Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.
And before I started Mixergy, I never would have imagined that sending food on a regular basis to customers is a business that could support more than one player. But I’ve been doing these interviews now for over half a decade, and I’ve interviewed several entrepreneurs who have built businesses where they send food out either one time or on subscription and the freaking thing just goes and it goes and goes. And I’m amazed that these businesses work. I’m amazed that they’re not changing the world the way like Uber would and they’re still doing fan-freaking-tastically well.
So I’m fascinated by those businesses, which is why I’m excited to have today’s guest on. Reggie Milligan is the founder of Mantry. Mantry is a food of the month club tailored to guys. We’ll talk about what the tailored to guys part means within this interview. It’s doing well, and I want to find out how he did it.
This whole interview is sponsored by two companies. The first is the company that will help you hire your next great developer–Toptal. The second is the company that will help you do marketing automation right. It’s called ActiveCampaign. Reggie, welcome.
Reggie: Thanks for having me, Andrew.
Andrew: Reggie, what kind of revenue are you guys doing?
Reggie: So we are–we don’t get into the nitty-gritty details of that, but we are in the millions of revenue and yeah.
Andrew: Wait. So millions of dollars a year or millions of dollars since you started in 2012 about five years ago?
Reggie: We don’t get into the details of that, but millions of revenue. That’s just to say that say so you know that we’re not doing $10,000 a month or something.
Andrew: Are you doing–have you hit over $1 million a year yet?
Andrew: You have? Recently?
Reggie: Yeah. We’ve been doing that for–we hit right at that number probably year two.
Andrew: And you stayed there. So here’s the surprising thing for me–and you have stayed there, right?
Andrew: So here’s the thing. You guys are built on WordPress, in a free freaking WordPress theme. I went to look it up, “Where’d these guys get the theme?” I looked it up and it turns it out I could get it for free from WordPress.org, right?
Reggie: It’s true.
Andrew: So one of the issues I had in preparing for this interview is I went to see the shopping experience on your site, and I’m stuck on the spinning wheel. What’s up?
Reggie: With the spinning wheel on our site?
Andrew: Yeah. I know it’s two steps. Step one is, “Where should we send your Mantry box?” I put in my address. I hit continue and it’s stuck on that spinning wheel. Then I went to Safari. Same thing happened there.
Reggie: That sounds like a bug test that I need to tell the tech team.
Andrew: Okay. So this is a fluke. The site ordinarily will work. If someone goes to Mantry when we publish this interview in a few days, it’s going to work. They can go and buy?
Reggie: Yeah. We have sales coming in, I think, every day. We had sales coming in today. So it’s working. It’s something that–I’d love for you to send a screen grab of what’s going on and then I can share that.
Andrew: I just got rid of it. But I’ll send a screen grab. I’ll grab another one of them.
Reggie: That’s not good if that’s happening.
Andrew: I thought what you were going to say is, “You know what, Andrew? We had our nice time and the thing is over.” But that’s not the case. You guys are doing well.
Andrew: Here’s the other thing. After I saw that, I went to SimilarWeb to see how much traffic you’re getting, and it’s like tens of thousands a month. That’s it?
Andrew: But it’s all ecommerce, so it translates into sales.
Reggie: Yeah. We don’t have massive traffic coming to the site. We launched some things like the blog on Medium, and we do a bit of social media stuff, but yeah, pretty small numbers of traffic. We spend almost nothing on marketing every year. So we’re not driving a lot. We’re not spending to drive a lot of traffic. So that’s pretty accurate.
Andrew: All right. I want to dig so much into this to understand how this works. Were you blown away too that the world could support another food of the month club?
Reggie: Well, when we started this thing, I guess it was five years ago. So it was sort of right at the beginning of that bubble, you know? So I would say that if you were to start it now, I would be surprised if it could support another one, because we’ve seen sort of hundreds if not thousands pump out. We were sort of early with it when we launched into it. Maybe that’s part of the reason.
Andrew: I see. I wouldn’t even think that five years ago was that early. But all right.
Reggie: Yeah. I think I would say like one of the markers would be like Birchbox or something like that, and I think they might have been 2011 and we were kind of like 2012.
Andrew: But isn’t Birchbox more of something I would buy for myself, and Mantry is something I would buy for my friend?
Reggie: Gifting for like guys is super–a big part of our business. People also get it for themselves, but yeah, you picked up on that pretty quick. It’s also a good gift. It’s a big part of the business.
Andrew: Okay. I figured it’s mostly gifts with you. Is it?
Reggie: We do–when we first started it, we were thinking, “Okay, sweet, people that are bachelors or something are going to be sitting in their apartment and they’re going to want to be getting these six different food products.” But then very quickly, we found out that guys are tough to shop for, and that was going to be a whole other part of the business. We’re about 50/50 on like gift and subscribers.
Andrew: So you’re kind of an entrepreneur. You’ve been doing this basically your whole life. Can you talk about the golf course thing? Then I also want to get into–you’re also a foodie and man did you get deep into that. We’ll talk about that. But the golf course thing, what did you do as a 10-year old?
Reggie: Yeah. I guess getting the entrepreneurial bug, I grew up on a golf course. So I would go into the gullies and the ravines of the little local municipal course we had an I’d find different golf balls for the course of a day, and then I’d come out the next day and I’d put them up in egg cartons and I’d sell them for $1 each.
So I always joke that that’s probably–I remember being like 12 years old and making $42 in a day when all I wanted to do was buy a Wunderbar. So that’s probably the most money I’ll make relative to what I needed at the time, I think. I did not need more than about $1, and I remember doing okay. So I guess that’s the first time that I got into like the entrepreneurship game of buying and selling golf balls.
Andrew: Yeah. And you continued and we’ll talk–I hope to get to talk about some of the companies that you’ve started. But before you got into entrepreneurship professionally as an adult, you got a $40,000 scholarship to culinary school. You got to apprentice at The French Laundry, which is hard for me to even get a table at, let alone go and apprentice. And what did you think of that lifestyle?
Reggie: Yeah. So, if you asked me when I was like 15 years old what I wanted to do, I would be like, “I’m going to open a three-Michelin star restaurant when I’m 24.” Like I guess the equivalent on what you see on like Chef’s Table. I was hell bent on that life. I got the opportunity at The French Laundry, when I was 17, basically just wrote a couple of letters until I got a letter back saying they invited me down, super gracious to give a young person an opportunity at that.
I was working up in Vancouver where I grew up at, sort of a Relais & Chateaux, which is a similar style fine dining restaurant. And yeah, I was just 100% into cooking, eventually just sort of burned out at 21, decided to go to college.
Andrew: Why’d you burn out? Do you have an example of a time that made you feel so overwhelmed that you said, “I think I’m done with this?” Did somebody yell at you?
Reggie: Yeah, I do. In kitchens, people yell.
Andrew: Give me an example of when someone yelled at you?
Reggie: I think the thing with like when you get into the sort of Michelin star thing, it’s not so much yelling. There’s definitely high standards to be held and just because you’re 17 years old doesn’t mean that people take like much for granted. So you’re held at high standards, and there are a lot of high standards.
But for me, I think there was a moment when I was like 20–you work probably 17 hours a day, which is not much different than entrepreneurship now. But I think there was just sort of a moment where I’d been doing it so hard since about the age of 14 was my first kitchen job. Around 19 or 20, going straight through every birthday and every sort of . . .
Andrew: Working your birthdays?
Reggie: Working, working, working my youth. So I think I hit a time when I think my buddies went to college kind of thing and it was just a speed check for me of like, “Do I want to take a year away from kitchens to see what’s up before I dive back into it?” Then something like that, once you step out of it, it’s hard to like re-immerse back in to that path.
Andrew: Wow. So you were working a lot. You’re a pretty cool looking guy. Did you get to date much considering all the hours you put in, or was that part of the burnout, “Damn, I didn’t get to date?”
Reggie: I mean, to be honest, I always say to people it’s more like the call when you call your buddy and he’s like second year of university and you’re working–I was working at an amazing restaurant and given an amazing opportunity. You get a call and he’s going shopping for coffee tables, and then he’s going to go for beers and later and you’re like, “Yeah, I’ve got 16 hours in front of me. I’m 18 years old, 19 years old. What am I doing?” You know what I mean?
Andrew: I had that too. It wasn’t even as cool as working at The French Laundry. You know what my dad did? My dad had me work in a basement of a store that sold his clothing on 17th Street in Manhattan. My job was to untangle hangers. You know you buy clothes from them, they take the hanger, they throw it in a box? My job was to untangle those hangers.
My other job was to put security stickers inside of new shoes, so if someone stole them, the alarm would go off. I worked I think it was from 8:00 to 8:00 because you’re a punk unless you work all day. My dad sent me there so I could learn business from the inside. I learned nothing from the inside except, “This is not the life for me. I’ve got to work hard.” But I was committed to doing it because I did want to eventually get into business.
Andrew: And it wasn’t that my friends were calling me to hang out that I missed out. I missed out that I didn’t get to experience and like be a crappy pick-up guy or a crappy hang out guy or vomit from having two beers and learning how to hold a beer. So, when I finally was able to hang out, I was out of my element. Did you have any of that?
Reggie: Yeah. If I could go back to that 18-year old I’d be like, “Dude, just stick it out for five years at a joint like that, then you could figure out what you want to do.” But I think for me, yeah, I just had–I still was able to balance like a bit–growing up, I didn’t overwork completely. But kitchens at that level–I use the Netflix example because a lot of people watch Chef’s Table now.
But those guys who are on Chef’s Table, you have to realize you just see the final end of their career, where they’re these artists, they’re 40. There is incredible amount of work, especially in chefs, that goes into honing your craft and beating on it every day. So I think it was just the classic like you’re young, you’re looking outside the box and you’re like, “Maybe I should go with the normal path.”
Andrew: Dude, Reggie, it sounds like you’re saying you wish you would have stuck with it and plowed through the burnout, right?
Andrew: No? Okay.
Reggie: As a business owner, I understand how challenging restaurants can be. Even the best chefs, like you can just screw up running a restaurant, so I don’t miss that. I just more like stuck it out for another year or two or something like that rather than . . .
Andrew: Yeah. You know what? I had Shep Gordon on here. He’s the manager who made a lot of these chefs into celebrities. I think he did too good of a job with them. He’s now made them look so good, so idealistic that people will work like crazy, burn themselves out, have crappy lives, mostly not go anywhere trying to be like them, and then even if they are like them, they end up with really not the greatest of lives. He did a great job with that. He basically made them into these superheroes that you could never live up to.
Reggie: Yeah. It’s amazing now. Like in 2004, when I was at The French Laundry, like maybe super foodies would know about a place like French Laundry and really be into it. Now chefs are like rock stars.
Reggie: I’m sure people in kitchens now are getting people that are like, “I saw Chef’s Table. I want to work at your restaurant,” whatever. But I think Shep would be–I think he represented like Emeril and some of them.
Andrew: Yeah, all of them. He represented all of them.
Andrew: So then you started another company, Create My Culture, which you told our producer is kind of like Facebook Events, but it didn’t really go anywhere. The next thing you created was Social Feed. You were starting to marry entrepreneurship, which you had as a kid, with food, which you developed as you got a little bit older. What was Social Feed?
Reggie: Social Feed, I mean, started as–when I went to college, I went to school at this tiny university in Victoria, Canada, and I would throw dinner parties because I knew how to cook, kind of for a social thing. So we’d invite 10 or 15 people over for dinner. That usually ends up being 15 or 30 when you’re kind of offering free food and some wine in college. And it just became a very amazing way to like socialize and like meet new people.
So the business started as basically long table communal dining, where you could buy a ticket–we’d go into a restaurant on a slow night, like maybe a Tuesday, say, “We want to throw a Social Feed for 30 people.” You buy individual tickets, like maybe the theme of the night would be young entrepreneurs. And then it’s sort of like a Meetup.com meets dinner. We launched that in Vancouver and we moved it to Toronto.
It was very much maybe you would grab one other friend, you’d go and the rub would be that you would want to meet other people at the table who were interested in connecting outside of the internet, and yeah, it was a fun thing to sort of transition from college and doing that and then building a business out of that.
Andrew: Yeah. It kind of reminds me of Grubhub–no, GrubWithUs, right?
Andrew: It was like Meetup at a table. But you were going to manage all of it yourself. I couldn’t go to your site, to Social Feed and create my own dinner, could I?
Reggie: No, you wouldn’t.
Andrew: You could not. Okay.
Reggie: You would just pick the restaurant and set the feeds. Yeah.
Andrew: How much did you sell it for?
Reggie: We’ve never mentioned that one either.
Andrew: Come one. Mention it now. It’s not that much and you’ve moved on past it. How much?
Reggie: We don’t mention it.
Andrew: Really? Who’s we?
Reggie: Me and my cofounders.
Andrew: Oh, you had cofounders there too?
Andrew: Same people as at Mantry?
Andrew: Okay. Fair to say it was under–
Reggie: Let’s just say it wasn’t anything to call home about.
Andrew: All right. You personally got less than $100,000 from that?
Andrew: Okay. So then you had a little bit of money, a little bit of success. It really shows that what you could create in your head could actually be something that the world would want to interact with, could produce money and someone else would want to buy it. I see how that would encourage you. Then you said, “You know what? I need to come up with another business idea.” You were thinking back on how you were in school and you wrote a case study for Food Magazine. What was the food magazine case study that you did back in school?
Reggie: It was a pretty bad idea. It was called Feed Magazine. At the time, I came off the restaurant thing, and I was sort of in this place of like I felt like my skill set was food and I just had this idea for like a food magazine that was tailored to guys. So basically, if you took like the food articles that maybe once every couple months showed up in Esquire or GQ and made an entire food magazine tailored to guys because most food media at that time was geared towards different demographics. So I just sort of built a little business plan for this thing, Feed Magazine that was–yeah, it was kind of like a GQ plus Bon Appetite-type vibe.
Andrew: Okay. And then that kind of put a thought in your head, which was, “You know what? Having an article like ’10 Hot Sauces to Try’ is nice, but. . .” what would be better and what’s the problem with articles like “10 Hot Sauces to Try?”
Reggie: Yeah. We just kept reading these like lists of “5 Things to Try,” “5 Mustards to Try,” “10 Hot Sauces to Try.” We said, “Why don’t we just put this stuff in a box and send it out? The one thing that would always frustrate me with reading any type of recommendations is it’s sort of like, “Okay, this is nice, but I kind of just want to have this stuff or try this stuff.” So, yeah, we set out to sort of–and this was also around 2012, when nobody knew what was happening with print and even digital magazines and that sort of thing.
We just said let’s try and create a product around a magazine experience where you’d physically send six products every month and sort of shape it the same way as a food magazine, where you’d do a theme being six products from Tennessee or six products for grilling or the same way a magazine would include recipes and stories and that type of thing and tips, but just send the products as well.
Andrew: So how inspired were you by all the boxes that were being sold at the time?
Reggie: Yeah. That’s a good question. I didn’t even–I was up in Toronto, Canada when I started the business. The business started with a friend of mine who was my initial cofounder who came to me and sort of said like he was interested in food. And I think he was the one who suggested subscription. It was more of like–I think he had done a business previous that was subscription and he just liked the business model of it, of having a recurring customer.
And then we just decided like it would be easier to keep people every couple months or every month rather than try and sell them over and over and over. So we didn’t actually look too much at the space. I think I mentioned to you before, we had–I think I knew there was Birchbox and stuff like that, but there wasn’t that much out there. But we didn’t look too much. Mostly when we looked at those other companies, we looked at their pricing. When we launched the business, we were like $75 a month, which was like three times as much as theme. That used to scare us big time because we were like, “Oh my god, are we just way too expensive?”
Andrew: Why were you so expensive?
Reggie: We just couldn’t make it work. We couldn’t make the numbers work at any price where they were at. We would punch in the numbers, and our costs when we launched the thing were like $55 a box or something like that. And we were looking at them and they were selling these things for $20 and we’re going like, “Okay, shipping is $8. How are we getting around this?” So it just concerned us that we didn’t have the knowledge or whatever. I think looking back it was a VC funding thing. It was more of scalability thing.
Andrew: I see. They were willing to take a hit on unit economics in order to build a big audience that then maybe they could sell to somebody else.
Reggie: Yeah. Exactly.
Andrew: All right. Let me take a moment here to talk about my first sponsor and come back to this. My first sponsor is a company called ActiveCampaign. Reggie and I both use marketing automation. If you’re out there and you’re not using marketing automation, you’re basically being stupid. I’m not insulting you, but I’m saying what you’re doing is using stupid email. Stupid email means that it’s not taking into account what people are clicking on. It’s not taking into account what people’s interests are. It’s just stupidly sending out the same thing to everybody and you deserve better than that and your audience deserves better than that.
Smart email means that when someone comes to your site and they express an interest in, I don’t know, let’s say Reggie had also male and female boxes. If they expressed an interest in male boxes, you might want to start sending them messages just about mail boxes. If they keep clicking over to see your latest offer, your latest box and then they don’t buy, maybe that’s someone that you might want to have your smart marketing send a 10 % discount to see if you can just tip it over. They’ve been considering it, “Come on, get in there and buy it.” That’s what smart marketing automation is.
Now, before we started we were talking about how we both have smart marketing automation and we both hate our software. And the problem with a lot of the software is they locked us in early on back when there wasn’t much choice and it’s too confusing and so it ends up causing a lot of problems for the business, which is why if you’re out there listening to me, you should think about getting much, much better software than I think most people have been around for a long time have.
Smarter software means software that you can actually use every feature of and not have one feature step on the other. Smarter software means that when you hire a virtual assistant to go and send out email to a specific group of people, the assistant can actually do it. Smarter software means that when you have an idea, “Everyone who watches this video should get a follow up offer if they watch it to completion,” you should be able to execute on that and it shouldn’t be tough to do that, right?
Imagine if writing a blog post was tough, you wouldn’t write a blog posts. Imagine if posting on Facebook was hard. You wouldn’t be posting on Facebook. You wanted to make it so easy that you use all these marketing automation features.
So that’s where ActiveCampaign comes in. These guys have been around forever and they decided that what they could do was take on the giants of this space with better software and they’re doing it. If you want to check out ActiveCampaign, they’re going to give you your second month for free. They’re going to do two free one-on-one sessions with their consultants who will help you think through how to automate your marketing right. And if you’re with one of these dumb email providers, they will migrate you for free.
I want you to go check out ActiveCampaign not just because of the offer that they have there, but even if you don’t need it, you should look around this page that I’m going to give you a link to because beyond the special offer on this URL, you’ll see all the features that smart marketing automation should have and you’re going to get ideas for how you can organize your marketing a lot more intelligently.
So here’s the URL. Go check out ActiveCampaign.com/Mixergy. You’re going to see what your marketing–oh, look at this, my favorite part is the flow chart. Towards the bottom of the page on the right, one little view will help you understand how marketing automation needs to be, needs to operate, the one that starts with contact belongs to list, potential clients. Take it from there, you’ll fully understand it. I’m grateful to them for sponsoring. All right.
Reggie: Dude, you’re a pro.
Andrew: You know what? I’m starting to run through this a lot faster because the feedback that I’ve gotten is I’m getting like too chatty in the ads.
Reggie: I thought that was impressive. You just ripped that off like one minute straight from your memory.
Andrew: Thanks. I appreciate it. I intentionally pick every sponsor just based on, “Can I talk about them, or am I going to have to have the script here?”
Reggie: It was amazing for adlib.
Andrew: I see what you were thinking of with this. I see where you were going. Your first product was actually a collection of hot sauces, right?
Reggie: Yeah. Our first product was actually–our first customer, the buy came in and we didn’t even have a product. So we just went to the local like specialty food market in Toronto, filled up six things and put it in a box and dropped it off. It wasn’t hot sauces, but there was a hot sauce in there. But it was pretty much–we did a quick fulfill from different cool stuff we found in the local market.
Andrew: I see. And I can’t get an old version of your site here, which is why I’m flying a little bit blind. But it seems like at the time what you were saying is, “I will find interesting things and send it out to you.”
Reggie: Yeah. We’ve always been the same model, which is like we’re going to find six different products and send it out. I’m just saying I think we came up with the idea on like a Wednesday, we launched on a Friday. When I say that, we literally had put the buy button up and didn’t expect anyone to buy for like the first week and we hit–we got a buy and we said, “Okay, we have to put this together.” So we got like a little box together, went to the market, found six cool things and literally banged on somebody’s door and dropped it off and ran away.
Andrew: Because he happened to be in Toronto near you?
Reggie: Yeah, exactly. We set it up so you could only buy in Toronto.
Andrew: Oh, really? I see.
Andrew: And you know what? The reason that you moved so fast was you said, “Look, if I don’t move fast, then what would happen?”
Reggie: Yeah. I’m a believer that with startup ideas in the beginning, like if you don’t get to the point of like hitting market right away–there are different opinions on this. For me personally, it starts fading every day that goes by and the chances of actually launching get less and less and less. So I think we went form like the idea to having our first buy within like three days, which could be crazy and hasty, but it was the way we did it.
Andrew: Look at this. I finally got an old version of your site. By the way, it does make sense. You’re talking with a bunch of guys. It doesn’t take that much to put it up. Let’s just get it up or else it’s going to be one of these things that we talk about and never happens.
Reggie: And people always see five years later, but you have to realize, the way a lot of startups start like ours, it’s just like a snowball and it gets rolling and you get a little bit of early momentum and five years later, here you are.
Andrew: I see. I’m looking at an earlier version of the site. It says The Mantry Company: A Modern Man’s Pantry. Now I get why–I thought it was like Man-try, like, “Hey, man, try this already.”
Reggie: No, it’s literally like pantry for men.
Andrew: Got it.
Reggie: It’s just non-perishable products. We don’t put kale or chicken breasts or whatever. It’s just like mustard, barbecue sauces, different charcuterie, salami, hot sauces. It’s just a pantry–we just try and stock your pantry with the best stuff we can find in the U.S.
Andrew: And the box that it comes in, always iconic. Where did the idea come from for this box?
Reggie: Pretty funny. In my days in working in restaurants, I used to always remember that oysters showed up in these like cool looking crates. And they kind of looked like that.
Andrew: Yeah. That’s what you’ve got your mic on today. Yes.
Reggie: So when we first launched, there’s an oyster restaurant called Rodney’s in Toronto. So I went and knocked on the door and Rodney was there. I said, “Hey, Rodney, you’re just throwing away this sort of packaging the oysters come in. The oysters are sealed off, so it’s not touching the wood. Can you throw a couple our way so that we can test this idea out?
So that’s how it started is recycled oyster crates from an oyster restaurant in Toronto. And then we moved on to sort of getting them produced at a larger scale and that type of thing. In the beginning, we didn’t want to–we wanted unique packaging and we didn’t want to pay for it. So, the free oyster crates sort of fit both of those criteria.
Andrew: Yeah. It looks really good and it’s got a nice stamp on the side of it with Mantry, right? Your design was really good from the beginning. What I’m wondering is where’d you get that first customer? You say, “Look, I went. I got a WordPress site. I came up with an idea. We didn’t even have the box but somebody bought.” How did this guy buy?
Reggie: Our strategy from the very beginning was like put the buy button up and just try to do a bit of press. We actually eventually–I think I sat down with like two beers for three hours and I ripped off emails to every small, medium to large-size publications in the Toronto area. There was a publication called blogTO, which did a small little article about–I think it was like a startup founder story. I believe the article is still online. They just gave us like a tiny little run. That really gave us that tiny little jumpstart.
Because our goal in the beginning was like we just didn’t want our mom and our friend and our brother to buy the thing because you just get no real feedback from that. We wanted a stranger to buy it. The tiny little press article kind of got us over that hump.
Andrew: I do see it, June 12th, 2012. This is blogTO as in Blog Toronto and because you’re in Toronto, you’re relevant to them. I see. And they talked it up. I read you received $40,000 to culinary school, burnt out at The French Laundry before he was 19, was lucky enough to work under Thomas Keller. Got it. I see. Okay.
Reggie: So we owe that guy a beer because he launched the entire company.
Andrew: And that’s where you got your first customer?
Andrew: Okay. And so you end up with a customer, you send the thing out. At what point do you realize this thing is actually worth doing on scale?
Reggie: So you mentioned GrubWithUs I think earlier. GrubWithUs, there was a company that was out of–the company that bought the Social Feed was out of like a Y Combinator type thing that was sort of around the same time as GrubWithUs. We ended up getting bought by like an American company that wanted to come to Canada. So, when we launched this idea, we were kind of like, “Okay, if no one is doing this in the U.S., we should try and launch down there.”
Canada has 30 million people, and the startup environment is not as–like the buying ecommerce environment in 2012 just wasn’t the same as the U.S. So we were able to kind of–we wanted to make a move into the U.S. This is just funny immigration stuff, but like we couldn’t work in the U.S. as Canadians. So we had to get like third-party fulfillment to launch the business.
So we were kind of forced into things like we weren’t able to set up our own warehouse. Like we had to find third-party fulfillment and all these little things that helped us sort of get scale or the capacity to scale by fluke. I probably would have like started shipping it, like I said, like kept deliveries going–
Andrew: From your house until you got to scale is what you would have done.
Andrew: But you can’t ship from Toronto to New York from your house at any economical level, so you had to–I see. So how did you find these places that were going to do your shipping for you?
Reggie: So I didn’t know anything about this industry. I didn’t even know that companies used third-party fulfillment. In 2012, I assumed that every company had their own warehouse and shipped everything. So we found some person in like Mobridge, South Dakota that had a warehouse that did this sort of third-party fulfillment. That allowed us to ship to the United States. The other thing is shipping from Canada to the States is like really expensive, crazy, like $40, like totally not possible when you’re starting out a business.
So we found this small fulfillment center. They agreed to come on with us for like 100 packages a month or something. And again, like if I was to come to the States and start fulfilling packages as a Canadian with no visa, like I’m breaking all sorts of immigration laws. So it was sort of like by default that we had to do that, and it was a blessing in disguise because we got out of our own way. We probably would have like gone the other route, which I think would have slowed things down if we had to run our own warehouse and learn about shipping ourselves.
Andrew: I was on your Facebook page. Again, one of the things that scared me about having you on is the Facebook page hardly has any posts on it. But again, mine hasn’t had one in a long-time either, so who am I to judge? What it did have, though, was a top post which was your featured post of your box being on “The Today Show,” right? I’m imagining that’s more of you sitting there with some beer cranking out emails to anyone who can potentially write about you.
Andrew: You get on “The Today Show” with like four other services that are similar, including Zapp’s Potato Chips, which apparently has a Zapp’s Potato Chip of the Month Club or something.
Reggie: They’re delicious.
Andrew: Oh, I love those. Their Spicy Voodoo Chips are the best.
Reggie: Yeah. NOLA, New Orleans, man, I think they’re the pride of New Orleans.
Andrew: They are fantastic. I have to give it to them, really. They have one–it might even be the Voodoo. I have to pause and have some water in between chips because it’s so spicy.
Andrew: But did that actually work for you? Beyond the prestige of being on “The Today Show,” did that actually get you customers?
Reggie: Yes. And I will say like we’ve had a lot of press in a lot of different places and the two presses that probably had the most effect–the thing is for us, if I say–if we get into, let’s say, I don’t know, like a GQ and somebody says, “Hey, you’re a guy out there. You love food. Subscribe.” That will very rarely drive very many subscriptions. But for us, if you’re in the holiday buying season and you get somebody like The Today Show or for Father’s Day or Valentine’s Day and you get somebody to say, “Hey, this is the perfect gift for your guy,” then that is where the power of press comes in.
Andrew: I see.
Reggie: So press for us has been a unique angle. Another example is like Lauren Conrad I remember like, in 2013, the girl who was like on “The Hills,” she had like a Valentine’s Day thing where it was like “10 Gifts for Your Guy for Valentine’s Day.” I think it was like the second biggest driver of sales we’ve had in a single day we’ve had from press was like one post from her.
So with those types of things, it’s mostly timing and very rarely if a company just tells you to sign up to the service because it will help you cook better, whatever, does that do–that would do 10% of what, let’s say Cosmo is saying like, “Hey, this is the perfect gift for him,” or being in a gift guide.
Andrew: I see. I see the post from February 12th, 2013, two days before Valentine’s Day and I can see why you guys would be perfect for that. Number one, quickie breakfast in bed. Number two tip is subscribe him to Mantry. “We all know the best way to a man’s heart is through his stomach. If your guy is a foodie, this is the perfect last-minute gift. Sign him up to receive six to eight full-size premium food products from top artisan makers that will be delivered to him each month.”
Reggie: So, if you know anyone that knows Lauren Conrad, tell her thanks for that too.
Andrew: What are you doing to get this press? What are you doing when you’re drinking sending out? Because I drink and I then just start watching Netflix. Actually, no I’ve sometimes sent some ballsy emails when I’m drinking and I like it.
Reggie: Yeah. I don’t do it as much anymore, but honestly, like I just would sit down and I knew that there were PR firms and companies spend money to that. But I just found good success by just saying, “I’m the cofounder. I don’t have PR company. If you want to feature us, let me know.” Like you said, just being a little more ballsy, being a little more remarkable. I think a lot of the times, it’s subjects lines like “Mediocre Gift for Him” or like “This Could Be a Waste of Your Time.”
People in press positions, editors get so many pitches and so many useless pitches, that I think as an early founder, the two ways you can differentiate yourself is just say like, “Hey, this is me. I’m the cofounder. I’m not a PR person.” And just try and have fun with it and just try and be real and authentic with it. We were always lucky. But it is also a bit of a grind of, like you said, sitting down, having a beer or two and cranking out like 40 or 50 unique personalized emails, not like a copy/paste type thing.
Andrew: And it’s you doing it around like a bigger topic or a bigger time of years. So it’s Valentine’s Day, you’re doing it. But you’re not doing it August 21st.
Reggie: No, I don’t bother. Print, you’ve got to know the cycles. Like if you want to get like Home & Garden Magazine print, maybe they close their December issue in like June, right? So you kind of have to understand some basic stuff, but yeah, it’s not even like a lot of work. It’s pretty much, like I said, maybe four or five hours of just cranking it out.
In the beginning like when you have no credibility and you have no money to spend on marketing, you know, getting a run on USA Today or getting on “The Today Show” is a huge jumpstart. It’s a huge opportunity to capture new engagement and involvement.
Andrew: What percentage of your sales come around the holidays and Valentine’s Day?
Reggie: Like Q4, we’ve tried–our whole goal in this business is to like not become the quintessential like gift business, like a Harry & David.
Andrew: You started out with the idea you wanted to be a subscription business, dependable revenue throughout the year.
Reggie: It’s scary as hell, right? Like nobody wants to be a business where you like load up on inventory and hope for the best for November and December. But we still do about–I would say we still do about a quarter of our yearly revenue in like the end of November and December. So that’s a very real part. If you look at our business as like half revenue, half subscribers, you’d see that like maybe a quarter will come throughout the rest of the year and then a quarter of the gift will come during the holidays.
Andrew: You told our producer that one of the big milestones for you was getting the business to the point where it could actually just support your lifestyle, where you automated it well. What did you have to automate in order to get it to be a business that just worked and allowed you to go and do things and take that trip to Spain?
Reggie: Oh my god. Yeah. So we did some very standard things. Obviously, we were able to like outsource customer service with virtual assistants. I wouldn’t even call our virtual assistant that now. We’re like so tight it feels like that’s a cheap phrase to use. But I used to do all the photography, all the writing, all the recipe development and all the product selection for the product. And then being able to outsource the photography, being able to outsource the copywriting for each magazine that goes in each box, I still do the curation.
But the other part that took me a long, long time, I didn’t dive too much into it with your producer, but like it’s just realizing like how much of the stuff that you can do, for me personally that I was doing every day that was just useless and just stopped doing it. So I find it’s not even so much–it’s not even so much the ability to automate and systemize. It’s like the ability to take your foot off the gas pedal and just say like, “Okay, that extra hour tweaking the grey in this logo or that extra trivial work doesn’t matter. Just stop doing that.” Or like email responses, those typical things.
So that was like the big thing. It was more editing things out as opposed to systemizing. Like I’m not going to blow the business up more than it needs to be. We put six things in a box every two months. There’s some compelling storytelling to do around that every two months, but there’s not a lot of moving parts in the first place.
Andrew: Tell me what else did you get rid of in order to have the business function well on its own?
Reggie: Yeah. So partnerships–we spent a lot of time trying to like do co-curated crates and bring in people to do brand partnerships where we would like–maybe we’d have a guest chef that would come in and pick some recipes or maybe we would have a magazine that would come in and one of their lead editors would curate a crate. And we just always found that like the partnership didn’t add a lot of extra value, but it really–now we had a whole other team looped into like our natural curation process.
So we found that that was soaking up a lot of time and we had one or two–we did one with GQ that was great, a partnership. But we also had other ones that were just like–they were fine. They looked cool, but it was just kind of annoying like going back and forth with people outside of your team. The other thing that we–customer service and really writing a good manual of like, “Here are the 10 things that people write in. Here’s how you can respond to them.”
Andrew: I was going to ask you about that. It’s the 10 things and then, “Here’s how to respond to them,” in a Google doc I’m assuming, right?
Andrew: What else did you do to allow customer service to allow your virtual assistant now closer than virtual assistant to handle it all for you?
Reggie: There’s Zingerman’s–I don’t know if you’ve ever heard of Zingerman’s. It’s a deli in Ann Arbor, Michigan that does like–I think they do like $40 million or $80 million a year. And Ari Zingerman, he was named like Inc’s Coolest Company of the Year like seven or eight years ago. He wrote an amazing book. I think it’s called “The Zingerman’s Guide to Customer Service.”
And in there, there was just one point that was amazing, which is just like empowering your customer service team up to a certain amount of money. So just saying like for anything under $20, just fix it. Like here’s $20 budget. If somebody wants a 50% refund or whatever, just make them happy, like setting a number. And that really dramatically reduced the amount of like customer service issues that were being escalated to sort of like me or whoever on the team. Yeah. It’s just setting that parameter.
A lot of it too was, again, back to the elimination thing. We used to do a loyalty program called–it’s still called Mantry Black, but what it was before is like for people that were longstanding members, we’d come up and we’d send them different gifts every couple months and send them all these little unique things.
That was taking a lot of work like curating extra gifts and trying to figure out what guys would like this and what guys would like this. And we just swapped that entire program out for just saying every year that you’re subscribed, we’re going to give you a crate to send to somebody.
Andrew: I see.
Reggie: So making tiny things like that, where you’re like, “What am I trying to achieve here?” I’m trying to make a person who’s been subscribed to Mantry for a while feel special. How is the easiest way that I can do that that’s a nice benefit for us? You get to expose new people to the product, obviously. It’s not like you get a free crate. It’s your friend gets a free crate. But stuff like that, eliminating things that aren’t systems and saying, “That’s a good supplement for it.”
Andrew: That’s really helpful. By the way, that book is available on Audible, “Zingerman’s Guide to Giving Great Service.”
Reggie: It’s amazing.
Andrew: It’s only a three-hour audiobook.
Reggie: It’s amazing. There’s also another point in there. I think he just says make sure you use a word at the beginning of your sentence that acknowledges the person. And like an example being if you got a jam that showed up in Mantry and it broke, I think he uses the word like, “Wow,” all the time and it’s not like disingenuous, but you forget how much when you respond to a customer you’ll just launch into like, “Okay, let me see if I can do this and kick you off to this person,” instead of just saying, “Oh wow, I’m really sorry to hear that the jam broke.”
Andrew: I see. Show that you’ve taken in what they’ve said before you respond to it.
Reggie: Yeah. Anything else can feel canned, right? Unless you’re sending a canned response from an auto-responder, the dumbest thing you can do is send something that feels canned when you’re writing it yourself. So he’s got a great point into there. I think he’s got his like three or four steps built into that book. I have no affiliation with Ari other than the fact that I think he’s a great businessperson, but that’s an amazing book on customer service.
Andrew: Who would have thought a deli would be doing that well. It’s more than just a deli.
Reggie: Yeah, it’s a lot.
Andrew: Mail order stuff. That’s an interesting business. I’m looking it up as we’re talking. All right. I’ve got to tell people about a company called Toptal. Everyone who knows Mixergy knows I’ve been talking about Toptal for a long time, but I don’t think everyone fully believes it. In fact, Derek Johnson was a guy who was listening in the audience and he said, “You know what? I’m running this business. Andrew interviewed me. Maybe I should just listen to what Andrew’s talking about with Toptal.”
He at the time, Derek had 20 to 30 interviews that they did, him and his CTO, to try to find the next great developer to bring in to his business, Tatango. As they were talking to different people, they realized, “This is a long drawn out process that’s sucking up a lot of our time and not producing enough results.” It’s one of those things that you know you shouldn’t be doing all day long, but it’s sucking up a lot of your time. But at the same time, your team is basically who your business is. So, he still needed really good people.
So he finally said, “You know what? Let me check out this Toptal that Andrew’s been talking about.” He called up Toptal. His CTO got to talk to the matcher at Toptal who introduced him to two people. They said, “Either one of them could have been great to hire,” but they picked the person who they jived with best.
Within days, they could get started with that person. They started out as a regular full-time person. Then they liked him so much, they worked full-time plus with that developer. The CTO now acknowledges, “Hey, you know what? This guy that we hired from Toptal is as good as I am, as good as the CTO of the business.” They’ve done so well with them that they’ve continued to hire multiple engineers from Toptal. That’s what Tatango is doing and they’re continuing to grow their business.
He told me in private how big their business is and then he said, “Andrew, shut up, don’t tell anyone.” He doesn’t want me to give the numbers yet, but he has got such a killer Mixergy in him, I’m telling you. Tatango, all they do is text messages, like email subscriptions, but text message subscriptions. Especially around the elections, this guy was kicking ass. Anyway, one day he’s going to come on and do an interview.
Anyway, his team is Toptal developers. If you’re out there and you want the best of the best developers, there’s one place where you can go where you can actually start to see results. Even if you don’t fully believe me that you’re going to get the best people, what you should do is at least schedule a call with a matcher at Toptal, tell them what you’re looking for. Give them a chance to either blow you away or to show you that you were right.
If you’re skeptical, what do you have to lose? Go give them a shot. You will see just like Derek and so many others here at Mixergy have found, they have great developers at Toptal and the special URL where you can get 80 hours of Toptal developer credit when you pay for your first 80 hours, that URL is Toptal.com/Mixergy.
And also they have the no risk trial period of up to two weeks. Who else is going to give you that? No one else. Go check it out–Toptal.com/Mixergy. I can’t say this enough. They have a great, great, great model on that website, Toptal.com/Mixergy, very attractive. All right.
Reggie: Look what I have for you here.
Andrew: What have you got there?
Reggie: I’ve got another Zingerman’s book here, okay?
Andrew: What is that book? What is it called?
Reggie: This is called the “Zingerman’s Lapsed Anarchist Approach to Building a Great Business.” It’s not rocket science.
Andrew: What is that book about?
Reggie: This is just more–
Andrew: Let’s get you a little closer to your mic because you sounded beautiful before.
Reggie: This is the “Lapsed Anarchist to Building a Great Business” from Zingerman’s. It’s just another book to check out. It’s the standard play, you find somebody in your industry. Artisan food, there’s not a lot of power players. Zingerman’s is one of them. So you find somebody who’s written some great books on it. So it’s a no-brainer to at least read the couple books that he’s put out.
Andrew: Do you recommend them from someone who’s not in artisan food?
Reggie: The customer service book yes.
Andrew: But not the other one.
Reggie: I think if you run a deli for 20, 30 years, a deli counter, you get good at customer service.
Andrew: Yeah, or you get so bad.
Andrew: You’re so burned out on them. Hang on, I’ve got to add that to my–now, this one is a little harder to get. This is apparently out of print and you can get the collectable version of it for $50. All right. We’re going to have to look at that later on.
Reggie: I’ll send you my copy when I’m done here.
Andrew: I think a good book–frankly, good books are always underpriced. Think about what can get you entertainment for two hours–not for two hours, for 10 hours for $20, even a movie is not going to do that.
Reggie: I think I heard like Seth Godin–
Andrew: It’s going to change your life way more than a movie is.
Reggie: I think I heard Seth Godin say that once. It was so bang on. It was like, “The best bargain in the world is a book.” It’s like compressing decades of knowledge into days.
Andrew: Frankly, they’re practically free. I don’t think most people realize this–I didn’t–with Audible, if you don’t like the book or it doesn’t hit the mark or it’s not good, they’ll give you a refund on it or undo that order.
Reggie: Yeah. I audible religiously.
Andrew: With Amazon, you can go to your local library–I walked in there once–I created a library card and then I got my username and password from them and then I went to whatever app they happened to use and I got to get all the audiobooks and digital books that I want delivered to my phone in MP3 format so I could pick whatever player I want, not just Audible for the audiobooks and for the non-audiobooks, they go directly into my Kindle if that’s what I want.
Reggie: From your library?
Andrew: Yeah, just about every local library does it.
Reggie: Oh my god, wow.
Andrew: In many ways, it’s better than Amazon. In some ways, it’s a little bit worse because if an audiobook is popular and someone checked it out, you can’t get it instantly, but the fact that they give you the MP3 unlike Audible means you can put it in your favorite audio player, which for me at the time was Overdrive and I still use Overdrive for it–is it Overdrive? Yeah. It’s the red one that’s on my home screen right now.
Downcast, excuse me, Downcast not Overdrive. Overdrive is the one that they ask you to use, but Downcast is the one I prefer to use. And then I can pump up the volume when I want to, increase the speed to the level that I want and I get all kinds of controls that I wouldn’t otherwise. Really, the library has that one big benefit and I think most people don’t realize it.
Andrew: Yeah, cool. All right. You have used the word we a few times. Let’s talk about we was at Mantry at the beginning and who we is now. You had cofounders, right?
Andrew: Do you still have cofounders?
Reggie: We started the business with two, then we went up to three, then down to two, then down to one.
Andrew: What happened?
Reggie: In a sentence, I think that my experience with business is that the business trajectory might stay constant, but people’s lives change. People want to move. People want to get married. They want to pursue other things. So sometimes trying to line those things up is difficult. My dad has had the same business partner for 40 years.
Reggie: Almost 40 years, maybe 35, but long enough that that rubbed off on me. Just in today’s startup culture and stuff like that, you know, a lot of things changed and a lot of moving parts and talk to any lawyer that deals with startup agreements and you’ll realize that not very often do the partnerships hold together anyway.
Andrew: Who’s the first partner? Is this Kyle?
Andrew: Kyle–is it Zien?
Reggie: Zien, yeah.
Andrew: Kyle Zien. This is the guy who helped you get things started. He has now moved on to a company called Parcel. What happened with him? Why isn’t he around? How did his life change?
Reggie: I mean with the original partnership, when we launched it, we had good energy when we started the business and we were able to get through those really early steps of getting to market and actually building to a point where we had some decent revenue coming in. Honestly, it just got to the point where about a year, a year and a half or two years in.
It’s always gut check time for every partner. Do people want to stay on, or do they want to make big moves? For us, we were moving from Toronto down to the States and everything. To be honest, I couldn’t zero in on the real reason that things needed to go to different directions, but at the end of the day I stayed on and now he’s off pursuing other things.
Andrew: How did you unwind things?
Reggie: We had a couple meetings. It was pretty amicable, where we had a great lawyer who had–honestly, if you have a startup and you’re setting up a shareholders agreement, just make sure you have a good lawyer that can sit in the middle and listen to both sides.
Andrew: Did you do that?
Reggie: Yes, we were lucky.
Andrew: I thought everything was moving so fast that you guys just kind of threw up a website.
Reggie: Yeah. That story is basically we were working out of a coworking space in Toronto at the time. They had some free office hours to some really great lawyers in Toronto, and we were able to make a good relationship with a very like talented lawyer who was very experienced who was basically willing to help out.
And so yeah, we always had that in our corner when a lot of things were very ragtag in the business at that point. Anyway, near the end it was amicable, but it was your classic like, “Okay, this person wants to move on and this person wants to go the other direction and that’s it.”
Andrew: So you bought him out?
Reggie: We did like a payout where–
Andrew: Over time.
Reggie: Over time, which is a lot easier to digest than–for anyone interested in that type of thing, doing an abrupt payout is a lot tougher a lot of times on both sides.
Andrew: So you just come up with a number that makes sense and you say, “Look, I’m going to give you this amount of money over this much time, and it’s going to come out of profits and if for some reason we lose money, then I might be stuck and won’t be able to pay you.”
Andrew: Okay. Is that what you did with the other one too, the other cofounder?
Reggie: Yeah. We did the same thing, paid out.
Andrew: I feel like the other cofounder wasn’t as active because he doesn’t even have Mantry on LinkedIn.
Reggie: You mean which one?
Andrew: I don’t know. I can’t even find the name of the other cofounder because he’s not putting you guys down on LinkedIn.
Reggie: They were both really active. We had one that was a non-technical and one that was a technical. My most previous partner was technical, and he basically built a lot of the systems around the site. He sort of set everything up in the database and all the stuff, so both very active, but I can’t speak to the LinkedIn pages.
Andrew: Day to day, do you do much anymore there?
Reggie: That is a fantastic question. I tried to–this is an interesting one because I think a lot of people want to–we’ve built something that runs pretty smoothly. I still curate everything. The product is the six products that come in a box and the story along with it. Like I said, it’s six products from Nashville or grilling theme or whatever. I do all of that. I used to spend half a month, like two weeks every month doing that process of curating.
So two weeks of every month I would spend calling makers and trying coordinate everybody and I’ve gotten that down now where since we switched to every second month too, I can do that the entire year in like maybe a month of hard work. So that sets the product up because the product does change every two months. It’s like kind of creating a different product every month. It’s not like having an ice cream scoop and putting it in inventory and never worrying about it again. But that has freed up the most time.
To your question, I just pursue different projects. Right now, I’m really fooling around with Final Cut and we’re launching a YouTube channel, and it sucks and I think we have 15 subscribers. But I went from like never using Final Cut a week and a half ago to like wherever the YouTube channel is now.
So just trying to–we launched the blog like a year ago, which has been great on Medium. So just trying to do your classic sort of like content marketing. I love sharing food stories. I love teaching people how to cook. I have a lot of knowledge there. I like doing that part of things more than a lot of the nuts and bolts of the business.
Andrew: It gets repetitive to keep doing the copywriting, dealing with customer service.
Reggie: Or doing another article to try to get another press or like chasing corporate sales. I could spend my entire day calling on people trying to get corporate gifts for the holiday season. At the end of the day, I started a business to pursue things I’m interested in. To answer your question, sometimes I feel like if I didn’t do anything over the last two years, we could potentially be in a similar position because it is a very simple system. But in realizing that, I just try and focus on things that I have good energy on and enthusiasm for and keep doing those.
Andrew: It does seem like Medium is sending you traffic. That’s where your blog is, right?
Andrew: But I don’t know if it’s actually getting you customers, is it?
Reggie: I don’t know either. That’s a really–I mean, we can track a little bit of it. But what it does do is it helps build the audience, engage some people with the brand and we’ve always taken on the strategy or we’ve moved into the strategy mostly of just trying to like–the Kathy Sierra mentality of like out-teach versus outspend. We’re an unfunded business and so we’ve decided that, “Hey, we have this position where we’re trying to help guys cook better. Let’s try and educate through cooking tips, different hot sauces to discover, whatever it needs to be, but that’s where we’re focusing on the energy and just really trying to build through creating content.
Andrew: Yeah. It seems like it’s also passion content that you create. You’re not sitting down and thinking, “What’s the keyword I need to rank for?” or, “What’s content that’s going to lead to sales.” You’re saying, “You know what? Here’s an interesting party trick that I have. I want to share that.”
Here it is. “I have dinner party trick, bone marrow. It’s inexpensive, easy and just graphic enough that people will let their guards down, which is not exactly what you want at dinner parties. So, the next time you’re fussing over what to make, ditch pan-seared scallops and drop some bones, good bread and a bottle of Malbec on the table and do what you’re supposed to do, get out of the kitchen, hang with your friends.”
Andrew: That’s not necessarily leading to people buying boxes.
Reggie: Yes. So we’ve been–yeah. You’re the guy to know about that area. I think we focus–I just write sort of things that I think are legitimate pieces of content that I think I’ve used in my life and I’ve found good experience. Like the bone marrow thing comes from throwing dinner parties. I’ve done it four, five, six times.
But to your point, like we don’t go out and meticulously try and create content that is going to strategically drive traffic. There is a part of me that believes like, again, if we never did anything with the blog, would we be in the exact same position?
Andrew: That’s what I’m trying to figure out. Where are your customers coming from? The only thing I can go by is SimilarWeb and this conversation. SimilarWeb is showing me Medium is sending you traffic. InStyle, which is an older article, is sending you traffic, right? Boxes.MySubscriptionAddiction.com, is that sending you customers?
Reggie: Yeah. They’re basically an affiliate relationship. They just review different subscription boxes every single month. Then you see like, I think, a pretty large proportion of our traffic is the classic like organic search, wherever, sort of tougher to measure play. Yeah. There’s not–again, we haven’t really established paid marketing channels.
Andrew: And you’re still doing over $1 million a year?
Andrew: And still profitable enough that this is what you’re living on?
Reggie: Yeah. We’ve been profitable–
Andrew: This is amazing. Let me ask you this. Do you think someone who’s listening to us could say, “I’m willing to put in this effort. I will do more PR emails than Reggie’s doing today. I will keep on pounding the pavement to get some corporate business.” Do you think that person could create not a Mantry but something like it, an ongoing subscription for tough to shop buyers?
Reggie: Yeah, of course. We also have our email list. Our email list is like–
Andrew: You did from the beginning. I saw that. I saw in the beginning the big button on the site wasn’t to buy. It was to get on the wait list. So you guys were active at collecting email addresses early on.
Andrew: So I’m not discounting that.
Andrew: But do you think someone could do that? Do you think someone could listen to this and say, “You know what? There is a group of people who I think I can create an ongoing box for and I’ll do the same thing Reggie did but I’ll do it for my business?”
Reggie: Well, yes. I think again, back to our conversation about price point, like what we got really lucky with in the beginning, Andrew, is we set our price at $75. So like we’ve always been in the position where like our profit margin is healthy enough that we’re not in AA play where you’re working with razor-thin margins. Like maybe something like a Blue Apron or a Plated or one of these people, by the time they’re doing customer acquisition at $20 a person or whatever, maybe they’re trying to make $2 or $3 or $4 a shipment, right? We’re more in the $20+ per shipment.
It doesn’t take much as long as you’re smart about not hiring too many people and keeping your overhead low to run a business like you said, that’s profitable. That’s why the revenue thing is interesting to me. For me, I’m always about profit. I understand that like we could maybe go get some VC and like 10x the business revenue wise.
But I’m very interested in just maintaining something that’s healthy, that’s profitable and sustainable and we–when I say to people if you pick the price point properly and build a healthy margin in and there’s something that you’re good at telling stories around and you can provide real quality content around a certain product or genre you’re interested in, there’s an opportunity.
I mean with us, it’s not rocket science. There are guys out there that walk into a Whole Foods or something. They see 70 different types of mustard and they go, “Send me the best one.” $49 is a considerable amount of money every two months, but at the end of the day, for a lot of people, $49 every two months to get six different products and have the experience, they’re happy to do that.
Andrew: You guys just changed to $49 from $75.
Andrew: Why’d you reduce the price?
Reggie: Yeah. We did that because we were making–since we started the business, we cut our costs almost in half. So when we did customer surveys, the two things that we always heard were, “I don’t use the products quick enough,” And they would also say, “It’s too expensive. So what we did is we moved it to every second month so that somebody could have an extra month to use the products, and we lowered the price to $49 because we could still have a healthy margin and it was just–it felt like the right customer price point.
Now when we talk to people, we never get price and we never get anything about using it. It’s most about customization, which is the next big step if we really want to get into it, like Andrew being able to go out and say, “I’m into health food or I’m into whatever.”
Andrew: I was thinking that. One of the things that scares me is I’m on your site and you don’t show what’s coming next, but you do show that in the past you’ve sent bacon out and chef’s cuts of meat and we’re vegetarian.
Andrew: Then that can be an issue.
Reggie: Yeah. So customization also brings tons of complexity. Like you need different SKUs and you need different inventory, you need more inventory. We are a surprise, absolutely.
Andrew: Which I like.
Reggie: What’s that?
Andrew: Which I like. I like the surprise of it.
Reggie: We got lucky with it. When we did interviews with customers, again, another thing they talk about is that surprise, is not knowing what’s coming and saying like–
Andrew: How did you do an interview with customers?
Reggie: What’s that?
Andrew: What was your process for doing interviews with customer?
Reggie: Every year, I’d book off basically our top 100 to 200 customers that have been with us for the longest period of time in that year and I called them for five minutes.
Andrew: I see. And you just say, “Hey, thanks for signing up. Why did you sign up? What do you like?” that kind of thing.
Reggie: Yeah. I try and ask–I read a couple books on whatever proper customers–I can’t remember what they were, but more open ended helps. As a cofounder, if I ask Andrew, a subscriber, and say, “Hey, what do you think of my service?” You’re going to be like, “It’s good.” But we try and say, “Hey, do you subscribe to other subscription boxes? What annoys you about those subscription boxes? What would you improve?”
One question that gets great results, I always ask like, “If you ran this company, what would you do?” So, yeah, it’s pretty–it’s not rocket science. Pick up the phone, five-minute conversation. It’s also like I think our customers like to hear from me for that, so it also builds a little rapport.
Andrew: I get it. All right. I’ve learned a lot. Yeah. I totally get that. Sometimes I feel like maybe you’re not fully in it, that you’ve got an easy business and so you get to enjoy yourself and then other times I think, “Dammit, he’s got some really great tips that I need to make sure to pay attention to because he’s kind of throwing them out like they’re nothing.”
I think frankly the way you’re phone calling your customers, it’s admirable and it’s interesting to hear. I think the Zingerman’s guide is fan-freaking-tastic. I’m now looking it up online and I see so many people raving about it that I had no idea this thing existed.
Reggie: We tried the survey thing, to be honest.
Andrew: Which one?
Reggie: We tried–
Andrew: Oh, surveying people, right.
Reggie: I just was never that good at it, I think, because I would get a response like–I would try and write a survey and say, “What is the reason you unsubscribed?” I always felt like maybe somebody would say–they would click one of the radio buttons of like, “Didn’t like the products,” or, “Too expensive.”
But I’d always be sitting there looking at the feedback like, “I just want to ask why again? I want to get to that third why.” I want to be like, “Why? Why is it too expensive?” So, for us, the phone interviews have been helpful. And it’s been more robust data to draw from.
Andrew: I know. I think people just don’t value that enough, companies don’t. One of the things we’ve learned over the last few years is when somebody tries to cancel, have a form before the cancelation completes and says, “Why’d you cancel?” and then people will fill it in with a few words.
That, I think, is definitely helpful. But it’s not helpful enough. When someone’s ready to be done, they’re not ready to tell you in detail. They’re not even ready to think for themselves about why it’s not a good fit. Sometimes they just say, “I didn’t use it enough.” But the reason they didn’t use it enough is what you really are after.
Reggie: Yeah. You’ve got to get that almost before. I’d rather have somebody tell me that before they cancel and then cancel because then you’re going to get the real response.
Andrew: But getting people on the phone is kind of a drag. They don’t want to talk to you. They just want to get the food from you, don’t they?
Reggie: Yeah. Well, we send out probably–I think like 20% of people when we blast out an email that says, “Hey, I’m Reggie. I’m a cofounder. I want to talk to you for five minutes on the phone. I’m happy to accommodate any time.” Like I book off a week. So I just say, “I’ll accommodate any time you want.” We get like 10% or 20%, probably 20% response to the email. So there’s a big bunch of people that don’t care, don’t respond. We get enough to formulate a bit of a clearer idea.
Andrew: You know what’s helped me is doing it as a coach, like, “We want to coach you beyond this.” Like imagine every company out there instead of saying, “I want to find out what you like and don’t like about my product or software,” maybe they did that from time to time, but also they threw in, “I want to give you some coaching about how to use my product better.” Maybe they did that from time to time, but also they threw in, “I want to give you some coaching about how to use my product better.”
Andrew: “I know you’re using my project management software. We have a coaching program where we can help you use it even better so you get more value out of it,” or, “We notice you’re not using it.” And then you see people’s problems with it, right?
Reggie: Yeah, instead of directly asking them. Again, directly asking, you never really get the full–you’re saying the right thing. You want them to tell the story and then draw from that.
Andrew: Yeah. And if you’re going in as a coach, they have to tell you the real problems because that’s the whole goal of the coaching process. Otherwise why get on a call with you?
Reggie: That’s good.
Andrew: I feel like the whole art of getting somebody on the phone is something that I could just–I could learn so much more about. It’s not as easy as I thought it was when I started doing these interviews when people would say, “I just call up my customers.” That’s what they used to say. So I would literally call up my customers. I’d make a phone call to them. No one takes my freaking phone calls.
Reggie: Cold calling.
Andrew: They don’t know who it is. What’s this 310 number?
Reggie: Right. Sometimes people just like to be listened to too.
Andrew: Yeah, but you’ve got to get them on the phone and no one wants to get on a call. All right. Thanks so much for doing this interview, Reggie. I’ve learned a lot from you and I’ve enjoyed hanging out with you. For anyone who wants to go check out your site, it’s available at Mantry.com. Let me know if you buy it, guys, and what you end up with. I’m looking forward to hearing from everyone about this.
And the two sponsors are, of course–I should just keep like instead of saying Toptal, I should just say Ditto. We’ve done so many Toptal ads. I’ve heard from so many people about Toptal that I should just call them Ditto. So, the first sponsor is Ditto, the same one you’ve heard me talk about a lot. And it works. And the second one is ActiveCampaign, which is the company that’s going to automate your–help you automate your marketing really well. Go check them both out. And Reggie, thanks so much for doing this interview.
Reggie: That’s a good sign if Toptal has been with you that long because that means you’re helping them.
Andrew: Dude, they locked it in. I know for sure that people–I’ve got names of people–the problem is the stories that come in about the stories about people who use Toptal are not always super clear and it’s hard for me to tell.
So even as we were talking, I got like Stuart from Vancord, like his notes on how he used Toptal. I’ve got James Ashenhurst’s note here, Eric Brown. I’ve talked about them. But I also have people whose stories from Toptal are just too hard to get into. Here, Omar Seffian, I didn’t forget that you sent me a note about how you used Toptal. I just don’t know how to express it clearly in like a 60-second ad, but I do appreciate you sending it over.
Reggie: You would know, you have a million people cold emailing every day like soliciting, try this software, sales people, this software, this feature that can help your business. I always just try and ask like, “What’s your longest client?” Honestly like space of time, like you said, that’s just a good indication, if you’ve worked with them long enough, then maybe your audience has heard it a lot. It just shows they’re willing to stay with you for a long time, whereas I always find it’s helpful to just say like, “What’s your longest client that you’ve had?” Because if they say, “We work with everybody for a month or two.”
Andrew: Oh, I see. Yeah. Right. Frankly, that’s what people should be asking more so than, “How many listeners do you have?” because there are ways to fudge listener numbers. I talk to other podcasters, they fudge them. But there’s no way to fudge the fact that Toptal is the longest running sponsor and then that gives you an indication the audience is hiring developers. They are either the founders or they’re higher up in the company. And Toptal keeps returning, so it’s working for them. Yeah, you’re right. That is a great question to ask.
Reggie: Okay. I have one more thing to say to you.
Andrew: Yeah. We’re still recording, by the way. So don’t say anything you’d regret.
Reggie: I wanted to give you the official distinction of I think you’re the first person that I ever heard or discovered what a podcast was from.
Reggie: Because I remember–I don’t know how long you’ve been doing it, but you’ve been doing it for a long time, and I still remember going on and hearing Mixergy podcast or whatever and this was years ago. I didn’t even know what the freaking thing was. Now everybody and their dog has a podcast, right? But I can honestly say the first time I ever heard the term was probably connected to Mixergy and some of the old, old, old interviews you used to do. Now I’m a big fan. I listen to them all the time.
Andrew: So, you know what–
Reggie: Don’t let anyone know that you’re copying people and launching a podcast.
Andrew: One of the things my assistant does is she gives me a link that lets me look up every guest name in my inbox before doing the interview. You just must not have ever emailed me.
Reggie: No. I can’t remember. I think I just sort of did the same thing I did with press, where I said, “We have a bit of a story to tell.” I thought you were going to be way harder with me and dive deeper. I’ve seen some of your interviews. You get pretty confrontational, which is pretty awesome. I was basically like, “We have a bit of a story to tell. Maybe people would find it interesting.” I just sort of hit up five or six different podcasts and got three or four responses out of it. So you were one of them. So I really appreciate obviously the opportunity to come on.
Reggie: Let me give people some inside information about how this works. First of all, you, I think, maybe messaged us 1,705 days ago and I know that because it’s in Pipedrive. So you didn’t ever email me, but you did email the team. I won’t say what they said, but I see their back and forth trying to figure out how to make this the right interview and when is the right time. That’s one thing.
The second thing is the reason it doesn’t sound very hard for you is before the interview started, I said to you, “I want to come at you with some challenging questions right from the start. I don’t want to tip you off on what they are so you’re not coming in prepared, but I do want to ask the things that have been on my mind. Do you feel comfortable with that?” You said, “Yes, I do.” Then we went for it.
So, as a listener, you would have heard the challenging questions without the pre-interview conversation, where I would have said, “I’m not here to knock you down but I’m also not here to be a lily–I’m not here to kiss your ass.” So, you would have just heard the challenging questions. Because you saw the way I introduced it to the guest before the interview starts, I think it felt less challenging than it was.
Reggie: I was thinking, “What’s he going to ask me?” I listen to podcasts too. There’s nothing lamer than a vanilla interview where there’s not any in depth questions. So I respect any hard hitting questions.
Andrew: I told you your site doesn’t work on two browsers. As we were talking, I took a screenshot of it.
Reggie: Send me that please.
Andrew: It happens. It’s not enough to dismiss it. We’ve obviously been looking into you to figure out–it’s not 100%, but we’ve been looking into you enough that I know it’s a real business here. Now I’ve got a screenshot of you in this interview with your mic and your site kind of spinning, so I can send it to you after this interview. Actually, here, I’m going to send it to you right now in Skype.
Andrew: For anyone who’s listening, I ask challenging questions. That’s my goal here. I hate when people are trying to be too friendly with the guest. All right. There we go. Thanks so much for doing this, Reggie and I hope you and I will get to meet in person some time.
Reggie: yeah, man. Thank you so much. Appreciate it.