Advice Line with Troy Carter of Atom Factory

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2:18Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at hibt at id.wondery.com. And make sure to tell us how to reach you.

2:59And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me today is Troy Carter, founder of Atom Factory, which managed stars like Lady Gaga and John Legend. Troy, welcome back to the show. It's great to have you on. Thank you for having me. Love being here. We love having you. You were first on the show. Troy was first on the show back in 2018. He told us about how he went from West Philadelphia to the heights of the music business in L.A.

3:36It's an amazing story. In L.A., he discovered and started managing the rapper Eve. but then it all came crashing down. She left Troy as a client. His house was foreclosed on. His car was repossessed. And at the lowest point, Troy, you were introduced to a then-unknown singer-songwriter called Lady Gaga. And of course, you helped build her brand and her career. And it's just an amazing story. And if you guys have not heard that episode with Troy Carter, we'll put a link to it in the podcast description. It is so awesome. It's just amazing. Anyway, after that, Troy, you became an investor. You got in early on companies like Uber and Lyft and Spotify, and you also had a stint at Spotify for a while.

4:17And now you are in the music distribution business. So you are still working with artists and creatives. Give us a quick update on what's going on in your life right now. Yeah. You know, when I left Spotify, I decided that there was this opportunity in the independent music space to really help out independent music artists with distribution and services and technology. So basically took my experience as a manager, my experience of working with artists and technology at Spotify, and now we're distributing independent artists. That's awesome. And, you know, it's interesting because you hear a lot of sort of conversations around, you know, Spotify and how it compensates people.

5:00And the reality is like, if you are an independent artist and you own the rights and your recordings and everything, like you get all the money, right? But it's the way the money is distributed. Because if you are an artist and there's writers and there's composers and there's all kinds of people involved, that dollar gets split 20 different, 50 different ways. Yeah. And for us, we like to work with artists who own all of their music. We encourage them to hold on to their rights. And if the music does well, they do incredibly well. Yeah. Yeah. You, when I remember on the show still, you've been on the show since then a few times, but your first episode, the story of your life, and just I still think about sometimes going up and down California in a van, you know, with Lady Gaga before she was Lady Gaga.

5:52You guys also at the time used social media, YouTube to kind of help launch your career. And back then, and even until recently, that kind of digital discovery was new, right? And it's a different world now. I mean, social media platforms are, you know, they're saturated, right? Digital ads, we're hearing from a lot of startup founders and even established companies, digital ads are not performing as well, right, as they used to. So what are some ways that you're hearing about how entrepreneurs, creators, other people that you work with are building their brands and reaching audiences despite those challenges?

6:26Yeah, you know, we're having these conversations in real time. You know, I was just talking to my team a few weeks ago about, you know, even with my own habits, when I use search now, which I rarely do, but when I do, I'm basically reading the AI summary and not even sort of clicking through or whatever on whatever else. So discovery is definitely shifting now. The reality is you just got to be really, really, really great at what you do and have a really great product. You know, because in music, we've always been like the canary in a coal mine. So probably a decade ago, when the barriers to entry to music went away because of technology, and all of a sudden you have hundreds of thousands of artists releasing music, you know, we figured out ways to be able to cut through the noise.

7:25But part of it was you got to take a really patient long term approach and not expect things to happen overnight and not fall for the traps that happen and taking shortcuts to sort of accelerate things. So, you know, I just think continuing to focus on product, on exceptional service. And to me, it's a bit of a longer route, but it works. But the shortcuts and the growth hacks, you know, is going to be a little bit tougher right now. Before we get to our callers, one last question for you. I mean, a lot of people, a lot of founders, startup founders today, and we may get this question today, too, ask me about working with influencers and celebrities, right?

8:10Because now you're seeing just an explosion of celebrity products. Not all of them work, right? We only hear about the occasional billion-dollar deals of the Haley Biebers of the world. But most of the time, they don't really pan out. What kind of advice would you give to entrepreneurs thinking about whether to work with celebrities or creators, even giving them equity in their product and the brand to boost it? Making sure that is not transactional. If it was me sitting in that seat, I would want somebody who's in love with my product and mission aligned with the vision of the company. and if you didn't have to pay them, that they still would promote your product.

8:54And that's the type of relationship you need to have. If it's transactional, it usually doesn't work. Yeah, makes a lot of sense. All right, let's bring in our first caller. Welcome to the advice line. You're on with me and Troy Carter. Tell us your name and where you're calling from and just one line about your business, please. Hello, Guy. Troy, thank you so much for having me. It's truly an honor. My name is Madeline Nossick-Ellis. I am in Phoenix, Arizona, and my business is The Nest Prep. We produce and deliver custom postpartum meals and snacks to new families that have just had a baby and extending into toddlerhood, families that just need to feed everybody around them.

9:30Nice. Awesome. Welcome to the show, Madeline. So you make fresh meals. Are they frozen or fresh? Yes, they're freezer-friendly, so everything that we make is intended to be stored in the freezer so that you can stock up before the baby is born. That's the primary model that we have. So we deliver frozen. And this is designed, you designed this for people who postpartum. So a lot of times I'm sure people listening have had like a meal train sent to you. Oh, our friend had a baby. Let's do a meal train. Yes. So something like this is probably perfect. They can just order food and then the food is delivered to their front door and they've got it ready to go.

10:06Tell me how you came up with this idea or how did you decide to launch this business? Exactly. Yeah. So I have always just loved feeding people. I mean, since I was a kid, I can remember wanting to feed people and cook. So I worked in food service management really my whole career, and I just love it. Through that career, I started having babies of my own, and that would kind of be my postpartum gift to my friends. Especially ones having their second or third babies, they don't really need a lot more stuff. You'd pack up meals for them? Exactly. And just bring them to their door? Yep. Yeah, I would make things for them at home, at my home, and then pack it up for them, bring it and, you know, help them reorganize the freezer a little bit, ask them what kind of things that they were into and liked.

10:48And I just, I loved it. And I remember doing it for myself when I was pregnant with my first baby. And I just had this daydream about how amazing it would be to do this for other people as a job. And it took me, you know, having a couple more babies to actually make it happen. But once I decided it was time, I just designed the website and went all in. And who is doing all the cooking? So we have a team of four. The kitchen team is really two or three of us. And we have a beautiful commercial kitchen. We produce everything in the span of like two or three days, depending on our amount of orders, which have just increased every week.

11:29So we have three of us on the team with nutrition and culinary backgrounds. And then one who's more in like operations management. Right. So this is a labor-intensive business right now. Yes. Because you're a small team. Yes. Yeah. All right. Before we dig in more, tell us your question. Yeah. So right now we serve the Phoenix area. And every one of our customers, everyone that we talk to, expresses what a need this is. You know, the need to feed your family is not exclusive. So my question is, when you have a business model like ours that not only takes pride in, but really focuses on utilizing the resources of like a local community, what's the first step to scaling that into other cities or nationally?

12:13All right, Troy, you know this well, Troy, because you've invested in companies that have started in one place and had to expand all over the country. Food delivery service designed for postpartum parents. Looks like a cool business. It's in Phoenix right now, but down the road, maybe get it to Tucson and to Los Angeles and San Diego. And how does she start thinking about this? I guess what's the current distribution? so weekly we have you know we have a couple hundred customers right now we also have a retail partnership with a local mom and baby sort of boutique workout class there's sort of an all encompassing location where they've agreed to have a branded freezer of ours on site and we actually stock that every week as well people can go in and buy it on site and what's the um what's the shelf life on the product?

13:07So we say on our labels anywhere from three to four months technically it's really more like six to twelve just because everything is designed to be frozen. Once you take it out and prepare it for consumption obviously the shelf life changes a little bit but we have that on our labels. So you know you can stock up but we have several families that order every week so it's become a part of their weekly grocery delivery. What's the price point? So the price range on our website, the snacks are anywhere from like the 15 to$18 range. And then our meals are 30 to$45. They usually feed four. So a typical average order for us is around$200.

13:52Got it. So is there a possibility of doing like a pilot program with a target or somebody along those lines? I've looked into Sprouts. That's kind of our local West Coast health grocery store. They have a pilot program available for people who are trying to get their products on shelves. That is sort of a, it's one route that I see possibly happening, kind of taking that retail route. But we really have found that this delivery model is very well received by our customers. And so I guess explain how the delivery model works. Yeah, so we are order cut off is Thursday every week. And then we use that Thursday to Monday timeframe to prepare the meals.

14:42Monday is our delivery day around Phoenix right now. So we have a team that shows up to the kitchen Monday morning where we produce it all, grabs the bags with their labels, and then they have a route on their phone, we've got a delivery driver app where they will take that to everyone's home that's ordered for that week. So we do it week after week, deliveries every Monday. I would pilot a small market nearby. And just to make sure that you can replicate what people already love about your brand. So, you know, don't feel the pressure right away on scaling, because I think that the experience is way more important than scale.

15:28And especially since you have a small team at the moment, because once you start scaling as the CEO, your job changes now. You know, you leave the kitchen to manage people. And so, and you don't wanna lose the magic of your brand within that transition. So I think being able to, you know, do a small pilot nearby might be the sort of way to sort of test it out to see whether or not it changes the experience for your customers. Yeah, I think that's right. I mean, I think that right now, you know, thinking about ways to scale it, you should do it very slowly and methodically. I mean, there are a couple of things here.

16:13Your price point is higher than what a frozen meal would be. Obviously, the quality is better and it's prepared by chefs, so that makes a lot of sense. But there are meal delivery services in cities all across the country. So the question is, what is that thing you're offering? What is the value prop here? Is it the branding? Is it the idea that this is for postpartum, you know, families, etc. And that could be an interesting, you know, way to position it. I think that you might want to start going to just literally to Tucson, or I don't know if you reach Prescott, Arizona, but a smaller, closer place that you can reach in, you know, a couple hours, where you don't have to hire too many more people.

17:00Because if you're doing it in Tucson, and you and then eventually you've got a kitchen in Tucson, and you're going to need a staff there, a team there. But it could be a great model for how to think about expanding out of state. I would really try and focus on Arizona first and the markets there and then see whether it's worth trying, going into Las Vegas. But I also, the other thing I would do is I would literally just do research on what cities, what parts of the country are seeing the highest number of births? I mean, literally, I would like go in, and is it Columbus, Ohio? Is it, you know, in proportion of population?

17:38Where are you seeing the highest number of births in proportion of population? And then also, you know, you want to cross-reference that with affluence. That's what I was going to say, because it's probably not a direct correlation, you know, but you think higher births and higher births usually equals lower education level. If you look at all of the data in terms of high birth rates and education level and education usually equates directly to income. Yeah. What's the current size of the business? We're approaching the six figure mark. I would really focus on penetrating your own market first because you can grow the business there substantially, but it gives you the opportunity to really work out any kinks that you may need to work out before you scale.

18:37Yeah, I agree. You're too small right now to work with Sprouts or any kind of national chain, but you're not too small to work with a local co-op. I mean, that could be an interesting way to try and test out, you know, how this might work in retail. I am all for that. I would love to be able to saturate it here and really work out the kinks, like you said. I mean, food service is high overhead, high labor. And the goal is to be able to have the service in other cities, but definitely not in some sort of rash decision or, you know, something that's not going to sustain itself. Yeah. All right. Madeline Nossick, the brand is called The Nest Prep.

19:18Good luck. Congrats. Thanks for calling in. Congratulations. Thank you both. All right, we're going to take a quick break, but we'll be right back with another caller and another round of advice. 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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23:00Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is Troy Carter, founder of Atom Factory and former manager of Lady Gaga, among others. And we are taking your calls. So let's bring in our next caller. Tell us your name, where you're calling from, and just one line about your business, please. Hi, Troy. Hi, Guy. My name is Tyler Beck. I'm calling from Hood River, Oregon. Name of the company is Guzzle H20, and we build portable water purification equipment. Cool. Portable for like RVs and like that kind of thing? Yeah, so our flagship product is like a box that's got a carbon filter, a UV sterilizer, a pump, and a battery.

23:40And so it will pump, filter, and purify 35 gallons of water on a battery charge. And it will fill up like a five-gallon jerry can in about seven minutes. Wow. So you can just like park your RV next to a river or like a lake and just get that water purified? Fill up your onboard tanks with clean drinking water. So we've got a lot of customers that with RVs, the van size RVs are really popular these days. A lot of people just doing car camping and adventure travel in vehicles where they need to source water. And then all kinds of people with off-grid residences and hunting camps and that kind of thing that would use a product like ours.

24:23and then we also have point of use systems that you can install in an adventure vehicle or an rv that treats the water coming out of your tank and cleans it as you use it because most people with an rv don't want to drink the water that's coming out of the out of the onboard tank because it either tastes like plastic or you know they're worried that it's got mildew or bacteria in it so the UV ensures that it's safe. So that's just, you can really literally go up to any body of water, not the ocean, obviously that's desalination, but pretty much most relatively clean bodies of water and you can get clean drinking water from this product.

25:01Yeah. Any, any fresh water source. Yeah. That's awesome. Well, tell me how you came, came to this. Were you, are you an engineer? Is this your background? What, how'd you start this business? Yeah. So my business partner is actually a professional sailor. And he, you know, put up a Facebook rant, you know, five or six years ago. He was traveling with his sailing team and they would be, you know, at some international waterfront and there's water on tap, but to support the team, they would go buy bottled water. And so they'd get to the end of the event and the dumpster is full of single-use plastic bottles.

25:36And so he was like, wait a minute, we are, you know, sailing on the ocean, all the plastic trash ends up in the ocean. You know, we can't keep doing this. So I picked up on it and I've known Sean for a while. So Sean is a sailor. Sean Coover. Oh, yeah. And yeah, so we just started like the first project was to see if we could put a drinking water treatment system in a case that they could travel around the world with. And so, wow. Yeah, that's how it started. So all right. So now you guys have this business going. Tell me a little bit about your sales? How did you guys do last year? Yeah, so we did about$800 ,000 last year.

26:17What's the price point and how many units is that? Yeah, so we've got products that range from$200 up to$1 ,000 is like the flagship system. Got it. All right. And before we dig in deeper, what's your question for us? I guess as a small brand trying to grow awareness, how should we think about working with micro influencers particularly like we have a lot of people that you know YouTubers and people on Instagram that are doing like we have people that drive from the north side of Alaska to the tip of South America and so they'll bring our equipment and so we have great relationships with them but we'd like to give these relationships some longevity and we've basically found that you know as we call bigger influencers they don't call us back.

27:03So we're sort of, you know, thinking if we had more structure to our program with working with these people, you know, we might have a little more success. Not that we're not having success, but it seems like it could work a little smoother and with a little more clarity for everybody involved. So before I bring in Troy, just really quickly, how, I mean, what has it, what's been the return like on working with micro influencers? Are you actually seeing a significant boost in sales or is it a mixed bag? It's a mixed bag. And, you know, that is another reason I'm asking the question. I would say, you know, it kind of ranges from you end up with a whole community that adopts your product because you pick the person that is talking to that community and it's super successful.