291 - Best of 2025! The "Hot Ones" Effect: What Really Happens When Your Brand Goes Viral? with Scott Zalkind

0:00Hey, disclaimer, I made my own kitchen. If you try this and die, it's your fault for trusting me. There's water activity in the product. You can cause botulism. It's a terrible way to die. My life goal is that nobody ever dies or traps themselves because of my product. They're very noble aspirations. Be the price to make your nut because nobody else looking out. It's like being the ugly girl in this universe batch. She's still really hot. The threat of tariffs are very real. Last time we had tariffs, we had a glass shortage. Glass jumped in price and that threatened everyone in my business because it was hard to get glass.

0:27So how do you make sauce like glass?

0:32Lucky Dog Hot Sauce is my company. I make and sell hot sauce. I have a model where I use a co-packer. I decided early on that my time was better spent out hustling the sauce and getting into stores and packing orders and doing the things that actually get sauce into people's hands rather than being in a kitchen stirring a kettle, which, you know, that's purely a time sink that I don't have the money for a giant kitchen or all the equipment. With my background in healthcare. I did some projects where I did ROI's for equipment purchases. So interestingly, I go to a commercial kitchen and I can identify the source of every piece of equipment in there and how much it costs.

1:10So it was pretty easy for me right off the bat to know I don't have that money to buy a liquid filler and accumulate table, a labeler, a shrink band, heat tunnel, and all the fun things that go into production line of a physical food product. So I do partner with the co-packer. I'm now on my third co-packer and I'm super happy with where I am. I do farmers markets and festivals for retail sales. I have a website that I sell hot sauce off, luckydoghotsauce.com. And I'm in a number of stores. I think I'm up to about 67 at this point. I wasn't as many as 200 stores. The pandemic wiped out quite a few.

1:48And then some of the bigger chains are a little fickle. So you kind of come and go in some of the bigger chains when you get in. But in the NFL, I make and sell hot sauce. At heart, I am a passionate hot sauce person. I love spicy food. I have my entire life. I love the creative process. I always wanted to do something creative for a living. And somehow I ended up in IT and project management as a career. So I was less than totally satisfied doing those things. And at one point just lost my mind and started a business. So I need to talk to you every morning because it's like, I'm like getting a shot of just caffeine just just hearing you tell your story um question for you well first of all you were featured on hot wings right like your your hot ones your your sauce was on one of their episodes or is it continually dog was actually on 13 episodes of season nine all 13 episodes i was one of the first 50 sauce makers who had a sauce on the show they have three houses one five and ten are the sort of house brands uh and they the bomb never goes away the bomb is always going to be number eight uh and over the years i think it's just become sean's little f you to everybody that you know what people didn't realize is every year they'd announce the lineup and a million people would complain the bomb was still on there because it's and what they don't realize is a million people complaining is a million people talking about it both marketing so if everybody got the hell up about bomb early on it probably wouldn't have been back every season for 25 years uh and back then they were doing one season a year so it was It was fun to be in that early sort of group of sauce makers that had sauce on the show.

3:23It's still really exciting to get on there. I'd love to get back on there. Let me ask you this, because from what I remember, you went from selling drugs to people to creating a side hustle and then starting selling hot sauce. And I say that tongue in cheek, selling drugs to people. But weren't you working in pharmacy? Weren't you working in healthcare? I was working in healthcare. I was a project manager for Kaiser Pharmacy for 10 years. I worked at their Health Connect. area for two years doing a number of different types of projects. One of the biggest ones is the custody. They had 237 internal pharmacies.

3:56It was my job for track and trace from where they make the drugs to the consumer all the way through the supply chain. And it was such a cluster. But those are the kinds of things that I would do. A number of other projects that I was on that would just bore you to tears. Okay. Well, like those are, okay, those are real things. Like those are, Kaiser is a massive business for people who don't know who aren't from california i grew up in sacramento by the way so you know stones throw from from where you are in hayward but um kaiser's massive so if you're working on all the pharmacies there's a lot of internal processes etc how does that skill set where you're an internal project manager translate to building a consumer product like hot sauce and then rolling that out as a company did it just happen overnight or was it a slow roll definitely not overnight i was a hobbyist for seven years, the first three or four years, they were pretty terrible.

4:46Probably. I thought some of them were okay. But after three or four years, I'd get friends saying, Hey, this stuff's pretty good. And then friends of friends, the bottles would find the way too. And I wasn't selling them. I was just making batches in a batch. You'd make 20 or 30 bottles. I'd keep two or three, I'd give away the rest. And then friends of friends and people who own restaurants or chefs or people who own grocery stores, the feedback would sort of percolate back to me that, Hey, tell your friend this stuff's really good and if he makes it i'll sell it or or a chef saying hey this is the best hot sauce i've ever had and this is somebody who went to culinary school professionally trained cooks i'm thinking well maybe i maybe i'm on to something here so after seven about seven and a half years i decided to give it a try like how hard could it be it's just you know it turned out it was pretty hard uh that's where the co-packer thing came in but it's funny the way you asked i love the question actually because not only with the project management background.

5:37Prior to that, I went to college and studied horticulture. I was an applied sciences major. So I did greenhouse management. I lived in the Netherlands for two years in Holland, growing roses in St. Paulia and, uh, stargazer lilies and a number of other plants like Pontus molus. I came back here. I worked in greenhouses. I worked for Robin Fallon company. I was an orchid breeder. I bred Paphiopetalum orchids for a while. I ran their spa for orchids. And, and so with a lot of career changes, you know, Working over here in horticulture, over in Holland, you're respected as someone who studied science.

6:09And working in California as a horticulturist, you're respected like the guy that mows your grandma's lawn. It's not the same kind of pay or respect as a society that really appreciates what it takes to run greenhouses and such. But at every juncture when you jump careers, you put all this time and effort into studying something, and you work at it for years, and you feel like you've accomplished some things, and you start over. I went to night school. I started learning about computers because I was living in the Silicon Valley. This was the year at INDs. Everyone was blown up. Went and worked at a game company.

6:38Got a job at a help desk to start. Worked my way up to IT management. And then jumped from IT management to project management. Project management translates to anywhere. Took a job at Casio Permanente and spent 12 years there as a project manager. PM1, PM2, PM3. And then quit that to do this. And even jumping ship from healthcare to hot sauce, you feel like, geez, I just wasted that 12 years. But you know, like I said earlier, when you go to a kitchen and you see the equipment, you're like, Oh, that's a capsule or a capmatic capper. I know how much that thing costs. So if I went to a commercial kitchen that I was seeing about working with, and I saw they used all cheap shit equipment, well, I'm not going to want to work with that kitchen because that's going to be the quality of produce they buy, right?

7:25They're going to cut corners on a machine. They're going to cut corners on my sauce. and I wanted to make a high-end product. And then same with just product management is a form of project management. It's the life cycle of a project from concept to execution to proof of life to how's this going and measurables in terms of running metrics to see what my top sellers and bottom sellers are and what the turn rate and velocity. And so all the things that I learned through horticulture, through IT, through project management, and they all add up to the sum of what I do today. So that's sort of, whenever anybody asks me that question, I like to impart that no matter what you do in life, you are sitting right there talking to me right now is the result of every step you have taken in your life to get to this exact point.

8:12There are no wasted steps. There are no wasted cycles. Experience is experience and it can all build on each other. And then you'll find that it comes in handy in ways you never thought it would. Well, and like you think a lot of times, at least I do. I don't know about you, but in entrepreneurship for me, it was like, I wanted to do something that I love to do and have control over what I wanted to do. And sometimes you think, oh, well, I got to make a million bucks or I got to make 10 million bucks to be free. But you've taken all of your experience and I mean, you seem really passionate about what you're doing now.

8:42And now you have control of your time. You're doing something that you love. All that experience is sort of fed into what you're doing now and made you successful. had you always wanted to be an entrepreneur or was this just kind of like that just seems like the next best step i've been doing this for seven years and it's kind of working out let me be an entrepreneur well as a project manager you know you go on a project and you you coordinate with stakeholders and shareholders and you know on any given project as a pm3 you have pm2s and pm1s under you and you interface with other departments and you've got timelines and you've got budgets and communication streams have to be clean.

9:19And there are a dozen bosses sort of informally, including your own boss who is more formal, but all these other people on this project are going to shake you down every minute of every day. There's so much stress involved in that. And what I want to do is get away from all that stress. And so I still work for a micromanaging jerk. It just happens to be me. So it's, you know, somebody went first quit of my job and started this, who I know who has a business told me the best part of being self employed is you get to pick which 14 hours a day you want to work, which I thought was the funniest takeaway ever.

9:50And now 12 and a half years later, it is the single most true thing anyone has ever said to me about this. And so it's, uh, it's not necessarily something I wanted to do. I've always wanted to do something creative with my life. I've artistic, I'm not a painter or a sculptor or a, or a good pen and ink drawer. I'm not a great, I'm not an artist, right? I, I, I think I have good ideas. Like all of my labels were my ideas, but ideas about execution are worthless. So I have good artists in my circle of friends and family. I go to them when I need a label art piece done. I tell them what my concept is and we'll go back and forth a little bit.

10:29And then I give them total artistic freedom from there. And usually that's when you're going to get the best results because artists do better work when they have that kind of box in an artist they're going to give you exactly the box you asked for you don't want an artist at that point you want a carpenter right and so when i go to an artist for a label like diana federal won first place for label art grand prize for marketing of the 30th national fiery food show in 2016 or the 20th it was the 28th annual fiery food barbecue show in albuquerque and it won number one for label art grand prize for marketing that label i said i wanted to deal those muertos version of my label i'm working on a Mexican table sauce.

11:05She said, what do you want? And I said, I love sunflowers go. So she gave the dog sunflower eyes and everything else was her. And that label is the most beautiful label I've ever seen. And there's no way that label would have been that good if I tried to pigeonhole her into doing something that was in my mind's eye. So I had a good concept, but the execution was all in the artist and that freedom helps. What I, what I really like about your story is like, there's a lot of people who talk about getting into entrepreneurship and it's really easy to sell the sexy dream of, oh, do the side hustle and you'll hop into it.

11:36Or, oh, it's super easy. Anybody can get started and you can figure this out. It took you seven years and that's not glorified many times, right? Because it's not as sexy. Like, oh, he just, he bet the farm. But you said something, I listened to one of the interviews that you did. You said something about the way you were iterating because it took a while for you to sort of perfect the formula. Can you talk about that process of like how you got from never making hot sauce to, all right, chefs are now complimenting me on and I should sell it? Yeah. So when I first started, I, you know, it's funny, the internet is there and I love the internet.

12:12And I love when I'm arguing with a friend about something stupid, like sports, because I play fantasy football and you start arguing in 10 minutes into your life, wait a minute. I have the hitchhiker's guide to the galaxy in my hand is all knowledge of the universe. well why don't why are we arguing over this we can just look up the stat right and so i kind of took the opposite approach uh what i looked for on the internet was how to make sauce without killing people i want to give people botulism what's a safe way to bottle something and it's all about ph that's the basic science again i was a science major back way back in the day uh how do you make it shelf stable how do you make it so that you know botulism is not going to grow in it how do you uh you know what time and temperature do you need to pasteurize something things like that Do I want to ferment?

12:54Do I want to pasteurize? Do I want to hybrid start with a mash and then add things and pasteurize? So sort of looked at ingredients I wanted to use. And then I was just going haphazard. I was roasting peppers on my fire roasting on my Weber grill and smoking them with various woods and smoking onions and, you know, roasting garlic and just doing all the ingredients that I didn't see in commercial hot sauces. And like I said, a lot of those sauces were absolutely just abjectly terrible. I call them drain sauce because you make it for down the drain and make a lot of drain sauce before you make something edible.

13:31And it can take years to make a good hot sauce. and the way I approached it was again with that sort of scientific method I would write down all of my ingredients in gram weight I would you know memorialize document the recipe in excel and say version control here's v1.0 and I'd make it and you sort of have to there's a expression in project management called scaling up right and I know that goes to a lot of things but especially in project management you do post-mortems on your project you review what went right and you review what went wrong, especially fixate on what went wrong. And it's not to be hypercritical of your staff or of the project.

14:09It's to avoid repeating mistakes you've made. So the next project is that much smoother, right? And so if there was a thing that went wrong in the project, you can make sure to focus to not make that same mistake twice. You probably still will. You know, it happens. You have different people, different projects, but with food, with making a recipe and that process of evolving a recipe, you try to fail up, you make the sauce and you try it and you try to taste for what is successful and ignore, not necessarily ignore, taste for what works in the sauce. And when you rewrite the recipe, you try to amplify those things while eliminating the bad notes.

14:47Right. Totally. I do. I freaking love that. The failing up. Like when you said it, when I was listening to it, I was like that. I love the way you said it. And then you even said, I can't remember exactly how you said it but you're like yeah I made it it was mostly crap and then I took a little bit of good and then it was like half crap and then I took a little bit of good and it was like 90 % good but there's still some crap he's like I just kind of failed my way up I thought it was good is beautiful but enough that's the thing I want to make great sauce right and with products that have won awards on the next batch I might add two percent more roasted garlic I never stop tweaking sauces because they can always be just a little bit better or a little bit hotter or less thought or some note I want to express might not open up as much.

15:28And so, you know, that's a never ending tweak. I won't announce these tweaks to the world, but that, and nobody is probably the, I'm the only person that will taste that subtlety because I know what's in my mind. I'm looking for. That's what I was going to ask is like, okay, it's like, this is a product, right? Like if I want to grow on social media, which is something I've been doing, because I'm trying to go in audience and I want to do a podcast. And you and I talked before the podcast started about how amazing social media is just how much we love the interactions anyways um it's very easy for me to measure whether or not something was quote-unquote good how many views did it get how many likes did it get how many retweets how many impressions how many shares whatever how do you do that with hot sauce like is it just you tasting it and saying hmm good hmm bad and marking it or like is there a scale of heat do you give it to other people are you blind testing it?

16:16Like, what do you do? It's a great question. So, uh, early on it was pretty much me. And then I'd get feedback. I'd bring some to a party, right? This was before I had a company, I had labels and I'd like, it'd be a potluck down the street and I'd go put a bottle out with all the food and I'd be a fly on the wall. And I'd listen to what people would say critically about the sauce. And I take it in as constructive, but you know, it's easy to get your feelings hurt because somebody didn't, you know, everyone, not everybody's going to like your child, right? But you have to sort of make it with a grain of salt, right?

16:44That maybe some people just don't like kids. Same with hot sauce. Maybe everyone has their own face hole, their own above average tolerant face hole. And maybe what's mine is hot to do. But you try to take an aggregate of the feedback and you try to evaluate it fairly and say, okay, well, you know, when you hear people saying, wow, this is great. Who made this? You know, that's, that's, that you're getting an A class grade, right? And so with future products, when I put out a product now, I just put out two for the first time in two years. I put out one called Deluxe. It has blackberry, black garlic, and dragon fruit.

17:17And I put out a wing sauce called Flucky Dog. They've both been best sellers so far for the six, seven months they've been out. And with things like that, I bring them to the farmer's market. I bring prototypes. I have many dealer customers that are loyal and come see me once a week, twice a month. And I'll usually bring that test badge there and say, hey disclaimer i made my own kitchen if you try this and die it's your fault for trusting me but you know have a taste i will get unfiltered feedback from customers who know my product and love it and i'm very fortunate that i have that outlet that i can go around to various now i might not always take the feedback if somebody says oh this would really be great to put some kumquat in it i'm probably not going to go put kumquat in it but uh if if the majority of feedback is hey this is fantastic well then i know i'm at least on the right track and then i'll hone in what I think are more desirable or less desirable attributes of the sauce.

18:07There's a fun adage, I forget what sculptor they were talking about, if it was Venus de Milo. How do you make it look just like her? And he says, it's easy. I start with a stone block and I chip away everything that doesn't look like her. And I have the same approach to hot sauce. It's a little bit cheesy, but you chip away everything that doesn't taste like what you want it to taste like. And there are some ingredient notes that will never go away. and you have to find a way to mute them or mask them or balance them with something else so that it does become a successful sauce. The Reaper is a really difficult pepper to work with.

18:39All super rots have a kind of battery acid bitter note with them. So something like a scorpion pepper or a brain strain or ghost, you take a bite of the raw pepper, it's going to be sweet and fruity or savory and floral. And then halfway through chewing it, it goes wonk and you get this battery acid bonk into. And if the finishing note is bad, nobody's going to want to eat your sauce because that's finishing note draws you in for something else. It lingers nicely. Oh, got to have some more of that. With the Reaper, that bitter notes right up front and it's got a bubblegum sweetness and that wonky bitter note to it.

19:13And so that's very challenging because a lot of folks will make a Reaper sauce and they're going for the hottest thing they can possibly make because they want the bragging rights. I want to make something that tastes good. So to me, it's about making a condiment. I'm not in that business of getting into the bragging rights contest with other sauce makers I'll never win it I don't use extracts and I'm not really interested that's one of the reasons I got into hot sauce because originally there were super mild sauces and stupid hot extract novelty sauces and nothing in between and so I was trying to as a project manager does fill that gap create something that fit into a void that I wanted to eat that had respectable heat and flavor now there's a whole bunch of wonderful sauce makers out there I I'm lucky to count myself as friends with a lot of them but with the reaper that the key it turned out to be using an ingredient like mango that's sweet because then that bolsters the the the good quality of the reaper pepper and amplifies that sweetness and then an ingredient like tamarind that's a little tart to create a counterpoint to the sweet note and when you've got the sweet and the tart then that forward bitterness kind of takes a seat in between them and it's a little bit muted so the bitterness is still there you just don't really taste it so the more reaper you put in the more bitter it's going to be so i also set out to make it not nuclear hot purposely i brag that it's the one of the milder reaper sauces on the market but it's approachable it's edible it's a good analogy i make is it's like being the ugly girl in the miss universe pageant she's still really hot not by me of course i'm way out she's where i'm out of it dude i this is one of my favorite things and when i have people come on the podcast many times i'll ask them beforehand like what are you really passionate about right now because most of what you just said could have been French, right?

20:53Like, oh, it's a bitter note at the beginning. And then you have the end note and the way it balances. I'm like, I don't even know what you're talking about, but to hear your freaking passion for it. I know that you love this business and it's not just a business to you. It's something that is like an art in what I do together. It's a life. I think that's what people miss when they're like, oh, I got to get my side hustle. The most successful side hustle is going to be the one you're most passionate about. And you're like the living embodiment of, of that. So, um, the stupid question, what is a co-packer?

21:26Okay. So a co-packer is a commercial kitchen. Uh, in my industry, you need to work with a licensed cannery because hot sauce and it's specific, it's specific to California, but also many other States, the laws vary from state to state. But in my situation, I'm required to work with a licensed kitchen that is also a licensed cannery where the people that run that kitchen are licensed canners because it's a hot packed, acidified, shelf stable product. Right. And so I heard I'd heard in food in particular, most of the country is sort of set to California standards because California is usually the highest standard.

22:02And so it's like, well, if we're going to mass produce for California, that might as well just be the standard. Is that true? It's largely true. Yes. And if Some states fight it and some states, like I know Louisiana had cottage laws for hot sauce, but I think that's long gone. Okay. But so a co-packed facility is someone who already has a space who professionally makes product, excuse me, for other people. And in doing my research, when I was looking at starting this company, talking to friends who were already in the business, it dawned on me very quickly that everyone who started their own kitchen because they had a hot sauce company ended up becoming a co-packer for other people.

22:37Because when you're small, like I am, you're going to whip out your year's worth of sauce in about two weeks. And then what do you do with your kitchen? What do you do with your staff? What do you got a bunch of stuff depreciating and using it? So they use their time and money to invest in their equipment. And then their business model is being in the kitchen making product largely for other people. Yeah, and there are manufacturers like that, right? Where it's like, oh, I make this specific precision part. And they don't necessarily own their manufacturing facility, but they rent out space. and they're making a small run at that facility.

23:07So this is just on the food side, right? Like you're just, you're mass producing food. When did you get to the point where you were like, okay, it's dialed in enough for me to go to a co-packer? So I started with a co-packer right off the bat because you cannot sell hot sauce legally unless you have made it in a certified. That's what I mean. You were doing it for seven years before you quit Kaiser, right? Right. So like when in the seven years you're like, okay, I can go to a co-packer. Was it year one or was it like year five? I'd say it was year zero because I continued to be a Kaiser for seven months while I was selling on the weekends at a farmer's market.

23:46So concept by, hey, I know this stuff's pretty good. I think I got it with a graphic artist. I got my business sales permit in California. You need a seller's license. So I picked up that. I did the DBA process where you do the doing business as, put it in the newspaper, you announce that you're starting a company, blah, blah, blah, trademarking the name, all those things that you have to do before. And then finding a space because, oh, shit, I just made 600 cases of hot sauce, three flavors, 200 each. Where am I going to put it? You can't put it in a U-Haul storage locker. You have to work with an FDA approved certified warehouse that gets inspected twice a year.

24:22So you got to rent ballot space in a warehouse or buy a warehouse. That was not in my budget. uh so i found a space that so you know all those things that you know and then insurance you liability insurance to sell a food product you have a million at minimum but recommended two million dollars of liability insurance and in 12 years i've had one scoundrel try to to jerk with my liability insurance by claiming they got injured from my sauce but it will it amounts into one email to me and me responding here's my insurance number good luck and never found it again. So without that though, you can get in a lot of trouble.

24:57People can make claims of harm. And if you're uninsured, you know, then whoops. So that you got to CYA, you know, on anything you do. And so the decision came to use a co-pactor immediately before I did anything I used, I decided I can either rent kitchen space. And at first I looked at Uptown Kitchen in Oakland, which aired kitchen space. Uh, the challenge is that's not legal because shared kitchen space is not a licensed cannery. And a canner's license, which would take me some time to get, I think it's a two-year program. I still wouldn't be able to go in. It's not like magically make it into a cannery.

25:30Becoming a licensed cannery involves inspections by the state and certification. You'd get a license. There are these things called ghost kitchens where essentially they're prepping the food centrally, et cetera. But the difference for you is it has to be a cannery. Got to be a cannery. It's a solid product. So like any other canned good, there's a risk of botulism. If there's water activity in the product, you can have bacteria and that bacteria can cause botulism. It's a terrible way to die. I don't want anybody to experience it because of at least that's my life goal is that nobody ever like dies or craps themselves because of my product.