Andrew: I feel like every one of these podcast episodes, I say that I’m in Austin, Texas, and I am, Hey everyone. I’m Andrew. I’m the founder of Mixergy. Yes, I am in Austin, Texas. And here’s why it’s relevant in this interview. This is a state that prides itself on being so free, do whatever you want. And so what I want us to buy with.
I just want, I wanted by fricking whiskey, I went to the grocery store. They don’t sell in the grocery store. I come from California where you could buy whiskey, good whiskey at trader Joe’s at a great price. You can’t buy it at the grocery store here. You have to go to a special liquor store. The special liquor store sells it for twice the price of anywhere else in the country.
Anyway. Or at least twice the price that I paid in California. I don’t know anywhere else in the country because they have this restriction number of stores that can, they can. And the reason that I bring this up is because even in Texas there restrictions on how whiskey, how alcohol can be sold. And it’s frustrating for people like me, but it’s even more frustrating for the creators.
Imagine a creator who makes delicious whiskey. And I find out about it by maybe seeing their Instagram account and I want to go to their website and buy it. And what do I do? I see that there’s a link to go and find it in my local store, which, you know, means I’m never going to find it in my local store.
I’m just going to go back in by my local Glen Levitt and move on with my life or Freud and forget. Well, today’s guest said, you know what? It doesn’t have to be that way. You know what if Andrew really likes a shirt, he can buy the shirt directly from the company that has the Instagram account, that links to the shop, and then he can just buy it and it gets delivered to his house.
And he wanted to find a way to make a kosher with all the legal entities around the country. And he did it. And the, the site, the software is called bar cart. It’s like a shopping cart for anyone who’s selling spirits. And it automagically in the background creates that beautiful shopping experience that we’ve come to know.
But more importantly, it redirects the order to a local store that has permission from the state and got the whiskey or whatever from the you that they got it and can send it over. So basically what he does is he gets rid of all that annoying stuff and packages it up in a nice little shopping experience.
His name is he’s nodding the whole time I’m talking about this. Cause he knows how frustrating it is for people like me and more frustrating. It is for creators, for distillers. And I invited him here to talk about how he came up with this idea, how he’s growing it. And maybe I could vent a little bit now let’s try not to let me vent, please.
Audi. If you see me vent, will you stop me?
Adi Pal: I will try. Yes. I was just listening to that. That was great. Yeah.
Andrew: There’s no website inventing. There’s an upside and salute in solving it the way that you did. I should say this interview is spot on sponsored by a Gusto. If you need to pay your people, use Gusto. He’s nodding about that too. And lemon, if you need to hire developers, I’ll tell you later why you should go to lemon.io/mixergy.
But first Audi.
Adi Pal: Perfect and yeah, glad to be here, man. Thanks.
Andrew: How much revenue you guys producing
Adi Pal: we’re we’re over 10 million, um, uh, this year as of 2021 now.
Andrew: and the way that you get that you count revenue is amount of liquor sold, not your share of it.
Adi Pal: that’s right. Yeah. Yeah. So GMV, uh, we have two different sort of revenue streams. One is the, uh, uh, ARR essentially for the use of our platform where, uh, the software fees and then the other one is our takeout, essentially marketplace value of the GMV on all the transactions through
Andrew: Do you make money, uh, as a percentage of the transaction? Or do you do in addition to software that you have that’s the shopping cart.
Adi Pal: Yeah. So it’s ARR plastic right
Andrew: Okay. Am I right about the way that it works? It works. Like if I had a distillery, let’s say I want to make whiskey in 12 years. In the meantime I’ll sell moonshine, which is a whiskey that hasn’t been sitting long enough. I talk about it on my podcast. I sip it with some friends, maybe on YouTube. And now I listed on my site.
If I work with you, how do I get it out to my customers, to my fans?
Adi Pal: Well, we’ll give you a free trial. You don’t have your first month that you do this, but the way this would work is you would come onto bar card. You would upload your product. You would point and click And design a checkout button, which is just a few lines of code that you would copy and paste on your website, where you want to sell the whiskey.
And anybody who comes to the side of that point is essentially able to click on the button, add the product to an embedded shopping card that slides out. Make a purchase and behind the scenes, that order is going to get routed to it, retailer around the country that can fulfill it to the customer, you know, based on the address that they’re going to.
Andrew: And does bark cart have the direct relationships with all those retailers? Are you working with someone else? You
Adi Pal: No bark art. These are retailers in our network. We have retailers that we invite to join our platform. And then we have retailers that our brands bring to our platform as well, which is as easy as just clicking a button and inviting retailers
Andrew: Got it. And so the customer doesn’t have to know which retailer is servicing the, the dealer do they?
Adi Pal: Uh, depends. So. And that’s where regulations come in. Um, we make that information available because the sale takes place between a retailer and the customer and the liquor regulators are pretty clear about that, that they?
want the customer to be aware of that they want the customer to know the name, and they want to know that it’s not just being all the sales now being directed to one retailer, which isn’t compliant.
So we are, you know, our checkout is designed. We couldn’t use an out of the box. Because there’s nothing that was designed to do this. And we used, we tried, but venting is good because we’ve vented a lot. And, and, and that resulted in, in, in this new checkout, essentially.
Andrew: And the checkout looks beautiful. It’s finally coming to like regular distillers. I wish more people used it. I hate when they say go find it at your local retailer. Let’s talk about how you got here and how you built up the business. You were, I thought you were doing like once you do micro finance, just before this.
Adi Pal: A few years prior to that. So that was 2008, you know, uh, it stars in my eyes and wanted to, uh, uh, do a startup. I was in India for two years, uh, decided to do a micro finance venture. It was like another regulated space. I don’t know how I find myself in these, but it was essentially, uh, allowing, uh, you know, people like you and me over here to be able to lend to microfinance companies in India who at that time. Right. Yeah, because lending to the end, a borrower in a market like India was very tough in microfinance servicing that loan is tough. So you lend to the companies that work with those borrowers on a daily basis. That point is there was a big arbitrage play because those microfinance companies were borrowing at like 25.
So that was a ridiculous rate. And obviously over here, this is 2008, you know, the depression or recession there. Um, and so we were able to find an arbitrage where people over here would make a good return. Obviously there’s a risk involved, but these were, that’s why we were working with the companies.
But long story short, you know, uh, that’s what I was doing, but, you know, tricky space, uh, finance, cross border, um, uh, transfer of funds and then. Um, one fine day. We woke up the law literally was changed by somebody who said, you know what, let’s stop the flow of foreign funds into this sector of our economy.
And that was a startup
Andrew: What was the sector?
Adi Pal: well into the microfinance
Andrew: Oh, into microfinance. Okay. So your whole business basically was done.
Adi Pal: literally the business model it’s like somebody took our paycheck And,
shut it down. Yeah.
Andrew: and so at that point, did you decide, forget it. I’m going open a little store.
Adi Pal: Yeah. So we actually, you know, we, we had a social component to that business, which we left running and it still does today. So it’s involved in providing a basic health care to people in India. Those camps that we do, I’m really proud of that if something did come out of that, But then I came back over here and, um, I w I was at group bank.
In the derivatives technology side. Uh, so another regulator space, um, uh, building, building, trading, and risk applications for, uh, credit derivatives. Um, and that’s what I was doing prior to the microfinance. That’s what I was doing. I came back to that, um, and I did that for awhile. Um, and it’s actually. I, I only half joke when I say this.
So that’s what kind of drove me to the alcohol sector, but there’s a lot of similarities actually, because in, in our world and in the banking sector, it was all dictated by who had the licenses to issue a product who had the licenses to sell that product. There were brokers involved. Um, you know, when you’re selling it to the customer, what are the rules and regulations per state?
It sounds like whiskey, you know, it’s not like the U S
Andrew: then had you ended up with a little liquor store? Was it, it was a liquor store, right?
Adi Pal: Yeah, yeah. Yeah. So this is a while back. So, you know, I’m married, I’ve been married back then as one wife and I decided where this really, no, there’s a lot of shitty investment out there. We don’t know what to do with that money. Let’s just get a little liquor store.
And, you know, we were into craft spirits. We’re like, this is going to be great. A great sort of side business, fun business, you know, and,
Andrew: seriously. Like a fun thing is to have a store that you have to show up in where you’re selling things for like 35 bucks.
Adi Pal: you know, we were younger and stupid or so, um,
Andrew: No. Well, the thing is that you’re in derivatives, you’re in New York at the time, right? You’re a guy who’s around ambition. When you go to a small craft store, is it with this idea that something big could come of it or is it just a nice little investment?
Adi Pal: Know, to be fair. Yeah. I saw something similar, right? Because we were seeing a lot of craft spirits coming onto the market. And there were available to people who knew what stores to go to. Same thing as what you said, they weren’t widely available now Nively, I’m like, let’s do this store. It will be a nice sort of side hustle. it is New York, everyone needs one. And, um, I want her to see if we can take it online and reach a wider population. It seemed like a simple concept until you start doing.
Andrew: was. A small store, craft, craft, liquor that you love and the bigger vision maybe is let’s sell this also online. Okay. I kind of get what you’re, what you’re going for. What
Adi Pal: It seemed like a good
Andrew: to do this in?
Adi Pal: This was the store. Wasn’t Manhattan. The store still exists. I just don’t own it anymore, but you know, the store, wasn’t a city. Um, and, uh, it was a fun little thing, you know, a Friday evening, you show up, you have tastings, make a lot of friends. It’s a great industry.
Honestly, it’s a lot of fun. Um, and then.
Andrew: set up the store
Adi Pal: Oh, you know, we found the cheapest door in the city. So I think had like two 50 K at that point, um, we got a loan for it.
Andrew: to set it up to make it look nice to buy the whiskey or the,
Adi Pal: We bought an existing store it’s because the licensing is easier to do that than to start a new one. Um, and yeah, uh, no that, and essentially, uh, we got a loan for an SBA loan as the, as great. So Well,
Andrew: So you borrowed the money in order to buy it.
Adi Pal: yeah, yeah. Yeah.
Andrew: How much money do you borrow?
Adi Pal: I think we put down a hundred close to a hundred, I think. Yeah. Um, I would say not, not too much.
Andrew: I’m spending a lot of time on this because suddenly this little thing that I was poo-pooing earlier, it sounds like fun. Right? Get people come in, do a tasting.
Adi Pal: I think it’s great. And that’s how we w we didn’t know anything about the industry. We had never retailed, not even met family anywhere. We learned a lot. The two of us, we, we learn how the industry works, how the business works, how the product, you know, the Three tier system really learned a lot.
And at that point I started seeing the similarity. I’m like, wait, it’s set up very similar to banking with the licensing and the restrictions
Andrew: Three tier system is the person who makes it cannot sell it to the end consumer. They have to sell it to a distributor who sells it to the store who sells it to the end. Cus consumer.
Adi Pal: Yep. See simple. Yeah.
Adi Pal: Well, it was put in place to prevent Al Capone from becoming too. big. Um, so that’s why they separated this out so they could see his business at every level. And then they got him on tax evasion. So
Adi Pal: that’s literally why we’re there.
Andrew: so I see that you’re looking at it. You’re going online. How did your online business do.
Adi Pal: Well, initially it did great. Uh, it was a very, you know, niche sector. We did a good job of curating products. There was demand for it, not enough supply it. Didn’t great right out of the gate. And then. Well, Bob, maybe I would say a little less than a year in or close to a year. And, uh, we started growing bigger and we realize what we’re doing.
Isn’t exactly compliant. A store in New York is restricted in terms of where it can sell and what it can ship and where it can ship to. And we started learning that. So on the job, literally.
Andrew: So you initially would get orders, put them into boxes and mail them.
Adi Pal: Yeah. Yeah, yeah. Um, and then we realized, uh, you know, all these restrictions. So we started, uh, re reducing our footprint in terms of where we could ship to. And it. just wasn’t making too much sense. Customers were getting frustrated. You had existing customers who you couldn’t service anymore. So then we said, how do we solve.
And we said, let’s partner up with the retailers because we know there are other good retailers out there. We’re already, we’re already figuring out what product to bring in. So we started curating the selection on mashing, great. And working with retailers in different states to say, Hey, listen, bring this product.
And we’ve got the orders and they were more than happy because they essentially get a buyer essentially Right. To tell
Andrew: essentially what bar cart does now you were doing just for your one store, anyone who wanted to buy from you, how did you get so many customers that you would then routing to local stores?
Adi Pal: Um, I think, you know, that’s, that’s the beautiful thing about our, uh, the mashing grape piece. It’s a curated selection of products. It’s not what you would normally see on the homepage of, you know, most other, uh, uh, online platforms like this. It’s as simple as, you know, it worked, people actually liked what we picked, um, and word got around.
There’s a good store. They, they, they, you know, they have good customer service and they have good selections. So it was the right
Andrew: good at SEO or social media or anything.
Adi Pal: No, no, it was literally word of mouth and it kind of is how it is even today. Uh, for. Um, it’s actually, you know, very, very, um, uh, rewarding to see that you do the right thing.
Timing does matter. Of course you do the right thing. If you got the timing, right. The market rewards you,
Andrew: And by the way, mash and grape, it’s the mashes, the whiskey.
Adi Pal: right?
Andrew: And grape is wine. Is that what it is?
Adi Pal: Yes. Yeah. That’s how I came about. Yeah. Um, it is more spirits than wine today.
Andrew: And I don’t think you’ve probably, I don’t think they’ve expanded much beyond whiskey. Right?
Adi Pal: Oh, well spirits. Yeah. Yeah. Whiskey engine do remain our biggest tool categories and then tequila’s growing very fast.
Andrew: Do you own the online part of the business?
Adi Pal: Yeah. So the online beast today is separated from the retailer. We sold the retailer off again, we can’t. So as of today, mashing grape and bar cart. It’s a marketing company or a third party provider as the regulators call us, uh, very dull, but, uh, um, uh, we, we still sell online and all the orders get routed to retail partners, uh, who then fulfill the, fulfill the orders.
Andrew: Okay. So you started doing this making phone calls, signing up local store. Getting a national presence. At what point did you say? I think this could actually help don’t spirit makers directly.
Adi Pal: Yeah. I’ll, you know, again happened kind of organically when you do something like this and you work with crab brands, you know, seven years ago, eight years ago, Um,
you build good relationships. And a lot of those brands were saying, telling the customers go to match and grape. Then they were linking to mashing, rape for people to purchase their products.
And we were always trying to figure out how to. Optimize that, right. So if you’re linking to us, there’s going to be, you know, there’s going to be some drop off. How do we, how do we make that tighter? And that’s always been, I guess it kind of worked out. I always cared about that. I’m like, how can we make that customer journey better from the brand’s website to this eventual checkout on mashing grave.
And that’s how we, you know, essentially came upon this concept of let’s give them a way to check out on the brands. And the first
Andrew: they specifically said, look, how do you already knows how to send this out? Why don’t we just link over to his site? People can get it anywhere in the country. That’s an easy way. Who’s, who’s a brand that did that
Adi Pal: So I think one of our earliest brands, uh, two of our brands, one was in New York called Cooperstown distillery. and the other one, um, is a barrel bourbon, um, which is based out of Kentucky, both
Andrew: and they just started linking to you direct.
Adi Pal: Yeah, they were linking to us And it wasn’t uncommon to link to a retailer, but it was a little less common to link to somebody like us, which is a marketplace.
Andrew: alright. At what point did you say, okay. I think we’ve got a new business here. That’s way better than selling directly to consumers will power will power other people.
Adi Pal: Yeah. You know, the funny thing is 2019 is when. Um, my wife and I both were for the first time full-time on it. Um, and we moved upstate to upstate New York, um, from New York city, um, and said, let’s, let’s really do this. Cause we, this, this might be something bigger. And so I would say 2019 March, roughly.
Andrew: You just said, this could be something bigger. Let’s create the thing that powers everyone else’s who built the software for you
Adi Pal: Well, initially a lot of it was just like, you know, uh, ad hoc consultants that we brought in.
for specific, uh, tasks. Uh, and it wasn’t as complicated, but we, you know, we, we, we asked around, we got some, uh, uh, great references and then I’m glad, you know, I ended up working with a couple of guys out of San Diego. the opposite end of the country. And by I think 20, 20, I mean, the timing you won’t believe the timing, but 2020 may is when we had what resembles today’s bar cart a lot. Um, but you know, uh, it’s, it’s changed even in the last one year and 2020 Mays, as you might remember, there was this little virus thing that happened.
Um, and that was March, I think the New York city shut down, um, New York city shutdown. And suddenly bars were shut down and every, a lot of, uh, alcohol brands were looking for other ways to sell. And they’re like, wait, we could, this online thing really would work.
Adi Pal: And we got flooded.
Andrew: let me come back to that in a moment. I still want to go back a little bit and understood. First version of the software cost and then how you built it up from there and how you got, uh, customers. But first I should say anyone out there who’s listening. We need to hire developers. I’ve got the place go to lemon.io/mixergy.
They’ve got these phenomenal developers based in Eastern Europe, mostly. And they’re available to work with you remotely. It’s a company that we have all watched remotely grow, grow, grow, grow, grow. In fact, a, the founder, Alex has said a long time ago that he was just going to show his revenue show his whole process, show his growth publicly.
And so we’ve all watched them grow from zero to a million. Then from 1 million to where they are now 2.7 million in sales. And then basically along the way, he said, I’m an entrepreneur too. I’ll share my journey as publicly as I can. And he’s been super. And as a result, he got on Mixergy where I interviewed him and he must’ve gotten customers because he reached back out and said, Andrew, I want to sponsor and a for about a year, I’ve said you can’t.
And now we finally had an opportunity, had an opening and he signed up. And so here he is, if you need to hire a developer, go with the company that so many of us in the tech community have used go to. Lemon.io/mixergy. Oh. And I didn’t tell people why they should use the slash mixer. Jesus, because he’s going to give you a discount on his already low prices.
And frankly, so you can give me credit and I appreciate you doing that. Go to lemon.io/mixer G
Adi Pal: Um, all be on the website. Thank you. Yeah.
Andrew: good copy on their website. They’re so funny. Um, what did it cost you? So I know that the, the store costs you $250,000 to buy 150 of it was financed by the SBA. When it came time to doing the online thing, what did it cost to build the first version?
Adi Pal: Well, so the good part was I was selling the store at that point. So I had cash from that. Um, it wasn’t a big profit, but I got the cash that I wouldn’t back. And we were able to put that back in And it’s kinda over a period of time. So, uh, five, I guess, you know, we were, I like a hundred K I would say across two or three developers, different.
Uh, to get the initial version. Like I said, it was a lot of it was done in projects, you know? Um, and we did it over, I think, five months, perhaps. Yeah,
Andrew: And do you need to have a retailer in every state and then start thinking about how to route it all based on where customers.
Adi Pal: almost, almost. Um, you could, you know, club a few states together cause uh, based on where retailers can reach, but yeah. Um,
Andrew: Thanks. I was suppressing a sneeze there. I’m actually on grape and mash right now. And I’m afraid to hit the buy button. Your. Mashing grape, excuse me. The it’s so fricking easy because there’s a pay, uh, an apple pay button, which I love. So I hit the buy with apple. I select the shipping. Let’s say this place here in Austin.
I’ve got my credit card and everything in there. Oh, I don’t want to double tap, but I don’t even see where it’s coming from. It’s just super fast.
Adi Pal: So, uh, you are probably going to get fulfilled from Buda, Buda. I’m not very familiar with Texas.
but I believe doodles nearby. And that’s probably where your order will come from depending on what you’re ordering, obviously. Um, but Yeah.
uh, this, this website right now mashing great behind the scenes is our platform.
So that order is going to hit Barker, which the best way to explain it you know, without sort of sharing my screen and doing a demo would be to say, it’s like a Shopify on the backend. You’ll see all your orders come in. So I’ll be able to see your order come in. I’ll be able to see which retailer it gets assigned to.
Um, the retailer is also on the platform and the retailer has then updates, you know, logging on and getting a notification, confirming the order. Um, Printing a label. They’ve got the ups and FedEx accounts connected. They’re able to print labels. Um, so you, so you, so you have an auto status page, uh, that you will be able to see the order status change as the retailers updating the order.
Our ops team is on it, making sure things are moving. If you’re buying this from a brand’s website, the brand is able to see that, uh, but that’s that whole meat and potatoes behind this. And you know, this is mash and grape. It could be any, it could be the New York times.
Adi Pal: It doesn’t matter what
Andrew: super, it’s super slick. I can’t even see who’s shipping it. I can see that it would cost me $15 to have it delivered here. Um, but I it’s just so fast and
Adi Pal: Yeah. and that’s the flat rate shipping we’ve negotiated with our retailers across the country.
Andrew: Okay. So you had the retailers I’m imagining that’s a pretty easy thing to do, right? To call them up, to get them to use your software. How hard was.
Adi Pal: It’s actually not hard to reach out to retail. The hard part is convincing them that this makes sense and why they should go with you. And the harder part is, um, just sort of, you know, the day-to-day making sure that this is not something they’re been doing. This is new for them. Um, come Christmas.
They’re not going to hire 10 people to, for something that they don’t know. Right. So that means a guy who’s, uh, Manning the, the, you know, the, the cash register is the one packing. Your order is, um, when he’s free. That is Right.
Uh, in most cases. So that was the case. Back then everyone was on double duty of the stores and they were doing this and things have grown.
You know, we were able to, we were able to deliver actual value to them where they’re like, guess what? This is actually a good channel for me. And I’m going to hire somebody. I’m gonna hire one person. Now I’ve got to, now some of our retailers have, you know, a 10,000 square feet warehouse with 30 people packing.
Adi Pal: Uh, with a customer support team, you know, and an outsource team. So it’s beautiful. Uh, it’s, it’s, it’s, it’s really growing in front of our eyes.
Andrew: Okay. But at first I, it was you making phone calls to retailers telling them what you’re looking to do. You’re going to get them customers. Sometimes. Sometimes you sometimes.
Adi Pal: Um, I was mostly the one sort of getting the retailers on board, trying to explain to them, um, And yeah, it was, it was a small team. It was like three of us, me, my wife and other person who was sort of helping us with the operations right. Ops, um, and yeah, and, and, and meanwhile, handling customer support. Um, then we hired somebody for customers for.
Yeah, but it wasn’t, you know, people understood people had, some of them had already heard about us, so that helped. They knew that we’re not focused on the big box items and we’re not just looking at the really hard to get stuff which anybody can sell online. Uh, we were in fact trying to find good brand good products, um, and you know, the, the concept of a buyer in stores, uh, Not many stores, not many small independent stores have a dedicated buyer.
So we kind of acted as the buyer for them. So what they also liked was we would essentially tell them, here are 10 products that we think are great. Would you carry them this month? And they’re like, great. You just did the buying for me that I can also put on my shelf and impress my customers.
Andrew: And you’re bringing in key customers.
Adi Pal: Of course.
And we were bringing me sales for them. Um, so it’s a, it’s a, you know, you’re helping me move product. You’re helping me improve my selection.
Andrew: What about the makers then? So the retailers are just getting you the supply and getting it out to customers. It’s the distilleries. It’s the, it’s the w do you work with winemakers too?
Adi Pal: Yup. Yup.
Andrew: Okay. So how did you get that?
Adi Pal: No, that’s where I think the retail angle really helped because again, as a retailer, we had established relationships and you know, the industry is beautiful. You, you start working with one small whiskey brand that no one’s heard of suddenly that whiskey brand blows up because it is good whiskey. And you were talking about them before anyone else was the five other whiskey brands that want to be this whiskey brand will find you because you’ve now become.
Today, we call them influencers. They didn’t call it that I use that word, but, you know, um, um, yeah, you’re essentially a, uh, a mast, an audience of people who discovered this whiskey through you. So if you will now like five other whiskeys and tell them about those whiskeys, you know, uh, will help their sales.
And that’s how people found us. So that’s how distilleries and producers and brands from.
Andrew: They found you, what did you have a process that worked for getting them to get on the call with you, for selling to them in the beginning?
Adi Pal: No. not at all. Yeah. Um, no, it wasn’t really structured and you know, maybe it
Andrew: thought that’s where the growth came from from you, finding more people who are making a spirits, making a wine who are then going to be using your software and helping you promote.
Adi Pal: No actually initially, right, right. The whole, uh, this is now before this is still a matching grave. So this is still 20, 19, 20 19. We’re still primarily a marketplace selling online and, uh, selling products that we think. Based on, you know, tasting or attending and, and, Um, reaching out and reading stories and doing our research.
So that’s how most of these products were ending up on mashing rape. Um, and then obviously word of mouth people reaching out saying I’ve got a new tequila, I’ve got a new gin. So on and so forth. I’ve come 2020 things were a little different, um, when people needed Barker and online sales channel and their own website, but 2019 was matching great for them.
Andrew: because oh, 29. Okay. And then when the pandemic hit, that’s when they started coming to you.
Adi Pal: Right. Cause now bars got shut down. Restaurant got shut down and they wanted to sell online and they’re like, how can we do that?
Andrew: I started Googling and then they found you.
Adi Pal: Uh, so Yeah.
initially for most brands, right? The strategy was, and in fact this was a considered strategy. They’re like, a focus for us this year, find every e-commerce retailer and tell them to carry our product. So they were reaching out to mashing rape thing, carry our product. We’re like, we’ve got a better solution for you.
And at this point we had done actual tests with a couple of the brands that I mentioned, where if the sale took place on mashing grave versus the sale took place on the brand’s own website. What the conversion rates were. We had done AB tests on, on Facebook. Sending them to mash and grape, uh, you know, if the brand runs an ad and sending them to a retailer’s website, as opposed to their own website, we were seeing three, almost three to four times better performance when the sale was essentially w when the ad was, uh, consistent with the domain name, right.
Andrew: Ah, you’re saying, if you bought an ad, sending people over to mash and grape versus one, sending them over to the, to the creators site, you found better sales from the creator side, better conversion rate. Okay. And, but what you’re saying though,
Adi Pal: times. Yeah.
Andrew: Almost four times more. And so what you’re saying also is that you, you are getting called because you are a retailer from these makers saying list us and you said, well, we can list you, but why don’t you also sell on your own website?
You’ll do better than we ever could have a direct relationship with your customers. We got the software in place. And so when they were reaching out into reaching out to you, you had an opportunity to sell them on the product. That’s a better long-term fit for you.
Adi Pal: That’s exactly it. Yeah. And it, you know, it was definitely cannibalizing the mesh engraved business, which at that point, just to clarify, it wasn’t a retailer, it was an online marketplace, you know, to separate it from the retail as we were working with. Um, but yeah, it definitely cannibalized the marketplace model, but it was a better product in a weekend.
So barcode cannibalized, mashing grade, But I’m glad we did because otherwise someone else would have
Andrew: All right. Second sponsor Gusto. Do you know Gusto for paying?
Adi Pal: yeah. Great. Yeah. Um, yeah, one of my, when we had the retail store, actually that was running on Gusto. Um,
Andrew: Gusto for the retail
Adi Pal: yeah, yeah.
Andrew: What do you remember about Gusto and how it worked back then?
Adi Pal: Easy intuitive. They thought about a lot of the things. They must be using it. They solve a lot of their own problems, but sometimes I would see things I’m like, wow.
I didn’t even think about that. You guys thought about it. Thank you. That really helps.
Andrew: They are phenomenal. One thing that I don’t even know how to even bring up in here is that there just to have good customer support. I know that for most of this stuff, it just works. But if you ever have an issue, if you ever have a question, if your people on your team have a question with HR, with getting paid, you want to have a team of people who can stand by and be there for support.
I’m using them now because frankly, everyone on my team is 10 99. And I want an easy way to pay the contractors who work for me. If you’re out there listening to me and you have 10 99 contractors who are working for you or full-time employees, or a combination Gusto will work with you, they will make it really easy for you to pay and for your people to get paid and see what they’re getting paid and to see their benefits and so much more.
If you want to get started with them for. This is a perfect time of year to do it. Even if you’ve already paid and run payroll with a different company, they will transition you. Well, just go to gusto.com/mixergy. You should have an easy way to pay your people. Use that URL. They’ll let you try them for free and let you continue to use them for very low price.
Great service gusto.com/mixergy. You come from India.
Adi Pal: Yeah. Originally.
Andrew: Cool. What was your childhood like there?
Adi Pal: Um, my parents were doctors. Um, so I was supposed to be a doctor. I disappointed them and became a computer engineer. I’ll never live it down, but,
Andrew: I didn’t realize you were an engineer. Yeah. It makes sense that you are right. Because you were in it the whole time, even when you were doing derivatives, you
Adi Pal: yeah. Yeah.
Andrew: side of it.
Adi Pal: Well, I actually went and I was a hardware engineer. I was supposed to design, you know, iPhone is maybe, uh, but Hey, you know, uh,
Andrew: that was your dream to do that.
Adi Pal: Well, that was my, uh, my senior year project. I, I designed a coffee mug that would display, this is 2005. Yeah. Designed a coffee mug that would display sports scores on it, you know, um, wireless. So I was like, you know, look at your score that you drink your coffee. Well, yeah. Um, what that software.
Andrew: So how’d you end up on wall street then?
Adi Pal: Well, this was I, I was in New York And all three with hiring. This is 2005 things that still booming, you know? Um, they were hiring. If you could read, you would get higher. Probably. So that’s how I got hired.
I wasn’t very good at this. Yeah.
Andrew: in 2005 was still the trough in the internet just before things were starting to pick back up again. Right.
Adi Pal: Well, most people was booming Right. at that time.
Andrew: Wall street was
Adi Pal: mortgages and stuff who were booming. So I got hired into derivatives. I got hired into credit derivatives, Which were based on mortgages.
Andrew: for a long time was like the hot part of the market to be in
Adi Pal: Yeah. I mean, it was actually very exciting work academically and intellectually challenging, phenomenal, learned a lot, worked hard. Great group of
Andrew: because derivatives are, are financial instruments that get their value from other financial
Adi Pal: from an underlying yeah. Yeah. Instrument. Exactly. Yeah.
Andrew: And so the
Adi Pal: a derivative of my parents. Yeah. Wow.
Andrew: Right. And so then what’s what part got you excited. What was it that was so exciting for you to be
Adi Pal: analytical, right? Just solid problem solving, problem solving. I just want to know what I like. And problem solving is definitely something I really enjoy. Um, which, you know, my wife hates sometimes, cause she just wants to vent, but I want to solve that problem. Um, we’re working on that, but my point is actually I like the problem solving and this was a big problem.
Um, and you’re reading about it in the news every day and you’re working on it, but it was good. Yeah, that was good.
Andrew: Richard you see people get back there.
Adi Pal: Well, you know, we, we, we, we, um, you know, people are doing well on the, on the trading desk, right. Uh, and you saw the numbers, but you get, you sort of get immune to those numbers. Right? All those zeros at one point a derivative contract is, Uh, you know, can be a very, very large number. That doesn’t mean anything.
It’s just another number at that point. It’s so unrealistic.
Andrew: Uh, so what are you going to do now to grow? It feels to me like what happened was you got like a, a rocket put behind you because of COVID and people were willing to go home. They were drinking more at home, uh, than they ever had before. And so now what do you do.
Adi Pal: Well, you know, it’s interesting with w we’re now focusing a lot on, on connecting the entire ecosystem Because that’s the biggest problem. All the various players aren’t on one platform. So imagine a world where the customer, the retailer, the distributor, the salesperson, the importer, the producer, and as a lot of players in this, we’re all somehow connected. And, you know, the order could flow through, you know, from, from the Korea, from the producer to the customer and there’s full transparency and tracking, right. Um, that’s the ideal scenario. So lots of barcode right now, you know, it does what it does well, uh, and what we’re focusing on on behind the scenes is working with the industry players to say, how can bark art work for you?
How can it work for a distributor? How can it work for a retail.
Andrew: the place where they all talk and connect with each other,
Adi Pal: And interact with each other, right?
Andrew: interact with each other. I see. So if they can all be one, maybe through software, they can operate more efficiently together.
Adi Pal: It’s it’s, it’s not unlike. And Uber or any marketplace model. Right. It’s just that the participants in here are the many, too many problems, essentially. Um, but, um, right now the issue is that, uh, we’re, we’re we’re, we have a lot of layers and each layer has a lot of players. Um, each state has different rules.
So even if you were to solve for New York, doesn’t mean you’ll fall for cab, Texas, or California, um, or Jersey for that.
Andrew: What do you mean? Like what type of rule is different from one state to the other that it would impact you?
Adi Pal: So you’re from California. Uh, you?
could walk into a grocery store and buy liquor, right?
Adi Pal: can do that in New York. You can’t do that in Texas. Did you know.
you can do that in New York, which is New York city, the largest market. For most brands, you can’t walk into a liquor store and get a lemon for your car. You can get all the other ingredients because by law they can, a liquor store can only sell wine spirits and non-carbonated water. Yeah,
Andrew: Oh, I see. They can’t even sell the ingredients for a cocktail. They just have to have the spirits. Got it. And then is, did they still have no, they don’t have the Sunday morning rule anymore. Right? Where you’re not allowed to get alcohol in the
Adi Pal: new York’s done with that. Yeah. Yeah. Well, there is a time limit, but Yeah.
but. And again, that’s another good point. Connecticut has different rules, different rules on pricing. So it’s unlike fine. Unlike derivatives it’s actually, I would say a tougher challenge in the alcohol space because you’re, you don’t have a consistent set of rules across the country. So you have to first build for New York and California, maybe your biggest markets, Texas, Florida, Illinois. And see where all that fits and then plug the rest of the sort of gaps, right. Or, or Morphett,
Andrew: And do you think that the growth is going to come from smaller distilleries from having a lot of them? Or is it going to be like, I think I saw that you have Johnny Walker on your platform. You have Glen Levitt.
Adi Pal: and yeah, we, we’ve got, you know, we’ve got some, some of the larger brands, you know, we’ve got Sazeracs which. And everyone’s desired Pappy van Winkle and you know, all that.
Andrew: Oh, I didn’t know. They made that.
Adi Pal: yeah, they’re, they’re one of the largest, so we’ve got, uh, the growth. It’s interesting. It’s a great question, actually. And I, you know, if you would ask me that question, say my last year, I would’ve said, yeah, there’s, you know, there’s going to be, it’s going to be driven by a lot of the newer brands, but also there’s some regulatory changes in the works, but with some bills that are sitting in different states that could literally change. blow it wide open. Um, you know, there’s direct shipping bills. Uh there’s uh, uh, even within states, uh, more on the supplier side, right. And those, those, those bills are really going to dictate how this market goes. Um, And that could, uh, result in some of the well-known established brands that already have brand awareness, uh, essentially immediately, uh, seeing a huge growth in sales, but also on the flip side, it would make it easier for a new brand, a small brand, your moonshine, uh, to reach more customers quickly,
Andrew: Well, what’s the law that’s going to do that.
Adi Pal: Uh, interstate shipping, right? So shipping across state lines, uh, shipping, even with it. Yeah. So today wine retailer can ship wine to 13 or 14 states, I believe. Um, and that changes. So we’re partnered up with a company that handles, uh, one of the two largest companies that handles all the compliance rules and stays on top of it and taxes, right.
Uh, tax collection and stuff. So bark art is actually the only app certified by them by Avalara this company, um, to, to Do this, um, and. As part of that, we’re kind of aware of what the changing regulations are. Um, this is one of the proposed ones, um, and we’re seeing it at a state level it’s changing, um, intrastate and across states.
There’s, you know, the bills and that’s part of, uh, one of the industry associations. We’re part of, I know there’s a big push, um, district council, the U S there’s a big push to open up. E-commerce is, you know, the cat’s out of the bag. Now they’re trying to figure out how to regulate it, which is what happened again in the financial industry.
You’ve got this
Andrew: you think that, that, so you’re saying there’s going to be a world where I could make my own whiskey and then ship it nationally to just about every state
Adi Pal: hopefully. So, yeah.
Andrew: come soon.
Adi Pal: we just don’t know how long it’ll take, but there’s no reason why you shouldn’t be able to write. You can do that with
Andrew: that exists, then where do you fit in? Wouldn’t somebody just want to use Shopify or any other tool
Adi Pal: So we, so we barcode And see, that’s the other question you asked earlier? What are we working with growth coming from next? Right. So Barker today is a universal checkout for a, a, an alcohol brand. That means if you sell in stores, if you have pickup delivery shipping from stores, if you sell DTC, uh, if you sell on third party websites, wait, you said.
Uh, UK you Southern France. Sure. Southern Canada. We can combine all of that under one checkout with and build
Andrew: back end, you figured out how to ship it out, whether it’s going to be this me shipping it or some third party.
Adi Pal: and even on the front end, right? The, the, the way the funds have to move are not exactly how it happens in every other vertical. If you were making a t-shirt and selling it online on say, Shopify, you know, the funds would hit your bank account through your credit card. Well, that’s not allowed you can’t do that in alcohol.
So the funds have to go somewhere else. Um, also, uh, uh, the, the rules for every state, New York state wants to Nolan retailer’s name. That’s true. So it’s wants to know the retailers name and five other retailers. They know that. So building a checkout that accommodates all the differences across the states, you still need a solution.
Adi Pal: And that’s what we’re building.
Andrew: Do you think someone can use bar cart to create an online store?
Adi Pal: Well matching rape. Is that, and yes. So yes, and
Andrew: meaning they curate the, they curate the spirits that they want and have it be there as the fits with their vibe. So if there’s like an Instagram or who has a vibe and then wants to create their own store to sell whiskey that they curate or rum that they, they could do.
Adi Pal: We’re we? Yes. We have two such clients. Um, one is, uh, a yeah, I, uh, um, they’re going live fab, I think was a website owned by Sazerac that, um, highlights all their, you know, sort of portfolio brand. Another one is wine enthusiast who is already an active partner and they have the bar card checkout on the, on their website for a bunch of their products.
Andrew: Right. So somebody could just create a virtual store that fits with what their, what their vibe, or maybe even sell whiskey or other alcohol as part of a bigger store.
Adi Pal: Oh Yeah. If you have a website that’s getting traffic and you want to be able to sell, you know, wine spirits in a compliant manner,
Adi Pal: Barker. I mean, it takes us if you want, if you were talking about your moonshine for real on this call, by the end of this call, we could have you selling online. We have gotten a brand live in four hours, so, um,
Andrew: I wish I liked moonshine, you know, because it is just faster whiskey it’s whiskey that takes no time to, to age, but, uh, it just sucks so badly.
Adi Pal: some good stuff out there. Honestly, there is
Andrew: Is there recommend good moonshine? What do you.
Adi Pal: I, yeah. I, you.
know, I don’t want to play favorites, but I’ll definitely email you something after
Andrew: Okay. I’d love to try. Good moonshine. Moonshine was always in my, in my whiskey tasting nights, moonshine was one of the last things I’d let people taste just so they could feel the pain and comparison to the good whiskey that we had. And then I had the kind that came in a jar. So that felt like an interesting vibe, you know,
Adi Pal: yeah, I mean, it’s, it’s more like why dog, which has this on aged whiskey. That’s the category I’m talking about? Uh, that is, you know, it’s good. Whiskey is just not aged and it. really, it’s a great sipping whiskey that I’ve had. Yeah.
We work with a few clear whiskeys essentially.
Andrew: You got to send it over to me. I like your vibe. I like mashing grapes design. I like the whiskeys that you’re listing here. You guys are not selling them for very expensive. That’s good too.
Adi Pal: Yeah. And we, you know, uh, we, we, we really enjoy the matching group side of the business. It’s it really is fun. And that’s what I think keeps us going. It’s not, it’s not dry, you know, it’s no pun intended there. Yeah.
Andrew: All right. So for anyone who wants to go check you out, if they know somebody who’s in the, in the liquor business, they should go check out bar cart, by the way, your competitors. We talked before we got started. I heard that one of your competitors is shipping from one location in California. On behalf of distilleries.
Is, is that going to get them shut down? Are they potentially going to go to jail for that?
Adi Pal: It’s not kosher. Um, it’s not compliant. The bigger risk is to the brands that?
are using a platform like that or anybody, right. That could be out of California, out of Florida. Uh, and this is the one thing that even as discussed members as a, uh, you know, industry participants, that’s the one thing I would say, we want brands to do the research know what’s allowed know what’s not allowed check us out.
You don’t have to go with Barker. Right. But at least
Andrew: But one of your competitors is doing is asking for forgiveness, not permission. Like they’re doing the thing that you’re legally not allowed to do.
Adi Pal: Yeah. And so the challenge with that is that when the regulators come after them, the sad part is they first go to the brand and they put a cease and desist on the brand. What they say you’re doing something which we can figure out it doesn’t look clean to us.
CSUN. While we look into your operations, that could be the, you know, debt sort of, you know, no for, for a brand when what’s happened to a brand actually ironically out of California, um, and the liability, you know, the, the, the loss at that point, it’s for the brand, um, they’re the ones who was in the business
Adi Pal: and potentially their, you know, their entire
Andrew: I wonder how they justify it. I wonder who they have on their staff that makes them feel that that’s okay. It does go against everything we know about the industry.
Adi Pal: Yeah. And you know, the industry.
is maturing. There’s going to be more education. There’s going to be actual guidance coming out from regulators in the absence of that, it is, it is a little bit of a wild west, but, it won’t be for too long and you know, the good solutions exist. Good solutions, et cetera.
Andrew: Alright, thank you so much for being on here. Congratulations on the success with bar cart and I, I want to thank two sponsors who made this interview happen the first, if you need to pay your people, go check out gusto.com/mixergy. And the second one you’re ready to hire developers. Great developers, highly vetted, you know, their reputation.
In fact, go, go look on Twitter. See what people have said about working with lemon when you’re ready to work with them, go to lemon. Slash Mixergy and I’m appreciative of them and view Hadi. Congratulations.
Adi Pal: Thanks a lot. Appreciate it. Thank you. Bradley me.