Wunderkeks Has Two Daddies

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week we welcome another new panelist to the podcast Hans shry who is co-founder of Wonder an e-commerce Bakery in Austin Texas Hans tells Jay goz and Liz picarazzi why he and Luis gaho his husband and co-founder sold a business in Guatamala immigrated here in 2019 and started their cookie business from scratch going from selling at farmers markets their first year to doing more than $5 million in e-commerce last year Hans also explains why he doesn't think it's enough just to make a delicious cookie why he's trying to raise seed capital and what would happen to his Visa if Wonder keks were to fail even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report wi in magazine recently named the best newsletter for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home Liz picarazzi who is CEO of City bin which is based in Brooklyn New York and makes trash enclosures and package bins and and of course Hans sh the episode is titled Wonder has two daddies welcome Jay Liz and especially Hans the newest member of our 21 hats podcast team it's great to have you all here Hans we uh we want to introduce you I'd love to hear uh a little bit about what you do your company is called vunder what does it do yeah well thank you I'm so happy to be here Lauren well Wonder we make the best cookies ever and we ship them Nationwide but more than that what we're doing is creating conversations that build safe spaces through food and beverage products what do you mean by that that means that the way we approach what we consume now like there's there are so many Brands so saturated that brands have become the new external signifiers and we use them all the time to say who we are this is particularly true of because fashion is changing something like an iPhone is no longer a status symbol so what we consume is who we are so there's many of us who will say oh I will put a picture of my independent coffee shop Cup in my Instagram or someone else is's very still very proud to do it with Starbucks so the point is that we get behind the brands that say who we are and so that's the thes is willing us so you can go wa Way Beyond the actual product and the function of the product to allow for people to say who we are and you can harness that to bring a positive message which in your case is to really make a point about the need to have conversations around the creation of safe spaces for everyone it started definitely from our perspective as gay men gay immigrant men but down line we figure out like this is for everyone so the whole point is if I am seeing caring about cooki then that means that I am the kind of person who is an ally who will not judge me for who I am who will probably open me to us to a safe space how important do you think that is to your brand I would say it's absolutely absolutely vital to the brand because I mean we make cookies we're very aware that we're not curing cancer they're very good but they are they have a ton of competition if you will and realistically that is true of most food like there's a ton of different options more now than ever so if you keep talking about oh the cookies are delicious they are but so is going to say the guy next door and there's a ton of substitutes to it so the only way we get people to commit to our brand to really say to really enjoy it Beyond like tasting the cookie which is something that would can be replicated is by having them use as a way to say who they are so a way that we have put it that I really love was thinking about in the context of the hero's journey the mistake that a lot of brands use is that they position themselves as the hero so everyone as a brand tends to want to be a Luke Skywalker and the customer doesn't see it that way the customer wants to be Luke Skywalker and the Brad needs to be Joda I don't know if that makes sense that's the analogy I use I think I get what you mean we're definitely going to talk more about your your mission um but can you give us a snapshot of where the business stands right now how big is it employees revenues yeah uh we came to the US in 2019 we start a farmers market um for the first year that's what we did uh when the pandemic hit we pivoted to e-commerce and last year we did $5 million in Revenue 99% of that was e-commerce that's about three million cookies wow that's a lot of cookies yes what do you expect to do in revenues this year we are probably going to the same number this year there's a lot to be said about what happened with all e-commerce business after the changes in the Apple privacy setting so that forced us basically to relearn their business have Midway through last year so we saw a bit of a contraction so we're thinking that we're going to recover in the second half of this year all right we'll get into that some more but I'd love to talk to you about how you wound up here you you mentioned that you and your partner are immigrants you're from Guatemala why did you choose to come here we had the business in guala uh the bakery I started about 10 years ago and we were doing fine me was well respected well known in Guatemala she's a tiny market so it was a tiny business anyway and uh we took a vacation and we went to California and we drove through the coast from San Diego all the way to San Francisco and this was a few months after Luis and I got engaged and gay marriage is not legal in Guatemala but we never thought much of it we were actually talking to lawyers about like how do we manage things like property rights and then of Life Care so that we'll be covered and didn't think much of it about how how important it was to us and then we took this trip and along the way we kept seeing a lot of samex couples with kids which was something that I had seen on TV but frankly had never like seen live and they were everywhere and we felt like our eyes kind of open like this is something that we're not sure we want but we were sure we want the option and that led to conversations about what it actually means to be a family and what it actually means to be married so when we came back we started talking baby this is what we should do this is that pce that's missing we decided to come to Austin to see if it was the right place to us and we landed on Austin mostly because it was close enough to home it was the liberal spot in Texas like the little blue do in Texas and it was a great it's a it is a great place for cpg companies so that's how we land it here it's a great place for uh cons consumer goods companies you say yes definitely there's a big big there's a big community of cpg Brands my theory is that really it really happened around Whole Foods which is headquartered here and has been forever oh that makes sense there's a lot of prodct development happening a a ton of events happening and more important than that there's a ton of opportunities to get people to try our product so that think that think is really helpful so we landed here we got an entrepreneur Visa which was before you tell us that Hans tell us about what did you do in guat did you sell your business did you just shut it down I sold it to my parents the business in guala still exists so is there any relationship between your business here and that business there other than the fact that your parents own it no not really no like At first there was like some Consulting going on but not anymore it's been three years now and how tough a decision was that I certainly understand the motivation how hard was it for you to leave the business family members the country you grew up and it was not hard at all I mean the hardest part was figuring out the istics but we set our minds onto that and it was we were very very decided that we never got like cold feeds or anything of the sort I'll give you like the full context uh because I think it's important to say we were a gay couple in Guatemala we were both out of the closet so that was not a concern and uh I am very privileged that coming from Guatemala we are both educated we both spoke perfect English that really helps we were very that this was even an option for us to have so I don't want to minimize I I don't want to make myself like I suffered this horrible type of violent oppression that I did not but what happens in places like this is like of course there is people who are actually dealing with violence and whatnot but for the rest of us you kind of get a sort of a Stockholm syndrome when you normalize a lot of things that you should not normalize and I'm not talking only and I'm not talking only about things that gay people experience I'm talking about everyday violence like we get in guala for instance we get this compulsion to block our car doors when we're in a traffic light that happens a lot I have had my phone stolen at go point four times probably in the past 10 years so that was part of it and then there's the other part you you normalize that that becomes like the default and that is very harmful because you spend a lot of your energy there and the other part was something that we learned how important it was for us was just being able to say and to be respected as a married couple and as a family was very important and very powerful and at first we didn't know it because again you normalize it the greatest Shame about how que people que people are made to live is that we are made to be grateful to enjoy the things that the rest of people give for granted so in our case we're like doing this thing to ourselves where we're grateful that we are not suffering violence where it's like of course we should no one should be suffering violence so it was not hard at all it was not hard at all to leave because once we realized like how the grass was greener on the other side it was very clear that it was the right thing for us I think I interrupted you before you were talking about what you had to do to get a visa to come here as an immigrant can you tell us about that yeah in our case it was an entrepreneur Visa I have a an Austrian passport so I can up to that visa and it was relatively straightforward actually it's just a lot of paperwork and a lot a lot of research that I had to do with like what are the requisites and all of that but it was not particularly complicated the most complicated part of it was housing you mentioned that you have an Austrian passport would it have been harder for you and Louise to immigrate here if you did not have the Austrian passport yes almost impossible it is a way immigration system is set up is um very confusing to start is very confusing but it does like realistically it does put a price on certain nationalities if you are European moving to the US is relatively straightforward if you are not it's a way different situation really I mean we made the most we made the most out of it but it is is the type of thing that really opens your eyes to how privileged You Are by chance because I have absolutely nothing to do with this and it really opens your eyes like of the many opportunities that are just randomly assigned to you tell us about starting up the business what did you do to get the business off the ground in Austin well the first thing that we did was like actually in order to come here we needed to have a business set up first you you set up a business and then you get the visa which is kind of weird because then you're not allowed to work on the business if you don't have the Visa so you know it's very it's very tricky so the first thing that we fear okay we need an actual viable business and we need to invest some money so the first thing that we did was we went to all the farmers markets here to talk to all the people and at some point we actually had to fly in with samples bringing cookie dough through customs TSA is a thing they were very confused and so the first thing is like okay so I have a place to land I'm going to be selling at the farmers market and you need to prove with data like how is this avable Market we did farm market for a whole year like rain rain or shine but it was of course we needed to actually like be a viable business but it was a fantastic opportunity to talk to a lot of people in a country that we didn't know so we learned a lot very fast and then you get to iterate so the first week we had one flavor and people kept asking for snicker tools so the second week we had Snicker TOs and that's how it keep going who does the baking now who did the baking then and who does it now okay back then it was Luis and I uh Louise would do the dough I would do the re I would manage the recipes and uh like measuring and all those things Louis would do the dough and then I would bake them it was only the two of us for a long time and now now we have a team and Louise actually manages it we have a team of H six people that do the waking and the the baking and the Fulfillment like they have actually grown with us did you change the product much going through that process of selling through the farmers market the first year not so much that we change the product itself but we cuz we started like with chocolate chip cookies and we started developing new flavors and new varieties of the feedback that we got so eat the most and you all the time you are like but this is like normal for for everyone in baking like you test oh let's try we use a better butter or if we change the ratio of flour and fat and that of thing so it's always evolving but yeah like I don't think we have even now I think we have a great product but I wouldn't say that it's fully done and I don't think it ever will be at what point did you decide that creating safe spaces was something you wanted to focus on that was early this year a lot of things happened like one of like there was this Florida law uh don't say g bill about um public schools there was something else happening in you there was a few like our own Liv experience and the last drop was when they made a whole political deer in Guatemala about banning gay marriage which was already not allowed so there was absolutely no need to pass a law Banning it and that really hit home that we were so comfortable here in Austin that we had in a way forgotten like how privileged we are here and we figure that if we if the two of us could forget there was a ton of people who did and the people who need to be reminded of yeah of course I think there's a lot to be said for to be sa for younger Generations learning about the history and how their rights that they enjoy are were hard earned before them but a lot of it is to reminding other people who are allies hey you are powerful you can help there is a fight to be have so that started like that and it started it started like about us andan it was not really Nam safe spaces at that point we just wanted to have the conversation and that's where we were going and then a friend of mine introduced us to Jeff Ferman he is one of the mins behind Ben Jerry and he's the president of the Ben and Jerry's foundation and he was behind their very pecular Arrangement that uh Jen and Y said with uni lab when they were acquired where uni L is obligated to continue on the mission of the company and if they don't don't the foundation is the foundation has grounds to sue them so he is the guru of mission oriented companies we talked to him and then he came on board as an advisor and it's amazing like uh talking to this guy is clearly there's so many years of hard work and so many years of insights that he gives you so what he he told us things one like if we're talking about the safe spaces and all of this you need to be aware that you're going to be put in an unsafe space was a revelation actually but completely true but the second part was right now you are telling your story and it's great because your story has taken you this far you keep talking about your experiences and people do want to hear them but at some point as you grow you are going to have to start listening and not only talk about yourself and that led to the conversation about talking of safe spaces not in the context of only the gay community who definitely needs them but in the context of the good that can be done if we all have them because we all need them in a different way so the safe space that I need is in a different is different than the the one that you guys need and people at different stages in different places at different ages different races they need the same spaces but they come in different ways and the only way we figure figure that out is if we listen to them and that is the first step to building the safe space look to actively listen without judgment so that's when it really clicked and it was like April of this year and then it's when we had like this a moment okay this is what we're doing so actually we just had a meeting with a BC like an hour ago the end goal is this these conversations the money side of things or on the mission side of things they both need to coexist and to have a healthy relationship to each other so at that point like all of this really clipped and it was very clear how to move forward so we really went all in on that Hans I got to tell you you you have a very unusual uh interesting Journey story and I can tell you the the way I know that is this is by far the longest that Jay and Liz have gone without speaking on a podcast I have questions so my question is when I when I heard about your business and I went to your website I immediately thought corporate sales and the reason is because when I worked at American Express we were always looking for gifts to give employees as well as to clients in a lot of situations so there's just massive opportunity for vendors to sell to corporations like that so I'm curious What proportion of your business is to other businesses versus to individual consumers actually right now it's quite small I think it was next to zero a year ago and it's close to 5% now you're exactly right like you come to a company hey cookies great they are amazing buy cookies because they're delicious they already have 200 different options of delicious cookies like they don't need a cookie when you come at like and we're actually making inroads with with companies talking about this so oh this is who I want to be perceive as and that that side of the business is actually growing because of that because when you have the clarity of purpose then it goes beyond whether the cookies are good or bad which at the end of the day it's an object is not an objective measure it's very hard like in these super saturated environment to sell them like you don't I I cannot go on to them and sell them cookies I need to sell them your mission this is how you're going to be perceived yeah this is what you're doing that also gave us a ton of clarity also of like so the cookies are secondary so we can do other things and actually we are not tied to that cookies are easy and one of the reason that we do cookies is because uh and sweets in general because you know how sweets are ritualized and you have a birthday cake and that usually comes with a conversation with a thank you or and I love you or like you're important to me so that that's the opportunity that's what we're selling and it became you know at some point we really asking ourselves like what are we doing and you get kind of bored because really cookies like it's more same old same old and once it really collects what you're doing then all of a sudden there's a whole conversation about to have about what is at the end of the day realistically a very conventional product can I say something Lauren because as usual your perceptive I'm kind of speechless because I'm just extremely confused because I love chalk chip cookies mhm and I went to your site and I saw a beautiful site with beautiful cookies and that's enough for me and now you're telling me Oh no it's our story I didn't even see your story on the websites and then you say things like there's two underpaid places to buy cookies I don't think so cuz if you said to me Jay where can you buy really good chalk chip cookies online I can't think of one company that would have come to mind so the consumer in me the business person in me saying great looking website great cookies good to go and now you're telling me Oh no it's about our story it's not about our cookies and like I I'm like in an alternate reality from what you're talking about cuz I like cookies and like I said there wasn't even anywhere on your site that talked about at least that I found readily I I didn't get any of that story so my consumer pardon me is hearing one thing and you're telling me the exact opposite you are frankly my ideal customer so please buy cookies and I will I it will make my life a lot easier if everyone thought like you but the reality is that you are going to if you went to our website you're probably going to start being Ser you going to Instagram or Facebook or something you're going to start getting a ton of ads for cookies now because now Facebook knows they would be assuming that I'm on Facebook which I'm not or that I'm on Instagram which I'm not so maybe I'm just aged out of this but I still like you're gonna learn more about J Hans no that's great and that that is my ideal customer like the reality let me put it in a different way the reality is this I'm pretty sure think of something like in my case I can I only wash I only brush my teeth with uh oral be in part oral be or Crest in part because I used to be a brand manager for them many years ago and I cannot use another toothpaste it needs to be crusted I hate it if it's 10 p.m. and I am out of toothpaste I will go to the store and get crusted that's me in that particular category and we all have one I'm pretty sure you have one brand of something that you will only have this for a reason that is beyond performance because I'm pretty sure Colgate or whatever other toothpaste is fine and the thing is that you need to understand your customer let me give you a little insight that maybe you don't have Laura who's on our show sent me some chalkup cookies in these like pizza boxes from this really hip cool uh cookie place and nowhere in this delivery was there a note saying where they came from I had no idea where they came from until she called me two days later and said hey did you get the cookies I sent my point is I think you're giving too much credit to everyone else that's out there in the world that there's these wonderful cookie companies with beautiful websites that ship on time with lovely I don't think you realize that most companies are really mediocre or bad here this cool Cookie Company wasn't even smart enough to put a note in there as to where they came from so you might be surprised to find out just running a really good company will keep you a lot of good business because there aren't that many of them as a matter matter of fact Hans if I heard you correctly you sold $4 million worth of cookies last year without having the mission is that correct yeah so let let me get back to my to my to my example about about cookies is that someone else can come and say hey my cookies are even better and they're cheaper you who are not the most engaged of customers are going to go to them and that's fine some of the customers are going to do that like same thing toothpaste I will not buy Colgate on the any circumstances but I'm pretty sure that even Lou my husband doesn't really care and he'll be fine but there is the type of customer that you're looking for and that you want to engage that is going to have a ton of options you want them to try yours and to fall in love with you so that they keep coming back it's it's it's very hard to convince someone to come with you and acquiring customers is the most expensive thing that you can imagine particularly in e-commerce so it's very hard to have someone come at you and stay with you over and over again and tell their friends what we're doing is giving people the tools to talk about us we're telling people these are not chocolate chip cookies these are opportunities for you to have a conversation with the people you love so that means that they will buy them you will be surprised like you see like when you see that they that they put this label on hair dryers not to put them in the bat you will be surprised on how necessary they are so if we tell people share them and actually we put a little instruction manual that says hey this a do cookies the first is for you the second is for you to put on your social media and the rest of them are for you to share and if we give them that tool that goes beyond the cookies cookies there's a ton of solution they can go to the supermarket and get cookies but here they have a conversation starter they have something that they can share with someone else so they are not buying cookies they are customers who are buying cookies the problem is that I don't really know who is who I have no way of knowing who is just buying cookies because they have a craving and who is is really interested in having this conversations but the point is if I offer them all of this so everyone will take up the Rand what they what they want but I get them to feel a specific way about my brand that I don't know cookies that their grandma made maybe not so that's the idea some are going to be casual customers some are going to be very engaged customers and most of them are going to be in the middle and they're going to say oh how cute and not think about it twice and that is fine you need to be very aware of that and I think a lot of Brands make the mistake of thinking that everyone is going to be a random bador like I would say you're lucky if 1% of your customers is talking about you with your friends and that's the reality I have to strenuously argue with that point because I've built a pretty big business with doing nothing more than giving a great product and great service and they do send their friends in and I'm not arguing with you that I think your story is a nice added element that will pick up some extra business and maybe keep some other customers but but I don't do not buy for one instant that if you don't have some story to tell what they'll tell all their friends that you won't be S every successful business I buy from I buy from because they give good service a great product every time and they're good to use I'm not arguing that it's a good thing what you're doing but I don't think that's the critical piece to running a successful business I think uh delivering on time and having a good product is what's critical I absolutely agree on that the thing is that and think of like um youer 60s you said right yeah how long have you been going to the same Supermarket for instance like your brand loyalties you started them many years ago think about toothpaste what toothpaste do you use you know what I've used several over the years I've changed numerous times I did see a study one time that said that getting someone to change the candy bar they buy is extremely difficult now that makes sense to me because I'm a Snickers guy I've always been a Snickers guy so I got but I don't think a branded product like a Snickers bar is the same as as I I think if you and your website's beautiful I you know before I went on here I I wanted to see what you were all about I understand why you're successful you've got a wonderful website and I assume you're cookies and brownies let's not ignore brownies by the way can we not ignore brownies and the brownies look great I'm sure they're good they're clearly doing some things right a lot of things right in a very short period of time so I have a visual to bring up I want to I want to try to bring in a visual that may help me understand this and and so Jay brought up the pizza box with the cookie inside Hans what does your packaging look like and do you are you able to get your your mission on your packaging in a way that that Cookie Company in the pizza box wasn't thinking about it as real estate yeah we invested on it for packaging it's a pink very fancy box Lauren has seen it I've tried the cookies too they are good so there's a lot to be said for the packaging the thing is that is hard for like the people I'm selling to are younger people who are between in their 20 in their 20 later is kind of in a transitional time on their lives and this is where their brand loyalty wa how do you know that wait wait how do you know that how do you know that because I I mean those are the people like I mean people order they put their name they put you have charge card you shipped cookies how do you know how old they are Facebook models that and CIO cio's email tool models that uh Facebook can tell me who is clicking on our ads and they are 65% feale Emil and over 50% between 25 and 44 did you consider the fact that some people aren't on Facebook and that you're it's like going into a bar and saying everybody's a drunk in there so everybody's a drunk in the world I mean you're going to Facebook and you're using them as the sample but plenty of people aren't on Facebook oh sure but I'm doing an e-commerce business so effectively I can sell to people who are on Facebook that is the medium that I use to get my customers so yeah it's a different situation if I were doing Outdoors or that type of thing but given the constraints I'm working with I am like there's some selection bias of course because I am doing e-commerce on Facebook and even the brand is presented in a way that's probably going to be more appealing to a certain Subs segment of consumer of of consumers is probably more more to women than to men because it's all pink okay so I just want to be clear I didn't know that you're saying that most of your new business that you've gotten you got through Facebook is that true yeah for the most part yes oh okay I didn't know that all right that changes then okay in e-commerce that's pretty much the game right now it's Facebook or Tik Tok which is even younger but the thing is that if you're you're talking to the segment of people and you're giving this all of that the thing is that think of Snickers bar you love Snickers bar and it's going to be very hard for me to change that probably impossible because you've been eating sneakers bars for how three years something like that and you like them and you are not in the market for a new one but when I'm talking when I'm talking to a 25y old girl who is just leaving college she something like is in a transitional stage that's when she's building her brand loyalties and the thing is that when you first fell in love with sneakers bars there weren't a 100 options and they were not online and they were not showing themselves to you at Facebook or Instagram all the time they were not saying bye bye bye bye bye constantly the way that they are now so my customer who is 25 years old she has a 100 different options at her disposal and let's assume assum that they are all equally delicious like they're chocolate chip cookies they are all just as good she has hundreds of options so I need to give them something else because otherwise I cannot control the only other tool I have is price because they expect like you should see my customer service and I think we do a very good job they expect that the very minimum is decent service like good service good follow through quality product uh timely shipping they assume that that is what you're offering that's the very least you can do for them so you need to get them something more like the thing is that this new consumer is very very demanding and if you don't give them like this thing to latch on they will probably buy this one time and the next and they're not going to find anything particularly interesting about you and the next time that they want cookies they may or may not come back to you whereas if you give them something to really latch on then you're way more likely to bring them back I find it ironic that the owner of the chalk company is monetized his product and said they all pretty much are the same when I'm thinking if it's a great chalk chill cookie why would somebody want to take a chance to not get a Great chalko Cookie and just stay loyal to this great tasting product and you've made it sound like you're selling this commodity like if the wind changes they'll buy from somebody else and there's probably some truth to that there's no question there's some truth to that but I think you've taken it to an extreme I I think they're somewhere in the middle I think a great chalk Cho cookie speaks for itself definitely as a line if you want I'm going to give that to you right now that's my tagline for the day definitely the thing is that I am already competing with a ton of different people and I am on e-commerce so they are not tasting the cookie right away they're not going to a baker in the cookie they have to be convinced like there's something here yeah no no no you've given you I I see where you there's some stuff I hadn't thought about I I totally understand where you're coming from and I'm not saying you're wrong I'm saying you might be a little a little overboard on it and maybe there's still great chalk chip cookies great brownies there's a certain core that will continue to buy those from you without the other stuff but I I can't argue with the fact that I didn't realize that's where you got all the customers from so you are in fact talking about an audience that I'm not you know used to we're running short on time there are a couple of things that I want to make sure we hit one is uh Hans you've talked about how you decided that the the mission was so important to you guys which does raise an interesting question you you chose to look ate your business in Texas has that worked out okay for you do you guys feel comfortable in Texas fre been great Austin is different than the rest of Texas I can tell you that for instance something that happens a lot like 50 miles from here is that is very white and very Christian and is probably not as welcoming for people like us but other than that like Austin has been amazing and that is I think that something that is that that is like very important like and really trigger a lot of things about the mission Austin is this bubble and we were so comfortable so so comfortable in this bubble that we forgot what's happening well that thing that happened in waldi a few weeks ago it's very easy to get comfortable so it has been great to us personally but we're we have really made a point of being very aware of how privileged we are because it is not the reality of a lot of places not far from here Hans I think you said that you met earlier today with a venture capitalist can you tell us what that's about what are what are you trying to do yeah we're racing a seed round uh our goal is to grow into retail uh the idea is to get the cookie though into the shelves and then the cookies so we're raising a $5 million seed round so we're all over the place talking to everyone everyone and everywhere so um the idea is that we there's a big opportunity not only on e-commerce because I think Ecom merci is that people who are ordering the $40 dozen of cookies they are very engaged with the product if you put it on Supermarket shelves you really put it at the reach of a lot of people and no one is really innovating in that category so we think that there's a big opportunity there so y we're racing I'm curious Hans um how much of your time does the fundraising take a lot a lot that's part of the reason I don't do it and I'm asking it is like having two jobs particular l in this climate the one thing that I learned that I found fascinating because at first I was okay we need to raise capital and I was tweeting it kind of transactionally and down the line we started like having more conversations and really enjoying the conversations and it is not a burden it is a lot of work because you need to be on your toes all the time and you never know what opportunity is going to present yourself like the one that I talked to this morning is a big big big big fund that are not were too small for them and they were very clear about that but it's someone who we really want to make a relationship so when we're ready we they will be our first goal it's stressful because of course you need to raise but we have learned so much and we have connected to so many people even if they have decided not to invest for whatever reason that it's a nice part of the job actually Hans do you need to raise God you you read my mind Lauren that was my question you used the word need to raise yes and I'll tell you why we started a business like I told you like we had a 25,000 cookies ready for soupie and we started the business we were $14,000 out and we grew the business out of nothing like literally nothing and we made it work like of course like that big boost at the beginning really helped and what we learned and we learned at the hard way was that the bigger your business are the riskier it becomes so we got ourselves to a point where we are doing I don't an insane insane numbers but we didn't really have the right capital structure for that because we very fast and that becomes very risky so you need to have two things you need to have like a proper capital structure for yourself and the other thing is that you need to open some doors for yourself so that down the line if you need to cross them you will what's the risk you referring to in in growing fast T what was the risk you were concerned about if I have a $10,000 a month business and I'm short $500 I can put them on a credit card or something I'll figure out $500 is easy to figure out if I have a million dollar business and I'm short $50,000 is a very different conversation that I need to have so you need to be prepared for that and frankly we were not we really went through a very tough time and actually we're still like in a very kind of let's just say that our wings are slightly clipped right now we're trying to be very we're being very very slow and very conscious of how we spend money but we cannot really grow unless we have capital okay that is absolutely crazy to suggest that you need to get more money because you can't grow makes no sense because if you have a profitable business you take the profit and you reinvest in in the business and you can grow it to suggest that going to a venture capitalist is going to be less risky is is is just laughable that you're going to give your life to these guys and they're going to take you to some wonderful dinners and tell you nothing's going to change you're totally with you that is just not how it always works out so I challenge that whole concept of that this is a less risky thing to go to Aventure Cal than just take your profits reinvest them in your company and grow it a nice clip because that's what I did that's what Liz is doing that's what Laura did that's what lots of people do and there's lots of people that went down that other Road and got us surpris at the end of the day which is oh the Venture Capital guys are not my best friends Liz you with me oh I'm absolutely I'm absolutely aware of that I haven't really gone down the path of of VCS for a lot of reasons but I can't actually say that I have enough experience to have a strong opinion about it my perception is that it would suck up all my time and my time right now has to be devoted to growing my business because it's growing fast if I had to pull away from that and do some sort of a road show that would be miserable well the thing is that in our case like we already put ourselves kind of in a risky situation which is unfortunate and if I had I known what I know now I would have taken a different path of how to grow the business what are you referring to Hans how how have you already put yourself in a risky position growing your business so fast and we were doing at our Peak we're doing $700,000 in Revenue in a month which was insane that required a ton of infrastructure and that required a ton of investment so that profit has already been reinvested and the other thing that is very important and uh just to make it super clear because I don't think most people appreciate this um I came to the country three month three years ago so I don't have access to credit and SBA loan for instance is not available to me and a lot of tools that are available to you guys Americans are not available to me okay that's interesting that's a valid point I consider that I would still question whether if you're profitable why if you're profitable if you have a bad month okay then you're less profitable but I I I don't know that you need to go and you're doing a decent amount of volume not decent you're doing a phenomenal amount of volume in a short period of time I would think that you could capitalize the company by just being profitable for a year or two and socking some money away if you say no I want to go big or go home okay if that's your plan no that's definitely the plan okay if you have that need to do that I can't argue with that oh no no no no of course that's the plan like the idea is to go National like right now we're doing e-commerce and the idea is to go National and supermarkets so yeah that's that maybe I should have started there yes exactly now that okay fair enough if you if you if your goal if you are if you are wired and you want to go National and and grow this a new gigantic company you're you probably need to take an Venture but you certainly don't need to take inventure Capital if you don't want to do that oh no no no no a good VC is also going to help you with distribution they're going to have inroads so there's a value in that that might Merit you know taking outside investment that would be a case for me like if I found a VC that really could help me with manufacturing and with supply chain and distribution I would work with them over someone that was doing something with technology in fact I already have decided that wouldn't work with a VC that focuses only on technology because I know that they're not going to understand my business and that would be a huge problem startup culture right now a lot of it is like raising money is the end goal and a lot of people and I've heard like very big big big big big big bus say that to me the goal is to just inject money and inject money and inject money and grow grow then raise $100 million and either go public or sell for ridiculous amount of money and get out as fast as you can possibly do it of course there there are risks with venture capital I mean you give up some control and things can go wrong I I'm curious Hans given the entrepreneurial Visa that you're here on what would happen if the business failed I would lose my Visa and then you'd have to go back to Guatemala well like you go go to Austria he's got an A Austrian yeah or I could go to Europe yeah probably we will go to Europe yes do you both have Austrian passports no well how did he come with you then oh yeah we we got the yeah yeah but if the business failed you would have to go somewhere else yeah or build a new business you know you keep thinking as an entrepreneur you've got all the risk youou I never heard of that one that's a whole new level of and then if you fail they kick you out of the country I mean that's just that gives new meaning to the phrase go big or go home yeah right and figure out where home is something that we have really struggled with because like um and don't take it the wrong way but you were not aware of like all the limitations we come about safe spaces and all of those things all of a sudden you start comparing yourself to an American company that start at the same time as you doing like and they're doing like 10 times what you're doing and you're like what and then you realize like we are in a way at a disadvantage to the point about BCS being able to bring their network with them we came to we came here three years ago without knowing anyone and I think we've made it very far but we haven't had 20 years of building a network or talking to people or get our name out there we had to do it very fast and we don't have that event this no absolutely listen we're on the same page now I got it good for you congratulations and again the most important thing though is good chof cookies and brownies let's not lose sight of that this has been really fascinating um I'm sorry I got to cut this off there were other questions about you Hans I had other questions for Jay and Liz as well we're going to have to do that another week my thanks to Jay goz Liz picarazzi and Hans shy uh as always thanks for sharing and Hans really great to have you here and really appreciate you're telling us what you've been through wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l r n at 21h hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]