Startups, CPG, Pitching and Raising Venture Money w/ Jason Hill & Shrimp Tank #scottsthoughts

Welcome to Success Story, the most useful podcasts in the world. I'm your host, Scott D. Clary. The Success Story podcast is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The HubSpot Podcast Network has other amazing podcasts, like NoStraight Path, hosted by Ashley Menzi's Babatunde. And by shedding light on the stories behind the shiny resumes, social media highlights and job titles, NoStraight Path aims to humanize success from the millennial perspective, featuring guests from all walks of life, NoStraight Path aims to inspire conversations around the nuance perspectives of success. Now, some of these topics at home, you're going to love this show. Success is all about maximizing happiness. An interview with Esther Akbaji about finding your voice. Success is communal with Yvonne Doc Aswad. Now, if these topics are interesting to you, make sure to check out NoStraight Path wherever you listen to your podcasts. Today, you're going to hear me on the Shrimp Tank podcast by I Heart Radio and FAU College of Business hosted by Jason Hill, Roland Kidwell, and Kevin Cox. We speak all things startup, entrepreneurship, consumer package goods, pitching investors, raising money, delusion, and basically anything else you could ever want to know about building a business from the ground up. Good morning, everybody. Welcome back to the Oz Digital Studio. We filmed the Shrimp Tank down here in Bogartone, Florida, in collaboration with the best university, the FAU, Adams and over Entrepreneurship. Oh my God, Kevin, I screwed that one up. Oh, that's great. Because Roland always saying, it's not FAU. It's a Florida Atlantic University. It always corrects me. Yeah, yeah. Well, you know, it's a very exciting week. We got a lot of stuff going on around here. Next week is Global Entrepreneurship Week, an entire week where we celebrate entrepreneurs and entrepreneurship. And we're kicking that off with a fantastic event called Ignite, Florida. There's a veteran's event on Friday evening and pitch competition as well as all day Saturday. And I will be there. I'd encourage you to come out and see me at the event. Say hello, witness some entrepreneurs who have crafted their pitches and will be pitching for prizes. And it's really just a celebration to kick off Global Entrepreneurship Week. It's a great opportunity to get out there and meet some fellow founders, some great networking opportunities. And right around the corner from campus at the Bogartone Innovation Center or BRIC, right? You can never find that place. It's hidden. It's like a hidden gem right off the highway, no one realize it exists. It's the largest campus in the entire state of Florida. 5,000 people go through those run tours every single work day. Yeah, it's a massive, really great facility, great venue. So we're looking forward to a busy weekend, regardless of the storm. I think we're the only people on this campus today. It's a little bit ominous. So for our guests, you know, it doesn't usually look like this. If they used loads over precaution for the storm, but we're here in the studio rocking out doing the show. Yes, and we will have the Shroom Tank podcast booth up at that event tonight, all day Saturday. So if you want to get on the Shroom Tank, come on down and we're going to be doing live auditions like the old days. We haven't done that in a while, Kevin. Yeah. How much fun that was and we have outbound microphones and people can jump into the studio for two minutes. Tell us about what they do. It's exciting. It was always fun. And we haven't done that for like a year or two. Yeah, we can add you to the list of factual guests on the show or we can throw you back. Absolutely. Well, uh, this is your first time tuning in. This is the podcast. We get to interview the best and brightest entrepreneurs from South Florida. Really fun. The do's and don'ts running a business. You want to catch all these amazing episodes? You get our website ShroomTankPotGuess.com. Of course, on Instagram, as ShroomTankVoga or Facebook Live every Wednesday at 10 a.m. So today we got Scott Clary. He wants his own podcast as well. And it's very similar. He actually interviews a lot of people about, you know, what they built, of course, and inspiring stories. And also he's the CEO of Omni Patch. So welcome, Scott. Tell us a little bit about your business. Our thing's off. So I appreciate you guys having me on. I appreciate you coming in when it when it does look like a storm outside, but you know, I've learned since moving down from Toronto that if it's not category, what three, four, nobody really, nobody really gets too stressed out. So I'm still acclimating to the South Florida climate, but I appreciate it. So a little bit about my business. So, you know, you listed two things there. So Omni Patch. So I'm still an operator in a company. Oh my goodness, I'm going to have to figure out who have to talk to because I'm going back and forth. So it's hard. It is like staring straight at. I am very used to staring straight. But okay, so let me just talk into the mic. So Omni Patch, which is a CPG company. It's CPG startup. My background's in tech. So that's even a little bit of a pivot for me. We can talk about that. And that's very early stage. That's only about a year and a half old. Raised to a half million dollar seed round. Taking that to market right now, direct consumer and through retail. And we're raising another round right now, which is more or less a bridge round. Because if you raise money, a five to seven million dollar round, which we're trying to raise, is no longer a series A in 2022, which is interesting. So we're trying to figure that out. So that's going well. And then also a success story, which is my podcast. So I've built an entire personal brand. If you look on social, it's mostly focused on the podcast. A lot of the content I put out is business podcast, speaking with entrepreneurs, highly successful individuals. Started that about four years ago. For the sole reason that I wanted to build a personal brand, I felt a ton of value in that. I felt that that brand could be used to leverage anything I do in the future, business or otherwise. I don't really sell a product per se. I haven't really monetized the podcast to the extent that it could be. But for me, it's looking at the GaryVee model, looking at the community he's built out. And then you look at all the companies that he can launch against that audience, right? The VaynerMedia, VaynerSports, VaynerWire, or EmpathyWines, or whatever he does. I was like, I need to do that. So how do I do that? How do I create a brand about stuff that I care about, which is sales, marketing, business, started a entrepreneurship kind of my life? And a podcast seemed to be a great, scalable way to do that. And also day one, nobody really cares who you are. So I wanted to bring in people who people did care about. And that would be a great way to get people to attract and start to listen to what I had to say. And the podcast made the most sense as an outlet to do that. So that's sort of a quick call notes on what I'm working on now. So tell us about the product. What is the product? Yeah. So the product is a TransDermal vitamin patch. So what that means is it's a patch that's on your skin very much like a nicotine patch. That product has been around for a while, obviously. But nobody's really tried to deliver much else through TransDermal. And I think I tried to figure out when I joined this company, because I joined this co-founder and CEO, it was someone else's main idea that I aligned with, and I absolutely loved. I tried to figure out why nobody's ever done this before. I think it's a bit of, it's definitely blue ocean. I mean, the tam or total dressable market for patch products is very low. It's almost insignificant. I mean, vitamin supplement tam is huge, but not patch per se. So I think that the tam is low. It's blue ocean. And people are in the habit of if they're trying to supplement anything, taking a pill or powder or vitamin or gum or something like that. So ultimately, the nutrition and supplement health, the wellness industry has been around for a very long time, and it's definitely entrenched. And people, you know, you go to your GMC, your vitamin shop, you can get anything in a pill or powder or whatever. So our goal is to change people's habits, which is a big, it's difficult to do. It's extremely difficult to do, but that's a problem we're solving for right now. But ultimately, the reason why we care so much is because a lot of the supplements that you buy are filled with so much garbage, a lot of additives. So when you do a TransDermal Vitamin patch, you get rid of all additives, so it's only active ingredients. And you can have it roughly an 80 to 90 percent delivery rate of the active ingredient versus if you take something orally and you're only getting about 30 to 40 percent of that active ingredient because it goes through your entire digestive system. Yeah, yeah, absolutely. And a lot of those molecules will not make it through the digestive system depending on what they're composed of. So actually, that makes makes a lot of sense to me. I'm glad you mentioned though kind of user behavior, consumer behavior. That is a challenge that you obviously recognize. It can be really difficult to change. You know, we worked on a project here with a great interdisciplinary team where the computer scientists utilize machine learning so that you could use like an iPhone camera to take a picture of a skin lesion. And it could sell with the 99.9 percent accuracy, whether or not it was cancerous, melanoma, right? That's incredible. Yeah. People still trust the dermatologist. Absolutely. Right. So the problem was they went into build an app. I was more on the side of like we should interview some customers and do like entrepreneurship. And they're like, yeah, we're just building an app buddy. We're engineers and scientists so we know much more than you. Nevertheless, they built an app. But you know what? People don't do when they see a new scary skin lesion or thing. They don't go, oh my gosh, look at this on my hand. I better get to the app store. No, not yet. Maybe someday in medicine and healthcare. I see a few projects that were probably a little bit before their time. But nobody ever does that. The app had seven downloads. It was largely a failed venture. Yeah. That's right. And those consisted of largely the development team and their family. It's because you've got to sell for a trust factor when you're trying to change somebody's habit. And actually, this is something that we're exploring in our marketing right now. So even with a product that requires a change of habits and a ton of trust, the actual person that would be the best advocate for that product, especially in that particular case, would be the dermatologist would say that, okay, it's funny that you mentioned this because I actually, I worked with creative destruction labs at the University of Toronto for a period of time. I'm not doing something insulting for startups there. And they're all very much similar story. So highly technical individuals and engineers, doctors that had this great idea, really no business experience to speak of, but they wanted to put this thing down to the world. And of course, these are highly vetted startups after a period of time because so many people apply for these incubator programs. They're very similar to a Y-combinator or any other incubator. And there's smart people, but they have a hard time understanding how to find product market fit. I don't even get their first 50 customers. So that's some of the stuff that I was actually doing back at U of T. But I think that the one thing that people don't understand is if you don't talk to your customers even ahead of time, you're just throwing, you know, you're throwing shit at the wall and hoping something sticks. And you also mentioned a good point like timing is everything to an entrepreneurship, right? So is it the right time? So we feel like for our product, it's starting to become the right time and how we're engaging as we are talking to customers, people are very health conscious, very health aware, especially post-COVID. And also, you do see some other very smart investors going into the space. So some of the competition that have been around for eight years are now just starting to raise money quite easily. So there is some momentum in the space, but it's still difficult. And even in the marketing activities, like we tried influencer marketing even on direct consumer, like, you know, paid Google Facebook, CAC is very high. So customer acquisition cost is very, very high. So how do you solve for that? Well, again, trust factor. So we found that even influencers on like TikTok or Instagram, it doesn't work because you can't convey enough information in a 30-second clip or in a static image to actually teach somebody about the product. So now we're working with YouTubers because you need that two to three to four minute explanation of the product. Makes actually bridge that gap. Yeah. Let's go backwards a little bit. I can tell you have so much knowledge around entrepreneurship. This didn't happen overnight. So let's start with your early days. Yeah. When did you first become an entrepreneur? Was it when you were five years old, selling lemonade? No. And where'd you go to school? Where were we brought up? And then kind of tell us your first chapter for school? So entrepreneurship started after, so I was always in sales and marketing. Okay. So direct contributor and then leader and then director sales and marketing. I worked for a large telco in Canada as a sales rep and I sort of moved up the markets and it was in tech and telco sales. They moved into a smaller telco and then got a more senior role managing sales in a smaller telco company. That company was sold to private equity. And that's the first time I'm like, shit, I wish I was on the cap table because I could have made some money. But the company was like 10 years old. So it's not going to happen. Obviously, but I was like, let me try and figure out how to finagle my way into an early stage startup leveraging what I know, right? And I had a decent amount of sales and marketing experience at the time, not building from zero experience, but enough that I could, and that's actually when I started working with entrepreneurs as a consultant. And I was like, listen, I know enough to be deadly, but I spread myself too thin. I was working with two other partners. We're trying to figure out the consulting game. It's very difficult. What time frame was this around? About five, six years ago. Okay. Five, six years ago, when we started doing consulting work. Okay. So that was very difficult, but that was the first foray into entrepreneurship because we're building a consulting firm for ourselves. And then we're also doubling down by working with a whole bunch of pre-revenue entrepreneurs, which is very hard, right? It's exceptionally hard. When you're going after a group of people that are have no money, are it's a terrible customer. I do less consulting, probably just more volunteering because they are so cash-strapped most times. So it was a risk. It was like, okay, so let's negotiate a bit of equity for a fractional CXO position. And then we'll work with you for a period of time and we'll have some retainer clients. But it's all betting. It's almost like VC without the money and putting all your time towards it. So it was hell. So I stopped doing that. Yeah, yeah. I've got a fair amount of small proportions of equity and any, quite a few failed businesses. So the value is absolute zero. It is very interesting how many people do what you've done, though, which is like go in thinking, oh, I'll just start taking a small piece of every company and then realizing how hard it is, because you have to give yourself and your time to every one of those brands. And then eventually it's so hard because miles of them never even reach capital. Right? They're gone within six months or a year. Exactly. Founders know what you thought. Sometimes they'll turn to a good business and a kind of a lifestyle company. And I mean, there are some things you can try to do. But like, your equity really becomes illiquid, right? There's not going to be a liquidation event. There's not going to be a clear exit. There's not going to be, there's no open market to really sell those shares. You can try to talk to owner into taking them back, but like they may or may not be incentivized to. So even if it's like, I'd say success, right? Like for the founder, that's great. You know, they're making a couple hundred thousand dollars a year maybe, but like it just can't scale. That, that is problematic position. It's super problematic. I kept those little shares just sitting there. It's like, okay, but they're not going to sell it. They're not really going to like pay out dividends. If they make more money, they should just give themselves a bonus. Like they are the one with that. That is work. And that version of entrepreneurship, the going into, I mean, like I was working with two other people that were good friends that were very senior that also just worked in companies that wanted to jump into building their own thing. So we built the consulting firm. That was like the easiest way to segue. And we went all into it. And it was absolute help. And you know, you still have your retainer coming in, but you, we were, we had really good retainers from some of the clients, but it was still, you know, you worked your eight hour day and we made the mistake of working on site at some of these clients pre-COVID. So then you can't be working on other clients. You can't even be prospecting. You can't be posting on social when somebody's paying you a really good retainer to help them out. So that's when I doubled down on one company. I joined a CRO. That company was acquired. That was my, that was the first real growing company from a very, very early stage to exit. We were bought by a company called Grass Valley, which is a big broadcast company originally from California, now based in Montreal. And that was a broadcast SaaS company. And that was acquired about two years ago. And that's around the time after that company was acquired that I decided to join on me as CEO. And then what about the personal branding? Were you doing that the whole time? I started doing that when I joined the CRO because I didn't, so the thing was I tried consulting and going 100% on to partnership and it sucked and I was burnt out. And I didn't really know what I wanted to do. So I'm like, listen, at least if I, I'm a non-technical individual, I'm a sales and marketing individual. I have some experience. So if I join the CRO, I know how to take a product to market. I know both on the demand gen for the, the B2C side. Plus I know how to move up market to larger enterprise deals. So I was doing that for a tech company, but I'm, I didn't have enough passion for particular product to start something myself. I'm not like a product founder. So I'm going to leverage my skills and get a seat at the table in an early stage startup that works for me. And then at the same time, I'm going to build a personal brand so that in the future, if I choose to launch something, I'll have this audience I can launch it against, but I didn't know what I wanted it to be. So I never started a company myself from scratch except for my personal brand outside of the consulting, which I wouldn't really say was a success. Yeah. Well, and that's a really kind of nice story. Sounds like some things are starting to fit together. So let's, let's go back to race fast forward back to the present because I'm still real curious about this product. So there's an absolutely wide world of supplements. And I'm here to tell you people and most of them don't do anything except for create very, very expensive urine, which you know, I don't know that there's a market to do anything with that. It literally just usually goes down the toilet. So if you're more curious about that, a good resource online is examin.com. A lot of meta-analyses, right? Studies of tons of studies where you can see there are a few supplements that do make meaningful differences very much. So depending on what your goals are and your effort. So given there's a wide world of that stuff, what are you looking at first in terms of the actual supplements to be just deployed via this unique and kind of newer mechanism? Yeah. So that's the thing, right? It's a CPG company, but what got me excited about this is it's a tech company. There's innovative IP that really hasn't been done properly yet. So you made a good point. A lot of supplements are wasteful. And if you take any hardcore multivitamin, your pee is neon. You know what happens after it. So that is the exact reason why this is a great supplement, a great company for the world, because when you have an active ingredient, a vitamin, mineral supplement that has a certain molecular weight, below a certain molecular weight, that passes through your skin at 90% efficacy into your bloodstream. Yeah. So that means that you're not wasting it. So there is a huge market for supplements, but most of that stuff is garbage. And even the fillers are garbage. And the fillers are just not great. And if you actually look at peer-reviewed PubMed studies, if you took many supplements that have very accepted fillers and you took that over a significant period of time, like like 5, 10, 15, 20 years, a significant portion of that audience or that sample, there's carcinogenic effects from taking even very basic fillers over extended periods of time. And this is documented PubMed stuff. So it's not great to put all that stuff into your body if you don't need to, especially every single day, one, two, three times a day for extended periods. So we're trying to solve for that. But to your point, how do you bring this product to market? So we don't want to overcomplicate things. Also, when you're bringing this up in product to market, you don't want to have to deal with the FDA and go through drug approval. So you could, in theory, put any type of drug in this product as well, but that's tons of money in time. So what's the MVP for a product like this? So we put together these very basic consumer skews. So energy, which is a very, like, you know, that can be strict with five-hour energy or a red bull or something like that. And an energy patch, hanging over patch, which would compete with a liquid IV. We have a sleep patch. We have a relax or stress relief, which is almost like a beta blocker. They have different active ingredients. We have an appetite suppressant and a thermogenic, which is a weight loss patch. So these are things that people are already buying. Yeah. In a supplement store. And this is the easiest way to shift a behavior. Just give them something that is, in theory, a little bit easier for them to use. Obviously, there's a mental hurdle there for sure. But once they try it, it's easier to use. There's a couple benefits because you do have the increased supplement delivery or active ingredient delivery. And then you also have the fact that it's a delayed release for the actual active ingredient. So if I have an energy patch and I put it on the morning, that can last for eight hours versus having to worry about a coffee every two, three hours or whatever. So that's how we take it to market. We sort of, we replace things that people are already using in their everyday life. Yeah. It does sound like some really reasonable kind of combinations of options. Very popular. Yeah. It makes a lot of sense. I'd love a couple samples. Of the energy one. I love this. I really wake up in the mornings, forget about Starbucks, there's my energy one. Throughout the day, I need something else to get clarity. I throw that patch on there. I can't go to sleep because I got an anxiety from doing too much the whole day. I throw the sleep patch on. So based on what your Starbucks cup looks like, though, you're just, you're going to need the energy one, too. You'll have to actually develop like an equivalent to a cup of sugar one. Yes. Because it seems like that's what you've selected from the menu there today. Look like the Starbucks logo there. Yeah. I'm like, Oh, it looks like Starbucks. I get that one. Do you have how many do you currently have? How many how many excuse? Yeah. We have 10 excuse right? Yeah. And is there one that just does a lot of that in one? So just one through that all day or no, we don't do that. So we so we have a multivitamin patch. But that's that's just pure multivitamin. So it's a mixture of vitamins you get in like just a vitamin, a multivitamin off the shelf, right? Yeah. Did you listen to what they were? Like one was for sleeping and one was for energy. You can't put all these all in. You see these multivitamin on loose in your mind. I just saw one yesterday. Me and my business partner, we were literally looking on TikTok. There was one that did it all. It's like, I wouldn't trust that. And they're like, I don't know. I can see what I'm talking. I know how I know how by all of you are. I'm like, this is too good to be true. I like stop it. Right? I had like two million likes and comments. It works. It works. But it's all be yes. You know, some influencers pushing that and there's big following they have. It's just commenting that it works. And we know it's not real. Not everything could be like, you know, giving you energy, you know, removing your anxiety, your sex drive. I mean, you see everything. No, that's not healthy. If you're putting all that stuff in one, now what you could do, which is actually, you know, you think about how to take a product to market versus how you could scale a product in the future. I mean, like stuff like almost doing, they have these custom supplements that you can now order where you do like test. I think I think it's like, maybe it's like saliva or blood or stool or some kind of test. And then they give you a supplement or a pill set based on what your body needs. We could do that in the future. That'd be a lot of fun. But I mean, right now, it's just again, it's solving for how to pay to the market, how to make significant, meaningful revenue. Lots of evidence of success too. In just those like multi-vitamins or vitamins and minerals or even, um, servings of vegetables, you know, one product that says really, really done well is is AG one, you know, not a sponsor or anything, but it's kind of, they do sponsor a lot of shows though. Yeah, no, they sponsor myself. Yeah, I'm not surprised. So I mean, it's a great product that can make sense. I tend to eat pretty healthy myself, but like when I travel and go on the road, it's really convenient to make sure you're still getting that stuff. It can be tough to get like fresh fruits, vegetables, all the stuff you need. Like it's just a pain. Like I'm not gonna go to a public and get a whole order and try to stop it and it looks how lazy we have become. I have become not gonna go away on a truck and walk into a food store and walk out with a couple of vegetables in six minutes. No, more than that. It's like, I'm 99 will have a job at your location now. You don't have to go out. You got a Uber. You got all that. Sometimes the mini fridge is tiny or there's not even one in the room. So it's like, well, I can't get anything cold. I would agree with you on that. It's BS when you get there and the fridge is like full of stuff. You're like, what is this going to do? You can go to the grocery store. And if you go to Vegas, if you even walk close to that, if you walk close to that fridge, something's going to move and you're going to get a charge on your bill. So you have to watch out. You do. But I will say the one market I would, I see this really working is the hangover patch. Yes. Because a lot of hotels that I've been in have little hangover bottles and I was curious. I drank one and I know probably didn't do much, but I was curious. And when you're hurt, you'll do anything. You'll eat that four pound burger. The next morning, bloody marries. But when they start placing those in the rooms, logic is out the windows. I don't like, well, if this is going to take this headache away, I'm in. And in places like Las Vegas or Miami, so a huge market for that in these hotels and a lot of profit margin for the hotel themselves. 100%. So you got to figure out, I mean, this is an entrepreneur problem, how do you take the product to market? Sure. So we first started. And also I had to understand that I'm not, I'm going to protect background. So I'm great at sales and marketing. And I'm also great at hiring people that are great at things that I'm not great at, which is probably the most important skill is any sort of CEO or founder, right? How do you hire somebody that, you know, compliments your skill set isn't just a carbon copy of you. And I found a great trade market or somebody who's working CBT for a significant period of time, a great VP sales who's working CBT for like 15 years. So that being said, found a great team. But now we're trying to solve for the fact that it is blue ocean. And blue ocean means customer acquisition is very expensive. So we're actually slowing down on the direct to consumer side and focusing more on the retail side. Because it takes roughly about the same effort, maybe marginally more to convince a buyer from a CVS or a public or any sort of store to take a shot on us as it does convert a somebody who's coming to our website for the first time, who's just a consumer. So I mean, that's another great entrepreneurial lesson, like how do you take your product to market? You have to test a whole bunch of different things. And if it doesn't work, then what's your next strategy, right? We could do a BD strategy. We're partnering with all these different hotels and and whatnot. We haven't done that yet. Just bandwidth. That's really it. But it's smart. Just follow all the kids at FU college, show the front party. Yeah, that's true. It's sudden give all the fraternity brothers all the patches and all of a sudden, yeah, on the reorders keep coming along. But again, that's direct to consumer. We're going to take a quick commercial break to hear from one of our sponsors when we get back. We're going to jump to our hot or not segment of the show. Look, Google is smart. But owls are wiser. Instead of spending an hour sifting through ads and click the BS, get the answers you need from qualified experts immediately. What is owl? Think a best of addition of Google, Camio and Clubhouse all rolled into one app. Owl is an app where you can get advice through secure private live voice calls tailored specifically to your questions. And all in real time need marketing or PR advice. Owl it. App or software development. Owl it. Healthcare investing social media, grant writing, education. Owl it. Coming soon. Owl one on one with sports legends, singers, actors, celebrities and more in real time. That's super exciting. Who? Owl. That's O-W-W-L-L. Two Ws for twice as wise. Two else because you'll really love it. Owl. Connect. Learn. Grow. Now available for Apple or Android. Download Owl today on the app store on your device. Hey everybody. Welcome back to the Shroom Tank. As a reminder, check out all these amazing episodes up on our website. Shroom Tank podcast.com. And if you want to speak to Scott himself, you will be on the owl app next week. He's going to download it, become an expert. And how cool is this? We're the only podcast out there that you listen to this show and then you can connect to them one on one over an audio call, pick their brain in more detail about the project you're working on. And Scott has so much knowledge about entrepreneurship. So 100% worth finding an owl, search for his name, Scott Clary and connect to course 101. So Scott, this thing is going to show. It is called hot or not. We're going to ask you a question and jump in why you believe it's hot or not based on your experience. Let's go. So let's talk about raising capital for a set. Look at Lincoln laughing. He knows I have no question ready at all. He's like, where's he going? Where's he going? I messed it up. Now he's really messing me. So raising capital, you know, do you think it is hot or not to go out and just spend 50% of your time just going up all these pitch competitions because we see so many startups. And that's all they do. It's just like pitch competition, pitch competition, pitch competition, and it's a hard balance, you know, when you're running a company as CEO and then just always fighting to get more money versus focusing on your consumers, the marketing strategy. So just pitch competition general, you know, 50% of your time plus hot or not. That's not hot at all. So explain why because a lot of entrepreneurs that are startups, they seem to like that's all they do. They master the pitch and it's like it's such fluff then behind the scenes. Yeah. So raising money is a full time job. Yeah, I would say it's more than 50% of your time. It's very, I hate pitches as well. I don't like pitch events. I like, so I use a tool called Brief Link and then I'll use some sort of tool to and I'll use like crunch base and I'll find investors that have invested in the same categories of me and then I'm running campaigns against those investors and I'll understand at what stage I'm at, how much money I'm looking to raise. If those family offices high-know-worth individuals, VC groups, have invested similar amounts of money at the same stage in similar kinds of companies and that's what I do to raise money only because. Yeah, because, okay, so often people go to the pitch competition and there's like five investors in the crowd of a hundred, right? And then the wrong people for your brand and then they're just giving you bad advice. They're like, oh, well, you know, I really don't see the solution you're solving or the problem, right? And you're going after the right ones that see it clearly, the right part know the category. You're being a pro-laption versus, it's actually funny when it comes to marketing, everyone says, don't just grill a market and throw crap everywhere but when it comes to pitching, that's what everyone ends up doing because it favors the angels and the VCs, but you're doing it a different way. You're saying, no, this makes no sense. I'm going to do the same marketing method that we've always been targeting. And itch market and target. Have an ICP, have an ideal customer profile for your investor, have everything lined up the same way you target a customer, like you said, because it's just a waste of time. So, yes. And then I went listening, would you recently had raise link on and that's exactly what they do. They created AI technology to point the startup founder to the right investor, which is a waste less time for everyone. And also raise more money than you need because you can even tell the investor who's putting money in. They don't want you distracted. So raise more money so you have two years runway so that you aren't looking to raise money again in six months. And any qualified investor that they're doing will not want you to be distracted raising money again in six months. Raise more and raise faster right now given current economic conditions. Some of those funding have already started to try it up so I didn't encourage people to do, you know, around they may have said six months from now, just do it now if you can. Some of these startups are in a really strong position and they can do that. They have follow on investors and say, well, let's do it now, just in case, you know, if I had an addendum to that, an appendix, whatever. You can also use an investment banker, which is probably going to cost you about 10K a month for a max of up to about 50 to 60K. It depends on obviously where you're at in your company. But if you can, outsource it because they have the relations and I don't think people think about that unless somebody said use an investment banker. But if you can allocate 60K plus a percentage of your raise, it's like zero time on you. Yeah, that's absolutely true. Typically for a little bit later stage to have those kind of resources, but if it's an option, it's definitely an option worth looking at. Now one caveat and alternative perspective when it comes to pitch competitions. I generally agree except there's one case in which I'd absolutely disagree and go the other way. If you're a student and particularly cash strapped, pitch competitions should be right in your wheelhouse all the time, all day, all over the country. Pitch competitions have become a reasonable way to raise money for a startup, particularly for college students. EFESC is with $240,000 TCU, $100,000. These are big prizes, these are non-deludive. Hey, hey, you might be able to win 100 grand and give up no equity. Yeah, they're competitive, they're time consuming, they're tough, but a great school. Like at value, the great entrepreneurship ecosystem will cover your cost if you become a finalist because you make us, me in particular, look good when you go out there and compete and win. Again, some of these schools that are perceived oftentimes is more elite. We had a guy named TCU and they split him up into brackets like the March Madness. In his bracket, he was with a Medtech from John Hopkins, Harvard, and somebody from Southern California as well as Stanford. And then FAU, not bad, right? So we like to do that. I encourage students to do that. That's a great opportunity for students. If you have the right type of technology or solution, many of the ones you alluded to, sometimes it's the folks that I like to say do entrepreneurship backwards, they build the thing and then they're like, nah, I gotta find some customers. I gotta find that Dr. Cox guy. He'll know what to do. And it's like, you already built a thing. That's okay. Depending on the type of technology, pursue grants. Okay. The National Science Foundation supports innovation to an extent that largely overlooked by all media in the entire country. But some of the most successful businesses on the planet are built on platforms developed by NSF. I don't know, like the internet and things like that. So they do fund basic research, particularly innovative research. And that is in the form of grants, SBIR, CTR. These are reserved for specific technologies. You have to make sure you're a fit. You could do our NSF iCore program that we host here at FAU. Sign up for that. If that sounds like you learn more about the process and going to get those grants, grants again, non-deluded funding. And there's a lot of money out there in that space as well. However, it's reserved. Like you may or may not be a fit. It is also time-consuming, but maybe the first to tell you, once you do the one grant, if you do a really good job, all the other ones are just fancy cut and paste jobs. I write grants myself. I pulled in as of the end of this year, 2.2 million to FAU in the last five and a half years. And it was really hard to write the first couple. Now, not so much. That's good advice, yeah. So let me ask you another hot or not getting back to that. So you did try. It sounds like you're still doing. You're doing a little bit of both at this point. Which one's going to be more successful direct to consumers. So subscription model, not or not. Very hot. I mean, it helps everything. So you have you have you have less churn. You have you have a higher LTV lifetime value of your customer. So churn is you stop your customers from leaving lifetime value. You're increasing the dollar value every customer gives you. Also, if you have predictable revenue, that can help your valuation if you're going to raise money. Yeah, no, absolutely. And we do do subscriptions. Kind of a set up question, right? I knew the answer to that one, but it's good to point out for founders out there. If your models will suited for it, supplements are, you're generally going to use the same amount of XYZ each kind of month, right? If you need energy each work day or certain days of the week or maybe you need it on the weekends, because that's when you really like to turn get loose. Hopefully you don't have a subscription for weekly. Yeah, like I don't want that. You can have that. That's why you see energy example. That would be a lot of maybe make some changes there. Hydration is key too. But yeah, I mean, I do like to tell my students those fantastic and phenomenal for business owners, not always great for consumers. So, you know, I like to teach the amount of each smart consumer. And not everything you want to have is on a subscription there. It's a subscription for anything you could possibly imagine. It's getting out of control. Yeah, it's getting out of it. It's like certain things. I just don't need to be on subscription. It's going to Amazon and set your subscription. No, then you're going to stock company that has finishing raise. It's like, okay, that might be like a cute gift, but it's like, okay, it's not too expensive in 1999 a month. You get some real fun dress socks. It's like, okay, but then four years from now, you ran out of room in your drawers and you spent $2,000 on socks. What? Hello, people like their socks. And I can I also there's a lot of people love feed out there. We're going to come up if you're going to do subscriptions. I stand behind this because I came from a software world and we had we had subscriptions as part of our software, obviously. But make it as easy to unsubscribe as it is to subscribe because I think consumers are just over the BS of getting locked into subscription that they can't get out of. I'm like, the only one that feels like every time I'm unsubscribed, I get to 10 more somehow. Like my email just don't stop. I cannot unsubscribe. I'm trying. I've given up. I think there's a little thing on the back in it's like, as soon as you click unsubscribe, it clicks. This email is now for sale. Yeah, to everyone. Something. I'm like, what do you mean emails? I mean, actual subscription, but yeah, so also even. I know what you meant. Yeah, absolutely. So what about, you know, partnerships with some of these, these box companies, like boxy charm was on our podcast. And then we also had single swag. Single swag is doing like 50,000 boxes a month. And, you know, of course, it's hard to get into the boxes. It sounds like it's a great marketing strategy. Oh, I'm friends with that individual. And I know your friends, the CEO of boxy, the past CEO of boxy charm. I know he exited, but like, is it really worth it? It's like influence or marketing at the day. You have to play to pay to get into that box. And it might not be worth it at the end day. So is it hot or not to partner with these types of box companies in your opinion? I think it's hot as long as it doesn't take away from too much of your other marketing activities. So we are in boxes. We went into we went into Ipsy that actually purchased boxy charm. We went into health box. But that was I told my my CMO just shoot an email. Like don't spend a lot of time on this because it's like a it's a brand awareness play. It's not a performance marketing play, right? And some of the boxes we paid to be in some of the boxes paid us some of the boxes we sort of broke even. But it can't it's sort of like a I classify that as not sales or marketing, but I classify that as BD as business development. Same thing as if you're getting into hotel. Is that it's not really a sales or marketing play? Like some hotels you'll pay to get in some hotels they'll pay you. It's unclear. Which is very important for everyone listening to understand. So often we're like, oh, if I could just get in that box, they're sending 50,000 of them out. I'm like a dollar on each one, but it's like it doesn't work like that. No, it doesn't. They know that number and they're not going to let you get in there. And then all of a sudden it's all free branding. Of course for your for your company. Yeah, I absolutely agree. You just kind of think about your whole business model. Somebody had bought me one of those like men's kind of basically in my demo boxes where they just send you cool products. And they were cool products. And I'm sure those products had to be steeply discounted to get in there. And I just couldn't understand like enjoy the thought of the products were very cool. That was what they were designed to curate this and that. But I'd get them and be like, okay, but this company has like three products. And I have this one. I'd never buy the other two or some companies might only have one product. It's like, wait, but now I have the thing. Like I also have the awareness, but I have the thing. And you probably didn't make any good money because you had to beg and plead to like it in the box to get your thing out there. And it's like, how's it going to work, right? Whereas something like yours, you can have recurring revenue, repeat customers say that batch was really good. Where do I get more of these? It makes a lot more sense with the business model. These other ones are just like, yeah, this is a really fly money clip. And that's all you make. It's like, yeah, okay. And it's carbon. And you don't own the customer either, which is the biggest thing, right? You don't own the customer information. No email address, no communication. And it's like, I don't need a money clip subscription. Yeah, exactly. One's going to do it pretty much. And now I have the one. So it's just keep in mind, business models are complicated and each little piece has to fit together with all the other pieces. And that's what makes it tricky. Nothing is independent. And he says I'm very important. You don't own the information. And a lot entrepreneurs put all their eggs in one basket. They go all in on Instagram and all of a sudden, the count gets hacked. And then what do they do? Yeah, right? They don't own the info. So I think a lot of people realize in going back to those traditional strategies, building an email list, right? So always have a newsletter going out and should one, you know, go down like, like Instagram. And remember, Facebook did that that time and went down like, people were crying that day. They're like, what am I going to do? I can't get in. I was like, really? It's like, you're your business has impacted that much. It shouldn't be. It should never go down. Well, we're going to take a quick commercial break to hear from one of our sponsors. When we get back, we jump to our plead the segment of the show. Insurance companies, it's time to step out of the past and into the future with Oz's latest solution, Rainmaker. Reduce 10 years of human work to merely days using intelligent automation to process contract and claim entries, increase job satisfaction, productivity, accuracy, data insights, and ROI while decreasing the time spent on projects. It's a no-brainer. Follow the hashtag, make it rain on LinkedIn and Twitter, or visit followos.com forward slash Rainmaker to learn more that F-O-L-L-O-W-O-Z.com forward slash R-E-I-N-M-A-K-E-R. Hey, everybody. You welcome back to the Shroom Tank. As a reminder, catch us on Instagram, watch all these clips every week, hashroom tank bokeh. Of course, we're on TikTok even these days. So, Scott, on this segment of the show, it's called Plead of the Fifth. You can only leave the fifth one time. And after that, you have to figure out how to answer those questions, so you've been on a lot of podcasts. What was the worst one you were on? That you just have to have a horrible experience. I can't. Oh, well, you need the fifth on the first question. Why was it so bad? What did they do? Was it salesy? Do you see a lot of podcasts that they invite you to come on? It's like, was this a pitch to get me to buy the product or this to share my journey? Right. Actually, is not naming a name pleading the fifth? You have to answer. I can't tell you. You have what you're, all right, because I don't want to throw someone under the bus. That's not fair to them. I support creators. So, I'll have to, don't make me throw anyone else under the bus. And I will plead the fifth on the name, but that's it. Okay. But the worst podcast that I've been on, yes, to your point, the person was trying to sell me on coaching services before and after the show. Yeah. And that it was, it was absolutely like cringe. It was cringe. And I get that everybody has a hustle, but it was before the show, too. So he was like, team me up for the fact that he's going to try and close me on a coaching service. And it was like, I don't dislike Tony Robbins, but it was like a Tony Robbins-esque coaching service. I'm pretty sure it was like an affiliate or something. And it was just like, I'm going to use this as a hard sale, but I'm not against somebody building rapport on a podcast. And if there's something that comes up in the conversation, you're like, oh, that makes sense. This is actually what I do as well. But you could tell there was no sign. We see that a lot today with I think two million plus podcasts, you know, there's so many that are learning like, oh, you can use a podcast to build your business. And then it's kind of like when LinkedIn also you started getting all the bots coming out, sending messages out, and then people are just doing it incorrectly. And they don't realize like, that's not the point, you know, of a show, you know, let it naturally happen to people talking. Yeah, be normal. Just be a normal person. And trust, if you're a normal person, build rapport, you will get business in some way or shape or form or a connection or something that you need. And then to piggyback that, have you had people kind of, you know, try to steal your likeness, you see that with a lot of shoes, right? Oh, you have a big personal brand right? And they're like, oh, if I get them on there, then they're over posting, right? They're like, you know, you saw that the last guests, they did two posts. But then with me, they're like, there's 25 posts out there. So there's one really on here. You sign rights to share your post and not your post, the podcast itself. And we see that a lot as well. It was like three or four tweets per day with clips. And I'm like, bro, like I retweeted like the first two or three. And I'm like, I can't keep up with you. You post more content than I do. I mean, Gary will say, who cares? Let them, you know, super fan, let it lie down. Yeah. Yeah. I mean, you just got to paste it out a little bit. Yeah. Super fans find it uncomfortable. I know what you mean. All right. So for those listeners who've been listening a while, they know I work with so many startups like you did at one point in time as well. And it's actually an excess of 500 at this point if you can believe it. So I have some fantastic stories. Then I like to stitch them into my teaching. They students saying, you know, I got a story for everything because at this point, I really do. Based on that and my knowledge and now learning this about you, I know that you probably, at some point in time, worked with some ridiculous startups. Just a crazy idea or a terrible idea. But maybe it was in the early days of consulting and you were like, well, client to client, you never really know if they're going to be successful even though this one seems ridiculous. What's the most ridiculous startup you worked with? The most ridiculous startup that I've worked with. I think the most ridiculous startups that one in particular I've worked with was somebody that was trying to be everything. So he was trying to start a media company, like a legacy media company, and he was also trying to start a marketing agency, and he was also trying to start some sort of, he thought that day one, he could start like, I don't know, some Bloomberg-esque startup incubator from his parents' house. And it was just, yeah, so a lot. I've had some stuff come in. I go even further when I'm instructing entrepreneurs. It's not even just like one concept you want to start on. You want to start with one customer, one channel of distribution. You know, if I had other startups say, you know, I have eight clearly defined customer segments, and I'm like, that's great. It sounds a little more like zero, but yeah, what's the best one? Because we'll start there. We don't want to do eight. I remember somebody's pitching to get into tech, runaway, and I ask them, I don't understand exactly your value proposition. He would have done me a straight face and said, well, that's probably because I have 11 distinctive value propositions. And I was like, I should finish you. Okay. Whoa, whoa, like, well, what's, so I just, you know, I mean, straight back and said, well, what's the best one? Yeah. And none of the idea, none of the ideas, I mean, candidly like building a marketing agency, building a news org, they're all very difficult things. Like, there's not things that I would recommend. I mean, it's very saturated. So already, you're not starting off on the best. But if you wanted to, if you were passionate about marketing, you want to build a marketing agency, and that's what you feel like you're calling is. Okay, fine. But like, hyper focus on what's the first iteration of them? Like to your point, what's the first iteration of the market? Because you're not going to be a brand, an SEO, a face, a social, a video market, like, you're not going to be experiential marketing. Like, you're not going to do all these things. You're going to hyper focus. And you're going to get those clients from one particular activity in marketing. Yeah. And I encourage people who do want to go to marketing or digital marketing. What I've witnessed is the evolution of specificity and kind of, you know, very, very specific solution. Yeah. Right. So I tell people consider it one tiny niche specific industry. Be the best at that. Think sure it's a national one whatever it is. We've had somebody on the show that built an extremely successful businesses. And really, very initial niche in corner was like dental offices. There's enough dentist. And now they know that so well, it's industry specific, it's solution specific. They have this niche. And digital marketing has evolved. It's like, it's totally different strategies and techniques and services and software suites that you're going to need based on the kind of business. You can't be a one one hat. Like, yeah, we digital market for every service. It's like, okay, then you probably don't do very good for any service or products. Like, it's going to continue. I predict to continue on that route where it's like, you will want to hire someone who knows how to market a dental office explicitly. And if they're the best in that and that's all they do, they're not dental offices out there. Trust me. Okay. Let's talk about failures for a moment. Every entrepreneur goes through situations in their past they regret. Obviously, it makes you stronger in the future. But in the past six years, looking back, like, what was it? When it comes to a failure financially, right? What was something that you did and you placed that bet, you know, incorrectly, you lost a lot of money. It could have been a marketing, you know, objective that you were going down, like, influence or marketing, for example, but every, every entrepreneur always remembers like, oh, I really screwed that up. What was it? Yeah. I mean, like, obviously, unlimited things that I've done have been screw ups. We all do. If we go through process, like if I think of like the biggest things that we've screwed up and I've screwed up, when I started that on me, we had a $50,000 a month agency we were working with. That was shit. That was horrible. I mean, that's a lot of money. So that got you say agency for marketing. It was a marketing agency to get the company. So, yes, so that was a bad call. I inherited it. So it's not a hundred percent. But it's still like, I let it run for a period of time. That $50,000 that was a line for pre-revenue cheese. Oh, yeah, it was not good. So that was really bad. Good for them. Yeah, they do well. I see their company. I see their company get together and they're and their trips. They're doing quite good. What else? Man, I haven't thank God. I haven't had a lot of, like, I mean, because, you know, I'm still, I'm still young. So I haven't had a ton of like angel investment failures. Yeah, but talk to me in a few years. There's some money there that will not be any more in a few years. I'm trying to think what else. I mean, if you talk about personal financial, a funny one, which is not so funny, because I was like very broke at the time. I had put I had put $10,000 into Bitcoin and and I didn't actually lose it because the market, it was like not a sick little thing that caused me to lose the money. My account was hacked. And then so what was happening, it was like early days Bitcoin and they, somebody hacks accounts and they do a whole bunch of buys and sells to try manipulate the market and they do it with other people's accounts with active money on it. So my account went from like $10,000 to $0 and like 24 hours with BS trades. So at the time, that was like all the money I had. So that was pretty significant, but that's not really a business issue. It's just a and the early days, that might have more than $100. So that was annoying. Yeah, those are probably, like those are too notable. I mean, every company, like even even my last company, Excitem, the software company that was sold, because of COVID, it wasn't really, we didn't lose money on it, but we iterated on a product like four times through COVID. So we had, we had, there was a couple different products we had. We had a polling product that was basically like, it was something that you could use for like classroom polling and whatnot, but we could also use that for, we could use that same product, we could repurpose it for news and broadcast. So we were and then we launched this huge campaign to get it into stadiums for like half time shows right before COVID hit and we lost about $500,000 in RFPs because we spent all this time at energy hire and enterprise sales rep to sell it into stadiums across the US and then COVID hit and they're like, we're not. That was hard to predict. That was a life time situation that, you know, a certain business like you run a gym, like what are you going to do? Exactly. Yeah. So then we actually pivoted and then what we did is we took all the products that we had and then we end up creating a cloud solution for broadcasters to actually run remote production. So that was a nice little pivot and segue, which allowed us to actually sell the company. So it actually worked out well. But I mean, that was a lot of stress at the time. And most importantly, you pivoted a lot entrepreneurs, complain, don't pivot and then go out of business and then blame it on others. Yeah. Well, we were the stadiums are not happening. So we felt like we had to figure something out. All right. So what is your long-term goals and preference for the company you're working on now with the supplements, right? So you're going to build this, this is going to be your legacy, build it, keep it forever. Do you hope to exit as soon as possible? Yeah. I want to go for an IPO at some point in time. So hoping for angling for, I know it's early for us. So you have investors so you can't keep it forever. That's, it's will not be happy. We will probably look at an acquisition event in the range of $70 to $100 million in annual revenue. That's probably when we'll start looking because the investors they they have built successful business before. So they're not looking for a small exit. So we'll look for some multiple on that. And that's when I think that we can start at that point is when larger players will start to notice us. So yeah. Yeah. And there's plenty of those in that space. I mean that that is probably I'm trying to do that in five or six years. It's not going to be easy, but it's not impossible if things go the way we want them to go. Well, that would be extremely impressive. I tell the founders that I work with is typically like you can do this pretty fast. You can be an overnight success in seven to ten years. Yeah. Takes seven to ten years. Exactly. That's an overnight success. That's an overnight. No one wants to wait seven. So we're on TikTok time. It's like I would say one year. We want to be in a Lamborghini in one year. Come on, Kevin. No one wants to wait seven to listen, man. No, but the thing is like, okay, so you talk about seven to a hundred million, which is a big business. But you're heavily diluted. You're heavily diluted at that point as well. Yeah, but people don't see that. Yeah, so it's only 10 to 30 percent at that point. Yeah, at most, at most, depending on how much money you raise to get there. But the goal is if we do retail well, then we can achieve that. Yeah, because a retail order can start very easily be one, two, three, four, five million dollars per retail outlet. Like for a Walmart, five million dollars is not a big retail order. Speaking of, what is the, what's the shelf stability of the product four years? Okay. Yeah, that's good. Yeah, okay. Yeah, that's good. Awesome. Well, well, Scott, thank you for joining us here on the Shroomtank today for audience listening. How did they get in touch with you? They can check out any of the social at Scott DeClarity. Scott DeClarity.com. And yeah, Scott at Scott DeClarity.com, they want to email me questions. I read everything. So, and they want to talk to you. They go right to Howell, of course now. Now they go to Alia. All we up there later today. Well, everyone listening. Thank you for listening. That next Wednesday at 10 a.m. Yeah, it's all real. It's life's all that it seems. All the chicks dream. All the dudes yeah, this is just what I do. And I do it well with the flow fresher than the new shoes smell. So with blue hell. Well, homie, keep going. You know the saying you can reap what you're so in. So, so I don't chase girls. I just chase dreams. Play the same game. We ain't in the same league running a campaign. You won't be 2016. It's like you from the time put me in charge. I'm a general from the front. I'm a lady charge. I'm a federal fellow. I'm a land.