Andrew: Hey there freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. And the guest that you’re about to meet today says that a TV show inspired her to follow her dreams and as a result, she built and sold a company and she’s about to launch another one. In 2008 Emily LaFave, cofounded Foodzie, an online marketplace that sold artisan food direct to consumers. Four years later it was bought by Joyous.com. Today she’s getting ready to launch a new business, Forage.co which helps you recreate restaurant dishes at home. They send you all the ingredients you need and show you how to use it. And that’s what Forage.co, her new business is.
Before I start I want to thank Leadspages.net for sponsoring Mixergy. They did this really cool thing. They asked me, “Andrew, what’s your highest converting page on Mixergy?” And I said, “Here it is.” And they said, “Can we copy it as an experiment?” I said, “No.” They said, “Come on. What do we do? How much do we need to pay you to let you make a copy of it? To let us copy it for our audience?” We came to an agreement and they copied my highest converting landing page.
Now they’re making it available to you as an experiment for a short amount of time. So if you want to see what my highest converting page is go to Andrewswelcomegate.com. For a buck you can use it. And frankly, you should at least go see it and study it because I get over 20 percent conversion on it. Let me give it clearly. Andrewswelcomegate.com where you can see it and add it to your site. Emily, welcome.
Emily: Hey there.
Andrew: Do you remember the day that you actually signed the paperwork and sold your company, Foodzie?
Emily: I do remember the day. It was, you know I think the thing I probably didn’t realize thinking about what that day might be like is how bittersweet it is to sort of have that moment where you feel so proud of creating something of value in the world that somebody else wants to buy, but you realize that you’re no longer in control the way you were. And a lot of things change. It was certainly so many highs and such a kind of roller coaster ride. It was definitely an intense moment. I think that when you’re going through the acquisition process, you just keep going, you keeping going. And I think we reflected for a moment there. But it’s kind of crazy.
Andrew: How do you celebrate something like that?
Emily: How do you celebrate something like that?
Andrew: Yeah.
Emily: I would say we, what did we…We probably went out to a really good meal. That’s kind of our, you know…
Andrew: But what about you personally? Did you say, “Because of this now I could buy something. I could have something.”? How did your life change because of this?
Emily: With that outcome I think really the biggest thing was taking some time. So we took the next year to travel and to go see the world. You know?
Andrew: Where did you go?
Emily: We went to Japan, to Tokyo, to Vietnam, and to Thailand. For us it was really about going and getting to experience things and enjoy food all over the world. That was our celebration.
Andrew: And this is we as in you and your husband who cofounded the business with you.
Emily: Yes. That’s Rob.
Andrew: Cool. And of course you were into food from an early age. You’re in a kitchen today. Which is why some people might be hearing background noise.
Emily: Yeah.
Andrew: I’m surprised how into food you got considering your background. You were raised in a family with four girls and your dad you say treated you like the boy he didn’t have. What did that mean for you?
Emily: Oh man, I think it’s had a huge impact on who I am. I think that mostly around the sports aspect of things. My dad had me in sports early on. He was the lacrosse coach himself. He told me when I was a baby and I had colic he would hold me like a football and watch football games with him. The Redskins in the 80s. I grew up in the Washington D.C. area. We’re doing incredibly well. So I got to see lots of victory there. So really just got to enjoy a lot of sports with my dad.
And I think that that has made me both a competitive person. It’s made me someone who’s sort of, an interesting thing I’ve learned about being able to play sports is being able to hang with the boys. My dad would throw a football game every Thanksgiving and I’d be out there with all the boys playing flag football. I recognize that in business I’m usually helping all the boys. And being comfortable in that situation is pretty important as a woman entrepreneur.
Andrew: Yeah.
Emily: And so I think that that really shaped the foundation for me that like shaped my confidence in a lot of the situations I get put in.
Andrew: The TV show that I mentioned at the top of the interview was Oprah. What did you see on Oprah that had such a dramatic impact?
Emily: The armchair mom. So yeah, in high school I would just come home and watch Oprah. It was this one episode where she was talking about our dream jobs. I specifically remember the Godiva woman whose job is to taste chocolate for a living. And it was a talk about do what you love. Whatever it is in this world that stirs your soul, find that passion. For whatever reason in that moment I was like, “I’m going to find it.” It was sort of like this thing that was always running in the background no matter what I was doing. Is this the thing that I’m passionate about? Is this the thing I’m passionate about? That was probably in ninth grade.
That began really as a process for me. You’d think I’d go straight to chocolate. That was like the obvious win. But I actually didn’t go straight to chocolate. I decided that I was incredibly passionate about chemistry. I spent three solid years in my high school with a professor that shaped me or teacher rather at that time. Really shaped me and had a love for it. She actually just won national teacher of the year last year, Michelle Shearer. I had this love for science and chemistry.
So going into college I actually was a chemistry major. Thinking, “This is what I’m passionate about.” Because I just wanted to do that all the time. But when I thought about what I actually how I was going to spend my time, I couldn’t imagine being in a lab every day. And then alternatively I was actually in my kitchen cooking all the time. Thinking like, “This is what I’m putting off my chemistry homework to do. What if I did something in food.” So that’s what began the journey with food.
Andrew: And wasn’t that another thing that you learned from watching Oprah? I don’t want to give Oprah too much credit here, but you know, sometimes when you hear an idea like that it does change you. As I understand it one of the things you heard was that if there’s something that you love so much that you’re putting off other things to do it, pay attention to that.
Emily: Yeah, that was definitely, I think it was those words that resonated. I was thinking about what am I procrastinating, right? What am I [??] my homework to do? I was just always in the kitchen taking pictures of every dish that I made. It was that. So it totally was that. Like what doesn’t feel like work? And what if that could be your work? I was reading all these food magazines that I was teaching myself how to cook from. I was like, “Well, why can’t I be an editor of a food magazine? That would be amazing.”
And so I actually went and started a food column at my school paper. I was like, “Well, let me just start writing about it.” I think it was actually in the magazine that used to put the email of the editors in the masthead of the magazine. I think it was Cooking Light Magazine. I wrote to one of the editors and said, “Hey, I’m a student. I want to know basically how I can have your job.” And she got on a phone call with me. Her name is Cathy Kitchens, believe it or not. Maybe she was more destined for the food world than I. But she said, “If you want to be in position, you need to be a food person first and a writer second. Go hone your craft in food, and then you can be an editor of a food magazine.”
Andrew: I would have thought it would work the opposite. That go be a writer so you can learn to express things. You can always learn how to cook for someone else, but someone needs to learn how to turn that information into content that people actually want to read. I see. So is that why you ended up at Fresh Market?
Emily: Yeah. So…
Andrew: What is Fresh Market?
Emily: Fresh Market is a specialty food store that based in the Southeast. It’s based in North Carolina. They have stores all over the East Coast and into the Midwest. Actually I think they now have some on the West Coast. I think it’s one of the third largest specialty food stores in the country.
When I was in college I took on food nutrition as a minor. I started actually taking some culinary classes to see if that’s the path I wanted to take. And it was actually the Fresh Market that really clicked for me because I really loved actually working with all the ingredients and products. So I was the private label brand manager there. I worked with all the buyers.
So I got to basically olive oil and smoked salmon and jams. We would bring in all the products. I would be able to taste them [??]. You know, you would have party oils to taste. And very quickly I started refining my palate as to what was good and what wasn’t. And got to launch all of these products into the stores.
Andrew: And Emily, you would work with these small producers and turn them into fresh marketed branded products?
Emily: Yeah, so we would work with these different food makers and oftentimes actually the small food makers wouldn’t actually work for what we were trying to do. And I kept coming across these really great purveyors that I wasn’t going to work with, and I was thinking, Wow, if they’re not going to be feature in our store, like, who’s going to discover them. These are amazing things. Where’s the place . . .
Andrew: Wouldn’t be featured, why? Because they were too small?
Emily: They were too small to him even though a lot of the things we wanted to do as far as like being able to, you know, the production or the margin structure that we would need to get for private label. And we were covering up all the stories. I was like so intrigued by all these makers because of where . . .
Andrew: I see. You were private labeling them. People couldn’t understand that this was a product made by a partisan who had her own label, her own personality.
Emily: Yeah.
Andrew: And people were disconnected. For example, Sylvia. Who’s Sylvia?
Emily: Oh, Sylvia, so she was this jam maker. This was the one that really stuck out for me. She made these Armenian apricot preserves that were just like . . . I had never tasted anything like them at that time, and it was her story about how she came from Armenia,, and the whole story about how she made this jam and I wanted the world to know about that and be able to taste her jams.
And so I think it was her where it all started to click for me, and so I mentioned it to who then was my fiancee, Rob, and I said to him, “You know, what it we were to like do this? What if we were to help these vendors sell their products online?” And he was working on this other idea at the time, and he was like, “That’s a way better idea than what I’m working on. Let’s go after that.” And he was working on it with our other co-founder who was Nick Bauman, and then all three of us started joining forces and started focusing on Foodzie.
Andrew: And the original idea was feature these local products on a single web page but as a marketplace where you allowed them to list their own products or as a retailer where you bought them and resold them.
Emily: Foodzie started as a marketplace where they would all sell their products directly. So things would be drop shipped and yeah.
Andrew: Drop shipped from you?
Emily: From the vendors themselves, so you . . .
Andrew: I see.
Emily: . . .so they would ship it to you.
Andrew: Gotcha. Okay.
Emily: Yeah.
Andrew: So that was the original idea. It’s time to actually build a website or is it? Is the first step a website or is the first step to go out and look for some of these retailers?
Emily: Yeah, so this . . .
Andrew: Some of these artisans, excuse me.
Emily: Yeah, this is the thing. You know, before the lead startup became a thing, that’s basically what we did because we’re like, we’re going to put up a landing page and get an email address. We’re just going to go to a food show and go talk to all of these donors and like pitch this concept in theory.
Andrew: Mm-hmm.
Emily: And see if they’re on board. It’s funny because I have a lot of friends who I’m still friends with now that, “I remember you guys, like you were young kids running around in green t-shirts at this food show.” Everyone else is like in suits and all dressed up, and your raw passion and enthusiasm, you just brought this energy that we knew you were on to something because it’s interesting looking back on that. And you’re like, “What were we thinking?” We were just like . . .
Andrew: We just assumed that we can walk around in here and I’m actually looking at an archived cop of this landing page. And it says this, “Discover unique artisan products and meet the people who create them. Our food-loving team at Foodzie is currently working day and night to create a place for foodies like you to discover and buy food directly from passionate people who make it. Find out how you can get your favorite products on Foodzie” and then there was a note here for producers. So this is all you had.
You walked around the food show in San Diego and with your t-shirts saying, “We’re looking for local artisans” or “We’re looking for artisans who make interesting products and we’re going to feature them.” That was the proposal, and they listed themselves.
Emily: That’s right.
Andrew: And you got an audience. How did you figure that you were going to get anyone to buy its products? It’s easier to get people to sell on your site, it’s a lot harder to get customers to buy from them.
Emily: You know, we were just like, “All right, let’s go see if anybody else wants to sell their stuff.” We didn’t even really think hard. That’s kind of the funny thing about it. And I do think about marketing a little bit. I think we have a really embarrassing like doc we saved because I think there’s some bumper sticks on the list [laughs].
Andrew: Bumper stickers is one thing you were going to give away, right?
Emily: That’s how we were going to get our customers. We knew exactly what we were doing. We just went for it. We went to the show. They had enthusiasm. At the same time, we were actually applying to Techstars. Buddying up, I’m like, “I’m intentionally wearing “This is my kitchen hat.”
Andrew: That’s a Techstars baseball cap. Techstars, of course, being the accelerator that puts a little bit of money into start-ups but gives them also a lot of mentorship and a lot of guidance. So you applied. Why do you think you got into Techstars?
Emily: I think that we got into Techstars for our team, for our passion, for the space and expertise in it.
Andrew: What do think they saw about the team that made them say, “They’re not just passionate but they also have good business sense?”
Emily: Yeah. I think it was really what we each brought to the table. I had the domain expertise in food, Rob has always been very business savvy about the business model, about products and then Nick was technical and could build it. I think they saw that. I think also our hustle. They had a Techstars for a Day. We showed up in our t-shirts. We were handing out salted caramel chocolates. We were meeting everybody.
You didn’t actually have to fly to Techstars for a Day back then, but we flew there from North Carolina and made it happen. I think we just showed our passion. David Cohen, on the first day of Techstars says, “You’re here all in spite of your ideas. You’re here because of you and because we believe that no matter where this idea goes, that you’re the team that’s going to create something out of it.” I definitely think that was a huge part of it.
Andrew: So you get into Techstars and David Cohen, the founder of the program, challenged you with something that helped shape the first version of the site, the one that I’m looking at right now with Seth Ellis, Chocolatier. What was the challenge that he gave to you?
Emily: David came to us and said, “What’s it going to take to launch?” We said, “We need 100 vendors signed up and we need all this functionality. We need, di-di-di-di.” We had the laundry list of the perfect site. He said, “What would it take to launch in two weeks? What could you have together if you had to launch in two weeks?” We were like, “We could launch one vendor and we could just transact a credit card even.” That was basically it. He said, “We’ll do that.”
It’s funny because it was basically this week that it happened 2008. So six years ago that that week happened. We put the site up. We had just Seth Ellis Chocolates. Which, it was the middle of summer, we’re selling chocolates, these are all the funny things. You don’t really think too hard about things. You’ve like, “I’ve got one vendor. It’s chocolate. Is anyone going to buy them in the summer? I don’t know. But I’m going to launch it anyway.” Matt Mullenweg was a mentor who was working with us that day and he’s like, “Can I order?” And we’re like, “Go ahead and order.” So he orders and he was our first order.
Andrew: First customer was the founder of WordPress.
Emily: Yes.
Andrew: That’s one of the greatest parts about Techstars. You get well- known people to be a part of your company. We’ll talk later on, hopefully, about how Tim Farris became one of the investors and of course Techstars brought along a lot of other investors. Let me do a quick plug here for something that I think is going to be a tool that’s going to come in tremendously helpful to people who are listening to us.
Here’s the thing. Many of us in the audience have ideas and the first step to putting an idea out there, as you saw today in this interview, is just throwing up a landing page and see if anyone cares enough about the idea to put in an email address. When I want to put up a landing page, I usually go to leadpages.net and I create one. Then I have to go and I pick the right one after trying to figure out which is the best one to use.
I often will find a great one on LeadPages. In fact, I had an idea for this program called True Mind, which I found a lead page for it that got high conversion rate and it told me, “Hey, there’s a product here,” and we built it out. Anyway, if you want to do that, I want to give you a landing page that will work right out of the box. I know it works because I’ve used it for at least a year if not two years and it consistently produces over 20 percent conversion rates. It’s the one that when you first come to Mixergy you see, the one where I ask you for an email address right away.
I’m working with LeadPages, I’m giving you a copy of that to use on your site. I will not be doing this forever because I don’t know if it will impact my conversion rates, but if you sign up now, you’ll get it. All you have to do to get it is go to andrewswelcomegate.com. Let me give you that URL again. Write it down because it will disappear soon. You have to go to andrewswelcomegate.com. Make sure to include the s there. Andrewswelcomegate.com.
When you get there, you will get a copy of this for a buck. You’ll get to use it on the Lead Pages platform for as much time as you want. And you can customize it. At the top you’ll see it has my logo, but of course you can click my logo and change it to your logo. Or get rid of the logo if you don’t have a logo yet. You can change the language on it. You can change the words on the button. You can say, “Hey, Andrew likes all his email addresses to go to Aweber, but I like Infusionsoft or I like something else.” You can tell it where it goes.
That’s the Lead Page platform and the beauty of it. So I’ve got the page that converts. Lead Pages will make it work for you on your site whether it’s a WordPress site or anything else. Or even if you don’t have a site yet. I’m really urging you to go and try it to see for yourself how you can turn strangers into leads who give you their email addresses and permission to stay in touch with them. And when you have that you have a business relationship that you can grow, that you can earn money from, that you can build a real company on.
Here’s the URL one more time. It’s Andrewswelcomegate.com. Andrewswelcomegate.com. And I’m really grateful to Clay Collins of Leadpages.net for powering that up for us. Here’s the URL again. Andrewswelcomegate.com. So now you got the chocolatier. Techstars has lots of mentors like Matt, but you can’t build a business by selling to Techstars mentors. You have to get real customers. Where did you get the next customers?
Emily: So we really started reaching out to family and friends. Anyone we knew. We said, “Hey. We’re launching this thing. Check it out.” And it is I think that moment where you feel like you’ve made it, where a stranger then orders. And so it really started with friends and family. They would tell people.
Andrew: But nothing more sophisticated than that. No AdWords, no content marketing, no nothing. Just go to friends and family, hopefully one of them cares enough to say, “Hey. My sister, my daughter, my brother, my uncle, whatever is doing this. You should check it out.” And then you get your first customer order. That’s where they first came?
Emily: Yeah. That’s how it started. And then we started adding all of my contacts that I had had from the Fresh Market. I started writing to those people. Sylvia’s of the world. To get their products on the site kind of one by one.
Andrew: And you were manually adding them to the site.
Emily: What’s that?
Andrew: You were manually adding them to the site. You didn’t have a way for them to fill out a form and get their content up. It was you.
Emily: Yeah. We had to do it manually at that point because that was just functional. It wasn’t built. So it was like one by one we got people on board. We got them set up ourselves until we got that piece of it built. It’s crazy because then we launched Techstars and got the press. I think the timeliness of just the way that the local food movement was going we were really one of the only players in food and tech at that time. We were still in the shadows of [??]. And it just really resonated. So from that press that we got things started to snowball. And we were still so embarrassed by our site. Like really nobody should be on this site doing anything.
Andrew: Can I tell you something. Because if you just say you’re so embarrassed people just say, “Oh, everyone’s embarrassed by their site.” I have a screenshot of what it looked like at the time. The second picture was called picture underscore five underscore giant. To give people a sense of what it looked like. It was let’s get it up as quickly as possible.
Emily: I don’t even know what you’re looking at. That’s hilarious.
Andrew: Verses later on where it just became a stunning way to display products. In fact today after the sale you do videos that are so stunning that I was a little embarrassed to have you on my little operation here with Skype. There’s constant movement. There’s blurriness.
Emily: [??] have me in my kitchen garb.
Andrew: That’s the least of my problems. But I get it. I get what you were doing. I still don’t get though how you ended up getting customers. You couldn’t keep emailing your friends and family. What happened that drew in people on a regular basis?
Emily: So I would say what first happened was we actually started getting PR. And I would say that that actually was something that was really just luck. Sometimes timing just works out and something just happens without you having to do much. And there is a blessing and a curse in that. We were a media darling with Foodzie. We were so embarrassed by the site yet we were picked up by the New York Times [??] blog just a few months after we had had this one vendor site up. And we were like, “I can’t even believe that the New York Times is picking this up.” Which then lead to more press and more press and more press.
What was great was that it was showing that the store was resonating and people were really excited about what we were doing. But the downside was we actually build those customer acquisition muscles early on in the business. It took us a lot longer once all that finally faded, that we had to really build the muscle for how do you get customers out of nowhere.
How do build the [??] marketing engine truly into your product. How do you, do really strong email campaigns. We started email, that was the earlier thing we did beyond the process. We started doing all of our email marketing. I definitely felt like we had to build those muscles later because of the [??]. It’s an interesting thing. People always think about PR and I think it’s great to do so when you already have a system in place, but don’t think that that’s the magic bullet to getting customers. Cause that’s just not [??].
Andrew: But you lucked into it and it wasn’t so much just luck. It was art as in food seemed to have been interesting. Because I’m looking even at an early Oprah article from Oprah.com. Go look at that, how things happen.
Emily: Yeah
Andrew: There it is from February 2010, where the author doesn’t just talk about you. The author says I visit Foodzie, Penzeys, Spices. I click over to and the whole article is about how you can eat like a foodie without leaving your house. So food directly to you is becoming interesting, but specialty food was becoming way interesting. So that seemed to help you. Here’s another thing that I noticed a lot of. A lot of articles focus on you being a founder whose female and it seemed like in tech people were hungry for stories of women who were running companies. Is that right?
Emily: Yeah, definitely. Definitely found that to be true.
Andrew: And so, that publicity started to happen in addition to the food. It wasn’t that you orchestrated this the way that I might have imagined. It was just that you hit on trends that were important at the time.
Emily: Yeah. It was one of those lessons that I think you learn by it just happening now. Now I feel like I really understand probably how to do a lot of that again. But I learned by just stumbling into a lot of that. Then we really nurtured those relationships so the, you know, the early crest we got definitely was just luck. Then we recognized that we were a source for all these particular life style publications. They were looking for the newest, greatest products. We had them signing up with us when they were just getting started. So…
Andrew: Ah, so if they wanted to talk about something…
Emily: Really Simple magazine, Oprah magazine, Food and Wine magazine. We’re going to feature a really great product in our gift bag. I always formed a relationship with those others and said, let me help you.
Andrew: How do you do it? How do you stay in touch with them? They write an article about you or they ask you and then what do you do to stay in touch without seeming like a pest whose hungry for promotion?
Emily: I think that you… It’s really not about staying constant in touch it’s about having that contact, it’s about saying how can I help you. It’s that gift you get sort of mentality right? That it’s like, how can I best serve them? What are they looking for? How can I make their job easier?
Andrew: So you just spiral off an email to them saying, is there any type of product you are especially interested in, I’m looking out there all the time. Is there something I should keep an eye out for?
Emily: Yeah, yeah. Exactly. It would be like if a holiday comes up and you are looking for something for Easter, Mother’s Day, Christmas… You know, barbecuing. Let me know and I’ll tell you the latest thing we’ve got going on. And I would promise if you come reach out to me, I’ll give you an exclusive on letting you know about those things. So that was the other thing, is publications wanted to have the first dibs on something. [??]
Andrew: Here’s something, speaking of something, bacon jam. What happened with bacon jam?
Emily: Yeah
Andrew: What happened with bacon jam?
Emily: So bacon jam was quite a holiday. So we in the summer, we were going up to Seattle to go and taste a bunch of food. Came across Skillet Street Food [??] and they put this bacon jam on their burgers. We were like, “Oh, my gosh. Are you selling just the bacon jam? This is amazing.” They were like, “Well, we kind of thought about it.” We were like, “If you want to do this, do it. We are getting ready to pitch all of the gift guides we would love to have you on Foodzie and help get the word out for you.” So we did that. He quickly got mocked up his labels to kind of pull it together. Well it gets featured in, I think, in three publications, but the one that really just hit was Real Simple magazine.
Andrew: What magazine?
Emily: Real Simple magazine.
Andrew: Real Simple, oh yeah.
Emily: A magazine read by women. It was in a gift guide of things to buy for men. It was the height of the bacon craze. It was like, just the right price point. We had the whole customer supportive team dedicated to bacon jam orders. We sold literally a ton of bacon jam in 8 ounce jars in a matter of 6 weeks. It was probably our highest… In one month the sales for bacon jam were, I’m trying to remember the exact numbers that…
Andrew: I think I’ve got your… you helped them sell $80,000 worth of the product.
Emily: Yeah, and that was in six weeks. That was really powerful. After seeing that kind of demand, they ended up selling it, turning it into a wholesale product that they sold across the country. It was quite a gravy holiday with them.
Andrew: I can see it. It’s all because of this Skillet is the name of the food vendor with the food truck. They had this thing that tasted good, that had bacon jam on it and you noticed it and said, “We have to get you on.”
Emily: Yep.
Andrew: All right. Then every time someone buys, they add themselves to your email list, which allows you to say, “Hey, if you like this bacon jam, we also offer other interesting artisan products. Here’s one that we think you’d like.”
Emily: Yep.
Andrew: Then you went into The Tasting Box. Is that what helped the company really take off?
Emily: Yeah. The Tasting Box was born out of realizing we had built a very seasonal built business with Foodzie. The specialty food business is one that you do the majority of your business the last eight weeks of the year. It was very much based on holidays. Then we thought to ourselves, “You know what? There’s this food and [??] audience that goes to new restaurants and once experience you taste simply to try foods for the fun of it, not just for a gift. They enjoy this every day. How can we build this business to touch those people all year long?”
We started thinking about a subscription where we could introduce people. We first thought about it in a traditional sense like, “Let’s do a Chocolate of the Month. Let’s do a this and that.” We first tested that with a group of people. All they got was chocolate. People are like, “This is great, but I probably wouldn’t subscribe to this every month and just get so much chocolate. Could I get other stuff in my box?” We thought, “That’s a great idea!” So we put together… this was a great test we ran which was that we created the product, and speaking of finding customers, we found 30 people that we felt were food enthusiasts, people who were influential in the food community…
Andrew: For example?
Emily:…nodes in the community. A person specifically?
Andrew: Yeah.
Emily: There would be different bloggers and things. I don’t have any names…
Andrew: Gotcha. So a blogger who was especially influential in the food space, someone like me for food.
Emily: Right. Yep.
Andrew: Then what would you do with them?
Emily: We said, “Hey, we’ve got this new product. You can give 10 away to your friends, anyone you want. You can choose. We just want you to experience it.” After we gave it, that was 300 people we put it in their hands, 30 people, 10 friends. Then we invited them to come back and say, “If you want to continue, click through here. This is what you’ll get every month to experience.”
We had three different price points in which we were testing what people’s propensity, what they were willing to pay for this. We didn’t put a price until you got to the checkout. Everybody’s was different. Then we watched the conversion rate on how that performed. That’s what helped us land on our pricing. That was a quick test that was so telling. You can see the difference…
Andrew: If I understand it right, you’d give these influencers the ability to give out 10 boxes to their friends, or to people who they thought should have them. Those people had to come to your site and register for the first one, say where they wanted it to get mailed, right. So you have their contact information…
Emily: Their email.
Andrew: A month later, you’d come back and say, “Do you want another one?” They’d say, “Yeah.” You see how many people actually say, “Yes, I want it.” Then you see how many of those actually buy and because you offered each person a different price, you can figure out which price point increases get you the most sales. And that price point was…
Emily: That was $19.99.
Andrew: So is it $19.99 plus shipping?
Emily: No, that was included.
Andrew: Included. So, here’s a problem that you brought up in the pre- interview with Jeremy Weiss. Food is very heavy, right? And it’s inexpensive. What do you do to ship food out without having to pay an arm and a leg for shipping?
Emily: We were working with vendors who had more single snack items. We learned what things worked that were lighter. Things that were heavier, things that didn’t work as well for model…
Andrew: So having bacon jam couldn’t have been included with other items because it’s heavy.
Emily: Yeah. It’s all in balance, right? If you have a lot of things that are lighter in the box, you could probably do one heavier. We had a weight that we were basically a threshold that we would try to hit. And things were all sample sizes, smaller sizes. So we were able to get people a smaller amount so it would help people with the weight piece.
Andrew: Did you have to pay for the food or did you get it free because you were essentially giving samples that would maybe get people to buy in the future?
Emily: Yeah. So we were getting everything free. But then once we started getting the the thousands of subscribers, we actually really hit a wall with that part of the program. And what we recognized was the constraint with more of the artisan model was like these artisans didn’t have the marketing budget to be able to spend and just completely give away all these products. So we had to shift the model where we went with slightly larger sizes. We paid a small amount to them. It wasn’t completely free. And that’s when we shifted the model that we actually increased the price. Now we’re only about scaling that model that we kind of ran into as we grew it.
Andrew: So again, you’re testing out increasing the price. How do people react when you tell them, “Hey, this thing that you’re paying $19.99 for is not going to cost $25.99 or $24.99.”
Emily: It was the worst.
Andrew: I bet.
Emily: The worst.
Andrew: What did you do? What happened?
Emily: If you can do anything to make sure the most, lesson learned. Like start at the most you can at first and you can always come down. I think that’s a huge takeaway for me in thinking about my next company is increasing prices was terrible. I mean, people were angry and hated us.
Andrew: Especially since you can’t grandfather them in. I’m in digital. I can grandfather people in and you can’t.
Emily: Exactly.
Andrew: Because you’re prices increased.
Emily: And we grandfathered people for a certain period of time and then we said, “Now we’re transitioning over to the new price for certain customers or for all customers.” So it was definitely hard. And that was a hard lesson to be like, I mean, it feels so personal, right? And I think I got thicker skin through all of that. It’s like, “Yep, these things happen.” And it really sucks and you really piss customers off. But then it all goes away and people…
Andrew: How much did your sales go down by after you started increasing prices?
Emily: We actually only saw a small dip. It was like only five percent of our recurring subscribers actually cancelled. It was just a very vocal community.
Andrew: What is the typical amount of time that someone stays subscribed to a product that’s delivered physically?
Emily: You’re digging back into some history here. I’m trying to remember.
Andrew: Roughly. I don’t want to get such an accurate number that then you’ll hate me later one and say, “Andrew, I’m not allowed to reveal that.” And I can’t edit so you’ll hate me. So just roughly. Are we talking about six months? Are we talking about three months?
Emily: Yeah. It was like six to eight months or so.
Andrew: Six to eight months they would stay subscribed.
Emily: Yeah.
Andrew: So now instead of having someone buy once, you get six to eight months of predictable revenue from the same person.
Emily: Yeah.
Andrew: Ongoing relationship. Wow.
Emily: Yeah. And that’s the amazing thing about the subscription model, right? That we learned. It’s like opt out economics. You know, predictable revenue. You can basically these cohorts start to become very predictable. And you can really understand lifetime value, the cost of acquiring a customer, and that formula starts to become very clear. I think that’s why the subscription product is so appealing. And actually my next company will continue to…
Andrew: Subscription.
Emily: …be a subscription for that reason. So yeah. We definitely felt like we stumbled on to a really powerful model. And I think in food especially. When you are into something that people are already consuming that all the time, it’s really natural. And they…
Andrew: How high do revenues go?
Emily: So we were, this is something that I don’t actually have to numbers off the top of my head.
Andrew: Ballpark. I’m not looking for like an accountant’s type of data, but I want to get a sense of how big your business got. This thing that you guys just started on an idea.
Emily: Yeah. We were somewhere between I think six to ten million in run rate when we sold.
Andrew: Wow. And that’s predictable run rate. So the company that buys you ends up having a predictable revenue source. And they’re so good at marketing that they could probably increase that even further. All right. I see how you built up this business. What about the low part. You raised how much money the first time?
Emily: So in the end, the first time? Like the very first raise we did?
Andrew: Yeah.
Emily: Or in total?
Andrew: It was Techcrunch, excuse me Techcrunch. It was Techstars and then it was right afterwards you raised how much?
Emily: Yeah. We raised the sea ground. It was about one point two million.
Andrew: One point two million. Uh-huh.
Emily: Yeah. And we did subsequent. We did a follow on seeds. We did 500K and then we did another million. I think that speaking of woes, the fundraising was really hard for us. You could imagine. I always look at this as an optimist. When we raised the money, we had just sold our house in North Carolina. This is 2008, September, the market’s crashing. We sell our house in North Carolina in August of 2008 just before that happens. That money gets us through closing our C round in October, and then we’re basically running a specialty food business in the recession. We were lucky to close that money that gave us that big chunk.
Andrew: At that point you were lucky, too. Then at some point, that money runs out, because you’re paying for products, you’re paying for other things, you’re paying for office space. What happened at that point, when that money started running out and the economy wasn’t strong?
Emily: Nobody was really funding much, and our numbers also were…We were still figuring things out. That was when we went to our current investors and said, “Hey, we need you to just do a follow-on, more like a bridge.” We did that, and that’s what got us to the chasing docks. Then when we really saw the gold paradox, and we raised the null plan to really nail in our customer acquisition strategy, so that we knew, to raise Series A, wherever you dump the money into.
Andrew: Where did the 1.2 go? Because before that, you didn’t have high expenses. What were you paying for?
Emily: The 1.2 went to building out our team. It was mostly team and marketing.
Andrew: What kind of marketing did you buy?
Emily: We would do a lot of event-based marketing. We would go to blogger conferences and do things like that.
Andrew: Gotcha. The team, was it heavy on people who would call up artisans and get them to list on your site? Or was it more on developers who were going to help create these small shops?
Emily: It was a mix. We had a few on the community, producer relations side, and then we had a small product team. The designer, we had an engineer. We had the team pretty lean during that time. We invested in overhauling our brand, which was a huge thing. You saw, from the beginning of 2009 to the end of 2009, we had completely overhauled that, which really elevated the experience. I’m trying to…
Andrew: Here’s the part that I heard from the pre-interview. I’m so glad that we do the pre-interview, because…I think we’re okay. The topic about this, there was a period after the 1.2 was running out, that you had to cry yourself to sleep, right?
Emily: Yeah, I know. Gosh, that day was intense. We didn’t think that we were going to be able to raise the money. We were basically a month away from being completely out of money, and we had actually come to a point where our investors were telling us, “You need to, basically, tell your employees you can’t pay them and they can leave.” We’re almost at that point, where they’re not going to be paid.
Your role as a leader is to maintain your sense of calm through all of this, and not scare your team. When you keep them in the know, so that they’re on the same page, and when you just let them keep doing what they do every day, and you kind of shield them from all this, we were just at this line. It was, how much do we, basically, scare them and let them know where we are. It was literally days. Our investors basically said, “You should be telling them today.” We said, “Just give us two more days.”
It was that night where I cried myself to sleep. That had never happened before in my life, being like, “Wow, is this really all going to end like this?” But then, we figured it out.
Andrew: What did you figure out?
Interview: It was like, “No, we gotten as far as we can go, and we need to go to somebody else. We need to get someone else on board.”
Andrew: Who was that someone else who got on board?
Interview: That was Dave Moran [sp]. I remember he believed and was like, “All right, I’m going to support you guys.” You feel like it’s all going to be over. I think there’s a lot of talk about failure, obviously, within start-up culture. We embraced failure and got to be okay with it. I think the thing you hear less about is like in your gut you’re like, “Sure. Okay. I’m going to make mistakes. This whole thing could fail, but failure is not an option.”
That is in that moment where you’re crying yourself to sleep and you’re telling yourself, “Oh my God. Is this all going to end?” You’re like, “No, it’s not. I’m going to will this thing into existence whatever I have to do.” So it’s an interesting balance. You have to accept that this whole thing might fail, but you really, really don’t believe that it’s going to happen. You’re going to do everything possible not to make that happen.
Andrew: At that point, you hadn’t yet discovered the Tasting Box. So what Dave was buying into was that you were going to figure out how to make small artisan shops make sense online.
Emily: So yeah. There were two moments of this funding that are like crisis. Actually the first one before the Tasting Box was the first 500K was actually Jeff Clavier, currently our lead investor. He doubled down.
Andrew: Got you.
Emily: And invest. So that was the first time. And then the second time this happened was Dave. That was actually when we were in the Tasting Box mode.
Andrew: And at that point you had the Tasting Box.
Emily: We had the Tasting Box at that point. So we went through that cycle twice.
Andrew: Wow. And by the end, what share of your revenue came from the Tasting Box as opposed to individual items?
Emily: It was about 60%.
Andrew: 50/50.
Emily: It was like 60, 70% on the Tasting Box. And then 30 to 40% was the Marketplace. The Marketplace was still healthy but it was definitely being fueled by the Tasting Box. People would discover things and come back and buy those items. It was definitely like we saw that trend. I mean, we still had all the holiday business that we had no matter what. We had that part dialed in. But it was the year round sales that we were driving.
Andrew: So you finally had figured it out. You were on to something. Why sell instead of continue to build?
Emily: Yeah. So that’s a really good question. I think we never knew what was going to be that moment. This is a story actually I have not really talked about. So this is the first time I’m talking about…
Andrew: Good. I like that.
Emily: …this whole process. So we had inbound interest actually from Scripts from the Food Network.
Andrew: Wow.
Emily: They were first talking about strategic partnership and wanting to work with us just in that sort of way. We were like, “No, we’re not interested in that.” We had actually, it was just a distraction from we were getting ready for the holidays. Then finally when the holidays came around, we were in the thick of things. They were like, “You know what? We actually want to talk about acquisition.” We were like, “Okay. That’s more interesting to us, but let’s wait until January when we get through our crazy holiday season.” So January comes and we go through three months of the most insane diligence process that I have, well I haven’t been through it ever before. But from what I’ve heard, it’s the sort of diligence that a billion dollar acquisition would go through. We were working with a really amazing team at Scripts. But they were incredibly diligent in their process.
And things all sort of were looking like this was going to happen. And we were really excited about that. Like what it was going to entail. It was kind of the outcome we never imagined. I never really actually envisioned Food Network as a possible outcome. This is a funny thing that people are like, “Oh, what’s your exit?” Da-da-da. It’s like, I want to build this into a great business and sure maybe Whole Foods. You hear these sort of things. And then you build this company and there’s someone you’d never imagine finds value in what you created. But it was perfect because we saw the convergence of content and commerce happening.
We saw how much media impacted what people bought, especially in food. And we love the story telling piece of that. So everything was lining up that this was the perfect scenario to continue to build the vision the way we imagined with the power of an incredible brand with the content that was behind it. So we decided, you know what, we think this is the right time. And I think you also, again, I’ve talked about timing a lot. You sort of just feel like, this feels like the right time that we need to do this. And so we get to the point of getting an offer. They’re saying they’re ready to send us an offer and then it’s no offer.
Andrew: Ah.
Emily: And it was, you know. I think I’m smiling right now, but it was so crushing. I mean I…
Andrew: Why is it so crushing?
Emily: Well, first of all again, that process dragging out was moving us into a time where we should have probably also been fund raising, but we were just. . . We kind of put our bet on this process of going for the acquisition and we were a super lean team. We were running our business and going through the acquisition. I don’t know if we would have had it in us to run a fund raising process at the same time, but we just, we went after the acquisition.
So, it was really scary because we were like okay now we really. . . We have to pull a deal together and thankfully we had run a process that, you know when you start an acquisition and you pull other people into the conversation; we actually had other offers as well. The Food Network was really the one that we really believed in and they were going to let us run independently our brand as Foodzie.
So, yeah so that fell apart and I think it was just so crushing because you put so much energy right and like the emotions of to what that will be. Then the other side is okay now we’ve got to actually find an outcome that is in. . . Now I have very little time and very little money left to get something done. That was basically where we were and so. . .
Andrew: What was your burn at the time?
Emily: That number I do not know of the top of my head. But. . .
Andrew: But it was getting dangerous. You had to raise money, but it seems to me, tell me if I’m wrong, but it feels like at that point it’s hard to go back to running the business. Your mind is already on selling. . .
Emily: Yeah.
Andrew: . . . And on taking a trip to Thailand and etc., right?
Emily: [laughs] Yeah. We weren’t even on to the Thailand thing yet. But it was just like the promise of what we could build with them, right? And it was. . . You do get emotionally attached. You meet all the people. The scripts team was amazing and we actually. . . I realize as an entrepreneur what I love is like getting to choose the people I get to work with every day and it was getting to choose. . .
Andrew: Do you want to work with them? So, why didn’t it work out? Why did they back out?
Emily: So, what ended up happening was. . . I guess I don’t know if actually some of this can be public. So, I’m not sure if I can actually speak to some of these things.
Andrew: Talk vaguely, but say as much as you can.
Emily: There were some internal things that had changed that they were not able to. . . All decisions were frozen.
Andrew: Oh, you mean internally something happened?
Emily: Yes, internally. They told us they needed more data which was very confusing to us because we had looked at four years’ worth of data, but that was actually because they couldn’t actually communicate at the time.
Andrew: They couldn’t tell you at the time, “Hey we’re going through something here.” So they kept saying give us more data.
Emily: Yeah.
Andrew: Oh, okay.
Emily: So, we had a sense of urgency that we just couldn’t wait. We had to get a deal done. So, we had talked to other people that we were also excited about and one of those is Joyous. James sort of visioned for what we wanted in a partner to build obviously Food Network was just a much larger power with more juice to put behind it. But it was. . . You know, we really believed in this media power of connecting with commerce and we wanted to see what that would do for Foodzie.
Andrew: I see and so you sold, you got to take some time off and then the interesting thing is you get right back into the food and tech space. What is it about food and tech that you like so much?
Emily: [laughs] I think, I think Rob and I, that’s like, that is if you ask him our compatibility. He’s tech and I’m food.
Andrew: By the way, did you sell for cash or a share of the business?
Emily: It was a mix.
Andrew: A mix. Okay, so then you . . . Where does the idea come from to get into a business where you teach people how to make restaurant quality food and give them all the ingredients that they need to do it?
Emily: So, the next company. . . After we moved on from Joyous and we were just taking time for ourselves the first focus isn’t, I’m going to start another business. I mean, it’s been two years now since all of that happened. It’s really like, I’m going to take some time, but then of course, the wheels already start turning. You can’t really help it. But, I think for us it was recognizing that we’re not actually cooking anymore. We started a food company out of our love for food and cooking and ironically have no time to cook anymore.
We thought okay, now that we’re fitting this back in our life again, when we start another company, how are we going to fit this in our life? We thought about, how do we make the cooking process easier for people like us, who are busy, but have a high bar for taste, quality, and want to use it as a mechanism for learning as you go, more technique?
When we saw the power of media, how media could also influence commerce we thought about how that could happen with our next company as well; the subscription. So, you sort of have a new problem you want to solve. You take old learnings and you roll all of that up and then you just go after the new things. The restaurant angle really came out of…
We’ve been working on this about six months or so building this product, six to eight months, tested with a small group, getting to the heart of the experience we want. The restaurant angle realized that these chefs in these restaurants are the ones that have technique. They’ve developed these amazing recipes that are inspiring to cook. To be able to recreate that in your own home is something that completes that whole experience. Outside of ourselves, in the [??] we’ve been testing with, customers love it.
Andrew: So, the test. Here’s the thing. At this moment, it’s not open to the public. By the time this interview runs, people will be able to go to forage.co and see this thing. But I found a way to get a sneak peek at what you’re doing. I can see, for example, you have peanut with butternut squash and kale, right? This is one of the ingredients. It’s $5.02 per serving, serves four based on the current ingredients.
Emily: Oh, that’s not something we’re currently doing. That was the first app that we tested.
Andrew: No, this is a test. It looks like it’s an app, in fact it’s hosted on a domain that supposedly is the app. This is where you were testing to see will people do this. Who are you testing with? Am I right to imagine that what you were doing was giving them this page and letting them almost pretend that they had an app to play with?
Emily: Yes. My story about building something and the minimal thing to put out in the world that we learned from David Cohen, we wanted to do that again. Simplify and ship it and start getting real feedback. That’s what we did with this app. The first version was a mobile app that people could… I would curate the recipes and then we would send it off to a courier and they would deliver the ingredients from a local grocery store in two hours.
Andrew: That’s how you could get it up and running so quickly, because, and the app was HTML, right?
Emily: Yep.
Andrew: HTML so you don’t even have to have someone code it up. It’s a standard web page and you don’t have to have a way to ship food across country. I see it’s just local. How did you get the people who were going to test it?
Emily: Just to comment on what you were saying, to build that app, this year we took off, Rob taught himself how to code, so he built all that from scratch himself. Then as far as getting customers for this, we took probably 100 of our friends that we thought would be, again, the friend test, 100 people that we thought would want to use this. We said, “Hey…”
Andrew: How did you pick those 100 people? What was it about them that made you say that they’re going to be the right ones to test?
Emily: We were the first customer, right? What is our demographic and what do we think is the demographic of the people that would want this service? Somebody that is probably a couple in an urban environment that already know how to cook, they just want to cook more often. We had these different things and so out of all my friends, I said, “Okay, these people fit that criteria. Let’s put them on a list and see what they think.”
Andrew: I see.
Emily: It wasn’t just like, “Hey let’s invite some friends.” You’re intentional about picking the ones that you think will want to use the product.
Andrew: That’s what I was going to say. If you and I were close friends and you shipped it to me, it wouldn’t make any sense. I’m not an avid cook. I hardly ever cook. I wouldn’t know what to do with the stuff. I don’t eat meat, so if you told me about the fried egg sandwich with bacon and bleu cheese I might have an issue. I see. You want to pick people who are representative of the customers that you plan to have. Based on the feedback that you got on this first version that I’m looking at — by the way, that egg sandwich looks freaking beautiful, it looks like little burgers with a fried egg on top of it. What did you learn from showing it to a handful of people like that?
Emily: We thought that we wanted to solve the problem that 4:00 you don’t know what to cook that you can still actually cook that night, we could get you everything. We realized that people actually wanted a little more planning, that that was a little too soon for getting your mind around cooking something. The second thing that was the bigger thing was, you create a list of your riskiest assumptions of the business.
When you’re building a business that has physical goods dependent on other things, like for the model to work, sometimes it’s customers loving it, that’s certainly one part of it. But you have all these other things that are a part of your model. One of it was that we did get access to the data from these grocery stores so that we could know exactly what their inventory was to be able to match to a recipe. If your recipe calls for sea bass and they don’t have sea bass and they don’t have the bok choy, then how am I going to get the sea bass with bok choy?
And so we needed to have that data, and thankfully one of our early investors and our friends and family around us and one of the board members of Whole Foods. We have great contacts there. We got to talk to Whole Foods right away from the top to like the manager of the local stores, and asked them this and say . . . And then we get this data and they said, “We don’t actually have this data so. We couldn’t get you this data, so if that’s a risky assumption and that doesn’t work, this model isn’t going to work, then you can move on really fast.
Andrew: You can’t do anything with exotic ingredients. Even bok choy is too exotic, and you have to think about ingredients that are dependable.
Emily: Yeah, we knew that we need to have 100% deliverability of an experience. Any time that someone ordered that they’re would never be like this . . .
Andrew: Who do you order from to get it to people’s homes? Where do you get the food that you deliver?
Emily: Oh, today we source directly from farmers and purveyors and work with different distributors that we source all those ingredients from. So, yeah, because . . .
Andrew: You can do that?
Emily: So, yeah, we’ve become now the grocery store.
Andrew: That’s what it sounds like.
Emily: Yep, and we do have a name.
Andrew: It’s not all coming from one part of the country, is it? It’s going from multiple parts of the country to people’s homes?
Emily: So we’re just on the West Coast right now.
Andrew: I see.
Emily: Sorry, I’m just going to pause for a second.
Andrew: We could end it. I know we’re running a little bit late too.
Emily: I actually have my dad . . . He’s sitting here.
Andrew: No, let’s end it right here. First of all, we ran a little bit over, but I got really fascinated by this, especially once I saw the site. So I’m going to say thank you so much for doing this interview. Thank you all for being a part of it. If you want to see this site that I’m so raving about that I’m taking more time than we agreed to, go to Forage.co, F-O-R-A- G-E.co and watch how this new business unfolds. It’s just . . . My mouth is literally watering. You can see it.
Emily: [laughs] Thanks.
Andrew: Thank you so much for doing this interview.
Emily: All right. It was great.
Andrew: Thank you all for being a part of it. Bye guys.
