They Had Goats, No Jobs, and a Dream—How Beekman 1802 Sold 60 Million Bars of Soap | Ep. 227 with Josh Kilmer-Purcell & Dr. Brent Ridge Founders of Beekman 1802

0:00I'm really excited because Beekman 1802 is a product that I'm very familiar with. I sold this product over a decade ago. And then when I saw that the founders of Beekman 1802 are going to be here today, I was super shocked. I'm excited. And the crazy thing I heard, Dr. Brent Ridge and Josh, is that you've surpassed 60 million bars of soap, which is insane. What is going through your mind right now when you think about that? No, we do always say, you know, we invested everything that we earned. We invested back into the company, particularly in those first few years, doing research, growing the brand, growing the science by what we were producing.

0:45So, you know, when I say where's the money, I mean, what did we invest it in? But I guess investing is what got us to that 60 million bars. What do you think about a product-focused business? What do you see as the, like how much of a profit or margins can people even make? Because I've heard this before by other successful entrepreneurs as well, that because they had a product-focused business, they had to put so much of the profits back into it that it took a while for them to really take home money. Yeah, I mean, probably for the first eight years of the company, we weren't drawing salaries.

1:20We were just putting everything back into the company, either into research or to hiring. So we were really investing in the company, but we were really passionate about what we were doing. We knew that we were onto something and we saw it as an investment. And I think that's one thing that founders often don't do if they have a cash flow positive company, which, you know, a lot of times founders don't have a cash flow positive company, is that they don't look at the amount of cash and think, oh, am I deploying this cash appropriately? And, you know, am I going to put it into my own pocket or am I going to put it back into the business?

1:54And, you know, we just chose to put it back into the business. So Josh, when you think back to sitting in your dining room, making bars of soap, did you ever even imagine, did you manifest or what did you do thinking like, okay, this is going to become something as big as it is and sell 60 million bars? No, absolutely never, ever thought that was going to be the case. We were often asked, what is the secret to success for entrepreneurs? And we say, we don't know the secret to anybody else's success, but our secret was desperation. So for us, when we started this company around our dining room table, it was the midst of the great recession.

2:34We had both just lost our jobs. So for us, it really wasn't about what our vision was. Our vision was, can we pay the mortgage this month. So, you know, I don't know that that's the best way for everybody to start a business, but I would say that if you're not hungry enough, no matter who you are, you're not going to make it. You really want to have a successful business. If you're just doing as a hobby or you're doing because you think you're going to be rich, it's not going to work. I like the desperation. It makes sense. You're so hungry. And the fact that you were laid off, you're going into recession, I think there's probably a lot of mirroring times that we're feeling right now or the last few years.

3:16What do you say to someone who right now that that maybe just got laid off and they're thinking like, oh, my gosh, like my life is over. I just got laid off from my job. Well, first, they should read Goat Wisdom because that's exactly who we wrote the book for. You know, we kind of anticipated this economic cycle coming about again about two years ago when we started working on the book. And the book is really focused at that small and mid-sized business. So people who are just starting to build a business or have a business idea, that's who the book is for. And the other thing I would tell people to do if they find themselves in that situation where they're just recently laid off is to take a really good personal inventory of what your skills and your assets are.

4:03And, you know, skills are sometimes not so easy for people to identify. And maybe they ask a friend or a former colleague to help them identify what their skills are for someone in an outside perspective can be more powerful. And then also your assets. Who do you know? What communities are you involved with? And those are using your skills and your assets as a starting point is a great starting point for any entrepreneur. Anything you would add, Josh? Yeah, I would say if you're starting out as an entrepreneur in a time when you're desperate, when you've been laid off, when you're starting over, don't swing for the fences.

4:43It's a luxury to say, I'm going to take a billion dollar risk. That's a luxury for when times are going well. When times aren't going well, make really solid, really stable plans. What I would say is if you are going into any entrepreneurial venture, identify what your personal metric for success is. Because if you don't know what that metric is, you're never going to get there. And, you know, be honest with yourself. Like for us, we had one metric first, and that was to make a million dollars so that we could pay off the mortgage on the farm. After we did that and we could start paying ourselves, our next metric of success was we wanted to have any property completely paid off our store, you know, the property on the farm.

5:28And we wanted to have five million dollars of liquid assets. And we thought if we can make that, we will be fine. We will be perfectly content and happy. And you know what? We made that. We are perfectly content and happy. We surpassed it, but surpassing it didn't bring us any more happiness. We set the goalpost, we achieved the goalpost, and then we were content. And, you know, good fortune blessed us to go beyond that goalpost. But I think having that goalpost and having the strength and conviction not to keep moving the goalpost is what will ultimately bring you the most happiness in life. So what brings you happiness now?

6:04And the reason why I ask is we've had some recent guests that did some, you know, massive exits and they said they weren't really happier afterwards. they were actually sometimes more depressed and they were kind of lost. But we seek, I think as entrepreneurs, we're always seeking something. We're trying to solve something. We're trying to achieve something. And then when you achieve it, there's almost a void. So how do you see happiness now? This is why we wrote this book. It's like passing on this knowledge because we saw a real white space in sort of the business how-to world out there where there's so much noise and so much sort of like buzzy, trendy, like become a billionaire.

6:47Here's the one secret to success. Here's the magic trick that you're not doing. And you know what? Not everybody is going to be Elon Musk. Not everybody should be Elon Musk, please. A lot of us just want to have a comfortable living, grow a business we're proud that. And we felt like people weren't getting that advice. They were getting the advice that was, you know, like we, my saying always is everybody wants to shoot for the moon, but you can either build a rocket or build a ladder. A rocket, you know, if you're going to, you're going to get all the way to the moon, but it's a rare chance that it's going to happen.

7:23A ladder, you might not make it to the moon, but at least you can be higher up than when you started. So we wanted to show people how to build that ladder. And then for me, you know, the purpose of our company has always been around kindness. The company started from a single act of kindness when we took in a neighboring farmer who was losing his farm and needed a place to herd his goats. And he brought them and we Googled what to make with goat milk and goat milk soap popped up. And that's how we started making the bars of soap. And so that idea of how we can spread more kindness in the world has always been really core to the DNA of the company.

7:56And even now, as we look at the horizon and think, okay, probably within four years, we're going to make our exit to a strategic partner or something like that with the company. We are setting up the foundation of kindness so that not only does it remain in the company that we built and continue on with the brand, but it allows us to continue to find ways to spread kindness in the world. And to Josh's point, we do see mentorship as an act of kindness. And so that's one of the reasons we wanted to codify, get all of the things that we have learned over the past 15 years and growing Beakman 1802 into one place as a starting point for this mentorship about how to grow a purpose -driven business and hopefully a business that is based on kindness and transparency and things that how you treat your customer, how you treat your employee is really critical to growing a great business.

8:52I love the mission, the values. You've obviously, when you get to the success, you had to have structured these things at some point in your organization. And now you're thinking about how the future, how it'll continue without you. When you look at, I think, Josh, you said something that I just got, I can't stop thinking about this. Maybe people overcomplicate business in terms of like, they're always looking for this giant problem that they need to solve because we're ingrained to think I need to create a unicorn. versus what you did. It was something very simple. You had some goats, you searched online and you realized goat milk.

9:30So what do you see in terms of how other people can also create a product-led business or just a business in general without trying to overcomplicate it and maybe just seek for a way to create something just slightly better? Yes, so you're absolutely right. And I think the first thing for anybody trying to start a business, think of something somebody needs that you can create and you can sell to them. It's truly that simple. The way we have messed up business in the last few decades, we call it the Shark Tank model. Now, we love Shark Tank. It's a lot of fun. But when you think you can't start a business until you get a million dollars of investment from other people, that's not how business has ever worked until the last few decades.

10:15And if you are lucky enough to get investment and start a business from other people, then your whole business becomes about getting more money from other people to keep your business growing. So you become a business about getting money, not a business about selling things, products to your customers. So I always look back to my grandfather who owned a small grocery store in a small town. And he always said, you don't invest a dollar till you make a dollar. And it really is that simple. You sell something, you make profit, you invest that profit. But, you know, the way we work today, we tend to think this unicorn, if I can get$100 million in investment and then I get a series B round of$50 million and then I get a series B round, that's a business.

10:57That's a business of getting money. That is so true. You become a salesperson just selling the next raise, which I've never done it. It seems very complicated. And it seems I know people that get kicked out of their own company. It's quite sad. When you look back at how you leveraged media, I know you had TV or QVC, different opportunities. How did that impact your business? Well, it impacted it tremendously. And I would say that these are not necessarily things that we sought out. They were opportunities that presented them to us. And with media, I would say both of us consider ourselves to be fairly introverted.

11:36So it really takes a lot for us to have to go out and talk about ourselves. But you do it. That's part of doing business. And when you're a founder of a company, the first salesperson is you. And then you hire other people and they become your salespeople. And then if you have grown a good company and you're able to scale, you're going to scale when your customer starts being your salesperson. And that's how we grew Beekman 1802. We focused on, you know, making a quality product and growing the community neighbor by neighbor by neighbor. You know, we fought hard for every single one of those customers.

12:14and some of them have been with us for 15 years. We can look back at order history and still ordering 15 years later. And that's how we knew that we had really created a love brand. When you ask people what their first thoughts of Beekman are, they'll say, love, I love that brand. And to Brent's point about media, we always saw media as marketing. So our belief is if there's a camera, if there's a microphone, and you have a business, get in front of it. and it can be your local media, your local radio, your local paper. It can be a comment section on a national website. Get in there, talk about yourself, talk about your business.

12:55Any chance you have to talk about yourself, take it, it's all marketing. Yeah, Daniel, the kids these days call that embracing the cringe because people of our generation hate to see themselves on video. They hate to talk, you know, talking head, but you've got it, you really do. These days you have to be your first and most important salesperson. When it comes to partnerships, because I think the fact that you said you're a married couple who's also in business together, we've heard great things about it. We've heard challenging things about it. It's just partnerships in general, not also the fact, you know, when you're also in a relationship with the person as well.

13:34What's something that you've done that you've said, okay, every partnership needs to look at this because this is what helped us stay together. 51 % rule. Like that is a 51 % rule. Now, a lot of partnerships, creative partnerships, what they say is, you know, this person was good at that, so he took care of all that. I was good at this, so I took care of that. That's, nobody is, if you're in a partnership, you're both good at, you have a shared interest. You're both good at a lot of things. How we divided it was who is most passionate about something, and they have 51 % of that decision. That doesn't mean that they have 100 % of the decision.

14:14The person was 49 % still puts forth their point of view, still argues, still passionately, you know, defends their point of view. But whoever is passionate about that particular decision gets that last, you know, final 1 % makes the choice. It's not who's better at something, it's who's more passionate about something. Yes, absolutely. And, you know, when you've been in a partnership for a long time, personal or professional, you often don't have to like codify it so severely like that. But if you're into a new relationship, a new business or personal relationship, it can be very helpful to have that conversation and say, hey, if we come to an impasse, who has the 51 percent?

14:54And it's just a great conversation starter when you're bringing new people into the business. And it's easy to measure. It's not who's more right or who's more wrong. That's how you get an argument. You can ask each other, like, scale of one to 10, how much do you care about this? You know, one person cares a 10 and one person cares a seven. Well, then the 10 gets the choice. What is one challenge that you went through that is the first thing that pops to your head? And what did you do to overcome it? We were offered the opportunity to run the amazing race and didn't want to do it. But we thought, OK, where else are we going to get the chance to put the brand in front of 11 million people?

15:28And so we did our best. Our goal was to make it halfway through the race because we thought, oh, by that point, no new eyeballs will be coming in to watch this show. And we made it to the halfway point. That was our marker for success. And then we just kept hanging on. That is unique. I like that. The amazing race. Did that equate into brand recognition or sales that you could tell? 100%. Because after we ran the Amazing Race, then we got our first opportunity to do TV retail. And then TV retail really exploded the company. And what TV retail did for us in particular is it made us master storytellers.

16:09Because we have eight-minute segments maybe at a time sometimes. You have to get your story out. You have to get your founder story out. You have to get your product features and benefits out. And just makes you super efficient at pushing all of those emotional connections with the customer as you can in a short amount of time. Well, this has been amazing. If people want to get goat wisdom, they want to reach out. Love the book, by the way. Love the brand. Been using it for over a decade. Really inspired that you were able to come here. I just thought it was so funny that I was just looking at the packaging and I'm like, oh, my gosh.

16:45I haven't thought about this in a while. Then boom, I found out about your book. So if they want to do that, how can they do so? They can just go anywhere books are sold, goatwisdom.com. Goat Wisdom is the name of the book. And they can check us out at beekman1802.com. Amazing. Dr. Brent Ridge and Josh, thank you so much for all that you shared today. I'm going to go watch that season. By the way, I want to see this amazing race. and I hope everyone checks out Goat Wisdom and it inspires all the entrepreneurs out there to just get started. And thank you for joining us today on Founder's Story.

17:19Thanks, Daniel. Thank you.