341. I Didn't Make the Decision. I Still Paid for It.

0:00I didn't make the decision, I still paid for it. There's one decision that changed almost everything for me, and it's why helping mission-based brands thrive is so personal to me. Let me explain. I didn't make it, I fought against it, and I still paid for it dearly. Have you ever been in a car accident where everything moves in slow motion, and you're completely at the mercy of gravity and circumstance? That nightmare had become my reality. I had lost the company I had bootstrapped and helped build. I lost the role I thought I would have building it from CEO to locked out. My ownership went from 47 % to less than 8 % in the blink of an eye.

0:39Another round of financing was already planned and that would have taken me down to less than 2 % despite the promises and insurances that there'd be no dilution or changes to leadership or our mission. And by then I had already put my savings, my retirement, and eventually a lot of credit card debt behind the business. I knew CPG. I had worked as a grocery manager and had worked for big brands who spared no expense sending me some of the best training programs available. I understood retailers, sales, category management, brands, shopper, data, and execution. What I did not understand yet was this part of being a founder.

1:16I learned it in one of the most expensive ways imaginable, and it is the primary reason Retail Solved exists today. Are you ready to hear more? My name is Dan Lohman, and I'm the host of the Bulletproof Your CPG Brand Podcast. At the end of each episode is a free guide to help you put into practice what we talk about. Now let's roll up our sleeves and get started. Years ago I helped build a sweetener company with a co-founder who had developed an innovative proprietary process. The basic idea was easy to understand. We had patented a process for dramatically reducing the calories from organic cane sugar while maintaining the same flavor profile and sweetness.

1:54Imagine the taste of real sugar with about one-fifth of the calories and without any of the side effects or downsides found in some alternative sweeteners. We are on a mission to transform the industry, or so at least we had hoped. I believe deeply in what we are trying to build. We had a solid mission that we are deeply committed to. I had a successful consulting practice at the time that I had placed on hold. With the support of my then wife, I started putting my own money behind the business. Savings, retirement money, later credit cards. I I built the website, the graphics, the sales material, the pitch deck.

2:27I even paid for both pilot runs, product samples, patent work, and travel. I owned domains and trademarks. I sourced equipment. I had identified a potential production location in Colorado. I traveled to pitch competitions. I shared samples with potential investors and retailers. People, investors, and retailers were interested. This was not something I was playing around with on weekends. I had bet on it, and I had gone all in. and I did what the founder ecosystem tells founders to do. I learned how to pitch. I learned how to tell the story. I learned how to raise money. I went through several respected founder programs.

3:03I listened. I learned. I became a sponge. How do you get the investor interested? How do you get the retailer meeting? How do you get someone to say yes? A lot of that education is useful, but there's a huge part of the conversation that I wasn't hearing enough. Nothing I'd learned was going to give my brand an edge or help differentiate my brand? What happens after the retailer says yes? What happens after the check arrives? What happens after the retailer gives you the store? What happens after the distributor and the broker sign on? What happens when your interest and someone else's interest stop being aligned?

3:38What does the next round of funding do to your ownership? What happens if the assumption you built the decision around is wrong? What happens when the mission you were on is scrapped for something unrecognizable? Those questions aren't nearly as exciting as winning the pitch competition. They may be a lot more important. At one point, with the help of a friend, I had another founding path lined up. Then another group became interested. At first, they sounded great, but I started digging. Something didn't add up. What I found didn't completely match the story had been told. Some of their promises started sounding too good to be true.

4:14I kept saying no. I repeatedly told my co-founder that I didn't think that we should do the deal. They kept working on him and applying a lot of pressure. I would talk him back down. Then they would come back with something else. Eventually, he decided to move forward behind my back. I did not sign the deal. I would not have signed the deal. By the time I learned about it, it had already moved forward. The new corporate paperwork had already been filed. That was the moment everything changed. I spoke to an attorney. I was told that I may have legal options to try to stop what had happened, but there's something important that was buried inside that sentence.

4:51Legal options require money, and I had already put everything I had into the company. I did not have another pile of money sitting around to fund a protracted legal fight in another state thousands of miles away. That taught me something founder success stories rarely talk about. Having the right to fight is not the same as having the resources to fight. The promises and the original arrangement initially appeared to protect much of what mattered to me, our mission, and what I had worked day and night to build. I expected to be reimbursed for what I had put into the business. I expected to continue driving the company, but there was language around future financing that became incredibly important.

5:30The verbal promises did not align with the paperwork my co-founder are signed. I tried to get that promise in writing. I couldn't. I eventually walked away from the deal altogether. I had no more to give, and what I had worked so hard on was unceremoniously ripped out from underneath me. Sadly, this is a side of launching a brand that you don't hear about. This is the first time I've shared my story publicly, so why now? Simply put, I want to help you avoid the painful mistakes that I and others have made. I want to help you steal clear of the blind spots and obstacles that derail brands and shorten your runway.

6:06My mission is to help mission-based brands doing good on our behalf grow and thrive so they can do more good. That can be as simple as commitment to quality ingredients, compostable packaging, the land, and the people you serve. I want to be careful about the lesson. This is not a story to scare you away from launching your brand. On the contrary, helping you thrive is the focus of more than 341 podcast episodes, all my articles across multiple industry publications, and everything I talk about. This is not an anti-investor story. Investments can be incredibly valuable. It is not a story about never trusting anybody, and it isn't about me pretending I made no mistakes.

6:46I did. One of the biggest was allowing promises and an incomplete agreement to stand in for protections that should have been fully settled before the stakes became enormous. I knew something felt wrong. I had questions. I pushed back. But I'd also invested so much into getting the business this far that I wanted the company to succeed desperately. And that taught me another lesson that stayed with me ever since. The more badly you need the deal, the less leverage you may have. That is why I'm such a strong advocate today for extending your runway with your available resources and helping you make better, more informed decisions.

7:23Not because a brand should hoard cash forever. Because runway gives you options. A stronger business gives you options. Preventing deductions gives you options. Better margins give you options. A shopper who actively looks for your product gives you options. Retailers that value what you bring give you options. Understanding your own business gives you options. The stronger you make the company before you desperately need the investor, retailer, broker, distributor, or the next round of funding, the better position you may be in to negotiate what comes next. You do not need a perfect company. You need another month, another capability, a good retailer, another profitable promotion, another thing that you understand better than you did yesterday.

8:06Baby steps. Learn to walk before you run. I eventually went back to category management solutions, the consulting practice I'd put on hold. It took years to rebuild. I wasn't completely starting from zero. I had written hundreds of articles for almost every industry publication. I had frequently spoken at industry events. I had built original spends distribution tracker and reporting tools for brands and retailers. I had spent years helping companies understand categories, shoppers, data, and retail. I had eBooks, courses, and a huge email subscriber list for my weekly newsletter. I had the resume before all this happened, but what I did not have yet was the scar tissue, and that changed the way I look at decisions.

8:50When somebody showed me a report, I no longer just saw the report. I started asking, what isn't here? What happens next? What has to be true for that answer to work? Who carries the risk if we're wrong? And what would make me change my mind? Over the years, retailers kept teaching me the same lesson in different ways. Here's a simple example. Years ago, I worked with a brand that sold an item that every assortment program recommended be deleted. Its sales were well below the minimum threshold in most trusted models. Competitors and retailers were all pushing to discontinue it. That was until we showed some retailers that it was an entry point to the category.

9:30On paper, removing it made sense, but the model could not see everything the item was doing. The model wasn't useless. It was answering the question it had been designed to answer. It just wasn't answering the whole business question. That distinction has shaped my career and it is why I'm sharing my uncomfortable founder story with you now. Let me explain. We experimented by placing the item in the checkout lanes as well as in the regular category. It delivered a high margin when it was in the shopper basket and it delivered a much higher total ring at checkout. What was interesting and unexpected is that it also drove trial in the category.

10:07By keeping it in the category assortment, we helped drive profitable sales in the category, boosted shopper traffic, and most of the time we did this in the absence of promotions. Let that sink in a moment. A strategy that was expected to fail returned an outsized positive result. I've spent decades working with syndicated data, shopper data, retailer portal data, assortment models, and the tools built on top of them. I even built some of the models and many of the tools myself. Those databases can be incredibly useful if you know what questions to ask and what the limitations are. The problem is that everyone's looking for the proverbial easy button.

10:47Sometimes that is new software. Sometimes that is AI. Sometimes it's a new suite of reports. The truth is that I've spent my career beating and pushing around brands who relearn similar capabilities. Sometimes it's because of better execution, and sometimes it's because I asked a different question. This podcast is dedicated to help you navigate through all that. I am not against those tools. Quite the opposite. Use them. Use a consultant. Use AI. Use the best software you can afford. Just don't outsource your judgment. Because an answer can be mathematically correct and still be answering the wrong question.

11:25And the easier it becomes to get the answer, the more important it becomes to know whether you're asking the right question. That is what I mean by retail judgment. It is not rejecting the model. It is knowing enough about the business, the shopper, and the retailer to recognize when something important may be sitting outside it. That is also why I started this podcast. I wanted to sit down with people who had already paid some of their tuition. Founders, CEOs, retail experts. People who learned something the expensive way and wish somebody had told them sooner. And if you've ever been a guest on this show, I want to say something directly to you.

12:02Thank you. You trusted me with part of your story and you helped leave something behind that another founder can learn from. But I would ask something of you. Don't let that contribution end when your episode ends. Listen to another person's story. Challenge something you hear. Add your experience when you see something differently. And when you hear an episode that could help a founder you know, send it to them. I don't want Bulletproof Your CBG brand to become a warehouse of 341 interviews. I wanted to become a living library of expensive lessons brands don't have to pay for twice. And if you're coming on this show in the future, that is the standard I want to hold us to together.

12:43Leave behind something useful enough that the founder coming behind you can make one better decision. So before your next important retail decision, run one simple stress test. You do not need perfect information. You do not need a 100-slide presentation. You need to pressure test the decision in front of you. First, the data. What does the evidence actually measure and what can't it see? Second, your shopper. What shopper need, behavior, or occasion could change the answer. This is even more relevant with the unique shopper your brand attracts. Knowing this is your competitive advantage. Next, the retailer.

13:21How does the decision make the retailer's business better, not just ours? Then economics. What happens to margin, cash, basket, inventory, and capacity if we're right? What happens if we're wrong? And finally, the execution. Who owns what happens next? What has to happen after the yes for the decision to actually work? And then the most important question. What would change my decision? What new information would make me stop, delay, say no, change direction, ask for different terms? That question forces you to challenge the answer you already want to believe. That is retail judgment. It is honed by fine-tuning your retail muscle.

14:01This does not mean every decision needs every piece of information. That is another trap. A challenger brand cannot wait until it's perfect data, perfect systems, and every resource a billion-dollar company has. Sometimes making the right move is simply making the next controllable thing better. Change the promotion timing. Fix the shelf placement. Get a better shopper question answered. Stop repeating the same deduction. Learn why one store works and another doesn't. Make the next decision a little better. Then learn from it. Then do it again. That is how you build a retail muscle. And sometimes the most important thing you can do is simply look again.

14:41We all become blind at the things that surround us every day. I live in one of the most beautiful places in the country. and yet there are days I can drive through it without really seeing it. Businesses do the same thing. The core item that built the company becomes background noise. The shopper everyone thinks they understand stops being questioned. The shelf problem becomes normal and then is overlooked. The report gets trusted because it's familiar even though it does not answer the right question. The process becomes this is the way we do things. Retail judgment sometimes becomes something a lot simpler.

15:17Look again. I knew CPG when I started that company. I knew retailers. I knew data. I knew how to sell. I just didn't know this part of being a founder yet. I learned it the expensive way. I have no regrets about where I ended up. I just wish I didn't have to get so bloody to get here. But if something I learned keeps one founder from paying the same expensive tuition, then losing all of that created something useful. That is why I'm doing this. Every week on the Bulletproof Your CPG Brand podcast, I share expensive retail lessons so you can learn it before your brain has to pay for it. If you're listening and you've already paid for one of those lessons, I want to hear it.

15:57What do you wish someone else had told you sooner? Put it in the comments. Send me a note. It may help the next founder and it may become a future conversation on this show. And if you know one founder who's dealing with something we have already covered, don't send them 341 episodes. Send them the one they need. That is why I built the new Start Here page. Start with the problem in front of you, and I will help you find the most relevant conversations and tools. Go to retailsolve.com forward slash start. I'm Dan Loman. Thanks for listening. And before you make your next big decision, ask yourself one question.

16:33What would have to be true for me to change my mind? That's retail judgment. Learn the expensive of lessons before your brand has to pay for it. You can get the Founder Problem Finder and the show notes at retailsolved.com slash session 341.