hero image

Ep. 56 - Carving Out A Niche and Being a Leader on Subscription/Delivery Services with Mark Fachler

Mark Fachler was born and raised in Costa Rica. While Mark’s background is in investment banking and private equity, his career ultimately took a different trajectory into the health food space due to personal experiences he was facing while working long hours and trying to eat healthily.

In This Conversation We Discuss:

  • [1:00] What is Veestro?
  • [2:56] Veestor’s origin story
  • [3:55] What was the first strategy of Veestro when it was founded?
  • [5:15] When did Veestro start?
  • [5:29] Did Veestro start on an Ecommerce platform?
  • [6:48] From one-offs to subscriptions because of customer feedback
  • [8:27] ReCharge really helped out Veestro on their subscriptions
  • [9:05] Sponsor: Gorgias gorgias.link/honest
  • [9:54] What were the marketing strategies Veestro employed in the beginning?
  • [11:42] Diversifying your influencers
  • [12:03] Veestro’s marketing mix
  • [14:08] The biggest mistake Mark made on Veestro
  • [15:53] Veestro teaser for BFCM
  • [16:36] Mark’s advice for the audience

Resources:

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

 

Transcript:

 

Mark Fachler

If you have the time, if you have the drive, and you're really passionate about it, do it. Because passion takes you halfway there.

 

Chase Clymer

Welcome to Honest Ecommerce, where we're dedicated to cutting through the BS and finding actionable advice for online store owners.

 

I'm your host Chase Clymer, and I believe running an online business does not have to be complicated or a guessing game.

 

If you're struggling with scaling your sales, Electric Eye is here to help. To apply to work with us visit electriceye.io/connect to learn more. Now let's get on with the show.

 

Hey, everybody, welcome back to another episode of Honest Ecommerce. I am your host, Chase Clymer and today on the show, we've got another founder sharing their story.

 

This one is really fun, it's a unique business. So today, we're welcoming to the show, Mark Fachler from Veestro. Welcome, welcome. How are you doing?

 

Mark Fachler

Good, good. How are you? Glad to be here.

 

Chase Clymer

Oh, it's fantastic. As we're recording this, we are one week away from Black Friday and right before (we started) we were talking about how much fun we're having and getting prepared for that.

 

So let's talk a bit about Veestro before we talk about your history. So you're the leading plant-based meal delivery company in the US. Talk a bit about that business model and what you guys are doing and how you're servicing your customers.

 

Mark Fachler

Great. So, we make fully prepared, plant-based meals. So it's a little bit different from what people are used (to), most people are used to which is, they send you the ingredients. We send you the complete meal, just have to heat and eat. It arrives frozen.

 

You just keep it in the freezer and eat it whenever you want. So, you don't have to worry about it going bad. So there's way less waste.

 

Most of the ingredients used in our meals are organic. We don't add any preservatives and we try to balance them as best as possible so that you get everything you need with every meal.

 

Chase Clymer

That's awesome. So, some of your competitors out there are some of those other kinds of direct-to-consumer box companies. But you found your own little niche with the plant-based options.

 

Mark Fachler

Yeah, so (there are) a couple of different little spaces that there's not a lot of competition. One is plant-based and the other one is, --like I mentioned before-- frozen.

 

There's been a lot of research showing that when you freeze a meal, especially if you freeze them at the optimum level, the clock stops ticking. So when you thaw them or heat them up, then it's almost like if they were as good as fresh.

 

Chase Clymer

Oh yeah. Absolutely. So are these options? Are they both vegan and vegetarian? Or do you have kind of both?

 

Mark Fachler

So everything that we make is 100% plant-based. So, absolutely no animal products. No dairy, no meat, no fish and not even honey.

 

Chase Clymer

Absolutely. That's writing your marketing message there a bit. So let's go back to before Veestro. You were an investment banker. Tell us about that and how you transitioned to starting this company?

 

Mark Fachler

Yes. So, I worked in investment banking and private equity before starting the company. And I was struggling because I was working very long hours, I would get home really late at night and all I wanted to do was eat something quick, so I could go to bed.

 

I made a lot of really bad choices. Tons of frozen meals from the supermarket and frozen pizza. And a lot of that stuff has a lot of preservatives and ingredients that I couldn't even pronounce.

 

o I started looking for healthier, convenient options and there weren't that many out there. That's why I decided to start something on my own.

 

Chase Clymer

I think that's the origin story of a lot of businesses: "I was trying to solve a need for myself. And then I realized a lot of other people probably had that same need."

 

Mark Fachler

That's exactly right.

 

Chase Clymer

So what was the first iteration of the product? What was the MVP product that you were coming to market with first?

 

Mark Fachler

Well, I was a little aggressive with the way I wanted to do things. So basically, I set up the company. I recruited my sister who is great at marketing. I knew I was going to need somebody for marketing. My background is finance and operations.

 

So she joined the company and we hired an amazing chef that created about 20 recipes and we launched with those 20 recipes. Most of those recipes are still available on our menu. Right now, we have about close to 60 different meals to choose from.

 

Chase Clymer

So you said it was a little aggressive. What was the aggressive part of that launch strategy?

 

Mark Fachler

Well, I didn't start with just two or three products. I figured that, in a business like this, if you want people to keep coming back, you have to give them variety. So we did some research on the menu, but most of it was the chef's creation that did it all for us.

 

Chase Clymer

That's awesome having great team members on your team.

 

Mark Fachler

We got very lucky from the start. We got very lucky with the people that have joined the company.

 

Chase Clymer

So when did you guys start the company?

 

Mark Fachler

The company... The website launched in May 2013. I started working on it about 12 months before that, and we've been in business, and for 6 and a half years.

 

Chase Clymer

Awesome. So when you launch the first version of the website, was it an Ecommerce website or was it a little more of an old school system to acquire the products?

 

Mark Fachler

Well, I didn't know much about Ecommerce when I started this. I figured that I would learn along the way and it was very difficult. But we got through it.

 

Our first website was launched on Magento and it was very complicated. We didn't have a programmer or a developer to help us out with changes. So we had to hire a company to do it for us, which started getting very expensive.

 

And then about a year later, we decided to change to Shopify, which gave us the opportunity to make the changes ourselves, until we were able to afford a developer.

 

Chase Clymer

You know, that's what we hear a lot. Some of the systems that are out there are just a bit too complicated to maintain yourself. Obviously, if you want a big functionality change or something like that, you're usually going to hire out. But just the maintenance of the site, swapping out some pictures and some copy. It should be user-friendly for just someone to get in there and do it.

 

Mark Fachler

Exactly. If you're paying somebody to do the basic things, you're going to go out of business very quickly.

 

Chase Clymer

Absolutely. So, back when you guys launched on Magento, you're selling this direct-to-consumer (products), is it all subscription-based? Was it a one-off? Were you doing bundles?

 

Mark Fachler

When we started, we started all one-offs. I wasn't a big fan of subscriptions and I wanted to give the customers the opportunity to say, "Hey. You know what, I like it. I'm going to keep coming back."

 

But we kept getting a lot of complaints from customers that said, "We love our food. It's just very inconvenient that we have to keep coming back and ordering." So we launched with Magento a very small subscription.

 

Basically, just some weight loss plans. We started doing our subscription. And it wasn't a very good software that we were using for the subscription. It didn't give us nor the customer a little flexibility.

 

When we changed to Shopify, things changed and became a lot easier for everybody. Now we still offer one-offs, but about 70 - 80% of our orders are subscription orders.

 

Chase Clymer

That's amazing. So what I heard there, --I'm going to point out-- is you personally didn't think subscriptions were going to be a big part of it, but you listened to your customers. You took that feedback, and then you tried it out.

 

And that was probably one of the better moves you made along the way.

 

Mark Fachler

That's correct. And that's something that's been very, very valuable for us. (Something) we've done since the beginning, we've always had the finger on the pulse on what (the) customers are saying and what (the) customers want. And it's actually the customers that have helped us get to where we are in terms of the website or the production we have.

 

Chase Clymer

Oh yeah. So, what software are you using to help you with the subscriptions today?

 

Mark Fachler

Right now, we use ReCharge.

 

Chase Clymer

That's the big player in that space. It's usually ReCharge. So I was trying to get the answer to that. (laughs)

 

Mark Fachler

(laughs) Yeah. ReCharge has been really good for us. We actually changed to ReCharge late last year and our subscription, our active subscribers have gone up like crazy because of all the flexibility that we're able to offer.

 

Chase Clymer

Oh yeah. Just giving people the options that they want always works.

 

Mark Fachler

The frequency and box size makes it a lot easier.

 

Chase Clymer

Yeah.

 

Gorgias Ad

Let's be honest today. All of your customers are going to have questions.

 

What are you doing to manage all those questions? Do you have a helpdesk for your business?

 

One of our sponsors of today's episode is Gorgias. Gorgias is the number onerated helpdesk for Ecommerce. It integrates seamlessly with Shopify. We have installed it in a bunch of stores. It's also used by brands like MVMT and Rothy's.

 

What it does is it takes all of your customer insights and information, brings it into one amazing dashboard so you can solve their problem as quickly as possible. If you want to give Gorgias a try, visit gorgias.link/honest to get your second month free.

 

Chase Clymer

Let's go back to the beginning of it though and let's talk about as you're growing the company, what were some of the marketing strategies that your sister was testing out there to try to bring people into the company? Where did it click and (where) did it start to grow?

 

Mark Fachler

So we started with pretty much no marketing budget. We started the company with very little funds.

 

So, we bootstrapped the whole way through where we are. So the first thing that we did is, Monica, --she's my sister-- Monica and I, we started contacting vegan bloggers. They weren't Instagram influencers back then so it was all the bloggers.

 

We contacted them, we asked them, --the vegan ones were the low-hanging fruit so those were the first ones to be contacted-- and we offered to send them food for them to try and if they liked it, they could write about us.

 

And we had a lot of success with that. I would say 98% of the packages that we've sent, we saw I write up about it, a very positive write up and that helped us get started.

 

Down the road, we started doing a little bit of Facebook advertising. We started developing a marketing budget, but in the beginning, it was all free advertising.

 

Chase Clymer

Yeah. And it's just that easy to get started. If you believe in your product and you find the right people to write about it, to review it... You hit the nail on the head there.

 

You're like, "Alright, our audience and our market are going to be probably vegans and vegetarians. We need to find a source that will... Where's our audience looking for information about that?"

 

And then you find those bloggers and you reach out to them. It's a pretty easy strategy to clone into any small business.

 

Mark Fachler

Yeah. And you know, then once you run out of vegan and vegetarian bloggers, you move into busy moms, people with allergies... You branch out into different segments that may be a little bit smaller, but you start getting more and more writers saying at the end how good your product is.

 

Oh, absolutely. And you got to diversify over time. You can't put all of your eggs in one basket, as they say. So these days, what's the marketing mix look like these days?

 

Right now, we do a lot of social paid search, we do tons of affiliates, we do some print, --very little. Only when it's very targeted-- and we have some influencers. We've tried bigger influencers. Usually, micro-influencers work best for us.

 

Chase Clymer

I've heard that a few times.

 

Mark Fachler

And we've tried podcasts. Right now we're at the point where we're venturing into channels that we haven't tried before because of budget constraints. And some of them work.

 

The investment's a little bit higher, so we try them out. If they work, we continue doing them. If they don't, then we just stop.

 

Chase Clymer

Yeah. Like you said, podcasts. Obviously, our audience is a bit more on the technical side or (the) entrepreneur side, but I'm sure that there are some that will be curious about the products that you have to offer.

 

Mark Fachler

Yes, definitely. I would hope so.

 

Chase Clymer

Absolutely. I know that... Well, my business partner is a vegetarian. He's been on the site before.

 

Mark Fachler

Great. Well, we're gonna have to send you some food.

 

Chase Clymer

Oh absolutely. I'll let him know. He'll be excited about that. I'm on the other end of the spectrum, though, to be honest. I'm more of a carnivore, I guess. (laughs)

 

Mark Fachler

Well, the beauty about this is that you don't have to be one or the other. You can eat both.

 

Chase Clymer

That's actually true. That's absolutely true.

 

Mark Fachler

A lot of our customers, they're meat-eaters. But they do understand that there's a healthy way to eat, but they don't want to sacrifice what they like, and we're fine with that. The more plants you eat, it's better for you, it's better for the planet, and it's better for the animals. But you don't have to be 100% one or the other.

 

Chase Clymer

You sound just like Shawn. He's like, "You gotta put some in your diet, bud. You're getting up there."

 

Mark Fachler

Yeah, exactly. And once you put some in there, you're gonna see that you're really not sacrificing that much.

 

Chase Clymer

Oh no. Not at all. So you guys are cooking along, you're starting to see some wins with these bloggers.

 

Let's talk about the other side of the coin. What was one of the biggest learning mistakes, I guess. There are always some that always stand out when you're growing a business. Just (for us) to see if anyone else you can help anyone else avoid it.

 

Mark Fachler

Well, the biggest mistake that we made... This was really my first business that was taking off. I started a business before but I left before we got to market on that one.

 

The biggest mistake that I would say (when) I started the business (was), I didn't set money aside for working capital. I assume that when we launched the company, I would send that email to all my friends and Facebook message everybody in my contact list, and then money will come in and (people will) buy and we will get started.

 

And that didn't work out the way I expected. We didn't get one order from any of my contacts. So, it was a little scary. I had payroll and I had rent to pay. So, the first few months were a little scary.

 

And then the other mistake is that when you get an opportunity to raise funds, raise as much as you can because it's very time-consuming. And we've had to do it on different occasions and it takes away --especially in a small company where you need to focus on what you're doing-- it takes away from that focus.

 

Chase Clymer

That is amazing advice right there. You can bootstrap it (for) so long, but once you start to get some traction, there's nothing wrong with taking some investment to turn up the gas, per se.

 

Mark Fachler

Exactly.

 

Chase Clymer

Awesome. So we're coming in... Obviously, we're recording this a week before Black Friday and Cyber Monday. It's not going to come out probably till the end of January. But marketing is still marketing.

 

So what’re some of the stuff you guys have cooking up for the sale next week? What kind of sales are you guys offering with the subscriptions? Or how do you guys approach bigger holiday sales?

 

Mark Fachler

Okay. So we issue our biggest discounts on Black Friday and Cyber Monday. We always save those for the end of the year. And (we got) really good stuff coming up. I can't share with you the amount. It's always a surprise. But our customers and especially people that want to try it, it's the best time to do it.

 

Chase Clymer

Awesome. Cool. Well, is there anything that you want to share with our audience before I let you go today?

 

Mark Fachler

Eat healthy. Help the environment. The world won't last forever at this rate so everybody has to put in their part and eating is a good way to do it. You're helping yourself as well.

 

On the entrepreneurial side, if you have a really good idea and everybody tells you don't do it, if you have the time, if you have the drive and you're really passionate about it, do it. Because passion takes you halfway there.

 

Chase Clymer

That's it. You just gotta get started and keep doing it.

 

Mark Fachler

Exactly.

 

Chase Clymer

Thank you so much for being on the show today. If anyone's interested in learning more about Bark or about Veestro, you can just visit veestro.com. Thanks, everybody and tune in next week.

 

Mark Fachler

Thank you very much.

 

Chase Clymer

I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses. Links and more information will be available in the show notes as well.

 

If anything in this podcast resonated with you and your business, feel free to reach out and learn more at electriceye.io/connect. Also, make sure you subscribe and leave an amazing review. Thank you!