Steve grew up in Rochester, New York as the youngest of five boys. A natural athlete, Steve followed his brothers’ footsteps and played sports, excelling at volleyball.
At 12, he met a 6’4 inch 14-year-old Robbie Page, as they were both dominating the high school volleyball scene on the East Coast. The friends escaped the North East winters and moved to sunny Los Angeles to play as teammates for Division 1 UCLA.
As a student, he studied History, built several startups, and traveled for volleyball. With just a semester until graduation, college life no longer made sense to Steve, as entrepreneur-fever struck him hard, so he dropped out of school.
Robbie took him in on his couch, and there they started Tenzo, a matcha company. Despite very little experience in running a company, no funding, and consumers not having ever heard of matcha, they used their competitive sports mindset to their advantage and kept moving forward, kept learning, and never quit.
With Steve as CEO and Tenzo past the awkward startup years, his leadership continues to propel the company forward after having created a market where there was none.
Tenzo is currently one of the fastest-growing Consumer Packaged Goods companies in the U.S. Steve’s leadership style is known to be fast-moving, brave, and compassionate and he has built up a loyal following on his LinkedIn platform.
In between long work hours, Steve is a voracious reader and loves writing and learning. When he’s not building Tenzo, you can find Steve reading a good book, meditating, or going for a walk.
He’s passionate about giving back to causes that help people and help the planet, as well as mentoring new entrepreneurs.
In This Conversation We Discuss: (50 Characters)
- [00:00] Intro
- [01:09] What sparked the idea for Tenzo?
- [02:29] Learning Ecom before starting a brand
- [03:23] From idea to building a store
- [05:09] Continuing the Tenzo journey
- [06:43] Timelines in Tenzo’s story
- [07:57] Sponsor: Avalara avalara.com/honest
- [08:52] Sponsor: Electric Eye electriceye.io
- [09:20] Is Tenzo’s strategy before applicable now?
- [10:34] Chase recommends the Y Combinator podcast
- [10:56] Being close to your customers
- [12:40] Sponsor: Rewind rewind.io/honest
- [13:16] Buying a poorly planned office space
- [15:11] When to move to a 3PL
- [16:58] Sponsor: Klaviyo klaviyo.com/honest
- [18:07] Naval’s founder’s cost philosophy
- [18:53] Letting go for your growth
- [19:21] Be careful of your speech as a founder
- [20:33] The hardest part of running a brand
- [22:05] Keeping the team in sync
- [23:21] Sponsor: Gorgias gorgias.grsm.io/honest
- [24:48] Chase’s operational model for Electric Eye
- [26:00] 3 main channels for Tenzo
- [29:16] It still comes back to the math
- [31:02] Lead times for wholesale orders
- [32:28] Managing cash flow
- [33:10] Ecom vs bulk in valuation
- [33:59] Expansion vs focus
- [35:18] Knowing the right kind of sale
- [36:12] You have to be profitable
- Connect with Steve linkedin.com/in/sodellicious
- Visit Tenzo Tea tenzotea.co Use TENZO10 at checkout!
- Listen to the Y Combinator podcast blog.ycombinator.com/category/podcast
- Visit electriceye.io to help you scale your business!
- Visit gorgias.grsm.io/honest to know how you can level up your customer support!
- Visit klaviyo.com/honest to get a free trial!
- Visit avalara.com/honest to find out how your business can be sales tax ready!
- Visit rewind.io/honest to get 1 month of automated Shopify backups for free!
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Validate an idea pretty quickly on Google Trends. It'll show you aggregated search data to see how popular the idea was.
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey, everybody. Welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer.
What's going on, Chase? I'm doing really well. I'm excited to chat with an Ecommerce Expert.
Well, let's see if I can hold it up. You're saying just a second ago, you are visualizing the whole P&L, you see all parts of the business as a CEO so we'll see where the conversation takes us.
Yeah, no. It's gonna be a fun one. I'm excited.
Absolutely. Cool. So for those that are unfamiliar, Tenzo Matcha is a direct-to-consumer brand selling matcha tea, obviously. It's in the name there.
But take me back to, I guess, starting the business. And you were at UCL when you started the business? Or was that right around when you were dropping out? Not to spoil it for those... (laughs)
Yeah. No, I was at UCLA and I had really gotten an entrepreneurship in college and started [to] helped out with a few D2C companies.
Some of my buddies were running dropshipping things and such like that. And it's a really simple beginning. One day, I drank 5 cups of coffee and I felt like crap. I got super jittery and anxious, I was having trouble eating... The whole nine yards.
And yeah, I just Googled "What's the healthiest form of energy on the planet?" And the Google result was matcha. And it's powder, it's light, it was easy to ship, it's consumable so you got a subscription... And the Google Trends graph... It's a great tip for anyone looking to start:
You can validate an idea pretty quickly on Google Trends. It'll show you aggregated search data to see how popular the idea was. And matcha was like... The graph [was] like, poof, sky high up into the right.
And I was like, "Oh man!" And there wasn't any competition. So yeah. And that's the starting point.
We're not even 2 minutes and you've already dropped a serious, serious golden nugget there, if we're gonna use that term. Google Trends is super cool.
But also, you highlighted something there. You were helping other people in the industry. Friends. Did you have any clients? Were you learning Ecommerce before you started the brand?
Yeah. Yeah. So one of my best friends in college, a great entrepreneur named Alejandro Rioja, had started a company that was dropshipping portable phone chargers from China and selling them online.
But yeah, then that was pretty much it. And I was like, "If he can make 6-figures as a senior in college a month, I know what it takes and I can start my own company, too. So..."
Absolutely. So from that lucky day of drinking too much coffee to getting the store up and running, what did that window look like?
Honestly... So we're built on Shopify. The ecosystem there is super great, as you know. The website started out as a weekend project. It was me and my co -founder, Robbie, one of my best friends. Shout out to Rob.
I guess the first step was where do you get the product? So one mistake we made really early on... We were super poor. I literally dropped out of college with no money.
So we got the Shopify subscription first right away on that first weekend like, "Oh, we need a Shopify subscription"
But then a day later we're like, "Alright, where do we get the matcha?" And so he googled how to find matcha suppliers and we emailed 100 people. And one of us... 1 person got back to us.
And then 4 months later, we'd already spent like $200 on a Shopify subscription. And then we finally got the matcha in and then launched on a terrible website. We had designed it ourselves, made some theme edits, designed all the packaging, all the logos...
And the gist was that when we first started, we were really unskilled. I come from an athletic background. And for us, this is like a long term play.
And so instead of just outsourcing it, we decided to do literally every single thing in-house: Building the inventory systems, building the website, and design... Everything.
We didn't even have an accountant when we first started. Our QuickBooks was all messed up. But yeah, that's how we got going.
So (laughs) I love that you started the website before you even had a product to sell. I guess you had a product, but you just didn't actually have it.
So sourcing suppliers, as you say, it's probably something you should do before you activate your Shopify subscription.
Yup. Yeah, no. No brainer. That seems like such an obvious thing. But there's a whole checklist of things that you really need to run through before you can open the store.
Or even before you want to start spending money, especially if you're literally just getting started. Make sure you're conserving cash as much as possible.
And so you want to put that into marketing and to other things to grow revenue later on. But we got really lucky. This one guy in Arizona emailed us back and he's like, "I can help you out. I'll design all the labels. I have matcha."
And he's just a distributor. And eventually, we have different suppliers now but it was... Yeah, this guy did private label matcha. So it was 100 units. We bought 6 different SKUs. And we now have 1 (SKU), by the way.
Simplicity is a great power in Ecom, especially when you're getting started. But yeah, we bought those and then we sold them.
[We] got a lot of feedback, added the packaging, and then we bought 200 units and then we sold those. And we scaled up to maybe 1000 units at a time with this guy.
And then we had enough money, we went to Japan and we met with a bunch of Japanese manufacturers. Now we're going direct-to- source (with) no intermediary in the US.
What year was this? Let's talk about timelines because I forgot to bring that up earlier. So how old is the brand? When did you activate the subscription prematurely into now [where] you're going in directly talking to the suppliers
For the timeline is. It was late in 2016. I just dropped out, maybe April or May-ish. We started the Shopify store "weekend project". And yeah.
And then we went to the 100 units. And then we really launched in early 2017. But we didn't get to Japan... So that timeline of selling 100 units or 200 units, 500 (units) and 1000 (units)...
Anyone who's opened their first Shopify store knows it's not... Unless you're a serial entrepreneur [or] well-funded, it's not this magic (situation): " Oh! I made $10,000 on my first day." So we had to learn the ropes.
And that took another 6 months or I guess 5 months. We went to Japan in May of 2017. And then from there we found legit suppliers cut out the middleman... Cost of goods went way down, margin went way up. And the ops get a lot more complex. That's the caveat there.
But yeah, we started importing directly from Japan.
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How are you finding initial success 3 years ago? And then a follow-up question immediately to that is do you think that same plan would work now?
Actually, yeah. Ours was really grassroots. And again, I think it's really about understanding where you're at personally in the company where the markets are. And matcha was... It was and still is pretty small.
I'm talking about coffee or energy drinks, which I consider our category competitors. But we talk to friends and family. We didn't have money so we couldn't spend a lot on ads in the beginning.
I love it. The non-scalable way to get your first 100 customers is like just such a SaaS growth hacking tactic. It's like these are things you can't automate or scale, really but you got to do them at first.
Have you listened to that Y Combinator podcast course thing?
I haven't. No. (Do you) recommend it?
Dude. It's like how to start a startup. And it's like Y Combinator. And it's like a series of lectures. I'm halfway through it right now. It is fantastic.
All right. I'm noting that down post this call then I'm gonna jump on it.
Yea,. But that comes up. "Do things that don't scale" is the first or second... It's in the first and second conversation.
Yeah. Yeah. Another really good one on that same note is we were really close to the customers. And we still try to be that way.
And what I mean in the beginning is everything related to D2C like our website experience, post-purchase email flow... The messaging is generally [just] messaging. It's like, none of that was really nailed. And it took a lot of one-on-one conversations with people.
So we would literally email them as the founders and be like, "Hey, can you jump on the phone for 20 minutes. We'd love to know what you think and how we can make this better and why you bought our product in the first place."
And that was a really formative exercise and something I still do today. I try to hop on Zoom calls with customers once or twice a week and I will [have a] spreadsheet and we record all the answers and all that.
But yeah, if you want to learn and iterate quickly --which is especially important in the beginning to survive-- go to the customers, hear them out and take their feedback and improve. And then they'll recognize it. It builds trust. All these things come through with that.
Yeah. The non-scalable stuff, actually talking to customers.... I feel like every episode of this podcast, there's some form of "talk to your customers" [topic that] comes up. And people just don't realize it's that simple.
Just go and ask them what they think about your products and why they did or didn't buy and the insights are just truly insane. They're like, "Oh well, we didn't buy it because the website's broken." And you're like, "What?" (laughs)
Yeah. Yeah. Exactly. "What? The checkout button doesn't work?" (laughs) Yeah.
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So when... I guess this is a new question that I've been trying to ask. When did things change where you're like "Oh, this is a real business now."
What was like the moment when you're like, "Well, I think this thing's working. We've made it per se. You're like, "This is a real business."
I wouldn't say that until the last few months. Jumping ahead in the timeline, we've tripled revenue every year or a little bit more. And it's been a really good run. But the first year, like I said, we were so inexperienced. We didn't know what the heck was going on.
So another huge mistake that we made which I would never recommend to any other founder, especially right now was we got an office in Santa Monica, on the second floor of a building with no elevator that we were shipping our own orders out.
So we're growing in Ecom and at this point, we started selling him to cafes, as well. And that's a big part of our business too. And we were getting pallets of boxes in the middle of a busy Santa Monica street and the truck would stop in the middle of the road, unload a pallet, and it'd be like this huge nightmare.
I would get our whole team down there. And we're all just like carrying boxes upstairs. It was a nightmare. It costs us so much money and [it's] just a big learning experience. And so we were stuck in that office for 2 years.
So that was a really, really poor decision. But, you know, we learned a lot about optimizing and eventually moved to a 3PL. And that was the best thing that ever happened.
I can just see you guys frantically sprinting to unload your trucks and get them inside. And...
While these cars are just honking. Everyone's super annoyed with us. Dude, it was not a good experience.
That's fantastic. (laughs) Thanks for sharing that. So, moving to a 3PL. That's a really fun little topic there.
So when... In your opinion, when do you think a brand is ready for 3PL? When should they stop doing self-fulfillment? Is it a number of revenue per month? Is it the number of orders shipped? When did it make sense for you?
Yeah. I think it's fundamentally a cost analysis. And there's this good expression I like to follow now: "It's not just winging it." And I just caught [myself] doing the math. It's really simple. And you get a lot better at it over time just modeling it out.
And so I don't think it's necessarily a revenue number. I think it's more about orders per month and then what's the cost [of] the 3PL and how much time you're gonna save.
And another good lesson for people that are just starting... I mean just starting, like shipping out of your house type thing. You need to...
You don't want to do it too early because it can get really expensive and you might not need it.
So there's this other expression: "Bursting at the seams." And so I have videos of our old apartment with me in my bedroom and there's tea stacked up everywhere, even in the open space in the middle of the room.
There's a column that just goes up to the ceiling and I have like 1 square foot where I can weasel my way into the closet to grab my clothes. But otherwise it's just pure tea.
So if you look at videos of other successful companies... The Gymshark founder has a lot of good videos of him in his house and he's just surrounded by packages.
So it's like, you can feel it. You can just look around and there's packing materials, there's Uline boxes coming every single day. And then it's like, get the heck out of there. But don't get an office.
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With doing the math, where does your time factor into those equations?
That's a big one. And that's obviously that's really challenging one. But Naval is a pretty common philosopher, modern philosopher, these days.
And he has a good... And he's also the CEO of AngelList. A really successful angel investor. He's got this philosophy that founders should put their hourly costs [to] $500 to $1000 an hour. And if you can afford it...
And if you're doing anything that's cheaper than that value, then you need to delegate it or just drop it entirely. And yes, I try to live by that. Iit doesn't always work out perfectly. But...
There's some stuff that you just love doing.
Yeah. Exactly. But then that's the battle. To really grow the company, you just need to let go.
And I've been trying to really focus on doing that thing a lot more now, letting go control of the brand and we have a full-time brand manager now. And I just defer.
I'm not trying to weasel my way into packaging decisions anymore or really specific design. I just let her handle it and trust the process.
Yeah. It's so hard to like to see stuff happening where you just wanna... Like, "Ooh, what's going on here? This is cool." But then also not... I'm one of the founders of our agency so I sometimes forget that what I say is gold and it's super important.
I might just swing by and say something off the cuff and then it changes the whole conversation by accident.
It's so hard to remember that you got to like letting things happen and be very cautious about what you bring into the conversations when they already have a game plan in place.
Yeah, no. I cannot agree more, man. That's it, I have to catch myself doing that too. And it is really difficult.
But sometimes it's just better to hold your tongue and not say anything, and just let the conversation go and develop and trust that your people are gonna get it done. And have checks and balances in place, too.
And quality checks at different points. But when you're having meetings, you just can't derail things. That's a nightmare. And I think that's part of becoming a better leader and growing as an entrepreneur and founder, though. So I'm hopeful that I will get better at it over time.
I think no one starts a business of any sort --service or product, or what have you-- and goes into it with the expectation of "I'm gonna be the best leader ever."
It's more like that entrepreneurial burn: What drives you to do it? And then you're like, "Oh wait, the hard stuff is all this leadership and this management stuff. That's the hard stuff."
The rest of this --I didn't realize-- was you just got to work at it and you're gonna figure most of it out.
Yeah, exactly. At this point that's a big... That's where I'm at right now. We have a bunch of team members and so many agencies that we're working with.
And most of my day now is just approving things, and meeting with people,and making sure that everything's moving forward.
But 50% of it is getting everyone motivated and hyped to come to work in the morning, and they want to show up and perform their best.
So I've been really trying to focus on getting the team to operate at their best level every single day. And just really staying out of their way as much as possible.
Yeah. Enabling them to do the best work, however you can do that. Giving them the resources to do that best work. And it sounds easy, but it's super hard.
Yeah. Yeah. Exactly. Again, you just catch yourself... Some of my friends were shooting the shit. And it's like at some point, you just can't do that. There's got to be this employer-employee relationship. And it's not like you're...
That's true. But it's the stuff that you find in those conversations are just super, super important. I recall a conversation I had about 2 weeks ago with our lead developer and he just said something off the cuff during the conversation.
And I was like, "Well, that's wrong and that shouldn't be happening." And it made us figure out where the process was broken, and how to make things better, got everyone more aligned, and it fixed things.
So, that's one thing that I miss about having an office because that stuff would just happen way more organically. But now, with everything remote, it's a little bit...
...more difficult to do that. We have one-on-ones every week with every team member. But as the team scales, it's a little bit more difficult to do that.
Yeah. And that's another challenge, I think, everyone's facing right now, too. How do you deal with a fully remote team?
And you can't have those like watercooler conversations, like you just mentioned, where things just pop out.
And you really have to put in the time and effort to one keep the team in sync. And then also make time to figure out those problems and see what are you really dealing with today and what's hard and what do you think might be going wrong?
And asking those questions in a way that is motivating and inspiring them.
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Yeah. We follow the Traction Model. I don't know if you're familiar with that book. That's how we run the business as operations.
So we've stripped it over like all the meaningless meetings. So we have 2 major meetings a week.
We set up for stuff that can't be hammered out in some asynchronous conversation through Basecamp --is what we use-- but it could be Asana or whatever project management software it is.
And then we have one-on-ones that are more about: "How are things? Any big issues? How are you working toward your goals?.."
And it definitely takes buy-in from the team culturally, to be able to work in an independent environment, but it just... It goes down to hiring. you gotta hire people that are gonna fit what you guys are going to do.
Awesome. That was a great little tangent down a rabbit hole about management and just the difficulties of growing a team.
But let's get back to what I know people love nowadays. So you guys are doing great. You mentioned that recently, it felt like, "Oh, this is a business now. This thing is really doing it."
So what's going on now? How has your marketing landscape shifted? Where are you guys spending a lot of your time? How are you driving revenue?
Yeah. Good question. So overall, I'd like to give one more quick background point. Tenzo has 3 main channels. They're all well beyond 7-figures at this point. And one is our bulk business.
We make matcha products with other CPG companies. So we're in Costco nationwide, Whole Foods nationwide, all these things with other brands. And then the second one is the cafe business. And that one grew like wildfire when we first started.
I just want to interrupt you here? So it sounds like you have to use 2 different wholesale-esque channels?
Yeah. Yeah. So (laughs) it's quite complicated, actually. It's weird because we're only selling one product. But yeah, bulk is like big companies. Truckloads.
We're filling up an entire plane. Multiple, I guess, pallets on boats or what have you.
And then now, is that your product? Or is that white-labeled product or a partnered product?
Yeah, so it's different depending on the deal. So some of the largest deals, they don't want to do it where it shows as Tenzo on the label at all so we're just selling the product as an ingredient and then they manufacture it.
Other ones, we also have branded products as well. So it really depends on the other company. And then for the cafe business, that's pretty much all branded products. We have point of purchase signs in all the cafes and all that stuff.
And hopefully the pandemic wanes down here and then we'll be back in business there quite a bit. But yeah, and then the third channel is this D2C. So we started out not doing subscriptions. Also a bad decision.
So if you have a consumable product that people are going to go through on a certain timespan, then it's like, get them on subscription ASAP. And one of the reasons we didn't do it is because we had really, really terrible data. And we didn't understand what the LTV was.
We didn't understand how to map repurchase rate into LTV with one time purchases.
And it caused us to go through this really weird [situation in which we are] slowly climbing, but also up and down, up and down, up and down, as we spend more on marketing and then pull back because we're nervous about LTV and spend more and that back and forth.
But yeah, I guess one of the biggest learnings that we've had of Ecommerce: Getting really good at data, that has been [a] cornerstone lesson.
And once you're comfortable with payback periods, LTV and CPA, then it's like, you just can't spend enough money. And that's where we're at right now. We're just spending every single dollar possible into paid [channels] right now.
So the math again comes back. Ecommerce comes down to math. The super simple concept to understand is if you know your average order value, your traffic and your conversion rate, you can pretty much guess what you're gonna make in any given month.
And then from there, you can reverse engineer what you can pay to acquire more traffic and all that stuff.
But the wildcard in that whole scenario is "What can I afford beyond that with LTV?" And that unfortunately, there is no one size fits all equation, I don't think. I think it truly depends on the type of brand.
Because if I'm selling a $500 luxury product that should be a buy for life, --like a really, really nice leather jacket-- that's something completely different. Then a tea, like you have that is, "I'm going to run out of that once a month."
Yep. Yeah. We call that day zero profitability versus a 6 month payback. And as a company matured, we've been able to, one, get more data.
So as you grow, there's this natural, compounding effect of more data = better understanding of the data = more efficient spending.
And so we've been able to extend the payback period quite a bit now. So we can therefore bid at much higher CPAs, which allow us to grow faster. Yeah. And so... Dude, that is the golden secret right here.
Alright. So I'm going to ask a question that you have... I've asked a lot of questions in this episode that I knew you already knew the answer to.
And by the way, this is the first time me and Steve have ever met or talked. But once you're in this game for long enough, the secrets are all the same.
What are your lead times with your wholesale orders for? Do you guys have a float with how the money works?
Oh my god. This is a nightmare. Okay. So it depends a lot on the size of the deal. Are you buying 10,000 pounds? Or are you buying 2 pounds? And for the cafe's, the lead time is very short. We have several distributors we work with that can ship...
They ship days off and they'll get there in three to five days or faster. But for the really large bulk deals, yeah, the payment cycles are totally brutal and they eat up a ton of cash.
It can be anywhere from 4 weeks to 8 weeks. If the order is [worth] a million dollars then it might take a little bit longer. Because we want to put that on a boat. That's another big tip.
When you're really small, you typically can't buy things in large enough volumes to put them on boats and containers. Then you have to airfreight them. Yeah. So you're gonna save a lot of money.
There's some really good margin expansion once you get into boat shipping. But yeah, for the really big orders, we gotta put them on boats. And, yeah. Payment terms are like, it could be anywhere from: You need to pay 90 days ahead of time or 60 days ahead of time. And we get to the customer 60 days later.
And then the payment terms with them, for the really big deals are typically 60 to 90 more days. So the cash cycle can be anywhere from like 120 to 180 days to turn around that cash.
Yeah. And so essentially what Steve and I are talking about here is to bring it back down to earth for people... This is like a 300-level conversation, I'd say. Once you hit a certain point, it's all about how you manage your cash flow.
Because once you purchase a product, it is essentially just money sitting there. And you need to stop using more expensive forms of money, i.e credit. So you have to find vendors that will allow you better terms.
And you have to be a little bit more strict with your wholesale purchases, to the less-friendly terms to try to speed up how fast you're getting paid back. Because the quicker you can move that money in and out, the faster you can grow.
Yeah. Exactly. That's like one of the most important concepts of our whole company right now. It's so much so that it'll dictate the valuation that Tenzo will get. If Ecom can turn the cash 12 times in a year or something...
So your payment terms are structured as you buy the tea, but you're not paying for it for 60 days. You're buying 60 days worth of product at a time, you're going through all that inventory before you even need to pay for it. That's how it's done.
But the bulk business is... We've negotiated so many times at this point. They're whittled down. And we have as best in terms as possible. But yeah, Ecom will justify a much higher valuation on revenue than the bulk channel.
Now that's a whole other conversation. And I'm gonna have to ask you that offline because I don't want to ask you something you can't answer.
But I do want to say now with the direct-to-consumer channel, you've obviously got the Shopify store. Are you also doing through third-party marketplaces like Amazon or Ebay or Walmart or anything like that?
No. Not yet. Yeah. We're not... I'm trying to delay that as long as humanly possible. Yeah. And really, it's just about focus. And I don't know if we need to go. And I don't think we actually can.
Our D2C business is literally like popping off right now. And part of that, I think, is from the pandemic. But we did like 10x D2C growth last year from the year prior, so that was just... That's hard.
I mean, all around the cash revenue supply chain breaking down. Yeah. There's a lot of issues, man. So we can do that... I think we should be able to do like 5x to 8x growth this year again on top of that. And, yeah, that's about as much as we can handle as a company right now.
Sometimes it hits a point where you have to focus. And if you start trying to do too many things at once, you're gonna hurt the business.
Yeah. Exactly. So yeah, that's another thing. In the beginning, we had 5 SKUs. And we tried to do all these things. We tried to sell in the corporate offices and a bunch of weird stuff. Even military organizations. Basically anywhere that you could buy matcha, we tried to sell it there.
And yeah, it was just a poor decision. And we had a conversation, maybe a year ago now with, excuse me, a guy from VMG. He's a very, very famous investor. And he was just really articulating the importance of the right sales versus sales.
And that's... I say that it's pretty abstract. And it's difficult for a first time founder to understand but it's really, really important to know what you're doing and know the margins and all that stuff.
And make sure you're not wasting a lot of time doing things that are totally in left field.
Yeah. The human capital requirement to make any wholesale deal or bulk deal --as you put it over there-- is the same regardless if it's the right or wrong deal. And there is only a finite amount of time in a day. And I agree so much. It's got to be the right sale.
Yep. Yeah. On the Ecom side, that's like... It basically comes down to "Am I acquiring this customer profitably?" Is it profitable on day zero, like you mentioned or is it profitable in 6 months?
Either way, you better hope it's profitable or you're gonna end up like Casper or one of these big B2C companies that when they go public or they have a later round, and all the financials become public, they're gonna get butchered.
And the value you're gonna have down round... Unfortunate things can happen.
Absolutely. Steve, this was a fantastic conversation. It was really fun exploring all this stuff with you. Is there anything I forgot to ask you about that you think is worth sharing today?
No. If anyone wants to buy Tenzo, it's a great product. And it's a good supplement. Switched from coffee or energy drinks, if you have a lot of caffeine [intake]. [It's] also healthy. You feel a calm [but] focused energy. So check out tenzotea.co. Gotta shameless plug, right?
Oh absolutely. I'll put a link to the description in the show notes. I believe you even were nice enough to put a discount code in there too. So I'll make sure that's in there as well.
Steve, thank you so much for coming on.
Yeah. Chase it's a pleasure. We'd love to connect more offline with you to see how we can collab.
Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us.
We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.