Smart Athlete Podcast Ep. 85 - Alex French - BREWING SUCCESS

Yeah, I mean, we went down a path at least where we kind of have to be big at this point. And I’d say as I’ve — because we started in — started as a side hustle, my co-founder and I in 2013. So, on a calendar that’s eight years.
Smart Athlete Podcast Ep. 85 - Alex French - BREWING SUCCESS

ALEX: [00:01] Yeah, I mean, we went down a path at least where we kind of have to be big at this point. And I’d say as I’ve — because we started in — started as a side hustle, my co-founder and I in 2013. So, on a calendar that’s eight years. And we’ve now grown this thing to where we have about 20 employees. We’re doing well on Amazon, we’re in 1000 stores, but very, very taxing. And we’re in like, go go, go go mode.

Like we can’t — I mean, I took my first vacation all year, and I really only took one day off, right? And so because we have to answer to investors and constantly keep raising money, where there’s a — the grass is always greener on the other side, right? I think about someone that has a smaller business with a small team or no team and they can go take a lunch break and go work out in the middle of the day where I’m always on my computer. I’m always on my phone, I’m always answering communication.

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JESSE: [01:49] Welcome to the Smart Athlete Podcast. I’m your host, Jesse Funk.
My guest today is currently the CEO of Get Bizzy Inc. He has his degree in Finance and Entrepreneurship and also is an ultra-endurance athlete that encompasses multiple sports, much to my chagrin, I feel like I need to kind of pick up the pace. Welcome to the show, Alex French.

ALEX: [02:09] Awesome. Thanks for having me, Jesse.

JESSE: Yeah, thanks for taking time out of your day. You know, like I was saying before we got going, we kind of have entrepreneurship in common, except that I feel like you kind of operate probably on a different level than where I operate, where you’re accountable to probably a slew of employees. And I think you said you raised VC for the company. So, there’s all kinds of people you have to answer to. And I just kind of live in my own little world. So, it’ll be interesting to talk to you about kind of what you got going on.

ALEX: [02:42] Yeah, I mean, it’s definitely been a wild ride. And they’re pros and cons to every type of business, right? So, it’s fun to be around a lot of people. I’m at the office, we’re kind of in a little photo studio here. It’s great, we get to interact, but at the same time, there’s a lot of kind of weight that comes along with having employees and a lot of investors So, pros and cons for sure.

JESSE: [03:05] Oh, yeah. You know, I often see the phrase and I don’t know how much time you spend in kind of, I’ll say entrepreneurship circles, and I mean online, it can be anywhere from probably not Reddit, because that’s turned into like a circle jerk. Sorry, Reddit. That subreddit is not very useful, most of the time. But you know, forums, private Facebook groups, anything like that. But often, I see people say things like there’s no advantage in thinking small.

Like you don’t help anybody by trying to keep your business small. If you make it large and affect more people, then you’re doing more positive things in the world. So, even though you’re accountable to people, you probably have the right idea about trying to share your message and what you’re doing with the company with a larger swath of people.

ALEX: [03:56] Yeah, I mean, we went down a path at least where we kind of have to be big at this point. And I’d say as I’ve — because we started in — started as a side hustle, my co-founder and I in 2013. So, on a calendar that’s eight years. And we’ve now grown this thing to where we have about 20 employees. We’re doing well on Amazon, we’re in 1000 stores, but very, very taxing. And we’re in like, go go, go mode. Like we can’t — I mean, I took my first vacation all year, and I really only took one day off, right?

And so because we have to answer to investors and constantly keep raising money, where there’s a — the grass is always greener on the other side, right? I think about someone that has a smaller business with a small team or no team and they can go take a lunch break and go work out in the middle of the day where I’m always on my computer. I’m always on my phone, I’m always answering communication.

[04:57] And I pay myself a salary. I don’t get to pay any sort of like, dividends or any of those things. So, it’s a different path. I think it’s fun and nice to be able to go into a store like I was in Arizona last weekend, and I gotta go see my product in a store. I live in Minnesota. That’s an exciting thing. But at the same time, I’m working my tail off. And you know, I don’t see as much of a light at the end of the tunnel.

JESSE: [04:23] Yeah. So, I guess we have to back up for the audience and kind of describe what it is you sell, and maybe why you sell it.

ALEX: Yeah, so we make cold brew coffee products, specifically focused for at-home consumption. So, we kind of have like, two product lines. We sell ground coffee for people that like to make cold brew themselves and the brand is Bizzy Coffee, B-I-Z-Z-Y. And then we also sell essentially brewed versions of those products. So, it’s a large-format, 48-ounce bottle of cold brew. So, everything for at-home use, we sell only kind of in the grocery store. So, no cans or anything like that.

And yeah, we kind of started it in 2013, where my co-founder and I generally frugal people, where we wanted that kind of coffee shop quality cold brew, but we didn’t want to pay five bucks for a cup of coffee. To us, that was crazy, especially as we get into the story of us being athletes. We were working a ton, we were training like crazy. So, we were consuming three to — on some days eight cups of coffee. So, the finances just didn’t make sense.

[06:36] And so we did a bunch of research, looked on the internet and saw that kind of the future of coffee was going to be cold, and specifically cold brewed. And we kind of have, you know, a thesis, which is obvious, but like you want to be solving a problem for a consumer, and it takes 18 hours to make. So, our thought was people are busy, they don’t want to spend five bucks for a cup of coffee, let’s make a coffee shop quality product for consumers at home. And then we’ve kind of danced around a little bit over the last since we officially launched in 2016 to kind of where we are today.

JESSE: [07:15] You know, my initial reaction, anytime I see a company that’s grown, it’s still a relatively short period of time, 2016 to now, we’re five years. And I did a little peeking on Amazon with some software, which I’m sure you’re familiar with. And I mean, you guys are definitely moving product for sure. You’re not the number one bestseller in the category for no reason. But anytime I see — it’s a coffee company, right, at the heart of it. You’re selling coffee, like you’re not– You didn’t invent the new iPhone, you didn’t do anything that’s — well, I’ll say groundbreaking.

But you’re still like charging pretty hard at a pretty good clip. And I sometimes maybe psych myself out and I just go, like, how do you have the balls to start a coffee company, you know, when there’s so many other coffee companies out there? You know, and I guess maybe it comes back to just solving that problem, right? Where people want the coffee, but maybe it’s not in the format, or the most convenient way for them to consume it.

ALEX: [08:24] Yeah. I mean, we looked at a lot of categories of an analyst kind of by trade. And you know, so we were analyzing a lot of different segments, like, we were really interested in beer too. Because like, we wanted something that we loved the product that was consumable. And so we looked at a bunch of different things. And, yeah, in hindsight, especially, like, it’s easier for you to look at it, when you’re in it, you’re just like, “Oh, I love this thing.

Let’s make this thing. Let’s sell this thing,” because you’re just so passionate. But yeah, on hindsight, I mean, it is they call it a red ocean because it’s filled with blood of your competitors. And we just focused on a small niche at first, which was essentially a ready to use coffee concentrate, sold on Amazon.

[09:11] And it was really a small niche meant to be a small business. And then essentially, through this world of entrepreneurship and competition, I essentially had to raise money. And then in order to raise money, you have to have a large vision for the investors to say, okay, so down the road, you’re going to be big, therefore, I can give you this money today.

And so it kind of forced us to be larger and have bigger dreams when even though when we started it was really intended to be a side hustle, where we were just going to be slinging some coffee concentrates on the internet. We’re in a very micro niche format where there wasn’t really a solution to the problem that we faced at least.

[09:56] And then since then, yeah, now I mean, we sell bags of ground coffee, which is essentially as commodity as it gets. And we’ve been able to command a premium price, which I think is key to some of the success that we’ve had is in doing that, and also being niche, because we don’t sell hot coffee products.

So, we’re not selling K cups we’re not selling — You know, we have a bunch of people ask us like, “Oh, well, can you use your cold brew grounds for hot coffee?” And the answer is, yeah, sure, you can. But like, that’s not at all what our consumers do, or how we message our products. So, it’s just being like really focused on kind of the niche that we’re in.

JESSE: [10:34] So, I mean, how much does your background because you didn’t, like, I guess I’d say, unlike me where I went from — I worked from like retail because I had athletic aspirations at a college, I worked retail to accommodate that and then left retail to kind of do what I refer to as the Craigslist hustle, which I’m sure you’ve probably heard about. You’re just buying things on Craigslist, refurbishing, sell. I did that for a while, before I kind of get going in my own thing.

So, I have no corporate background. So, it’s always interesting to see, like, the advantages and disadvantages from coming from different places. So, how does that — your experience in corporate America, because you worked as you said, you’re an analyst by trade. How does that play into you running the company now and kind of going from that the decision of, hey, this is a side hustle to, no, let’s actually make this something bigger?

ALEX: [11:29] Yeah, I mean, there’s definitely pros and cons to it. So, I started at BestBuy in essentially a supply chain as an analyst and then became a marketing analyst on the Cheerios team at General Mills. And so because of that background, I almost was trained to go a very specific path. And I had an expectation to go a path. So, the benefits and the pros of that background is that I was viewed as very credible to investors, as long as I followed that path.

And now, as I look at it from a negative standpoint, that path of because again, BestBuy, General Mills, I was supposed to sell my products into the grocery stores. And that was the path that we raised money for. But that path is very, very, very difficult and very expensive.

[12:26] And I would say kind of the negative to that is it forced me down this path where if I would have come in without that specific expertise, I probably would have just built in strictly e-commerce business, and would have been able to raise less money, and been more profitable from a cash flow perspective out of the gates.

So, I think there’s certainly something to being naive to a specific business, because you’re just going to come in with eyes wide open, as opposed to what you think is the correct path, when in reality it might not be the right path. And so I think there’s pros and cons to it. Like it allowed me to certainly raise more money. But I basically blew all that money following the path, which is very, very difficult and very bloody, as opposed to just being like a wide eyed entrepreneur.

[13:23] It was like oh, let’s sell this stuff on the internet. And that’s what we’ve been very successful at, but that’s not what the investors invested in. But we chose that path alongside it essentially. So, pros and cons, certainly.

JESSE: [13:36] Right, right. You know, something that I don’t think people really reasonably so don’t pay attention to, when they go to the grocery store, it’s like, how competitive it is to get products on shelves at a grocery store. I have a little bit of behind the curtain info.

One of my business mentors was a food broker for a number of years before he had his own kind of food shops here in town and then retired. And so when I started, we were always talking food stuff, and he’s like, oh, this is what you do. And it sounded insane to me. You know, so can you, I guess, give me and us listening to you a little bit of primer on what it takes to be successful in like the grocery store game, basically.

ALEX: [14:30] Yeah, I mean, honestly, you have to be extremely well financed. Because getting the product on the shelf is pretty hard. It’s pretty competitive. But to get your product off the shelf and into a consumers shopping cart is so much harder. I mean, we’ve definitely gotten into stores, and then we didn’t perform within three to six months and then they kicked us off and you have to pay to get on the shelf, like literally, you have to write them a check in certain situations.

So, it’s just — it’s very difficult because who you’re competing against. Like there’s a — you go into a grocery store, and there’s a finite amount of space. So, for you to get your product on to the shelf, you have to displace someone else. And then you have to perform better than what you displace. Otherwise, they’re going to just kick you off and bring that other product back on because they’re incentivized, just like anyone in a job, like I want to get promoted.

[15:30] My goal is to make more money and get a raise. And you do that by having more profit and generating more revenue. It doesn’t matter if they like you, if they’re your best friend, their objective is to make more money selling products in their category. So, that’s like the framework, and that’s the context. And so you have to navigate all of these very tricky things. Like grocery is probably the hardest of every single retail category.

So, let’s say you want to get into pet food, or you want to get into a Home Depot, you got an idea for a nail or something, those are going to be significantly easier. Because the grocery store as consumers, right, we’ve been trained to shop what’s on promotion, what’s $1 off, or what’s a buy one, get one, You’re just like, whatever is cheaper, I’m buying. Loyalty is almost out the window. Plus, you have shelf life, with the product, unlike a nail, which can sit there forever.

[16:26] So, there’s a ton of complexities and what we didn’t realize, and that came from the industry, right? I thought I knew these things. But you don’t even sell your product to the grocery store. You sell it to a distributor, who then sells it to the grocery store. But you gotta get the grocery store to agree to the product before the distributor is willing to carry the product. So, it’s this really difficult chicken and the egg challenge.

And most of the way that new brands basically get around it is they say, grocery store, I will pay you — this is like 10 figure checks. Let’s say you’re getting into a 100 store chain, they might ask you to pay $10,000 in cash. Say hey, I’ll pay you $10,000 if you agree to carry my product. Okay, I’ll give you six months to test the product. Then you got to go to the distributor and say, okay, now, now I got this retailer on board, will you pick it up? Yes. Okay.

[17:25] But the deal is, let’s say your product sells for $5 on the shelf, you don’t make $5 because the retailer has to make money. But then you actually don’t even sell to the retailer, you sell to the distributor. So, you may sell your product for $2 or $2.50. And the consumer pays five bucks. So, the margins are really slim and you have to be what’s called high velocity.

So, the product has to sell a lot of units in order to make it because if you’re only making 50 cents on a unit, you gotta sell a lot of units to cover salaries and marketing expense. And all those things. So, yeah it’s definitely super challenging. But if you have a good idea, and it’s something that’s consumable, there’s a lot of opportunity there. But it’s just really, really competitive, especially in the last say, seven years with kind of the Better for You Movement, almost every category has been disrupted. And so there’s not a lot of places left to innovate basically.

JESSE: [18:29] Considering you’re the CEO, I’m imagining most of your day is spent coordinating operations. But was there a point when you’re out actually hustling? I know, when I was talking about food and stuff with my mentor [inaudible 18:47] first getting started, he was talking about yeah, like, you personally gotta go out to the stores, do product demos, did you do any of that? Or are you coordinating any of that?

ALEX: [18:58] Yeah, I mean, I, have sampled myself probably 200 times. I still attend almost every sales call. I still email buyers, I still pick up the phone, I call buyers, I’m probably the chief sales officer if there was such a thing. Because at the end of the day, I was reading a blog post on LinkedIn yesterday and it basically said, until you get to a million dollars in revenue, as a CEO, your only job is to sell.

You gotta make revenue and cover overhead. So, I do a ton of that work still. That being said, I’m also fortunate where I have a co-founder who is our COO. So, he does all the coordination and operations. I sell and raise money and make sure that the products and the strategy is kind of going in the right direction.

JESSE: [19:53] So, now I’ve lost my train of thought. What does your typical day look like where I know I’ve talked to — I’m trying to remember what episode it was. I was talking to, if you’re in the online e-commerce space, Ezra Firestone. I had him on a while ago. And you know, he runs his biggest brand is like 30 $40 million a year. And he was saying he basically works like six hour days now. He’s got a team of about 100 people so he’s got a lot of things delegated. Not quite, he’s a little bit bigger than you.

ALEX: A lot bigger.

JESSE: [20:29] But because I don’t think he came from — I don’t think he has VC involved. I think it was, for him, a series of building and selling companies and kind of, I’ll say bootstrapping [inaudible 20:42] that way. And like being his own VC over a period of time. He doesn’t have quite the same pressures that you might. So, are, able to work six hour days? Are we talking longer than that? What does your day look like?

ALEX: [20:56] Yeah, I mean, I’m still grinding hard. We’ve raised less than 5 million, but kind of in that general ballpark. And we’re still under the gun is to grow fast. And the problem is, hyper growth is not in our control, because we have to get into retailers, and that’s not up to us.

We can’t just click increase Facebook ad spend, and go from X million to Y that, that’s not in the world for us, because, again, I went down this path of retail. So, you know, I’m still working, minimum 10 hour days, and pretty much six days a week. I’ve within the last year forced myself to take Saturday’s off. But I mean, I was working seven days a week, 10 hour days, at least for four years.

[21:48] And I think a lot of it is because we did go down that path of venture and I envy Ezra. Because in hindsight you don’t have to do the Shark Tank venture capital fundraising strategy. It’s actually probably not the right path for most businesses, unless you truly have like a hyper scale business where you can plug in $1 and get back $5.

Until you have that, it’s just better to go raise debt, or get an SBA loan or something that’s more conservative, where you’re going to actually be making profit. And because we’ve been on this, in air quotes, hyper growth business model we’re losing money every month. And that puts a ridiculous amount of pressure on the team. Because you know at some point, you will run out of money if you lose money every month. And there’s two ways to cover that. You either sell more, or you raise more money.

[22:51] And then that gets you kind of in this, I don’t wanna call it a death spiral, but essentially a reliance on outside funding, which you basically have to work through that. And so there’s really the path of sell, sell, sell as hard as you can to minimize burn rate. And if you’re unsuccessful, where we for us to get into more stores, that’s not in our control, a buyer says yes or no.

And then the alternative is go fundraise. And so you’re still selling, but you’re selling an investor instead of a retail store. And so long story short, I’m still spending a ridiculous amount of time working, way more than I’d like to.

JESSE: [23:32] Yeah. Well, I mean, as you said, that’s kind of the path you kind of lead yourself on, and there’s not — I certainly don’t know, from my inexperience here, how you would even pivot any other direction at this point, you just kind of keep grinding forward.

But you know, I think that’s one of the things that is hard for even myself, and I think I’ll say average, Joe, or you, as the listener may have a hard time wrapping your head around is that some of these companies like Alex’s, for all intensive purposes, don’t make any money for a long time because they’re trying to gain market share in such a competitive market.

And I think the tough part to wrap your head around is How do you stay alive while you’re burning all this cash, which you’ve already explained, you either sell more or raise more money. But then I personally am curious, like, What’s your major burden? Is it marketing, is it employee salaries?

Like what’s the biggest thing that draws back because I can see, well, if you know, if say, you’ve got 10 people, I can’t remember how many — I think you said you had 20 people now. Well, it’s like okay, so I have a fixed — You know, if everybody’s on salary, I’ve got a fixed expense that I’ve got to cover. And if we’re only selling 20,000 units This month and it doesn’t cover, I need to sell 40,000, well, then I have like a definite goal of this is where we get to breakeven and then profitable beyond that.

But then marketing obviously is variable, as you said, unless you have something where you like, put $1 in and get $5 back. And it’s more complicated than that. You can have different return on ad spend, depending on what your margins are, and your model, where’s your biggest burn? How do you get to that place where you’re like, okay, we’re no longer burning, or at least breakeven and then moving forward.

ALEX: [25:34] Yeah. It was kind of like two pieces. So, we own a brewery. So, you can’t really tell here, but behind that wall over there, there’s a brewery, and it looks like a beer brewery. And so we had a fixed overhead of just the facility, right, we got rent, and we have utilities, that’s a fixed monthly cost. Then we have the people to operate the facility that are fixed.

But where the big challenge is, is there’s a lot of equipment in there. That equipment costs us a lot of money. And so there’s a you know, we primarily used equity. So, we raised money to buy the equipment, but some of it was purchased through debt. And so because there’s purchase through debt, there’s now a fixed overhead cost to cover it as well. And so our business, as I mentioned, is very slim margin.

[26:22] So, we may make depending on the product, $2 to $4, $1, in some situations, profit per unit. And so for us, like I got this kind of a bottle here if we’re buying one bottle at a time, this bottle could cost $5. But if I buy 5 million bottles at a time, it could cost me 30 cents. And so we’re in a business where the goal is to get to scaled manufacturing, because there are very large economies of scale, in buying bottles in buying caps, and putting more bottles on a semi truck.

Because right now we do what’s called LTL, less than truckload, where we may ship two pallets to a customer, but I got to pay for the truck. So, if I have two pallets versus 22 pallets on the truck, that fixed cost gets spread across every unit. And so kind of the world that we’re in, which is why it’s so hard as our competitors are at scale. And they basically have an ATM machine, where we have to fund losses to get to a level of scale to be able to cover the overhead.

[27:33] But then once you get to that level of scale, it’s extremely profitable. Because your profit margin per unit is pretty decent but you have to move a lot of units in order for those to add up to cover your overhead. So, that’s kind of a long answer. But really, it is the facility overhead.

And then as I mentioned earlier, because in the grocery space, we’ve all been trained to buy the yellow tag as we joke about, whatever’s on sale we buy, and that price reduction comes out of my pocket. And so when I used to be making two to $4, we’ll say a unit, I may only make 30 to 50 cents. So, you got to sell a boatload of units to cover that overhead.

[28:17] So, that’s kind of the world that we’re in. But that is because we manufacture the product. If we would have outsourced manufacturing, that would have been a little bit different, it just would have been a different cost structure. But we were unable to find someone that could create the quality product that we thought we needed to achieve in order to be successful.

JESSE: [28:37] So, now at least for me, that begs the question, how were you manufacturing in the beginning, you know, kind of getting to where you are now I know — So, like we have a local coffee company here in Kansas City. And the gentleman that started the company actually lives in my neighborhood. He started it in his basement. He bought a roaster, he bought whatever he could fit in his basement, started it there, started just selling like beans and that kind of thing.

So, his story kind of makes sense. But thinking about like the equipment you’re using to produce what you have now, how does that progression work from starting in the apartment, trying to figure out how things work, official launch in 2016 and then moving forward?

ALEX: [29:23] Yeah. So, when we launched in 2016, we actually had a contract manufacturer making it for us. So, that was our initial plan. We didn’t — [crosstalk]

JESSE: That was my guess.

ALEX: Yeah. We did not want to be a manufacturer because it’s very expensive, and it’s very challenging. You go from just selling a product to managing people, to make the product, it’s very challenging. But we, long story short, had a terrible breakup with our contract manufacturer through some unethical business practices on their end. And so we’re essentially forced because of a timeline with a product launch in grocery stores were forced to start manufacturing ourselves.

And so we had to buy a filling line, which wasn’t super expensive. It was a relatively inexpensive one. But so then what we had to do is we actually started brewing our product out of a kombucha facility. So, we would just pay them a small fee when we went to use their space. And then we outgrew that space.

[30:19] We found an old cheese facility that had some vats that we could make it in where, again, we still weren’t paying for the equipment, which was the key piece there. We worked out of there for nine months, outgrew that space, and there was no more shared spaces for us. And we had to essentially signed a five year lease, build out our own facility. And then that’s where basically the burn and the financial losses really came into play. Until we get to a level of scale.

JESSE: [30:49] See, and that’s what I wanted to ask you in the beginning was whether you are, you know, you’re running three shifts in your facility, which is 24/7, for you listening, if you don’t know what I mean. Or whether you’re hiring out your machines at any point in time Because that was another thing that my mentor mentioned about, the whole situation is maybe you can find, like you did find somebody who’s already got the equipment that can kind of be your co-packer or just let you use the facility without having to buy all the stuff.

And then once you own it going and being on the other side of that equation to maximize the dollars for all the hours of your equipment are sitting there. Because you got to pay like you said, it’s a fixed expense. If it’s $5 a month for your equipment, which is obviously a gross understatement, it’s $5 a month regardless of whether they’re running all day, or whether they’re only running two hours a day. So, do you run all day? Or do you have any time rented out?

ALEX: [31:48] No, we definitely have downtime. And that, again, puts us in the question of we’ve raised capital, and those investors, because there’s kind of like two very distinct paths. You are a brand and you only sell branded products. Because the way that we’ve built this company is to sell it someday down the road, which is terrible. You’re never supposed to start a business like that. We did, our investors wanted it that way.

We needed money, long story short, and the path is sell branded products only. Because when you sell your company to let’s say, like Folgers as an example, we’d love that would be a great partner for us. They don’t want to be making someone else’s product, they want to just have busy. And so we’ve had a challenge of our investors only want us to sell our own brand, because you get a higher exit multiple, which means they’ll value your business off of revenue.

[32:47] So, let’s say you’re doing $10, they’re gonna give you five times that, they’ll give you $50. Where if you’re doing $10 in sales, and you’re making someone else’s product, you only net $1 in profit, they’re gonna give you 10 times that profit, so $10. So, a huge difference in value. And so they’ve almost demanded that we don’t do other people’s products, which is foolish if you think about it, just from a pure business perspective, because there’s downtime and we’re still paying for it, even though the equipment’s not being utilized.

So, that’s where a lot of what my job has been is, I got to maximize that equipment, because it’s a fixed cost. So, go sell Bizzy everywhere I possibly can. And again, but that is because of the path where most manufacturers are just like, if we can make it, we’re gonna make it because it makes money. We want to cover our costs. But because we kind of went the institutional investor route, they have a plan and a formula that says, generate as much revenue with own brand sell on brand for large multiple of revenue.

JESSE: [33:56] So, here’s my just, most these questions just come from a place of being naive. So, you have to pardon if I ask anything stupid. Even though you’re obviously your focus is selling your own products and your own brand. If you have downtime, you haven’t yet achieved the scale where your machines are running all the time.

What’s the downside to run being a contract manufacturer for somebody and running that extra time to help pay for those fixed costs in the meantime? Is it a matter of like, say, with Folgers, if they came in, would they say we want a 10 year contract? Or I mean, I guess I don’t understand why you wouldn’t say, yeah, we’ll take the money to continue the machines running.

ALEX: [34:49] It’s a different business, fundamentally. You’re selling a service instead of a product. And so I’m your side. I’m like, yeah, that’s obviously the right move — [crosstalk] financially sound —

JESSE: For you, it can be a split in attention too. Like, I can understand that where it’s like, your focus should only be sell more of this product versus bringing new clients on and selling the product. So, like, I get that, but it just, like I said, I’m just thinking about, well, how do you stem the bleeding the quickest?

ALEX: [35:25] Yeah. And the bleeding is not so bad anymore. Two years ago, it was fearful, I will say. The bleeding is not so bad anymore because we’ve gotten to a larger level of scale. But yeah, I mean, you’re absolutely right, that’s the logical path.

But it is a very different business. And then to your question, there are contracts that get in place, and you have to sign up for long term commitments and agreements. And then it just deviates the strategy from just being a branded manufacturer to essentially being a service provider, which is, again, a great business, but not the path that we’ve gotten down, essentially.

JESSE: [36:03] Yeah, I think some of it is just trying to get beyond my own head and my own like risk tolerance. Because I personally like low-level commitment in terms of capital and high potential return, where I can test something out cheap, instead of just throw it against the wall and say, hey, does this have any wheels on it? And if it does, great, like, I’ll throw more money at it. If it doesn’t, then I’ll shut it down, and I’ll move on.

You know, when you’ve got to buy equipment, and you start raising capital and selling equity, raising debt, doing all these things, then I guess I start to sweat bullets. And I go, oh, nevermind, which is probably why I do what I do versus what you do. It’s just not my risk tolerance level. So, that’s kind of where those questions come from. It’s just me on a personal level going, yikes. Like I would be stressed out a lot. So, I mean, do you experience that or are you pretty comfortable because of the corporate background?

ALEX: [37:03] No, I mean, everything you said, I feel as well. But we’re kind of in the point of no return. And the second that we brought in institutional capital, which are professional investors, because we needed a lot of money, there was kind of no turning back. You know, because there’s all these contracts in place. This is the plan, this is the path to deviate from the plan requires all this sign off. It’s not what people signed up for.

So, no, I mean, it does you do sweat bullets, and it’s extremely challenging. And that’s what makes you realize this is not a get rich quick, it’s a long term endurance thing, which is why I think the athletics has helped so much, especially as an endurance athlete. Because like, left foot, right foot, and just keep going forward and you gotta — the path is clear.

There’s no questions about what we need to do. It’s just, you just gotta keep going and put in the work. But no, I mean, it definitely is stressful. It’s less now than it was we’ll say, two, three years ago, when it was really uncertain if we had product-market fit. But now that we do, the path is pretty clear. The timing is still unclear, but we know exactly what we got to do. So, that’s helpful, at least.

JESSE: [38:15] Yeah, yeah. That makes me think about since you do ultra endurance events. And as I mentioned in beginning and I’d asked you before we got going, you know, clarification on that, because a lot of people specialize. They’re ultra runners, they’re ultra swimmers. I had, I’m sorry, I’ve forgotten her name right now, I had a lady who does stand up paddleboard in ultra, like ultra fashion. She panelboard from Cuba to Florida.

ALEX: Geez.

JESSE: Yeah. So, one of only two people who have done that. So, I’ve had a number of people on but most people specialize. and you seem to just say, to hell with it, whatever it is, I’ll do it. So, is that the stressful [inaudible 38:59] it’s like, okay, at the end of the day, like, I’ve just got to go get on the bike for a while, I gotta go run for a while, or does that add to the stress?

ALEX: [39:08] No, I think, for me, I’m — with this world of entrepreneurship, I’ve learned that there really is no finish line. And it’s just really difficult and challenging to just, like, work so hard, so long without knowing when it’s going to be over, essentially. And as a person that’s like, very difficult for me, and my personality does not mesh well. So, I’ve found that for me, I need to have something that’s not work-related, that has a start and a finish.

That’s extremely challenging. And so for me, I just want to always be — so like 2020 was tough because all my races got canceled. And so I was just like a year of grinding with no end, where I just love to be able to try something new because, you know, in my role I’m going to be doing something different next month than I did last month.

[40:01] And so the variety I think is important for me to just like quickly learn something, push myself to the absolute limit, but importantly, have a start and a finish. And then be able to like, because I love saying, okay, I’m gonna go, like we did, the first thing I ever really did was called The World’s Toughest Mudder. It’s a 24 hour race. And it was like, “Okay, I have a goal. I know when the day is my goal is to get first in this race.” Totally unrealistic expectation, but like, all right, I’m gonna get first in this thing I’ve never done before. And then it’s okay, now I’m going to go engulf myself in this community.

I’m going to find a mentor, I’m going to learn what they did. And it’s kind of this like, I think Tim Ferriss calls it like, just in time learning, where it’s like, I have this goal, it’s crystal clear to me, I’m going to learn as much as I possibly can about it as quickly as possible, create a plan, execute it and see what I’m capable of.

[40:55] And I love the idea of doing that in different disciplines because I can try something new. And that’s something that I love. Personally, I get bored relatively easily, for better or worse. And so it’s like, okay, I did that one. I accomplished it. Maybe I’ll try it again next year to see if I can get better and then I’m going to try something else. So, like we did the 24 hour race, I say we, this is my co-founder and myself. We did the 24 hour race, we did that for three years.

The first year, we got sixth place. The second year we got fourth place. The third year, we didn’t even finish. And I was like, all right, the competition has gotten too stiff. I will not be getting first, let’s find a new goal. And then it was okay, what’s something else that’s extremely challenging, that has maybe even a better brand or a more tight knit community.

[41:45] And so then we said, all right, let’s do Ironman. Because people that do Ironman are like, it’s a cult, essentially. And everyone’s heard of Iroman. And let’s just go do it. And we hadn’t even done a triathlon before we did a full Ironman, didn’t even do an open water swim. It was like, let’s just go do this thing. And so personally — [crosstalk]

JESSE: How long did you train for before you did it?

ALEX: [42:06] The Ironman was in June and we started training, I think, the last week of December or the year before, so it was just over six months.

JESSE: See, that’s funny, the way you were like yeah, let’s got was just go do it. I’ve had one other person on the show, Will McGough, who wrote a book Swim, Bike, Bonk about his adventure doing that. And he did it in three months, basically and just said it was — he didn’t know whether he’d finish. And I actually won’t tell you whether he did finish or not.

You gotta read the book, back to him. But it always — I have another show on the YouTube channel where I just talk about running. And I always tell people not to do that shit because there’s such a high incidence of injury when you get to like such a long distance in such a short time. And then people are like you come along and make it look possible. So, shame on you.

ALEX: [42:59] Yeah, I mean, I do not recommend it at all. And it was at elevation, right. I’m in Minnesota, we did it in Denver, Boulder. So, like, terrible experience. Finished it but absolutely barely, I walked the last 10 miles. And I’m not a walker. Right? So, I got my butt kicked. But the goal was just get the W, finish it. I kind of had three goals. It was like, I think sub 13 hours, goal one. I think it was before the sunset was goal B, and then goal C was finished with a smile. So, got that last one. There was a finish. It was a fake smile. But we got it done.

JESSE: [43:38] Yeah. So, I just — Is it a matter of just pick the biggest baddest challenge you can find and jump headfirst into it? Or I mean, how do you end up in ultras? Because everybody comes to ultras, I’ll say ultras as a general thing here, obviously, everybody comes to that challenge from a different place. So, I mean, is that it just saying, all right, like, what’s the most rad thing I can think of or find and going and doing it?

ALEX: [44:07] Yeah. I think when I — I was probably in my early to mid-20s. I was like working corporate and was really people have to say their midlife crisis had a quarter-life crisis. I was like, God, I kind of hate my job. I’m not really fulfilled. I need something extra. And I feel like I couldn’t get promoted, I couldn’t get more work. So, I was just feeling like I wasn’t being fully utilized.

And I just kind of had this like, moment of clarity where I was like, I just need to see what I’m capable of. And at the time, I had done one of these Tough Mudders, there was a 24-hour version. It was like right, when the Death Race and Spartan Race were becoming a thing and I was like, I’m gonna just join this clique of people that are just trying to see what they’re physically capable of. And it was the simplest one I had done one of them.

[44:56] So, I was like, all right, I’ll just sign up for this thing with my friends. And that was truly the intention was just like what, physically, mentally, emotionally, like how far can you push yourself? And I was hoping that was gonna be a kind of a correlation to the rest of life. Right? And I think probably most crazy endurance runners are somewhat prophetic in that way of like, that’s a correlation to life. And yeah, once we did that race, basically, it was like, okay, we completed it, wasn’t very successful the first year, but finished it just not ultra-competitive about it.

And then it was okay, well, I’ve done this now. Now, what’s that next thing? So, I certainly don’t want to go backwards, I want to continue to improve. And then yeah, now it’s just like, what else is next? And what’s the next biggest baddest thing that we can do? But of course, now, we have time constraints. So, we’re kind of limited to those. But hopefully, down the road, we can do a little bit more of them.

JESSE: [45:54] One of the things that surprise me sometimes is I spent a number of years training pretty heavily up to the point I was training 15-20 hours a week doing like, half Ironman at that point trying to get over all spots. And people would say, “Oh, yeah, I do full Ironmans. I only training like eight hours a week.” I’m like, I don’t — it doesn’t even register in my brain that that is reasonable. Yet, people still do it and seem to get pretty good results out of it, depending on their genetics, obviously.

But I would say at least in a maybe moment of hopeful, not inspiration, but a note of hope for you is that you can probably do more with less training than you think you can. So, [inaudible 46:51] like you work and crazy amounts. And hopefully, there’s a point when you can pull that back a little bit. Like, I know, there are tons of people that can just put in a little bit of time and still go out and do you know, some of that bigger stuff, as long as they’re consistent with it over time.

ALEX: [47:11] Yeah, and I think there’s really like — I look at the race community, and whatever it is, whether you’re cycling, you’re running, you’re kayaking, like whatever, right? Especially with endurance, I think there’s just like two types of people. And there’s computers and there’s completers. And like, when I did that 24 hour race, like we weren’t computers we were, I mean, all I thought about, wake up, go to bed, eat every meal, everything was focused on winning that race.

And then with Ironman, it was like, just get across the frickin’ finish line. Like, yeah, I had a goal time, but like a 13-hour goal time isn’t even like that fast. You know what I mean? So, like, that year was really just, like, just complete the damn race. Let’s just finish this thing. And so I’ve been on that, like, completer track for a couple years.

[47:57] And I think once you have the mindset of well, I know, I’m gonna finish like doing the Ironman, doing the 24-hour races, there’s never a question in my mind, if I’m gonna finish or not. It’s just like how fast, right. And so now it’s more of a fun thing just to remind myself of like, go do something epic.

Like, last weekend, I mentioned, I took my first vacation to Arizona, first vacation all year, like one day off, and did a hike from the rim to the river and back in a day, and you’re not supposed to do it, people die every year doing it. And it was like, let’s just go kick our butts for a day, remind ourselves what this feeling is like, but I knew I was gonna finish even though it was extremely challenging, I knew I was gonna finish just not in a record time.

JESSE: [48:40] Now, this is maybe I don’t want to concern your investors. But did they make you do like executive physicals and they’re like all right make sure like Alex isn’t gonna go kill himself while he’s doing one of these?

ALEX: [48:54] Well, you know worse, what they do is they force us to get this thing called the key man insurance, which is a life insurance policy, essentially. And so we have to pay every month to make sure that like if Andrew, my co-founder, or I die from doing something, that there’s an insurance policy on the business so that they can go hire someone to take care of it. So, they’re using the business way around it. So, you can do whatever you want, drive your motorcycle to work, but like the company is paying for it.

JESSE: [49:27] See, and I hadn’t heard about that, but were you thinking about like how much money gets involved in investing? It doesn’t seem crazy that that exists, you know. Because if, as you said if you’re the key figure in the business, and then suddenly you’re gone for whatever reason, whether you know, a pigeon picked you up and flew off into the sunset or you fell off your bicycle and cracked your head, you know, that’s obviously a major issue to have to get resolve. So, it’s interesting to peel the layers back behind kind of like startup land and what you guys go through.

ALEX: [50:10] Yeah, it’s funny because like, after I was at the General Mills on the Cheerios, I worked in the capital division. And I thought I knew all of these things. But as you get further down, I mean, all this specific language in these contracts is just so specific to this, like venture capital, startup world where there’s things like directors and officer’s insurance. So, if an executive says something and get sued, like, the people that work for the company aren’t liable.

And there’s this Key Man Insurance, and there’s all these like, really crazy things that are huge industries that you don’t even know about as a business owner until you sign a contract. And you’re forced into kind of doing these things. So, yeah, so definitely constantly learning everyday, which is good, exciting. Yeah, there’s just a lot of complexities to it for sure.

JESSE: [50:59] Yeah. Okay. Alex, I think it’s great that you’ll be the first person I asked us to. So, each season, we’re on season three, you’re the first episode of season three here of the show. I asked a question to everybody for the entire year, something that kind of goes beyond genre or particular discipline of sport, jobs, and all those kind of things. Because we all come from different places and I think it’s interesting to see how people approach these questions. So, last year, I was asking people what they thought the purpose of support is. But for you, you’re the first person to answer this question, I’d like to ask you, how do you stay motivated after failing to reach a goal?

ALEX: [51:45] Yeah. I mean, I think for me, personally, it really goes back to goal with a deadline. So, I’ve failed a ton of times, I mean, more than I could, this would be a 10-hour show for me to talk through your one. And I think for me, it’s just always having the next one and just getting back up on the horse and knowing I’m going to complete it. So, like, that 24-hour race, the third year, we failed, like, we didn’t even finish the race. It was so hard, we were so drained, we were so undertrained, we just failed.

And it’s just like, get the next goal. But it’s critical to have a deadline that you’re doing the thing, and then completing the thing. Because you can — you have just like, you have the line in the sand, you can see where that’s going to be. And then you just know if you’re successful or not. And if you fail once, then do something that’s going to be a little bit easier to get yourself back going again. And then get back and progressively get kind of more and more, and that’s what I’ve found to be successful for me.

JESSE: [52:45] Sounds good. I think that’s — The reason I ask is, you know, you see all these, like motivational posters and videos and people seem to feel like they lack motivation. But sometimes I think maybe it’s easier than that, like you said, having a, you know, definite goal, a definite timeline, things that basically you have to be accountable to, to get you moving again. So, I appreciate you answering that. Alex, if people want to buy Bizzy Coffee, if they want to see what you’re up to, where can they do all that?

ALEX: [53:22] Yeah, check out, B-Z-Z-Y. Or go to Amazon search cold brew coffee, we’ll pop up. Give us a shout, follow us on social. You can find me on LinkedIn at Alex French.

JESSE: [53:35] All right. Thanks for hanging out with me today, Alex.

ALEX: [53:37] Awesome. Thanks so much, was a blast, Jesse.

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