Advice Line with Steve Holmes of goba Sports Group

25:33We looked at all active ingredients that were available for repellency, including DEET, and seeing how we could reformulate them and just make the experience better. I am, Cody, I'm super paranoid about ticks and Lyme disease. And even though I'm in California, it's less common. And I do use that DEET spray, but I hate it because I'm always like, it's just like, this is not, I'm not sure about this. And so this is exciting. Tell me a little bit about how you got into the bug spray business. I'll tell you, you know, it really has been a journey. I went down the rabbit hole. You know, I travel very frequently to Costa Rica and I was having to use a deep formulation and I would use it on my skin.

26:11And when I would use it, it would make my skin feel like radioactive. And then I just began to jump down the rabbit hole of like, there's got to be a better solution to this. There's got to be other options. I've heard of the essential oils, but I've never really had great efficacy with those. Like mint or peppermints or different. Yeah. Yeah. Yeah, so I really just became an expert in the space by digging and asking questions and looking in the EPA database of what was available, what other countries are using. I used something that they had used in Germany, and I brought it here and used it in my formulation.

26:41And that's picaridin? Is that what it's called? Correct, picaridin. Which comes from pepper, right? Black pepper. Yeah, it's inspired. So it's not necessarily a biomolecule, but it is clear, and it's odorless, and it has a nice consumer feel and experience. And more than anything, it's got a long protection time. So it protects you for 12 hours. Cody, what were you doing before you launched this? I started out working in emergency rooms. I used to be an emergency room scribe and used to do trauma research, but most of my career was spent in pharmaceuticals and working in medical devices. So I just really became cognizant of, you know, the health factor and cognizant of what we put in our skin and the ingredients and the chemicals that we use.

27:16So that's kind of like my niche is in the health field. Nice. All right. So you've got this, it's called Grand Tongo. Really cool. I like the labels and you're new. And just very briefly, what kind of sales have you done so far? Any data to share with us? Yeah. I mean, I will share. The first year, you know, we did really small. We only launched in a soft launch of just doing 1 ,000 of each SKUs, like 5 ,000 units. So that was itty-bitty, teeny-tiny. We really just validated the product on Amazon and became an Amazon's choice product because that's when we felt like we had, like, product market fit.

27:49And in the second year, we were capable of scaling up to, like, meet a more substantial MOQ. So we were right around a million dollars. And then this year with Target, we're projecting to be quite a bit higher than that. But of course, with this great opportunity with Target comes a great responsibility. It's like when you have this partnership with a retailer, you need to perform. You're held to units per store per week. So that's a lot of my focus. This just went into store and we're crossing this atmosphere going from digital into big retail. And it's just uncharted territory. So, Cody, before I bring Steve Holmes on, what's your pain point?

28:25What's your question for us? Yeah, my question's really this, is considering my product category, you know, that it's insect repellent, it's bug spray, how do I build a sustainable business with an effective advertising engine with a highly seasonal product? We see a super strong demand during the summertime frame, and then the demand tips down, you know, towards September. Yeah. Steve Holmes, I'm going to bring you in. Canada is a mosquito heaven in the summertime. I've been there. So anyway, before we answer Cody's question, do you have questions for him? Yeah. First, congratulations. I love the brand.

29:04I've just jumped on the website really quick. I'd love to know one thing. Is there anybody else that uses that active ingredient? so are you having to compare yourself to anybody else or are you just really focused on the deet deet deet yeah it's a good question we're not exclusive the ones only using picaridin but there is stratification in the category i would say most of the category and probably 80 percent of products to date still use active ingredient deet and there's also a small segment on the opposite end of the spectrum which is a lot of use the essential oils so you have like people who want great efficacy but they like trade off toxicity to be able to use that and then you also have the essential oils that kind of sort of work, but they also don't really work that well, and they don't have firm claims.

29:43So where we sit, even though picaridin is not exclusive to us, there's still significant room for us to run with and educate on this active ingredient. We kind of fit right in the middle. We've got the longest protection time at 12 hours on the market, but we've also got more of like a cleaner feel, better for you kind of story about the active ingredient. I guess my question for you, Cody, is why does it need to be more than a seasonal product. I mean, there's plenty of products that are kill it and Halloween candy, snow gear. I mean, there are pumpkin patches. I just did a whole thing about a very successful pumpkin patch in Nebraska.

30:21They're open one month to six weeks a year. I mean, toys. I have a toy line for my kids company. Wow. In the world. And we make most of our money on those toys between Thanksgiving and, you know, a couple weeks before Christmas. So I guess my question is, is there a world where you plan 12 months of the year for four months of profit? Yes. And that's the environment we're currently living in, the second cycle moving into third, most certainly. You know, we do have that always-on approach on Amazon. We just do see a significant uptick during that summertime frame. But when you advertise for big retail, it's a whole other complex scenario where you're advertising in Meta and Google and in these different channels.

31:01And oftentimes when the demand or the return on ad spend decreases so substantially, you got to flip those ads off because you're running red. So when you're doing big retail, I'm just, what I'm finding, you know, and this is my question is like, how do we do it to where it's just, we can meet that demand, but always keep an always on approach so that the algorithms and those ads stay optimized so that you can find the best consumer at that time that you need it. What I would say to you is, as you look at your ad spend, that turn off, turn on, the only other alternative you may consider and i know you probably have but you've probably got limited resources is what grand tonga has a brand you build that package you build that shelf space what is that next product that falls under grand tonga i mean yeah citronella candles or soothing gels for bug bites i'm excited because i've got so much in queue to be able to produce and stuff that i just can't share just yet you'll have to stay tuned we've got a lot in queue Well, I would say it's a wonderful thing if you look at Chris's, Chris Zook wrote a book about a profit beyond your core.

32:04You've defined your core, you've got a core retail partner. And then the other thing is looking at new products is always a good thing, but they need to come from your core. You know, what are the things that are really critical? Because, I mean, I don't know what it takes to manufacture your product, but you don't want to be diversifying manufacturing processes too much. Most certainly. You know, one of the things, I mean, you're, you know, is that the cycle, the sales cycle for this really starts in January, February. I mean, first of all, people are still going to warm places in the wintertime in North America.

32:38They're going to the Caribbean and Mexico. So if there's a way to create some kind of campaign around, you know, always have this in your suitcase or or, you know, when you're, you know, in early spring, you start advertising on Facebook, you know, beat the swarm, you know, get get protected before the mosquitoes hatch or something like that. Well, as an extension of your comment there, Guy, I have no idea what, I mean, you've now learned so much about retail. You might look really carefully because they have high margins at retail in airports. Yes. So it's that last minute thing. And typically when people go to those stores in airports, you know, they're not thinking price.

33:20So they're not as price sensitive. But they are thinking, what did I forget? I mean, how many times have you guys been in an airport and said, geez, where's my toothbrush? Three days ago, Advil. I bought a bottle of Advil. I didn't even look at the price because I needed it. Right, exactly. So I don't know where that fits in your distribution channel. We can do that, no doubt. I think if you look at the business model, Canvas is another tool. There's two ways to get to your customers, either a direct relationship or through channel partners. And you need to broaden your channel partners. And now that you've launched and got a target as a channel partner, that is always a great way to leverage into other channel partners.

33:59You know, you can use that brand to say, we're here. This is what we're doing. We can help you. And we can do this. And there are chains that now run so many of those airport convenience things. I don't even know them. Yeah, Hudson. Yeah, exactly. And Canada, there's a relay. There's tons. Exactly. Exactly. And ideas are easy. Guy and I. Of course, implementation is a bit more difficult. Absolutely. Cody Johnson, the brand is called Grand Tongo. Good luck, man. Thanks for calling in. Yeah. Thank you so much. I appreciate it. Thank you. All right. We're going to take another quick break, but we'll be right back with another caller.

34:38Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

34:54if you've shopped online chances are you've bought from a business powered by shopify you know that purple shop pay button you see at checkout the one that makes buying so incredibly easy that's shopify and there's a reason so many businesses sell with it because shopify doesn't just make amazing buying experiences for customers they're also the experts in helping small businesses grow big. Stop seeing carts going abandoned and turn those sales into... Sign up for your$1 per month trial and start selling today at shopify.com slash built. Go to shopify.com slash built. Shopify.com slash built. As a founder, you're moving fast toward product market fit, your next round or your first big enterprise deal.

35:51But with AI accelerating how quickly startups build and ship, security expectations are higher, earlier than ever. Getting security and compliance right can unlock growth or, if you wait too long, stall it. With deep integrations and automated workflows built for fast-moving teams, Vanta gets you audit-ready fast and keeps you secure with continuous monitoring as your models, infrastructure, and customers evolve. Fast-growing startups like LangChain, Writer, and Cursor trusted Vanta to build a scalable foundation from the start. I love that over 10 ,000 companies from startups to huge enterprises trust Vanta because it makes me trust them.

36:38Go to vanta.com slash built to save$1 ,000 today through the Vanta for Startups program and join over 10 ,000 ambitious companies already scaling with Vanta. That's V-A-N-T-A dot com slash built to save$1 ,000 for a limited time.

37:06Welcome back to the device line on how I built this lab. I'm Guy Raz, and today I'm taking your calls with Steve Holmes. So, Steve, let's get back into it and bring on our next caller. Well, that's great. Let's do it. Welcome to the Advice Line. You're on with Steve Holmes. Please tell us your name, where you're calling from, and a little bit about your business. Hi, Steve. Hi, Guy. My name is Kenesha. And I am the chocolatier and founder of One More Coco, a gourmet chocolate company based in Whitby, Ontario, Canada. Our chocolates are inspired by our Jamaican heritage, nostalgic flavors. We have creations like a scotch bonnet honey and caramel popcorn.

37:48Nice. Well, welcome to the show, Kanisha. From Whitby, Ontario. Where is that? Where's Steve? Do you know where that is? Just east of Toronto. Just east of Toronto. Just a 35 minutes drive. All right. So these are chocolates inspired by your Caribbean heritage with, like you said, scotch bonnet. A scotch bonnet chocolate? Because that's a spicy pepper. Yeah, yes. It's one of our most popular. So it has a bit of honey and a dark chocolate, and you have the kick from the scotch bonnet. It was a slow burn at first, but it's now become one of our most popular. It's a slow burn indeed, that scotch bonnet.

38:23So tell me about—and so these are chocolate bars, or do you make like chocolate bonbons? Tell me a little bit about the products you have. So we make chocolate bars, bonbons, hot chocolate, which was featured on Oprah's Favorite Things in 2023. It was our trio set. It was our white milk and our Jamaican hot chocolate. And then we have, you know, other seasonal products that we bring throughout the year. Kenesha, tell me a little bit about how this started. Were you in food and pastry? Is that the world you come from? No. I'm a trained counselor that went into travel insurance when COVID happened.

39:01So just as I got promoted to travel across Canada for my job, we were hit with COVID, as was booking my first flight. And so while at home, I just wanted to do something that I was really passionate about. So chocolate is a big part of my life. I love it. I will eat it anytime, anywhere. I've had it for a whole day. That's it, breakfast, lunch, and dinner. So I thought, why not chocolate? I taught myself how to— How did you teach yourself? Like YouTube and stuff? YouTube, Google was my best friend scrolling through social media because there was not much to do during that time. And so I launched Omer Coco in the basement of my parents' house.

39:43Wow. Congrats on that. And tell me a little bit about how the business is doing now. I mean, I'm assuming it's mostly direct-to-consumer through your website. I see she's got a retail store. Yes. Do you have a retail store? Yes. It was a whirlwind of a year. So we launched May 2021. Then we opened our store September 2021 because I outgrew my parents' basement really quickly. And we've been there now going on four years. Wow. So you have a store in Whitby? Yes. Yes. We have a store in downtown Whitby. So we do our retail, we do online sales, and we also do wholesale and a lot of corporate. So mostly corporate.

40:23Awesome. And do you cook there too? We make everything on site. Yes. Wow. Wow. And tell me a little bit of how the business is doing. I mean, are you guys sustainable? Are you running into headwinds right now? Are things just seem pretty stable? You know, starting out this year was one of the best year for us. It's kind of strange with, you know, the chocolate industry, the way it's going. Because prices are going way up, right? A 300 % increase over the last eight months. But we've been very lucky. I think more Canadians just want to support more Canadian businesses. So we've seen our best sales so far.

41:04You know, usually after Christmas, we see a major dip. We haven't. So, you know, now it's just trying to build capacity. You know, I am a one-man show. So I do everything. So I'm the cashier. I'm the chocolate maker. Sometimes I am the delivery person. Wow. You have no employees? None employees, just family and friends that help out. We are hiring this summer, finally. So it's been, you know, it's been a roller coaster, but it's been a great roller coaster. That's amazing. All right. Before we get to Steve Holmes and bring him in, tell us what your question is or your pain point that you're trying to solve.

41:42So, you know, one of the issues that we had after being on Oprah's Favorite Things is how do we convert, you know, a viral high profile moment into a sustainable marketing strategy? it's great to say I was on Oprah's favorite things, but what does that really mean for my business in the long term? How do I take this to convert those customers who only came that one time to keeping them as long term customers who engage with our products? All right. So you were on Oprah's favorite things in 2023. And of course, there was a viral moment. But how do you sustain that or take that momentum and turn it into a long term, more sustainable marketing strategy?

42:20Steve Holmes, I want to bring you in. Fellow Canadian here, Kenesha, making chocolates. Not too far from you. Yeah, absolutely. Congratulations. Thank you. I love chocolate. It's probably an impulse purchase. How are you finding your customers? And then I'll come back to that Oprah question. But how are you finding your customers? So I'm very lucky with the community that I'm in. So, you know, mostly people buy our products for gift. But we have those customers who come in every two weeks to buy just to have in our home. So, you know, we're starting to lean more into trying to really showcase how giftable our product is.

43:01And, you know, it's strange. We were on Oprah's everything in 2023, but we didn't see the traction until 2024, like late 2024. That's when people found out, weirdly enough, almost a year later. Wow. Well, back in 2007, we were on the Ellen DeGeneres show, and I'm going to share with you, the number one thing you get out of a viral moment is joy. But you don't build your business off of it. You get joy and you get to always go back and look at it as a joyful moment, but you still got to stay really, really true to those roots and the foundation about how you're going to build, get your product, your chocolate into the channels that you want and into the customer's hands that you want, whether through a direct relationship or whether it's through a channel partner.

43:45Do you guys, when you sell, right, because a viral moment, as Steve said, is really ultimately it's really just about the joy and the moment. And, you know, we've done stories where even big brands, like there's a brief spike, but it passes. My question to you is, do you have a way to capture email or telephone, cell phone numbers now when people buy the products? Yes. So we don't have paper receipts in our store. You can only get a receipt through email. So that's been helpful. And on our website, we do have an option to sign up for our newsletter. So but those are those are you've got to opt in.

44:26And I wonder if there's a way to make it almost automatic. So on the website, it's one thing because you're you're going to put an email address to get the order. But when you buy it in store, it's a little harder to get people to give their email addresses and phone numbers these days is because people are more wary of it. But could you incentivize them like, hey, get 5 % off if you give your email address or your phone number. And the reason why I say that is because email and SMS capture is that's the long game. That's where you can send the newsletter, remind people, give people opportunities to try, you You know, limited edition drops, join the insider community, early access to new flavors.

45:11You know, when you use platforms like TikTok or Instagram, you're renting space, basically. They kind of own your audience. But when you've got your own email or messages, phone numbers, you own it. You can communicate directly with your customers. Let me give you a quick observation. I'm looking at your packaging. It looks great. It's fabulous. One of the questions I would ask is, do you have any space in that packaging to be creative with, I'm going to say, a QR code for a moment. Oh, yeah. Guy. And the only reason I say it is this. In Canada, we, Guy, you may not know this, but you've been to Winnipeg with him.

45:51Oh, yeah. So you know this. There's a thing called roll up the rim to win. Yes. And I say to you, have a QR code that says melt in your mouth to win or something. You know, I think if you could figure out how to utilize the QR code in your packaging and tie it to a promotion that captured their SMS or captured their email, as guys suggested, using that way. I remember we rolled out QR codes in 2006 and they died kind of in America, but they didn't die in the rest of the world. And they're actually back, kind of back. Yeah, they are back. They are really back. They're back. And that's an interesting idea because you could do whatever you want with that QR code.

46:34It could automatically launch your little – you've got a video on your YouTube page, on your page, a video that tells a story about this chocolate. Maybe down the road, you invest a little bit and you show the chocolate being harvested or the farm that you buy it from. There is a story there. But with a QR code, it can say put your email in. We'll send you 10 % off right away. and not everyone's going to use that 10%, but then you've got the email address and then you're directly communicating with people. And you mentioned you have a newsletter. Tell me a little bit about the newsletter. How often are you updating it or writing something?

47:12Usually it's around when we have a promotion happening or if there's a new product or any changes, we do the newsletter. The goal is to do them at least once a month because I'm one of those people who don't like newsletters. I get annoyed if I get too many of them. So I thought, you know, once a month is more than enough. And we do see quite a bit of engagement when we do release a new newsletter. So another comment I would make to you, just to be careful, and here's, Guy and I don't want you to think that we want you to become Lindt chocolate. I mean, we'd love to become Lindt chocolate, but I think you need to think about geotargeting.

47:48You don't want chocolates to be shipped and go bad and you get a bad review. So I think it's really critical to find that market segment within you. You're talking about people who come back to your store every two weeks to pick up chocolate. So there's a geotargeting strategy that I think is really, really critical in how you can figure out. And maybe, to be honest, I know in your area there's lots of Caribbean restaurants. Maybe that scotch bonnet should be sitting on the checkout of a Caribbean restaurant. I don't know about you, Guy, but if I walk out of a Caribbean restaurant, I'd probably buy a chocolate bar right away.

48:22Yeah, and to kind of double down on that, I mean, a lot of businesses, especially in the early stages, focus too much on customer – well, not too much. They focus on customer acquisition, which is the right thing to do. But really, as your business begins to mature, right, and you're a couple years in here now, right? You're about four years in. It's really the repeat customers. It's doubling down on your existing customers where you're going to extract the most value. It's, you know, to get new customers, they're going to come into the store. And over time, you're going to need new customers.

48:58But making sure that your existing customers are, as Steve said, buying more. Could you create a club where every month, you know, not just a club, but these are going to be your, call them your brain trust. These are the people who are going to try your experiments. Maybe you come up with some super weird flavors, you know, like maybe you come up with like a, I mean, just all plantains, all kinds of things right in there. We do have one. You do plantains? Cool. We do. It launches soon. And we've done like a truffle oil chocolate bar. So, you know, I'm willing to throw anything in a chocolate bar.

49:34But have a club. Have a club that gets your newsletter that's committed to buying like a wine club where you're buying a case every quarter. they're committed to buying it but they also get first dibs on these new unusual flavors because you know for our bonbons we're also rolling out our card where you could stamp and after 12 purchases you'll get a free box um because most of the time our reoccurring customers are coming in for our bonbons um so it's one of the things that we're rolling out but i think they would really love a, you know, box of the quarter or month club and try all the new flavors.

50:12Cause that's how I test everything. When they walk in a store, I'm like, do you want to try something? Yeah. Yeah. Here's, here's my last piece of advice. Okay. So you're doing it all alone. So congratulations, but take care of yourself. You know, one of the hardest parts about being an entrepreneur is, and it's about passion and it's about hard work and all of those things, But we've heard hundreds of guys guess. And what I would say is make sure you don't forget to take care of yourself. It's good advice. Great advice. Kenesha Lewis, One More Cocoa Inc. Congrats. Good luck. Thanks for calling in.

50:46Thank you so much. Bye. Bye. Thanks. Steve, you mentioned something I thought was really important, which was to take care of yourself. And I would be remiss to say that you have – you're a survivor of cancer. I mean, you've been battling it and living with it for over a decade and going strong. You look great. Tell me a little bit about how you're feeling and how your health is these days. Well, I live with cancer. I have cancer. I have a number of active nodules. They are slow growing, but they seem to be resistant to most other things. And occasionally they impede behaviors. And so recently I had to have my lobectomy and lost the top part of my right lung.

51:34But otherwise, I feel great. I do. I feel great. And I think I've shared with you many, many times, you know, today is the best day of the rest of my life. And this moment with these entrepreneurs has been a great joy. It's been a really good, fun time for me. And so when you live in those moments, hey, it is – we are all blessed. We can find reasons to complain, but we are all blessed. You've given some great advice today, really great advice about purpose and about the why. And if you could go back and give the young Steve Holmes, young entrepreneur Steve Holmes some advice now, knowing what you know, what would have been helpful for you to know?

52:18Well, I'm going to tell you two things. One is it took me about 20 years before I started keeping this black book. And the reason is that what I'm going to tell you is you may think you can remember everything. You can't. Write everything you learned down. That's number one. because you can't remember the things you've learned and things you've experienced. So write it down and keep it with you. But the most important thing I would say to my young self, be honest with yourself and honest with others, regardless of the consequences you may perceive. Because most of the time you perceive consequences truthfully that never materialize.

52:57And you should have actually just come clean to yourself and to others. Because in entrepreneurs, you know, we've got young guys who, you know, they got an inventory issue and they don't really want to tell somebody. But I'm just, you know, the reality is make sure you're honest with yourself because that's the only way you won't get yourself in trouble. I love it. I love it. That's Springfree Trampling founder and chief activity officer Steve Holmes. Steve, thanks so much for coming on the show. Always a pleasure to be with you and thank you for all that you do for young entrepreneurs. And by the way, if you haven't heard Steve's original How I Built This episode with Dr.

53:35Keith Alexander, you've got to go back and check it out. We will put a link to it in the podcast show notes. And here is one of my favorite moments from that interview. I decided to invest in some fundamental research, and I wanted to ask myself one question. Did any retailer in America believe that trampolines were dangerous and so dangerous that they wouldn't sell them? The answer was yes, and that was Costco. The CEO of Costco was a man named Jim Senegal, and Jim said, I will not sell trampolines. Wow. And so I made it my mission to try and sell Costco a trampoline. Hey, thanks so much for listening to the show this week.

54:16And by the way, please make sure to check out my newsletter. You can sign up for it for free at GuyRoz.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 you 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.

54:53This episode was produced by Sam Paulson with music composed by Ramtin Erablui. It was edited by John Isabella, and our audio engineer was Gilly Moon. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coates, JC 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.

55:27If you like How I Built This, you can listen early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey.