Roller Coasters And Life Lessons - My Interview With My Friend And Fellow Entrepreneur Vinny Kitirattragarn - Part 2
This week, I’m finishing up the interview with my good friend and high school classmate, Vinny Kitirattragarn, Founder and CEO of Dang Foods, that you’ve probably seen on the shelves of your local Whole Foods or Safeway.
We continue the conversation, and I find out more about the tough side of running a massive snack company, and the lessons that Vinny learnt along the way. We also delve into some cool brands we both love, and talk about what good branding really looks like.
Enjoy!
[Pia Silva]: As an entrepreneur myself, I've gone through so many roller coasters of emotions, and, you know, the highs are high and the lows are low.
And I can just imagine, you're just feeling that even more extremely.
What has it been like? Has it been kind of a roller coaster? Have you been able to keep it steady?
Maybe because it's a product and that it gets a low price thing? Like for me, every client is worth 10s of 1000s of dollars. So to win or lose is to either be huge or nothing.
[Vinny]: Yeah, the best one is the first one.
I remember getting that first sale, just being like ‘Wow, you're going from zero to one, like, that's huge.’ Now going from like a million to a million a half, it’s different.
But the emotional part of being an entrepreneur, I think people are just starting to wrap their heads around it and talk about it. But yeah, here's a lot of sleepless nights, there's a lot of, ‘Hey, I wish I had someone to go through this with.’
It’s lonely at the very beginning, especially if you don't have a co-founder. I've gone through bouts of depression, I've seen multiple therapists, I've talked to counselors, had group therapy with other people in the business, but 10 years running your own business, you're gonna deal with a lot of conflict, a lot of heartbreak and some highs.
And hopefully you don't come up jaded on the other side - I still want to start another business! I still want to keep going with this, because that's what I know how to do.
I feel like with what I learned this first time around, my second tour is going to be smoother. It might not be smooth, but it’ll be smoother.
[Pia Silva]: Absolutely. So what's the goal? What do you want to do with this business? And what kind of timeline are you on?
[Vinny]: Right now, you're catching us at the tail end of a global supply chain crisis.
If you're making a product here in the US, and you're sourcing an ingredient from overseas, you're gonna have a problem getting your ingredients, and we're sourcing our whole product from overseas.
Our products are made with coconut chips and rice, which are made in Thailand, and then shipped over here and ready to sell boxes, which means we have a lot more money sitting on the water at any given time, or in a port.
And so that just stretches your cash flow, like when I was talking about when you pay for your product versus when you actually get paid on it. That got stretched out really wide for us, which is really tough because cash flow is tough.
As a business now, we have to look at financing partners to continue funding the business because we just need that much more cash to put in a product.
We haven't been able to do a lot of what we wanted, like launching products, like expanding. It's been more mindful operating right now. And like a lot of entrepreneurs that's their comfort zone. It's not trying to spend crazy amounts of money just to grow, grow, grow, but managing a smaller but pretty business - there's a lot to be said for that.
[Pia Silva]: Yeah. So what kind of entrepreneur are you?
[Vinny]: It's a good question - depends on the day.
I’m not a ‘grow at all costs’ person - that usually comes from some belief that the person is invincible, ready to take on the world. And a lot of that is ego, right?
I think I'm more ‘What makes sense today? What does the market look like? What do our resources look like?’
I think there's a more mindful way to do that, so I think it depends. Definitely, when we started this I didn't know as much about building a brand or even product margins, cash flow and financing - all this stuff is, I had to learn on the go.
But now, having gone through it, I'm like, ‘Next time I do this, I'm going to have a different margin structure for my business, different financing…’ and it's going to look totally different than the way we've set it up.
Now, I think the way we set up the business is great for who we are and where we're at. But I think it'd be very tough to set up the same business today and have the same type of success, a decade later - it's a totally different ballgame.
[Pia Silva]: Really? Because of all the access to online selling and just the whole makeup? Yeah, you would do it differently.
Do you think there's more opportunity or more competition? Or just different?
[Vinny]: Well, how do you see your shopping habits changed in the last 10 years?
[Pia]: Yeah, I've refused to go to a store.
[Vinny]: Right. I think 4% of groceries were bought online before the pandemic and now it's 11%. So it's almost tripled. Only 11%, but if you look at China, that's 70%.
So there's still going to be this huge wave towards e-commerce and online shopping. I mean, that's a big opportunity, right there.
You know, it's a challenge. If I'm selling a product directly to you, everyone's expectations are ‘Get it to me now’. Right? ‘Get it to me fast. Get it to me cheap’.
It's not easy to compete against behemoths like Amazon but you can build huge businesses selling direct to consumers, if you have the right product proposition and pricing and all the pieces, right.
And then there's the next generation of food businesses that’s going to be built online. It's not going to be built in stores. They'll probably start online, and then they'll go into stores once they're big enough.
[Pia Silva]: Someone just told me there are restaurants opening where there's no restaurant, it's just like a Seamless takeout restaurant, where they have a big kitchen and they cook all types of food in it. Just to have a kitchen.
[Vinny]: Ghost kitchens?
[Pia]: I don't know. Is that what they're called?
[Vinny]: Yeah. A ghost kitchen are the ones that just sell on Seamless or DoorDash. There's one down the street from me. My experience with the food is terrible.
[Pia Silva]: Terrible. Oh well, that's something different!
[Vinny]: Yeah, the idea is great. You can just exist online - you don't have to have an actual retail space right now.
[Pia Silva]: So you can spend so much less money and your margins can be so much better. Of course, you have to have good food. Interesting.
So are you going to sell it at some point? Do you want to sell it and build a new business? Or maybe you don't know yet?
[Vinny]: Yeah, we'll see. We'll see. If I got the right offer…do you want to buy?!
[Pia Silva]: I would not know the first thing about running a food business, a product business, a snack business, any of those things!
[Vinny]: Have you read ‘Rich Dad, Poor Dad’?
[Pia Silva]: Yes, I love that book. Steve and I were like in Hawaii or something, and we're kind of off the grid reading books, and I read it again.
And I was like, ‘We need a product!’ And that's actually where we started.
We came up with the idea to even do anything online, like selling info products, because I was thinking, what is the product we should do?
And the first product we thought of was a ‘badass baby’. A baby gift, a box that had only cool things for babies for when you go to a baby shower or something.
Anyway, we never did it. Because as soon as I started looking at the numbers with products, I was like, ‘This is hard and expensive.’ And then immediately after that I said, ‘You know what, what is the thing that we have? It's the information.’ So an information product makes sense for us.
[Vinny]: Yeah, well, everyone's a bit different. The question is how do you get that product idea? How do you start a new business? Where does that come from?
[Pia Silva]: Well, I think you were doing some of that - knowing you want to start a business and then looking around and playing with things to figure out what the product was going to be for you.
I mean, that's kind of what I did too. I want to have something, so what's it going to be? As opposed to how I think a lot of people think, it's more like lightning strikes. ‘Oh, I have an amazing idea!’
Now it's the idea that's guiding the process but you know, ideas are shit. Because you having this dang coconut idea really wasn't gonna build the business that you have today.
[Vinny]: Yeah and there are lots of good ideas that tested well but didn’t work.
[Pia Silva]: What's an example of something that didn't work that sounded good?
[Vinny]: So you know Funyuns? We're like, ‘Oh, why don't we do that with real onions because that's made out of corn.’
And so we found someone who made these really nice and crispy onions, it tastes great, and we sold them at a Safeway.
Initially, people told us they loved it, when they came up and tried it at our booth. But then, when it came to buying and rebuying, people just weren't.
[Pia Silva]: Why do you think? Any ideas? Onion breath?
[Vinny]: Yeah! That’s actually something I did not think of.
We started asking more people about it - they were a little worried they would come back with this onion breath, and it's hard to sell onions without telling people you're going to have onion breath.
But when you caramelise it, you don't have that. Caramelised onions get rid of all that sulphur compound stuff in the cooking process. But still people thought that.
Hey, I should have talked to you, and that would have saved me $1m!
[Pia Silva]: Yes - next time you have an idea, call me!
[Vinny]: I actually have an idea now.
[Pia Silva]: What's your idea?
[Vinny]: It’s a way to donate 100 gallons of water for every bottle of water that I sell. So if I sold you a bottle of water, how much would you pay for bottled water? 16oz? A dollar? A couple of bucks?
So I can find a way to donate 100 gallons of water by investing in water purification projects.
[Pia Silva]: Is that 100 gallons per bottle?
[Vinny]: Yeah, so here's the key. I'm creating a plant that will operate for 25 years and provide clean, safe water to a community in Honduras.
But it's gonna take 25 years to get that 100 gallons delivered to that community.
Is that misleading to you? Or do you think that's a fair claim? 100 gallons for this one bottle of water?
[Pia Silva]: Interesting. For every bottle, there'll be 100? So for every dollar or two, that will generate another 100?
[Vinny]: For every $2 that you spend on the bottle of water, my company will donate to a partner that will create this plant.
[Pia Silva]: Is that misleading? Well, once you tell the story, it doesn't sound bad.
But if I hear it first, and then I hear the story, then that's where the misleading thing feels. Because I hear the first part, and then I make an assumption.
[Vinny]: OK, you're a little sceptical at the beginning.
[Pia Silva]: I wouldn’t be sceptical until I heard the story after, especially if it wasn't upfront.
That's tough, because people don't like to buy insurance and things like that - buying things for the future. But they will need that water even more in 25 years. I like the idea. Yeah.
Is that a business though? Or is that a nonprofit?
[Vinny]: It's a business where you make money selling the water.
So here's the key. I probably shouldn't say this, the key - you can still make it a profitable business.
[Pia Silva]: You can still make it profitable, and do that. Well, yeah, that's the goal.
[Vinny]: Because that type of water delivery is very scalable. So we're talking about amplifying your impact. If you were to donate $1 to the nonprofit, they would go out and do this stuff.
Or you can buy one bottle of water for your dollar and create a plant that's gonna operate for 25 years. And that's going to provide hundreds of thousands of gallons of water. So your impact has been amplified.
[Pia Silva]: I love it. I love it. All businesses should be like that.
Are you familiar with that? TerraCycle. I love that shit. That's what I was studying in college, and really wanted to get into. And I don't know how I ended up here. But I'm helping in a different way.
But I loved the idea of these, like super profitable companies that also were doing really good, but you didn't need to do the good. You still got the value of the product. I think too many companies rely on people wanting to do good. And so they don't have to deliver as much in the product or the product is more expensive because it's doing good. It's like ‘No, it's got to be good. And I want to buy it no matter what.’
Because in your example, if there's two bottles of water in front of me, I might as well buy the one that's going to create 100 gallons of water and we should all buy that.
[Vinny]: Yes - consumer choice. OK, so I’m preaching to the converted as far as bottled water is not great for the environment. People don't like plastic, right?
There’s a sin there, right? You're sinning, but we're already buying it. So if those dollars can be spent anyway, you're going to buy bottled water. Bottled water is huge. And it's growing.
It's like $40 billion, and it's still growing. So people are going to be buying bottled water. Why not have them buy something that helps someone? You know, why not?
I’m actually surprised that there's not that many brands in water that have a ‘good’ component. Like ‘We do good for [blank].’ Right?
Most of them are just about being smarter, or…
[Pia Silva]: Wow, so you’ll like this. Do you know about ‘Liquid Death’?
[Vinny]: Yeah.
[Pia Silva]: OK. I just heard about them. They're trying to do good in water. I don't know if it's legit.
[Vinny]: Brilliant branding. Probably 10 years ago, I thought ‘We should sell water in cans’, but I didn't execute on it.
And they figured out that if you make it look cool, then people will do it.
[Pia Silva]: I have to say Steve bought me a can as a joke, because we think that ads are so funny. And I was like ‘I don't enjoy drinking this water. I don’t really like drinking things from cans anyway. Right? Like a little annoying. And it feels weird to drink water from a can. It does feel weird. It's just on principle.
[Vinny]: But you can sit at a bar drinking and feel fine. You’re not nursing a glass of water. You could look the part.
And the other thing they've got they nailed is the brand voice - like heavy metal destroying your thirst - it's very aggro. And I personally don't connect with it from a professorial perspective, but it’s brilliant.
You can own your brand voice and it’s very hard to copy. It’s super playful. And everyone knows they're not serious. But it's kind of like you have that friend who's just always being ridiculous. And you're just laughing at them, and It's ridiculous.
[Pia Silva]: I mean, they have an amazing ad on Instagram with a porn star that you should definitely go watch if you have not seen it.
But the question is, does it have staying power? You know, we bought that one can because it was funny. We're not going to buy any more of it. But I'll talk about it. And I'll mention it and I remember it. We're talking about it right now.
[Vinny]: I had more conversations about this brand than any other brands.
[Pia Silva]: Oh, really? Okay, so there you go. But it has to translate to sales, or else doesn't really do anything.
[Vinny]: I think they're at $50 million.
[Pia Silva]: Are they really?
[Vinny]: Yeah. I give them props.
If I were to run with that idea of doing canned water, I would have been ‘Listen, cans are better for the environment than bottles’ and I would have rationalised and tried to logically explain to people cans are better than bottles.
They totally ignore that they're like ‘We're just going to talk about heavy metal.’
And they did it in a way that almost seems whimsical.
[Pia Silva]: That’s what I'm saying.
What you're saying is focusing on my desire to help the environment at the cost of my not enjoying drinking out of this can.
And they're playing to ‘there's times when you can drink water and not feel like an idiot.’
And that's a need. Mine would be more like ‘I'd have to sacrifice something.’
[Vinny]: Yes, exactly.
[Pia]: Take Tom’s shoes. I don't wear Tom’s. But some people really love toms. They like the shoes, they like that they give away a pair.
I like that they're giving away a pair but I don't like Tom's shoes so I don't wear them. I'm not going to buy them just because they give away a pair.
[Vinny]: I don't think people want to buy things for virtue signalling, just to show people that…
[Pia Silva]: I don't think it's virtue signalling. I'm saying I think they want to help. They want to do whatever the good deed is, but people aren't going to sacrifice their own desires to do that. So just play to the thing they want.
[Vinny]: Right. That's a higher level need. That's more of a self actualization ‘need’ than ‘I want to be socially accepted and have friends and connections with people’, you know? Yeah, you’ve got to fulfil that first one.
[Pia Silva]: How so?
[Vinny]: Well, if it’s social acceptance, you can't wear ugly shoes, right?
[Pia Silva]: Right. I see.
[Vinny]: You have to wear nice shoes first. If it’s self actualization it’s like ‘I'm actually improving the world’ - everybody wants to improve the world.
[Pia Silva]: Exactly. So it has to tick the first box first. And then that needs to be an add on. That's great.
[Vinny]: Maslow's hierarchy. Absolutely.
[Pia Silva]: I 100% agree.
I don’t like it when a lot of small businesses will (and I don't think they're virtue signalling) randomly say ‘10% of profits go to this thing or that thing’.
Just get the profits, unless it's like a really authentic part of your brand.
[Vinny]: Yeah, so every company now has a mission. And all the missions sound like they're saving the world in some way - I think a lot of it is fluff.
But at the same time, why would someone go work for your business versus another business? You have to give them a reason.
We're all just selling things, trying to make a living but if you can get that self actualization piece ticked off, like we are giving away some profit, helping homeless people - why wouldn't that help?
[Pia Silva]: Vinny, I'm so happy to have heard this full story from you.
Thank you so much for sharing it with me. I've been so curious about what's been going on with you, as I see you in the periphery and on the shelves and stuff.
I'm so excited for you. So well done, congratulations!
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