Ep 5: Alejandro and Nikhil make the jump to medium-sized

Learn how you can scale your business from small to medium.

Alejandro and Nikhil make the jump to medium-sized

Featuring: Small Business Owners Alejandro Velez and Nikhil Arora and founder of OpenTable Chuck Templeton

On Episode 5 of This Is Small Business, Andrea sits down with Back To The Roots co-founders Alejandro Velez and Nikhil Arora to discuss their story of growing from college classmates with a quirky idea to sprout mushrooms out of coffee grounds, to a multi-million dollar garden supply company with a mission to help reconnect a new generation back to food and where it comes from. They produce and distribute easy & fun grow kits to help you get started, or a line of packet seeds if you want to really get your hands dirty. To ground it out, Andrea follows up with Chuck Templeton from S2G Ventures, best known as the founder and former CEO of OpenTable, a long-time entrepreneur who has a deep passion for helping early-stage and emerging entrepreneurs and companies scale their businesses. Chuck is now in league with Back To The Roots as they really start to hit their stride, making the jump from boot-strapping entrepreneurs to a booming medium-sized business. So come listen-in as Andrea gathers some great pointers for her small business playbook on what it takes to grow your creative adventure into a full-on venture!

Nikhil and Alejandro

Episode Transcript

[00:00:03] Nikhil: As you continue to grow the team around you, your partners, your investors, you're no longer able to do everything yourself as the company grows. Thinking about what it takes to go from a small to medium size business, what comes to mind is just how that transition, who you do it with, becomes more important than what you're doing.

[00:00:23] HOST: Hi I'm Andrea Marquez -- and This is Small Business – a podcast by Amazon. This show is all about learning how to start, build, and scale a small business. And -- just so you know -- I'm new to this. But I'm taking everything I learn in my conversations with business owners and experts -- distilling it into actionable lessons -- and filing it away in my playbook. By the end of this episode I will recap everything we learn today into tangible, actionable takeaways for you to use in your small business journey.

Today, I'll be speaking with Chuck Templeton, a long-time entrepreneur, founder and former CEO of Open Table, [00:01:00] and now Managing Director of S2G -- a Venture firm that helps early-stage and emerging companies scale their businesses.

But first -- I want you guys to meet one of the businesses that S2G is backing. Back to the Roots is a "small but mighty" company with a huge vision and a ton of heart. They make and distribute these really cool indoor gardening starter kits. You can grow mushrooms -- carrots -- onions -- flowers... all kinds of stuff. And they make it super easy. Their mission? To reconnect every family & kid back to where food comes from - "no green thumb or backyard needed." Which is a good thing -- in my case.

[00:01:42] HOST: Back to the Roots has been on a pretty wild growth trajectory lately going from small to medium. For extra context, we’re defining small and medium-sized businesses based on Gartner’s definition which defines small businesses by the number of employees and annual revenue. Small businesses [00:02:00] have fewer than 100 employees, and medium-size businesses have between 100 and 999 employees. When it comes to annual revenue, small businesses are defined as making less than $50 million in annual revenue and medium-sized businesses make between $50 million and $1 billion dollars.  

These are big jumps. And I want to know -- what does that actually feel like? What keeps them up at night as they grow from a small business to a company that is starting to make a real dent in their category?

So -- let me introduce you to founders Nikhil Arora and Alejandro Velez, who have had big dreams ever since they started their small business.

[00:02:46] Andrea: Nikhil andAlejandro, thank you so much for being with us on This is Small Business. I'm excited to talk to you guys.

[00:02:54] Nikhil:Thank you for having us on, and we're excited to be chatting with you too.

[00:02:58] Andrea: So tell me how Back to the Roots got started.

[00:03:00] Nikhil: So Back to the Roots, Andrea, got started actually during our last semester in college and Alex and I we were both undergraduates at UC Berkeley and a few months away from graduation, undergrad business majors, we both thought we knew what we were doing, had job offers.... And we were sitting in this business ethics class a few months before graduation. And we hear a professor bring up this one sentence in this lecture about sustainability that "gourmet mushrooms could potentially grow on recycled coffee grounds." And something about that one sentence, this idea of just turning waste into food and, what was going in the trash and upcycling that, you know, we separately, we both actually heard that sentence in a class of about 200 people. And after that class independently were the two, I guess, crazy kids that thought that was kind of cool, and emailed that professor for more information. He wrote us both back and said, "you know what? this other kid asked me about it too.You guys should probably meet up." And that, that put us, on this incredible journey.

[00:04:00] Andrea: That is an amazing story! So let's fast forward. And then, at what point did you guys know that this was going to be a lot bigger than you imagined?

[00:04:08] Alejandro: I think we believed that this could be bigger than we imagined from the get-go. We were really driven, and so I think we always had this mindset of we believe wholeheartedly in the American dream. Both of us from different backgrounds. I immigrated from Columbia to a small town in Michigan, Nikhil, first-generation Indian, and I think that American dream was instilled and we saw it first hand through our parents moving here and, you know, making a life and a family out of really tough situations coming here without speaking much of the language or knowing anybody. So I think we believe that at our core. So even when we created the company, our website, the first image, wasn't a mushroom farm. It was an image of a beach and...

[00:04:48] Nikhil: A hammock,

[00:04:48] Alejandro: A hammock. Yes.

[00:04:50] HOST: The guys had an image of a pristine environment -- everything existing in a kind of natural harmony. A sustainable dream... In other words -- they saw "The Big Picture."

[00:05:00] Alejandro: Even though the whole thesis was, we could take coffee waste, charge Starbucks and Peet's, so get paid as waste collectors and then sell the fresh mushrooms to local farmer's markets and grocery stores. Even though that was what made us quote unquote, leave our jobs, our first image, wasn't a picture of fresh mushrooms. It was a picture of a beach and a hammock.

[00:05:22] Nikhil: The start of this company it actually was called Better Ventures, BTTR Ventures, which stood for Back to the Roots. It was something about, you know, building a better world and kind of connecting us back to something deeper and going back to our roots. And I think it's been an evolution. I think what that's meant for us and how, how big that vision can be.

[00:05:37] HOST: All right. So they started off growing mushrooms out of coffee grounds -- but pretty quickly -- they evolved.

[00:05:43] Nikhil: We now have a whole line of indoor small space grow kits. So even if you don't have a big backyard in green thumb, you can start gardening to over a hundred varieties of organic USA - grown seeds. We have raised beds, soils, plant foods. Really want to build the organic gardening brand for the next generation. [00:06:00] For us gardening is about something so much deeper now. It's about reconnecting to where our food comes from, and just reconnecting to the earth as well through it.

[00:06:09] Alejandro: Nikhil and I always joke that we may not solve world hunger while we're alive. But if we can inspire the next generation of kids, families to grow food at home...Imagine how more connected America would be, how more connected the world would be, by just seeing stuff grow. It's freaking magic to see something grow and sprout out of nothing. I mean, that is entrepreneurship at its best is what a plant does every single time. It's, it's pretty wild to see.

[00:06:42] Andrea: I love that lens of responsibility. And I have to say that I didn't even think or consider ever doing that until COVID, the pandemic. I was like, we need to have our own greenhouse. Like we need to grow our own food. So I think that what you guys are doing is incredibly important. You guys have grown so much, [00:07:00] have so many big names who have backed Back to the Roots, and I'm so excited that people are seeing the vision and understanding of what this could mean for future generations. So, can you guys tell me a little bit more about that shift from, being a small business, to where you are now?

[00:07:18] Alejandro: You know, it's fun to say that we've doubled the business year over year for the last four years. We're now in a hundred-million-dollar POS brand. Which is super exciting when you start thinking about the millions of homes that our products live in, as we speak right now. And at the same time, we feel like we're still a small business. Like we're still just scratching the surface. We say we are on our warmup lap. We believe that our product should be in hundreds of millions of homes in America. We believe we should be in every gardener's indoor garden and their kitchen. We believe we should be in every outdoor garden with our products and make it easier, more fun to garden at home. [00:08:00] And then we also believe we should be in every single classroom in America. So for us, it's like, we're just getting started.

[00:08:07] HOST: Back to the Roots is clearly on a mission to grow -- just like the seeds they sell. But as they grow, I wanted to know... what concerns do they have? What are they dealing with operationally, and emotionally, as they're scaling up?

[00:08:20] Nikhil: Where we are today with, you know, a much larger team in much larger distribution and investors. I think a lot of what goes through our mind, one, I think we just, we feel the responsibility more now from just the people on our team and our team members. And I think that responsibility to make sure we continue to create an environment that's a place of growth for everybody is that's a real one. And you know, when we've had to go through tough times and always try to make sure, you know, can we, can we hit payroll? Cause we feel like every time we make it, we bring someone on this team, it's a promise we're making them and "Hey, this is a place that you can grow with us for not just a month or two." You know, we want people to grow with us for a decade. So I think that that becomes more real as you kind of start growing from a small business as an idea to really, you know, having more people on staff.

[00:09:00] HOST: I can hear the heaviness of that responsibility in Nikhil's voice -- and to be honest-- that's one of the things that freaks me out about the idea of running my own business. Here you are -- suddenly responsible for other peoples' lives. Your little idea is growing up -- gaining momentum. But how do you keep the fresh ideas coming while managing concerns like cash flow, investors, and employee payroll?

[00:09:25] Nikhil: I think that the mindset that Alex was speaking to is what helps us continue to grow every single day. I think Amazon is the best in class at this. We've been so inspired by Jeff's philosophy of "day one" and treating every day, like day one still. And the moment when you think you're a bigger business then " the end is near," so to speak. And every day thinking like, "Hey, I'm still a business. I'm a startup." We've taken a lot of inspiration from the Amazon culture around just because, you know, revenues grow and the team's grown, we can't, lose that, that scrappiness. And I think the hustle and the, you know, the desire to take risks and make quick, you know, pivot sometimes. We try to think about that a lot.

[00:10:00] HOST: So it sounds like the guys are trying to stay humble -- keep it real -- even as they grow. They make it seem kind of easy, but you and I both know it's not. So I pushed them to explain: How did they get to that "next level" where they were able to start carving out significant market share in their category?

[00:10:21] Alejandro: One thing that we try to hold present is to Zig when others Zag. Whatever space, your small business is, there's a hundred other folks trying to do it better, bigger, cheaper than you are. I mean, this is a 24-7 job to be an entrepreneur and to compete and win in your category. And I think winning means trying to do things that really wow the consumer and putting that consumer first. How can we do things different? I think number one is our focus is around being a hundred percent organic. Another big focus of ours was being able to solve the consumer's needs by being a multi-category garden brand. So nobody in the space before Back to the Roots [00:11:00] could start a garden from scratch under one brand. It required a bunch of different brands to start a garden.

[00:11:08] HOST: So. Dare to be different. Put the costumer first and anticipate their needs. Two excellent tips. But then there's the logistics of it all. How do you get your product into the hands of as many people as possible? Alejandro thinks that businesses should do a really good job at using multiple channels and being both in physical stores and online.

[00:11:32] Alejandro: And we built it one brick at a time, one store at a time and we would sell to Amazon. We would sell on our website. And our idea was if we build it long-term enough, people will want to buy us in store or online. And through that, I think it's led to having long-term relationships with all our partners. And I think that goes back to the zigging when others zag. And I feel like to get from a small to medium sized business, you got to take risks. Meaning you got to think differently [00:12:00] than the rest of the marketplace in order to get that respect from the category. I think it's more important to think about what consumers are going to want to buy over the next 10 to 20 years. That's how you become a category captain. And that's how you're able to get a lot more shelf space, a lot more "unfair" share of attention from your retail partners, from your consumers.

[00:12:20] HOST: On the one hand -- it seems like the guys at Back to the Roots have it all figured out. They hedged their bets with direct to consumer and retail distribution. They "zigged and zagged" at the right time. But they're the first to admit that a lot of what they know now -- they learned the hard way!

[00:12:38] Nikhil: The other part that as we think about going from a small to medium business, that's just important for other entrepreneurs, I think to not forget is, in that transition, 99.99% chance of what you think is going to work is not going to work. And that's okay. And the faster you realize that things are not going to work, so your eyes are open to be able to correct that and constantly be in a state of learning versus trying to prove your hypothesis [00:13:00] right in any way possible. It's a whole different game where now you're just trying to solve the "what" and solve the "how" of your business.

[00:13:09] HOST: I'm hearing this message loud and clear from the different entrepreneurs I've been speaking with. So many of them have spoken about "failing fast." And about not being afraid to change your products or your tactics -- "the what and the how" of your business -- if something's not working as you scale up. That said -- Nikhil still feels that some things should remain sacred...

[00:13:32] Nikhil: But I think one piece of the long-term vision that you should try to stay true to is what builds a brand is keeping your "why" consistent. If your why, and your north star of your brand stays consistent, your consumers, your retailers, your partners, they'll go with you as you have to change your what and your how, because they know what you're trying to do. What's allowed us to be here today is that our north star has never changed our, why has never changed.

[00:13:58] HOST: So in other words -- never start a business you don't believe in. [00:14:00] You may not know the what or the how right away-- but you'd better be clear on the why. Because as Alejandro said, growing a business from small to medium sized enterprise is a full time, 24/7 job. You need to love it.

[00:14:15] Andrea: Can you guys give me an example of a moment where you had to look back to your why, but change direction or pivot in some way.

[00:14:23] Nikhil: The second product we sold and launched in the kit category was actually an at-home aquaponics hydroponics system called The Water Garden. So imagine now we spent five years just obsessing over mushrooms, growing fresh produce mushrooms, and then selling mushroom kits, and then saying, we're now going to sell a hydroponics kit. That's a self-cleaning fish tank that grows. People around us thought we were crazy. They were like, you guys were mushroom guys, and now you're selling me a fish tank. But for us in our hearts, we're like, this is just another really cool way of connecting back to the environment and growing food sustainably using aquaponics. And this is true to our mission of connecting people back to their food. And this is a different way of doing that. [00:15:00] And, you know, it's still one of our top selling items all these years later.

[00:15:03] HOST: As someone who has a lot of crazy ideas -- I appreciate that story. And I also love the way Nikhil and Alejandro think about serving a need that some customers may not even know they have... yet.

[00:15:15] Alejandro: It's not about just addressing the current market, but we looked at also how many people don't garden today because of their fear of screwing up their fear of killing a plant. "I don't have a green thumb. I don't want to try this." And we noticed, and I think that was one of the opportunities is we noticed that so many people love the thought of gardening and think I'd like to try, but I'm going to make a mistake. And we saw like, wow, this is a pretty big consumer base already. If we can create products that are simpler and more fun, more, I think sustainable to speak to that consumer, that maybe we can convert those consumers and actually make them gardeners or, you know, novice gardeners. And then obviously speaking to the hardcore gardener already was important for us too.

And pandemic made people. and you referenced this earlier Andrea, you know, made people more self-aware of what they were eating, where their food came from [00:16:00] and wanted it to, you know, wanted to try growing food themselves. And I think that almost expedited, 10 years of slower growth turned into, you know, a ton of younger consumers wanting to try a gardening. And we were there to create products for them to make things simpler, easier a community for them on, you know, digital community on social media, through our website. And I feel like we were at the right time at the right place. But we've done that through just relentless, year over year, just staying in business, staying relevant.

[00:16:30] Andrea: I completely agree with that. One of my last questions for you guys, when it comes to going from small to medium as a business, is, what is something you would do differently based on what you've learned now?

[00:16:40] Nikhil: I think first and foremost, the biggest question to ask for anybody is what do I want? What's the growth that I want. And I think being really honest with yourself before you start hiring a team, because there's no right or wrong answer there, right? Like entrepreneurship, there's no one path. There's no one answer.

[00:16:58] Alejandro: And then the other one is don't get analysis paralysis. [00:17:00] You know, we all know that nobody's got a crystal ball, our business, is going to face many challenges over the next few years, and all we can do is do our best, but that includes the word DO so we gotta do, we gotta take action. Don’t just sit back and over analyze. If you want to do that, you know, become a professor. Entrepreneurship is about doing and taking risks and failing and learning from them.

[00:17:25] Andrea: I am very inspired by both of you by not just your partnership and what you've been able to start and grow. But also about your mission and what Back to the Roots is achieving now and what I hope it continues to achieve. So thank you so much for the work you're doing. Thank you for being on This a Small Business, and I hope to be talking to you guys soon.

[00:17:46] Alejandro: Thank you, Andrea.

[00:17:48] Nikhil: Thanks for having us.

[00:17:52] HOST: You're listening to This is Small Business -- brought to you by Amazon. I'm your host Andrea Marquez. Do you have a small business that wants to grow and grow... [00:18:00] like a plant in a garden? Well, on this show, I want to take you guys through my journey of figuring out what it takes to start a small business today by asking small business owners themselves and focusing on the pivotal moments, decisions, and challenges they are going through.

Did you know that more than half of the products sold on Amazon come from small-and-medium sized businesses? Back to the Roots is one of the many small businesses selling on Amazon that have tapped into some of the tools and resources offered to help them succeed and grow. You can learn more about them in our show notes on our website ThisisSmallBusinesspodcast.com.

Coming up, we'll hear from a Venture Capital firm about what they look for when they're thinking of supporting a business. But first -- just a reminder that a podcast only helps if you listen to it. So if you know someone who needs to hear this episode -- I hope you'll share it as soon as you get the chance. And if you have thoughts you want to share with us, send us a message to [00:19:00] thisissmallbusiness@amazon.com.

Ok. I can't wait for you to meet my next guest. Chuck Templeton he’s a Managing Director at S2G Ventures, where he helps emerging entrepreneurs and companies scale their businesses. Nobody could accuse Chuck of having analysis paralysis. He's been an active entrepreneur at many different capacities. He was the founder of OpenTable, an online restaurant-reservation service, first Chairman of GrubHub, an online and mobile prepared food ordering and delivery platform, and an early-stage advisor for several other startups. These days -- Chuck has a pretty cool job. At S2G, he helps entrepreneurs use their business innovations to find solutions to the most urgent environmental and societal problems facing humanity today. This is no doubt one of the reasons S2G invested in Back to the Roots.

[00:19:56] Andrea: Chuck Templeton. Thank you so much for being on This is Small Business today. It's a pleasure [00:20:00] to have you.

[00:20:02] Chuck: Andrea, it's great to be here. I appreciate it.

[00:20:04] Andrea: You're here because of Back to the Roots. They have spoken very highly of you but before we even dive deep into the Back to the Roots, can you just tell me a little bit about your entrepreneurial background?

[00:20:15] Chuck: My real sort of entrepreneurial story I think started as the founder of Open Table. And so it really happened one day when watching my wife try and make restaurant reservations. Sort of in the early days of the web, you know, back in the nineties, frankly, and she spent, one Saturday morning trying to book reservations for the next Friday, Saturday, Sunday night. Her parents were coming into town. And, like she'd call restaurants and they'd be closed or, you know, one wasn't open yet and was going to be closed on Saturday, but were open on Sunday. And so it was just got to be this mess. I'm like, Hey, there's gotta be a better way.

[00:20:46] Andrea: Leading us to today. How did you first learn about Back to the Roots and what made you want to get involved?

[00:20:54] Chuck: So we were an early stage food investor, to try to reinvent the food system and make it more sustainable, more healthy, more distributed. [00:21:00] And when we first met the Back to the Roots team, they had, they had started their company first in how you could grow coffee out of mushrooms. And so they started that business and then they had a ready to grow business and a ready to eat business. And so the ready to eat business was really interesting for us because they were trying to do, you know, low ingredient, pure sort of products that had, you know, source back to the original sort of supplier.

[00:21:22] And so we liked both of those businesses. However, building two businesses at once is very complicated. It's hard to build one. And so they really focused on being, you know, the garden brand of the next generation. And, you know, we've been very excited to follow them in their progress. And so we, you know, have been investors for six and a half years now and just have really seen this team, and company come a long way in their maturity, how they go to the market, how they innovate so it's been a really exciting ride.

[00:21:48] Andrea: And you keep saying "us" who is us?

[00:21:50] Chuck: SDG ventures, we're food and ag venture fund. We invest all across the supply chain. So we look at it from a systems approach trying to go [00:22:00] both the supply side and the demand side. So we invest way upstream in the ag space. But we also do sort of what we call the messy middle, which has all the, you know, the transport and, product, you know, manufacturing and that kind of stuff.

And then we have a last mile at the consumer side, so CPG products and, in-home and, and delivery. And so we have about a billion dollars on our capital that we invest across those three broader areas. And, you know, so the ag, the supply chain in the, the food side of it, and, we do anywhere from, 500 K up to 50 million into any one business looking for companies that are making the food system more sustainable, more healthy, more distributed, mitigate, or adapt to climate change or increase food access. So really trying to take an impact approach or an impact lens to helping us transition or transform the food system.

[00:22:47] Andrea: There are many small businesses out there, or companies that are doing, maybe not something similar to back the Back to the Roots, but something that your company would want to invest in. Right. So what is it about them? Exactly. [00:23:00] That you said, "okay. Yes. I'm going to go in here"?

[00:23:04] Chuck: Yeah. So, we're venture investors, right? And so we're not the right capital for every type of startup. Obviously there are some that, you know, should do more friends and family round or local types of businesses. So what we look for, at least what I look for in entrepreneurs is really a couple things. So one is an entrepreneur who will get out of the building, if you will. Someone who will go out and they're hustling, they're talking to their customers.They're not in the back room hypothesizing about what some someone may want or whatever. And so I think one of the things that these guys have done is they're on planes or at customers, you know, doorstep. Alex moved to, to one of his customers sites for a month to be able to work with them closely, to really figure out how to make sure they had a product configuration that worked for them. Right. And so getting out of the building is one of the main things that I look for.

[00:23:53] HOST: "Get out of the building" ... a phrase that echoes a bit strangely in this work from home era -- but it's still an important concept. [00:24:00] It reminds me of Nikhil and Alejandro's observation that when you "do your best" as an entrepreneur -- that involves actually DOING something.

[00:24:10] Chuck: Two is really thinking about, entrepreneurs who hear and take feedback. But ultimately make their own decision, right. But we want them to be learners and people who are growing as, entrepreneurs because, this is a dynamic world and things are changing all the time. And if they're not keeping up with the changes that are happening in the marketplace, because they already know all the answers, then that's a big red flag for us. And there's a third other aspect, which is sort of obvious, do they have unit economics, can they make money at the single unit of sales in what they do. Because obviously if you can't do it at the unit economics, you can't do it at scale. So this next question is, is how do we think about scale? And do they have an idea for how big this market can be or what the opportunity is?

[00:24:54] Andrea: Thank you for putting them that way, because Alejandro and Nikhil both talked about that. And I think that's one of the important things [00:25:00]  that most of the small business owners we speak to are trying to figure out at the inception of their idea. What does that look like over time? What does the brand look like as well? Like what can you attach to it to keep growing? And how is it going to change in a way that you don't lose your customers and that they're willing to go along that journey with you, which I think was another important thing that they mentioned.

[00:25:24] Chuck: Customer discovery. What does the customer really need? I have ideas of what the customer needs, but who cares right. It’s what is the customer really need? And so having that ability, you know, the whole adage of, you know, two ears and one mouth, right? Like, you know, listen twice as much as you talk. There's a difference from what the market wants and what the market needs, right?

Because the market oftentimes needs lots of things that they don't necessarily want, but they need them. And so that's where it is hearing what they have to say. It's parsing that the right way. And then it's really figuring out how to build a product that will suit the needs of, of their particular customer.

[00:26:00] HOST: This whole notion of customer "wants" vs customer "needs" is pretty interesting. I think of how the guys from Back to the Roots told me they thought about what kind of easy-to-use gardening products would get reluctant gardeners out into the garden -- they designed for that need -- and carved out a new space in the market.

[00:26:18] Andrea: Do you have any advice or suggestions for how a small business can set themselves up in a way that will allow them to scale quickly to medium sized?

[00:26:26] Chuck: Certainly, I think about the evolution of a business and maybe this is oversimplified terms, as idea, validate, infrastructure, and scale, right? Sort of you have an idea. You know, someone may like this, or someone may want to buy that. You validate it by selling a couple of them and going out to the market, then you really think about the infrastructure. And then you think about scale, right? And so at some point in that, as you're growing, the entrepreneur needs to move from working in the business to working on the business. Right. And scale is about process. [00:27:00] It's about doing the same thing faster, more, efficiently, more cost-effectively right. To be able to move through that. Right. And so when you're thinking about it, it's all the time is "how do I polish the friction off of this process?" "How do I make this process more scalable?" "How do I, reduce the cost and increase the efficiency in this?"

[00:27:19] I'll sort of go back to sort of, Open Table. We had to sell to restaurants. Some of them were really great at, you know, lighting a candle and cooking a meal, but didn't have a lot of the other practical skills that you might expect business people to have. And so, you know, we had to sell it to someone, oftentimes who was a CEO, right. Have their own business. They might have three to five to seven restaurants or something. They would come in at 10 or 10:30. You could sell till 11:30. Then you, you had, from 2 to 4:30, you could sell them. But outside of that, you couldn't oftentimes, the busser would, cut their hand and have to go to the, the emergency room. The host might fall in love and move to Barcelona. And the wine person may not show up that day.

[00:28:00] Right. Like the chaos that happens. And so if we're going to sell into that environment, We have to really think about how do we adapt our process to make it work for them. Right. If you have a sales person who needs to sell to a CEO, but they've only got four hours a day to sell, that's pretty limited. So what we had to do is then work on the, the sales process. Right. And so we got the sales process down to about a 35 minute meeting. So everything is about if you're going to scale with anything, you need to figure out how to get really super-efficient at doing things over and over and over again. And again, that sort of comes from, really understanding the customer's needs and the customer's challenges and the customer's opportunities and how you can position your product to be successful there.

[00:28:43] Andrea: Knowing everything you've learned now, what is something, that you would have done differently?

[00:28:48] Chuck: It took me a long time to learn the idea of maniacal focus. Right? Cause I think one of the challenges with entrepreneurs early on is that, it's not opportunity that is their challenge. It's focus [00:29:00] that is their challenge. And I think Amazon's even a great story. Jeff started off with books, right? He didn't start off with AWS and, you know, delivery and all that stuff. He started off with books, right. And he figured out the marketing books. And then he added to it from time to time. You know, with Open Table, the original idea was going to be, it's going to be called Easy Eats. And it was going to be Easy Putts and Easy Docs and Easy Cuts and all these other verticals, these, these reservation verticals. And, you know, what we realized is that, you know, the restaurant world is a big enough opportunity for us to be able to go after, to make a real business out of it. And so by decluttering, you know, and moving away a lot of the stuff, which is also what the Back to the Roots team did, you know, they got rid of the ready to eat stuff and really focused on the ready to grow stuff and became world class at that because they were able to really focus on it.

[00:29:52] Andrea: And you mentioned those things that attracted to you to Back to the Roots. And what really caught my attention was that you know both of these people, [00:30:00] like you talk to these people. Alejandro and Nikhil are amazing. So was it a gut thing? Was it trust? What was that additional factor that if you saw it on paper and it was the same two companies that would distinguish one from the other?

[00:30:16] Chuck: Yeah. I mean, I think that's a very important aspect of certainly entrepreneurs and who they partner with, oftentimes, especially who they get investment from, because not every investor is thinking about the business and the exit and the time horizon, the same way the entrepreneur is. And so, you know, when you get into a relationship, it might be a 7, 8, 9, 10-year relationship you have with this investor. I mean, we're six plus years in with Alex and Nikhil, and we're not close to, you know, I mean, the company is doing great, but we're not ready to exit it yet. So it's going to be another 2, 3, 4 years before we think about, you know, a potential exit for them. And so I do think that having a good gut feeling about that and having a working relationship with them and me really believing in them [00:31:00] that they do have this learning culture to them and that they are going to grow and it's about, you know, getting it right versus being right. So a lot of that is a gut feeling. It is a personal relationship. You know, it's not like a stock you can buy and sell, you know, when you're investing in early-stage companies

[00:31:16] Andrea: I know that there's certain degrees of involvement from different types of investors. There's some that will want to be more hands-on involved. Others that will be more hands off. So what would be your recommendation to keeping a relationship that helps the company or the business to keep growing?

[00:31:33] Chuck: There's a great job advert that Ernest Shackleton, who was an Explorer back in the early 1900's, it talks about, you know, his job advert that was, you know, "long, darkness and, hazardous conditions" and all these sorts of things like that. And he was very upfront about that. And so I think being upfront with your investor and being able to have discussions both good and bad about the opportunities and the challenges in front of you, I think is a very important thing, cause investors can help [00:32:00] problem solve too.

[00:32:02] HOST: So there's one more big note for my evolving small business playbook. Be upfront with your partners and your investors. because, hey, while Shackleton the explorer met an early death and his ship, The Endurance, got trapped in the ice-- nobody ever accused him of false advertising.

[00:32:21] Andrea: Thank you so, so much for being with us today, Chuck, it was a pleasure, really to have you.

[00:32:27] Chuck: Yeah, me too. I'm super excited.

[00:32:29] HOST: And that's it for this episode of This is Small Business. I want to thank Chuck Templeton, Nikhil Arora and Alejandro Velez for coming on the show today. Some of the key takeaways for scaling from small to medium that I’m adding to my small business playbook are:

  • No matter how big you get, treat every day as if it’s “DAY ONE.” At Amazon, that’s one of the first things we learn. It’s important not to lose that scrappiness, and willingness to try things and take risks.
  • Zig when others zag. [00:33:00] There is a lot of competition out there, I don’t need to tell you that. So to stand out, especially in front of a customer, it’s about thinking how you can be different while putting them first and meeting their needs, not just their wants. Because as Chuck mentioned, many times, customers don’t know what they need and that is an opportunity.
  • Know that not everything you try is going to work and that’s ok. Because to grow from small to medium, you need to take risks. And it’s not about focusing on what didn’t work but about how fast you’re able to correct, and solve the problem.
  • When it comes to managing relationships with investors and customers, during critical stage of growth, listen twice as much as you talk, and question your decisions, but never stop moving. Don’t, get stuck in analysis paralysis.
  • Have a clear why. Don't be afraid to change the "what" and the "how" of your business as you grow and streamline your processes -- [00:34:00] but cling to the"why" like the mast of a ship that's way out on the ocean.

 I really enjoyed this episode. Back to the Roots, like all the other small businesses I’ve spoken to, are doing amazing things.

[00:34:17] On the next episode I will be talking to a small business owner who was inspired to create a product that has a positive impact on future generations. And her product can be used, and eaten! Meanwhile, if you like what you heard, don’t forget to subscribe to our podcast so you can stay up to date with new episodes, let us know what you think by leaving a review on Apple Podcasts or email us at (thisissmallbusiness@amazon.com) with episode ideas, and tell your friends about us too!

Until next time – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening!

CREDITS: This is Small Business is brought to you by Amazon, with technical and story production by JAR Audio.



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