are you a fish or are you a bird? And then live in that world. Is it in the oceans or is it in the skies? And know what you are, I think is the best advice. Both have beautiful stories and but the problem often occur when you are a fish, but you think you're a bird and then you get into trouble. So in my case, Because of my family basically like at one point for our standards our family was incredibly wealthy and we owned this big piece of land and we had all these other assets and my Previous ancestors like blew all that money and I was like the youngest of the youngest and I was able to witness when I Comparably great wealth was destroyed and I got none of it and I saw my mom's family was really poor and they were really happy. So my lived life experience taught that, I think it's a Bob Marley quote, that some people are so poor that the only thing they have is money. And I had this lived experience where Money doesn't solve happiness by itself. It solves a lot of hygiene factors and that might not be your lived experience or someone else's lived experience and that's totally fine. But that was my lived experience. So for me, I fall into the kind of Missionary versus mercenary mindset, but I've also seen the value of what the mercenaries can do and what their different blueprint can help with. So I respect the other view. I'm not wired that way. I can't get myself out of bed every day. As a founder, entrepreneur, you just eat crap all day long even when you're successful. Trust me, the more successful I've been, sometimes the more crap you eat. So I can't be motivated by it and I know I'm going to die and I have kids. If you're going to work, work for a mission, that's my blueprint. Again, I understand the other way. So for me, it was like important that even if I would fail, I tried to accomplish something that's bigger than me and meaningful. And that was the baseline. But I've also been around those founders, and I realized that they ignore things like unit economics. They ignore things like Legal and practical manners and sometimes they're so, they have such high conviction and that they're blind to consumer feedback. And instead, taking the consumer feedback literally, they don't even take the thematic feedback. In our case, like the product tasted like crap in the beginning. But me telling like, but it's good for you, you should learn to eat bitter foods, which is true, like bitter foods are good for you. But like, You have to learn is like, well, the bitterness is preventing people from taking it. Therefore, they will not get the benefits. Therefore, I'm not achieving my mission. So then I have to think like, what bitters do people like? Well, people like coffee and chocolate. So let me make a coffee and a hot cocoa with these things. So it's more enjoyable. It's still bitter, but it's like a good bitter. So yeah, that's a long-winded way of saying is that both parties kind of could use a little bit of the other person's point of view like the yin and the yang. For me, I've always been in the missionary world camp and that's kind of how I think but I need a little bit of my friends who are a little bit more mercenary mindset because they teach me things that I have like a blind spot to and I have to, like, respect that. And the best lesson I've learned from them is, like, take customer or consumer feedback very seriously. And even if you're not going to do exactly what they're asking for, it doesn't mean their feedback is not valid and legit and worth solving for to amplify the mission that you're trying to achieve. Speaker 1: I love that. Such a good answer. What's one direct-to-consumer rule you think founders should ignore? Speaker 2: The one rule that I think DTC founders should ignore is grow quickly in the beginning. And I think a slow growth year one, slow growth year two is usually a good thing. Speaker 1: What's one mistake you'd never repeat? Speaker 2: So many, but the number one that comes to mind is don't send the email, make the phone call. If it's possible, a lot of things are better delivered in person than over the phone or over the phone versus over email and a lot of quick emails that I've sent have led to Difficult situations that I could have been avoided if I just called the person. Speaker 1: That's a good one. If mushrooms could talk, which one would give you the best life advice and which one would give you absolutely toxic advice? Speaker 2: Psilocybin varieties would probably give you the best life advice quite literally and although I love another psychedelic that's actually legal called Amanita Muscaria, if you're not ready for it, that might give you some scary answers. Speaker 1: Be honest, how many times a week do people ask if your products are the psychedelic kind and do you just roll with it? Speaker 2: It used to be daily, multiple times. These days, people are pretty aware of functional mushrooms, so it's still weekly, but a lot less than before, I would say. Speaker 1: And last question, were you on shrooms during this interview? Speaker 2: Yes, I was on the five mushrooms. So I take, I'm fasting today, but I've had three cups of Lion's Mane cold brew, Lion's Mane and Reishi. I do half decaf with Reishi and Chaga and half full calf I'm with Lion's Mane and I make a cold brew. And because I'm fasting, I've had a lot of black coffee today, so pretty jazzed up. Speaker 3: Before we wrap up, just a quick reminder about Instant. A good abandonment email can make all the difference, but 88% of shoppers never get one. With Instant, you can send up to 10 times more retention emails and use AI to personalize every single message. Fast-growing brands like Higher Dose, Garrett Popcorn and Karen Kane have tripled their abandonment flow revenue since going live. You could be next. Don't miss out. Book a demo today at instant.one slash Chew and receive 50% off your first 60 days. That's instant.one slash Chew. Now, let's get back to the episode. Speaker 2: Yeah, I listen to a lot of podcasts and advice and a lot of people give philosophical advice. I'm guilty of that too. But I have to think the very tactical operational advice is the one that I've benefited the most. So I'll try to leave you with something very tactical. That's lawsuits. I feel like no matter what you do, you'll be hit with an ADA, whatever, you know, lawsuit every now and then. Most of them is like money grabs and BS. But as an operator, you have to assume that it's will you get sued is when you will get sued. And in budgeting, those costs, even though they're not huge, they end up settling to make the lawyers money. They're very lumpy. So budget for like, either rainy day or a lumpy annual cost in these legal fees. And again, like if you haven't been Somebody tried to sue you yet. It's going to happen in America. Very litigious country this is. So just prepare for it. It's not going to be the end of the world. They end up always being totally fine, but they're kind of surprise expenses. So prepare for those surprise expenses because they're usually the ones that are not in people's budgets and forecasts. Speaker 1: Yeah, I always tell people this. If getting sued is your biggest problem, then you should consider yourself very lucky. Yeah. Chew on that. Speaker 2: If you want more from us, follow us on Twitter, follow us on Instagram, follow us on TikTok, and check out the website ChewOnThis.io.