Advice Line with Alberto Perlman of Zumba

26:43And transparency is very important. People with sensitive stomachs need to know exactly what they're putting in their body. Cool. Jack, you seem like a pretty young guy, which is awesome. Is this your first business? This is my first business. Oh, awesome. Okay. So tell me how you started. Tell me the story about the business. The idea for Drink Wholesome came from personal needs. So I was a two-sport college athlete training year round. I use protein supplements as a convenient way to fill in gaps in my diet. But despite my best efforts, I couldn't find one that didn't upset my stomach. So I made my own.

27:15I bought a spice grinder. I went to the local health food store and I created a recipe that, although it wasn't the most soluble nor the best tasting, it didn't upset my stomach. That was a first. And this was something that I used or made for myself and used myself for a long time before considering the idea that other people might benefit from it as well. All right, so when did you decide to turn that into a business? So after graduating college, I worked as a boarding school teacher. I taught French. I lived in a dormitory with a whole bunch of kids. I coached sports. And the great thing about being a boarding school teacher is you get the summers off.

27:50So that first summer, I took to developing my product, finding someone who could make it, establishing a business. It took a while. And then I ran it as a side hustle for almost four years. That's awesome. And then and now, it's still direct-to-consumer. You sell this through your website? Correct. We sell on our website and on Amazon. Okay. So you launched this, and how much money did you put into it to get it off the ground? I saved up all the money I had from summer jobs and from teaching, which wasn't very much, and that amounted to around$20 ,000, and that allowed me to buy all. I built my own supply chain, so it effectively allowed me to buy the ingredients in the package, and I needed to make the first batch.

28:33All right, tell me a little bit about where the business stands now. Give me a sense of your revenue of what you guys are doing. We crossed the$2 million threshold this year, which is amazing. It is a great accomplishment, but it's been a grind. It's been about five years now. And so the growth has been incremental. And today I work with my younger sister. We're a two-man team. We outsource things like warehousing, fulfillment, production. But at the end of the day, it's Tessa and Jack behind the brand. That's awesome. So$2 million in revenue, which means that obviously you've got your costs, and then probably the rest of the money is going right back into the business and marketing and things.

29:14You're probably not paying yourself a whole lot yet. Correct. I invest as much as I can back into the business. We don't spend a ton on marketing like other direct-to-consumer e-commerce brands because our main marketing tool is practitioner referrals. because our target customers, someone with a sensitive stomach, we work with dietitians and nutritionists, in some cases, MDs to spread the word. And before we dive in deeper, tell us your question that you brought for us. Sure. So my sister and I were wondering how a brand like Drink Wholesome with a very niche focus generates broader appeal without alienating its core customer.

29:54So again, our core customer is someone with a sensitive stomach. They're the lifeblood of the business. But because we use a short list of simple ingredients, drink wholesome is appropriate for a number of different dietary needs and restrictions. And we love to include those people in the community. I'm talking about diabetics, people with kidney issues, children, pregnant and breastfeeding mothers. We have lots of these people come to us organically, but we don't go after them. And I would love to because we could help so many people, but I don't want to do so at the expense of our core customer.

30:27So the question is, how do you appeal to a broader audience, even though your niche is with people who have sensitive stomachs, which is a good niche to have, but to grow, you want to reach more people? Alberto, before we get to Jack's question, I'm sure you've got some more for him. How do you talk to the practitioners? How did you build that network and how big is your network of practitioners? It is a lot of cold outreach, boots on the ground. That network is all about relationship building. I started it a few years ago. My sister heads that effort. And we have probably about a thousand folks with whom we work regularly.

31:06And we hope to grow that tenfold if we can. Do you spend any money on marketing? We do. We work with an agency to run some digital ads. We invest in SEO. We spend a little bit here and there. One of our large marketing costs is samples. So we love to share the product with people because especially if they have a sensitive stomach, they're pretty inclined to like it. Yeah. What about – I mean you're in New Hampshire, right? And New England has an influential consumer audience, right? A lot of products are launched in New England, particularly in Whole Foods, for example. Is that a world that you have thought about exploring or have you tried?

31:45We do a tiny bit of traditional retail with some local natural grocers, but retail is really expensive and we would need help. We'd probably have to build a team in order to manage all those accounts because every new account is like a child. It needs nurturing and we just don't have the bandwidth right now. But if a good opportunity came our way, we wouldn't necessarily say no. We would just have to take a very measured approach because I talked to a lot of founders who got into retail a little too early. And it's hard that, yeah, either sent the business in the wrong direction or just burned them out, which is a real risk.

32:26Have you thought about getting other certifications on your packaging, like organic, kosher, NSF, certified for sport, good manufacturing practices, all of those. And then gluten-free. Is the product gluten-free? So it's not certified gluten-free primarily because our facility isn't. I am certification averse. Having worked in this space for several years now, I think that all of the certifications, the labels that we slap on products give a misleading impression of what they are, which is food. I want Drink Wholesome to just be food. I don't think that a banana needs a certification. And because of the short list of simple ingredients, I don't want to distract from what makes Drink Wholesome different, which is, again, that simplicity and that transparency.

33:24So, organic is great. I would love to become organic certified, but if I were, I wouldn't put it on the bag. I just love that response. I think it's a great response, and it makes a lot of sense. Alberto, you know, one of the things I keep thinking about is there are a lot of protein powders on the market. You know, you go to Whole Foods, you go to GNC. I mean, it's just endless. And this has really happened in the last 10 years, you know, just an explosion of different brands. And so it's hard for some people to figure out, you know, what to do. We've told the story of Orgain on the show, but it's hard, right, especially when you're competing against big brands like Orgain.

34:01What I don't see a lot on the shelves are this. You don't see a lot of brands with very few ingredients. So that to me is interesting because I feel like that puts Jack's product in a slightly different category. And it's resonating a lot right now with all the talk going on around microplastics and around cancer-causing ingredients. And so it's the right moment to talk about very simple ingredients. I take a protein shake with only one ingredient, but I can handle that taste. Most people can't. I guess a question for you, Jack, and also I'd love to hear your take, Alberto, is he's looking to appeal to a broader audience, right?

34:50But I would argue that you could probably lean more into the sensitive stomach crowd before you do that because that is a potentially huge audience. It's huge. I just Googled how many people are lactose intolerant in the U.S., and it's like 30 million people. Yeah. I mean, think about Orgain. Orgain was founded to serve people in hospital recovering from cancer and other surgeries. It was essentially designed to be like insure but organic. But eventually, bodybuilders and people who worked out found this product, and that became its use case. Now that's primarily who uses it. But to me, I think that there's an argument to be made that you really should lean into this niche.

35:33I mean, maybe even on the front of the label, I'm looking at it to somehow to indicate for people with sensitive stomachs. I mean, maybe on the back of the bag it says it, but I think it could be worth really leaning. What do you think about that, Jack? Well, that suggestion is very in line with my question because I don't think Drink Wholesome would have made it this far had it not leaned into the specificity of its value proposition. However, I don't want to exclude people and make them feel or give them the impression that this brand is not for them. Because Drink Wholesome risks coming off as a medical brand, risks coming off a little sterile.

36:13And I want it to be inclusive. I want anyone to resonate with the ingredients and understand intuitively that it's good for them, even if they don't have a sensitive stomach. So it's a tricky balance. Yeah. Have you guys done any trade shows? Not as of yet. Maybe one day. I do think the trade show route for what you're doing is really important. It's going to cost a lot of money. It's going to cost, you know, at least$10 ,000 to get a booth and do what you need to do. But it's going to be an investment worth making. I agree. I mean, it's just what we've heard on this show over 700 episodes and probably a third of them have been food brands.

36:49And you just gave me an idea, Guy. You just gave me an idea. What about sponsoring? Do you know those physician conferences they have where they have doctors in a certain field all together? Yes. Sponsoring the ones with gastroenterologists and having a 15-minute talk during one of those conferences. and you reach a thousand different gastro doctors. I think that's great advice. You're going to need to set aside, if you can, 50 grand at least, maybe 100 if you can, in marketing and sponsorships and things like the trade shows. It's going to pay you back in spades. I agree. And then PR is the other thing.

37:30So maybe talk to outlets like MindBodyGreen and have MindBodyGreen write an article, stomach issues, digestive issues. here's a list of products, and then they would name your product. And I think you can give them an affiliate commission through Amazon or maybe even advertise with them. But I think they reached like 10 million people. And you can take small risks here, a few thousand dollars on some of these things where if it doesn't work, it'll sting, but it's not going to tank your business. Jack, I think that you've got a great product. Congrats on taking it to 2 million. It's called Drink Wholesome, Jack Shropp.

38:04Thanks so much for calling in. Thank you so much for having me, for the advice and the opportunity to share. Have a great day. Good luck, man. Good luck, Jack. Yeah, when I first saw this, I was like, wow, that really does look like the front of an RX bar, which is really, and that rebranding on RX bar transformed that company because initially it didn't look like that. It didn't say, you know, four egg whites, three dates, two cashews. But once they did that, and Peter Rahal talked about this on our show years ago, it just transformed that product. And now it's ubiquitous. Transparency with consumers right now is huge.

38:38I think people have realized that they can't trust all companies. Before, when we were growing up, if we assumed that the FDA was protecting us and that there was someone, some government authority protecting us and that anything we had from companies was good for us, then we realized it wasn't. And now I think transparency is very big. So I agree with you. All right. We're going to take another quick break, but we'll be right back with one more caller. Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

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41:37Welcome back to the advice line on how I built this lab. I'm Guy Raz. And today I'm taking calls with Zumba co-founder and CEO Alberto Perlman. So Alberto, you ready for our next call? Yeah, ready. Hello, welcome to the advice line. You're on with Alberto Perlman. Please tell us your name, where you're calling from, and a little bit about your business. Hi, Guy and Alberto. My name is Peter Arlene. I'm calling in from Carbondale, Colorado, and I'm the founder of Mountain Flow. We make sustainable accessories for the outdoor industry, specializing in plant-based non-petroleum ski wax and bike lube.

42:14Ski wax and bike lube. Okay, let's talk about, so ski wax, like the wax that you put on the back of your skis. Exactly. And you say non-petroleum based. So is the ski wax that goes on the back of my ski a petroleum based product? Exactly, Guy. Just like the majority of candles that people have in their house, wax is a petroleum based product. The interesting thing about skis is that whatever you put on the bottom of your skis or snowboard goes directly into the environment. Right, because it's just going to go right, it's going to get melted down, and eventually that's water we're going to drink.

42:47What is it made of if it isn't made out of petroleum? So the interesting thing about plants is that you can extract a wax from nearly all of them. So when we created the product, we had a catalog of hundreds of different plant-based waxes available, and were able to kind of isolate the exact characteristics that we were looking for so that we could create a product that had the same or better performance. Is it a lot more expensive? No, it's right in the middle of the market in terms of pricing. Same price as a petroleum-based wax? Almost too good to be true. Wow. So Peter, I'm imagining, I imagine that you are a skier.

43:24You live in Carbondale, which I'm looking on the map. It's not too far from Aspen. I mean, you're in Colorado. us. You're near a bunch of cool, great ski resorts. I'm imagining that this came about because you're a skier, you worked in the industry? Yes. Yes. To both of those. I worked in the outdoor industry for about 20 years. And for a good chunk of that time, I was working as a ski tech, which meant that I was in a small room in the back of a ski shop, waxing skis all day long. And at some point I asked myself, you know, like, what is wax made from? And I was like, Oh, well, you know, wax is made from wax, like plastic is made from plastic.

44:03And yeah, after a little research, I learned that both of those products, wax and plastic are made from petroleum. And then I learned that everything you put on your skis goes directly into the environment. And as a skier, as someone who loves the outdoors, as someone who's a father now, it just didn't really sit well with me. So you decided, hey, I'm going to figure out how to do, how to make something that's a little better for the environment. Yeah, exactly it. And, you know, a lot of people ask, are you a scientist? And I'm not. And I developed it like a skier would based upon how it felt on snow.

44:40And it was a trial and error process. It took about two years, but eventually I was able to get the formula to a place where I was really happy with it. We've now got a couple of patents on the formulation and we're probably the world's largest manufacturer of sustainable ski wax. Wow. And most of your sales are through ski shops. You're actually selling to the ski shops. We do. We've got a bunch of distribution channels. So we're in a little over a thousand retail doors worldwide. We also sell to ski resorts that are using it on their rental fleets. And then we sell direct to consumer through our website.

45:18What's a bigger business? The one that is to the ski resorts or one that's for the end consumer? Who buys more? Right now, our wholesale channel is about 60 % of our business and 40 % is direct to consumer. It's pretty good. It's pretty good. And you mentioned this briefly, but you're not just doing ski wax, wax for skis. You're also doing oil for bikes, right? Yeah, exactly. So we started with ski wax and as the business progressed, more and more people were asking us for a plant-based bike lubricant. Essentially, it's the same exact concept. Most chain lubricants come from the automotive industry.

45:57They're made from petroleum. One way or another, that lubricant is ending up in the environment. And so we were able to develop a full line of bike maintenance products that's also plant-based, biodegradable, non-toxic. All right. Before we dive in deeper, tell us your question that you brought for us today. So I'm looking for some advice as to how to evaluate opportunities. You know, when I started the business, it was just ski wax. And now we've expanded. We've got recycled aluminum ski poles, a handheld infrared waxing device, the bike products. We do bioplastic water bottles. So it looks a lot different than it did a few years ago.

46:38And, you know, when I started, I definitely had the hustle mentality. And I said yes to everything. And I chased every dollar. And to some extent, that's still around, that hustle mentality. Although my hunch now is that it's actually probably doing more harm than good. And saying yes to everything, I think, is bogging us down. So learning how and what to say no to so that we can be open to bigger opportunities. What have you said yes to that you feel might have not been the right opportunity? So a shop will reach out to us and say, hey, you make your product in a 100 gram bar. Could you make it in a kilogram for us?

47:21We'll order 20 of them or 100 of them. And then in my head, I go, oh, well, that's a grand or that's 10 grand. We should do that. And then it's a whole process. We work with a lot of small mom and pop ski shops and bike shops. And honestly, that's one of my favorite parts of the job. But it takes a lot of time and effort to scale a business with small POs going into small shops. Have you heard of the impact versus effort matrix? No, I have not. So basically, it's very easy. It's just basically you have impact on one axis, effort on the other, and you just map all the different opportunities you have in front of you.

48:00And the ones you focus on first are high impact, low effort, followed by high impact, high effort. That makes a lot of sense. It seems fairly straightforward. Do you think the ski shops are buying the product from you because they care about the environment or their customers care about the environment? Are you having any situations where the customer comes into the ski shop and says, what wax do you use? Do you use plant-based wax? Is that a thing? So when we started, the ski shops that got on board were the ones that believed in the mission. And now we've grown because customers are coming in and saying, hey, do you carry Mountain Flow?

48:40I heard about the brand and that's what I want to put on my skis. Because I think that's when you really have something special. That happened to us at the beginning is people started going into gyms saying, do you have Zumba? And if the gym would say no, they said, well, I'm not joining then. and so the gyms were kind of forced to bring in Zumba because people wanted it and once you get there I think it's very powerful and once you get there then you can start saying hey this is my standard deal like this is what we sell wholesale for and you could create a online Shopify B2B site where these shops can just go in and place their orders and you don't have to be working custom deals for each one.

49:26Yeah, Alberto, I think that's a great point. I mean, the first thing you said about the push versus pull is huge, and we are starting to see that. And then I know something that our competitors do is they say, hey, this is a minimum order. If you want to work with us, you got to buy at least this much stuff and you have to carry the whole lineup. You can't just pick and choose. And we may be getting to the point where we could start to drive that bargain. I wonder whether there's a way to lean into sort of a bigger partnership that doesn't require you to be doing whack-a-mole every day. Yeah, that's something that we're really trying to focus on is to get in with those larger conglomerates, go through their onboarding process, become an approved vendor, and then all of the resorts or all of the ski shops under that umbrella are then able to buy.

50:17And sometimes there's actually one centralized buyer, which places a huge PO for everybody. And obviously that is probably the easiest route for us to go. Yeah. Alberto, do you have any thoughts about the value proposition here? Because a lot of people I think would be attracted to this, are, right? A lot of people say, you know, when I ski, I don't want to be polluting the environment. I think there needs to be more attention drawn to that. You could even think of some publicity stunts that you could do on the different mountains, like have people walking around saying, I don't want petroleum on my snow or something, whatever.

50:57You could do certain types of stunts that would call attention to the problem. I don't know if you already do this, but you could create some beautiful stickers for these ski shops that talk about this problem saying we're using mountain flow instead of petroleum-based products to keep your snow clean. Keeping your snow clean movement type of thing, I think would be very valuable. Especially the rental shops, right? We just went to Tahoe and those rental shops are just doing incredible business, obviously, this time of year. But yeah, you can imagine on the outside that says, you know, we use mountain flow, you know.

51:36To keep your snow clean. What is the benefit? We keep your snow clean. Yeah. But people don't even think about that. I had never even thought about petroleum. Like most people don't even know that their skis are waxed. Like it's crazy. You're right. And education is such a huge part of what we do. And Alberto, I liked your suggestion about getting some press because if we can get the word out there and then we've got incoming attention and people asking for the product, that's just fulfilling orders. So that's not necessarily using up our bandwidth, but it's still growing the business. There's a point in time where you switch from begging and trying to push your product to market to people asking for it.

52:16And when you do that, that changes everything. And then you can have, this is our standard order. And this is what you get when you order from us. This is the standard margin and only very, very big players can get like different deals, but everyone else gets the same deal. Yeah, I like that. For sure. The brand is called Mountain Flow. Peter Arlene, thanks so much for calling in, man. Good luck. Thanks, guys. Good luck, Peter. I know you're in Miami. Do you guys ski? I'm skiing next month. Oh, okay. I'm going to bail and I'm going to ask for Mountain Flow. I'm going to say if you don't wax my skis with Mountain Flow, I don't want to be on them.

52:53There you go. I love it. There you go, yeah. It's sort of like the 1 % thing. Like if we can make the world better, 1 % every day, imagine the commutative effects. And even though this is not a huge, I mean, it's just for ski and for bicycles. But if you can get rid of petroleum on those two items, it makes a dent, you know? And one thing at a time and we make the world a better place. And why not? I mean, if it does the job just as well. I mean, if your skis are waxed, your skis are waxed, like why not use something that's going to have a minimal impact? 100%. There's zero reason why not to. Well, Alberto, before I let you go, I want to ask you a question that I ask every guest who comes on, which is when you look back on your early days, you know, the first couple of years of starting this thing, your business, which is now Global Brand Zumba, what do you wish you knew or what do you think you would say or offer in terms of advice?

53:49I think this too shall pass for an entrepreneur is very important because every time you're dealing with an issue, and I think it's what makes a great entrepreneur is that when you have an issue, you stress about it so much that you find a way to fix it, but it also takes a toll, right? And many times I thought to myself, this is going to be the end. It's over. It's not going to continue from here. And then it did continue because we had a great product that people really loved. So have faith in your product. And whenever you encounter challenges, just understand that this too shall pass and that there's always something on the other side.

54:38That's awesome. That's great advice. It's Alberto Perlman, co-founder and CEO of Zumba. Alberto, thanks so much for coming back on the show. Thank you so much, Guy. This was fun. And by the way, if you haven't heard Alberto's original How I Built This episode, you got to go back and give it a listen. You can find a link to it in the podcast description. You can just search Zumba and How I Built This on Google. And here's one of my favorite moments from that interview. We spent the whole$14 ,000. We had zero in the bank. We created this beautiful email. we press send and we're praying please, please and suddenly 450 instructors joined and so that's when we said this is going to be our life and let's make it work hey, thanks so much for listening to the show this week and by the way, please make sure to check out my newsletter you can sign up for it for free at gyros.com or on Substack and of course, if you're working on a business and you'd like to be on this show send us a one-minute message that tells us a little bit about your business and the questions or issues you are currently facing, because we would love to try and help you solve them.

55:48You can send us a voice memo at hibt at id.wondery.com or call us at 1-800-433-1298. You can leave a message there and make sure to tell us how to reach you. And by the way, we'll put all of this in the podcast description as well. This episode was produced by Sam Paulson with music composed by Ramtin Ereblui. It was edited by John Isabella, and our audio engineer was Neil Rauch. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coates, J.C. Howard, Catherine Seifer, Kerry Thompson, and Neva Grant. I'm Guy Raz, and you've been listening to The Advice Line on How I Built This Lab.

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