On this podcast, we talk about how Ecommerce is a “democratic” industry, scaling the email list while deleting people, having Black Friday but without the discounts, and so much more!
In a few short years, Steve Sando has taken the lowly bean from a neglected legume to superstar-status ingredient.
Sando’s company, Rancho Gordo, grows, imports, and promotes heirloom and heritage varieties while working directly with consumers and chefs like Thomas Keller, Deborah Madison, Paula Wolfert, and David Kinch.
Sando’s seed saving, bean production, and marketing efforts provide professional and home chefs with heirloom beans that would otherwise have been lost to history.
The beans, along with corn, chiles, and tomatoes, have become key ingredients in the new American food revolution centered in Sando’s native San Francisco Bay Area.
In fact, Sando and Rancho Gordo were named number two on Saveur Magazine’s “The Saveur 100 list for 2008.”
Bon Appetit magazine declared Sando one of the Hot 10 in the food world of 2009.
Food + Wine magazine placed Steve “at the forefront of the current seed-saving movement.”
Steve’s three books are Heirloom Beans (Chronicle, 2008) (with Vanessa Barrington), The Rancho Gordo Bean Growers Guide (Timber 2011) and Supper at Rancho Gordo (Rancho Gordo Books 2014). Heirloom Beans is in its fourth printing.
Steve Sando came to agriculture not from the 4H club but from the grocery store. As a frustrated home cook, he decided to grow the ingredients he wanted in his kitchen.
At the forefront of neglected ingredients were beans. Although they are an indigenous product of the Americas, the only beans available commercially to most home cooks were pintos, navys, and kidneys.
Discovering heirloom beans to be as rich and varied as heirloom tomatoes, Sando almost singlehandedly created the market for these unique and worthwhile legumes.
He now grows more than 25 varieties in California and works with small indigenous farmers in Mexico to import their heirloom beans for the U.S. market. He lives in Napa and travels frequently throughout the Americas.
In This Conversation We Discuss:
Resources:
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Steve Sando
I just think people like to feel like they have discovered a secret rather than you hitting them over the head.
Chase Clymer
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.
And today we're welcoming to the show, an Ecommerce veteran, self-described as Steve would say. But Steve is one of the founders of Rancho Gordo.
And he decided about 20 years [ago] to make a crazy leap to sell beans online. So take me back to that thought process, Steve. Let people know a little bit more about Rancho Gordo and how did you stumble into this?
Steve Sando
Well yeah. It wouldn't be the worst business plan, you could imagine. "Oh yeah, I'm gonna sell heirloom beans that are hard to grow and nobody's interested in."
But I had turned 40 and I remember thinking this isn't working. I had done Ecommerce --not Ecommerce, but web design-- and different kinds of marketing. And every time, it just kept failing.
And I thought, "You know what, I'm just gonna get a garden and a job at Target. And that's really all life has to offer me. And that's fine. I think if I have a garden, I'm gonna be okay."
And then that morphed into having extra crops that went to the farmers market. And then I got really good at the farmers market.
And then I thought, "Well, the vegetables aren't ripening fast enough. I'm gonna do beans to carry me through, because the beans will be ready before the market starts."
And of course, I was an idiot. The beans were the story, not the rest of the vegetables. And it just morphed from there.
Because of the web design background, it was really easy to switch to ecommerce when it was time.
But it was probably 6 or 7 years of selling to farmers markets and direct-to-consumer, without Ecommerce because that was the early 2000s. So Ecommerce wasn't quite the thing yet, I guess.
So weird to talk about this in the past tense (laughs) to me.
Chase Clymer
Yeah . Well, it's in 2008. I'm trying to remember... I don't even remember. I guess WooCommerce existed back then. I think.
But well, did you remember what the first iteration of the site was? What you built it on the technology, at least?
Steve Sando
Yeah, we will. For the Ecommerce part, it was Miva Merchant, it was called M-I-V-A. And at the time, it was considered really forward. And it was the most archaic...
I shouldn't say that. There might still be around in some iteration, I don't know. But I was able to do it.
And I didn't have to hire a designer because of my background. It was web design so it was not like hard coding, but it needed to be somewhat user friendly.
But I also knew, you didn't have to hire a whole team, if you could make stuff look good with your own assets, which is what I think I was good at.
Chase Clymer
Mm-hmm.
Steve Sando
But it was Miva Merchant. And I also remember the first 4 orders... I screwed up every single order. And so you really have to... I thought, "This isn't what I'm good at." So I hired... That was the first employee.
It was actually to deal with the Ecommerce (part), which was probably 6 orders a week. They were also doing other things. But in the beginning, it was very slow.
Chase Clymer
What exactly did you screw up?
Steve Sando
I would literally look and say, "Take 2 pounds of this and one pound of this..." And I screw... I just don't... For some reason, I can't look at a picking ticket and fulfill an order. It's not a gift.
Chase Clymer
So the pick and pack, they got Steve's surprise?
Steve Sando
Yeah. Then you would screw up an order, you don't make any money on that order but because you have to stop and deal with the person, you have to replace it... It's...
You choose your battles and I thought, "I'm not going to do this. I can't." And I also thought Ecommerce was going to be horrible.
That it would be just full of mistakes and really whiny people that weren't going to be happy. And it seemed like a real... More of a courtesy to my customers than something as a way to make money, especially in the beginning.
Chase Clymer
Well, in the beginning, how did you find those first initial customers online? Were you drawing them in from the farmers markets? Or do you have a different strategy?
Steve Sando
No, it was from the farmers markets. And we'd have a lot of people, tourists, who wanted us to ship.
So that seemed like, "Ugh. Alright. Fine. We'll do that for you." (laughs) [But] now, of course, we kill [it]. And something in me said "Collect their emails." because I was very comfortable with email and websites.
Everyone said, "Oh, you have a beautiful website except for the Ecommerce part." And so I started collecting emails. Mostly at that time, it was to provide recipes because beans are a weird thing.
And our beans are heirlooms so they're even weirder. So I thought, "You have to make people feel really good about what they've just bought."
So we're going to support them all the way. And at that point, there was no talk of customer acquisition. It just was a way For people to buy into your lifestyle, I'd say.
So that list now is at 150,000 and they've never bought anything. And we've actually culled it too, about 2 years ago, because it's getting expensive to (laughs) send stuff out.
Chase Clymer
When did you have the realization, where you're like, "You know what this thing is actually... Something's going on here."
And [you're] starting to either take it more seriously from a customer acquisition perspective or.... I don't want to put words in your mouth.
But was there something that was a time and a place or just a feeling?
Steve Sando
Well, starting this all late in life. I will say, I still don't believe it's gonna...
I tell them "Don't order too many labels, because we can go out of business tomorrow and we're gonna be stuck with all these labels."
And that's how petty and small I can be. But I think for me, it was probably three or four years into it. When I had really great chefs like Thomas Keller for French Laundry, and almost every Bay Area chef was buying my beans.
I thought, "Oh, it's... This is gonna work." And then the Ecommerce part... I don't remember what the moment might have been. But definitely we would shop... I called. This is so interesting to me. (laughs)
I called a friend who was a techie. And I said, "Okay, Miva is driving us crazy." I'm looking around all of a sudden, there's all these great sites. And he said... Well, he gave me 3 different options.
One was... 2 of them were agencies, and one was Shopify. So I started talking to agencies, and they're telling me how much it's gonna be.
And I thought, "Well, I've gotten away with murder up until now. You know what, I'm going to invest and go with this guy."
But once they found out, I wasn't interested in fulfillment --because that was the word of the day, that they would fulfill it for you.-- they kind of ghosted me.
And I thought, "Well, I'll just try this Shopify." And I really fell in love with it. So I still... I still do it. (laughs) We have 26 employees. I'm still the one writing the copy, doing the photographs. I'm doing it all.
Chase Clymer
Do you remember what year that you made the switch over to Shopify?
Steve Sando
No, I don't. I should find out. It'd be interesting to know, but I don't know what year we did it.
Chase Clymer
It would be interesting. It would be more interesting to me because I'm a nerd. And we didn't really get...
Let's see, I knew what Shopify was before we started the agency and before my partner started... We started tag teaming things.
So I think I've been into this ecosystem for 7 or 8 years now. And even what it's grown from that long ago to now is a completely different product.
Steve Sando
Yes, I'm gonna guess it's 6. Well, it's got to be at least 6 years, I would think. And I also started out with an email program called YourMailingListProvider, which was out of Holland, I think. And it was really reasonable.
And then I went straight to Klaviyo. That seemed like overkill. Then we went to Mailchimp. But then MailChimp started kind of fighting with Shopify and the prices went up.
And I thought, "Well, let's just go back to Klaviyo." and I'm in Klaviyo but as you will learn as we talk, I'm wasting my money, because I'm not using any of the data.
So you'll be a therapist today, too.
Chase Clymer
That's a conversation that we can have after this podcast. We're Klaviyo Gold Partners over here. And if Andrew, on my team, finds out about that he's going to... He's going to email you. (laughs)
Steve Sando
Yeah, I'm happy to talk about it. I'm sure there's a lot of low hanging fruit I'm just missing. But it's working.
So and then when people look at... Well, anyway... When people look at [our] open rates and our click rates and our buy rates, they're freaked out. They're so high.
And it's like... Well, it's not because of anything I did. I don't even know what a good one is, technically, so.
Chase Clymer
Well, that's what happens when you have a product that's like... See, that's the power of product-market fit when you have something that people want.
Please don't take this the wrong way. And I'm not saying this about you. But you can put out a subpar experience and people will still go through with it to make a purchase because they love the product that much.
Steve Sando
No. No, trust me, I could just come or I could do it for sure, but..
Chase Clymer
(laughs)
Steve Sando
...it's working. It's a weird thing. And I think part of it is... I was early... On Facebook, I was doing some Shopify groups.
And the difference is a lot of these people are Ecommerce people and I'm actually a bean person using Ecommerce. So I think that's the main difference.
Chase Clymer
Well, absolutely. But what you're saying is you don't have to be an expert. As long as you are passionate about your product...
Steve Sando
For sure.
Chase Clymer
...or you start a business, you just have to listen to your customers.
Steve Sando
Yeah. And listen to some of these people. It's like, "Dude, you should go do a pop up or walk the streets or do something."
But they're just sort of waiting for that whole "If you build it, they'll come." And it's like "Well, not really." If it's a great product, sure. But it does take a little more work.
And I think depending on technology is a mistake for a lot of people.
Chase Clymer
Even now Shopify itself, the barrier of entry to build an Ecommerce business has never been lower in the history of the world. But your competition is higher than it's ever been.
And if you're not building something that's going to differentiate yourself, your product knowledge or you're passionate about the problem that you're solving doesn't exist, why would someone pick you over the dozens of others that exist, you know?
Steve Sando
No. But that's the great equalizer to me and why Ecommerce is so exciting is it's really based on your talent not on your budget. There is some budget stuff and you can be obnoxious and bombard people with stuff.
But if you're really clever and you've got a great idea, and people can smell that, you could still make it. I don't know how much longer that will be like that. But I think it's really democratic in the best sense.
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Chase Clymer
Let's go back a little bit, you make the switch over to Shopify. And you're all-in on the Ecommerce side of things. What have...
What's worked for you as far as new customer acquisition and growth? What helped you scale the email list to a point where you got 150,000 subscribers, after deleting some?
Steve Sando
Well, it's been word of mouth. Your... I have never paid for a Facebook ad, believe it or not. And I've never paid for Google placements (laughs). And if you go...
If you type in "heirloom beans", we’re the first 2 pages of Google searching. With Facebook, if we had an event at one of our... We also have a retail store, too.
If we had an event at the store, I would try to find local people and do an ad for them. But I would never spend over $25. So it's all been word of mouth, I hate to say.
But we've grown, I have to tell you, between 15% and 25%, every single year since I've started.
It has never gone down except for in 2020, where we doubled because of the pandemic and people were eating beans like crazy.
Chase Clymer
Mm-hmm. So obviously with the pandemic, that's pretty easy to understand what that growth [was]. But what would you say what attributed to the consistent growth for the business?
Steve Sando
Partly, I think, people like to discover stuff for themselves. And you see some sort of internet marketing and it will be a young, attractive person saying, "Hey, guys, I'm trying this..."
It's so formulaic (laughs). It's like... It turns me right off. Whereas if I'm revealing a secret to you, and we're not... I don't think you could do this with a mainstream product. I think it's really furniture products.
But it's like Seth Godin talks about like "People like us do things like this. So you have to find your people like us and really thrill them."
So my thinking was, "Beans are not going to be something that everybody goes for so why don't we just delight and thrill the people that we're with more than anything, and they tell their friends."
So as a joke, I thought, "Well, let's start a Bean Club. Because we have wine clubs here. And I live in Napa and there's tons of wine clubs. And aw, that couldn't be more boring to me. But let's do a Bean Club. That'd be funny."
Well, right now we have 11,000 members, and a 30,000 person waitlist to get in. And I did it as a joke.
But I thought "I would love to have you every quarter. You get all these great beans." And then the customer service part of it was killing us.
So I said, "Let's just start a Facebook group, just for Bean Club members." And now they just sell themselves. And when the new shipments are about to come, we say "What beans do you still have? Because you're about to get 6 new pounds."
And they all... They just take care of each other. It's... And one reporter claimed it was the nicest place on the internet, because everybody...
Chase Clymer
(laughs)
Steve Sando
...is super supportive (laughs). And in the... I didn't plan this, but one of the big club members worked for The New Yorker. And then he ended up pitching the idea.
And so the New Yorker did it like a 12-page story on me where he came to Mexico and came to Napa. It was amazing.
But the secret is also, I just think people like to feel like they have discovered a secret rather than you hitting him over the head with this.
Now maybe if we were selling sunglasses from China, it'd be a different story. But because it's a real product... (sighs) I just don't know that mainstream advertising would work for us. So I'm sorry, I'm going all over the map. But... (laughs)
Chase Clymer
No. No, it's a very interesting story. But I think the one thing I want to really point out here and you highlighted it was how niche your product is.
It's just shows how passionate your community will be around it. And you guys serving your customers in such a passionate way and building the community around it, that's helping you guys grow hand over fist every year. You can't...
You can't even supply the demand that currently exists.
Steve Sando
No. And you know... And that's just the Bean Club. We also have a regular business and plus we sell to restaurants as well. So we have a wholesale and a retail (store).
And that's for us because Shopify is really not great having 2 different businesses trying to use the same inventory.
We were using something called TradeGecko. We started really early with them and it's been a nightmare from a customer service standpoint from us from the [get-go]. I hope they're not a gold partner. (laughs)
Chase Clymer
I'm familiar with the product, but I don't think we've actually integrated anything with them, historically.
Steve Sando
Yeah, we're getting out of it as soon as we can. And my staff is almost in tears. We also are very, I don't want to say, political...
Well, I am. That hasn't hurt us is the interesting thing. It only helped, so...
Chase Clymer
But you mean just being true and honest to the brand through your own personal voice and how that resonates with your customers.
Steve Sando
Well for one, we're really big on immigration issues so we started donating money to a group called No More Deaths that provides water for people trying to cross the border.
And a lot of times it's our policies that will create situations that they have to flee from. So it's like all of our problems. And we take drugs. They don't, mostly. So, it's our problem, too. So we donated some money.
Originally, we got a lot of blowback from that. But then... I've had some great conversations with people... It's a humanitarian thing. And I mean, I'm all for immigration reform, drug reform, everything. But these people are dying.
And then after the Parkland Shootings, FedEx was giving a discount to NRA members. And this isn't about gun rights. It's about the NRA. So we actually cut them, and we got a lot of publicity from that. And we got a lot of people upset.
But we had even more people... We had this letter writing campaign thanking us, so... But we're not... We aren't back with them.
So but once in a while, I think you have to draw a line in the sand about stuff that really matters to you. And it's culturally relevant.
Chase Clymer
Mm-hmm. Well, I think it's just one thing that people need to know that at the end of the day, it's your business. You can make any choice that you want.
Steve Sando
Yeah, well, the funny thing is people say "Businesses should never take a stance." We'd have people on the opposite side telling me that.
And I say, "Really?" because I think there's a lot (laughs).
Coca Cola is giving a lot of money to political things. They're just not working on their sleeves like I am.
Corporations are involved in politics all the time. I'm just being upfront about it, so...
Chase Clymer
Now, is there anything that I haven't asked you about the growth of Rancho Gordo that comes to mind that you want to share with our audience?
Steve Sando
Well, I think, you know, keeping up with what's going on... Everything's data driven. If you change the box from blue to red, you're gonna get a 0.2% increase in clicks.
I find that really boring unless the box is gorgeous and will help enhance the experience of buying the beans with us. I think also... I see other companies that are just so caught up in data, which is I'm complete... I'm sure I'm wrong about it.
But I just think it's really important to know what your product is and have a passion for it. And then also, you can be sort of old-fashioned.
We have a retail store that does really well. Our retail staff is also our customer service staff, so we keep that in-house. And it's really expensive.
But I think, these people are hard to find, so I overpay them. I think so, right? No, I don't overpay them. I pay them what they're worth.
But they have to know how to cook, they have to know to check our package, they have to help someone with a Christmas gift, and then they have to know how to work the inventory system.
So I think they're really valuable and I don't think you can farm that out. So I'm just saying there's a place I would say for old-fashioned business, like in the old days... And we're not built to sell.
You can tell some companies are built in order to be sold later. And we've had a lot of --especially lately-- interest lately and I'm like, "Ehh, doesn't feel like the right thing to do. "So I'm not going to.
Chase Clymer
Absolutely no, I think...
Steve Sando
You could be... (laughs)
My flag is you can be old and still do this and have a great time and be successful.
Chase Clymer
There's nothing wrong with a lifestyle business. I think that that is something that's been put out there by...
I don't know. It's just...
It doesn't feel [good] to me either. I think that there's nothing wrong with just having a beautifully profitable fund business that waking up going to work every day is fun.
Steve Sando
Yeah, I wouldn't go that far. But yeah (laughs). It's close. Most days, I will say, yeah. Our big issue is securing farmers to grow our beans because the heirlooms taste better.
They're harder to grow and they're fussier, but the payoff is the flavor and the texture. And you can go to the grocery store to get really crappy commodity beans for $2 for a sack and ours are $7 and $8 and we're hopefully not higher than that.
But it's still pennies a serving and everybody wins. We're growing mostly in California... But finding the supplier is a real tough thing, which I'm sure is the same thing if you're printing books in Asia or whatever.
Supply chains are really a horrible issue right now.
Chase Clymer
Absolutely. It's something that a lot of our prospects and clients are currently dealing with, especially...
For those not in the know, we're recording this one week before Black Friday and Cyber Monday. So it's probably peak on the mind for anyone out there.
Steve Sando
We started the 10th (of November). I thought I can't do this again. Last year was a nightmare and I thought, "Oh boy, it's only gonna be worse." because the post offices promise they're going to charge more and give us worse service.
And I'm sure that's going to be with everybody. So we actually started our Black Friday last week, but stuff (are) dribbling in so we're gonna actually have to do another Black Friday announcement.
Oh, and can I tell you another thing. We've never discounted a pound. I've never offered a sale ever. Not one. So I think that's a slippery slope to go down.
Maybe it helps with certain commodity items. But our Black Friday is all about "Here's the new stuff we're doing and these are great gifts. And here's recipes to go with them."
Chase Clymer
Yeah. No, I think that you are correct. When you are building your brand out, the way that you establish discounting into your business model needs to be really not a snap decision.
You really have to understand your margins and how it's going to affect things if you're successful in 3 years, 5 years, 10 years.
Steve Sando
And if you're successful and you have people that really love what you're doing, they're gonna wait for the sales. And they're gonna just gonna say...
Your very best people are gonna screw up your margins, I think, too.
Chase Clymer
Absolutely.
Steve Sando
Yeah.
Chase Clymer
Steve, it's been a wonderful conversation. One, because a refreshing perspective. And I I liked hearing a lot of those from you.
But I think what resonated most with me is as long as you have a passionate marketplace and you have a quality product, it's almost hard not to succeed.
Steve Sando
Yeah, I would buy that.
Chase Clymer
(laughs)
Steve Sando
And also know your customer. I'm trying to please me.
Chase Clymer
Yeah.
Steve Sando
And that's really much easier than figuring out what other people want, like, what do I want? And how do I make myself happy? And that has been… That's been my tool.
Chase Clymer
And I think it works. That natural curiosity is what led you to producing the product in the first place and then going to market with it.
Steve Sando
Yeah. But feel free to call me with suggestions. I loved it (laughs).
Chase Clymer
(laughs) Awesome. Steve, if people are curious about actually trying the beans, where do they go?
Steve Sando
Ranchogordo.com. And we're a couple of stores all over the country. But the ranchogordo.com is the best.
Chase Clymer
We'll make sure to link to that in the show notes. Thank you so much for coming on the show, Steve.
Steve Sando
Nope. Thanks for having me.
Chase Clymer
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.
Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.