How to Create New Product and Sell Out During Launch

0:00Hey, guess what? Shopify Masters is now on YouTube. You can watch our interviews on YouTube. Just search for Shopify Masters. And as always, thank you for listening or watching. Now, without further ado, here is this week's episode. Eight weeks to sell out six months of product was nothing that we could have ever imagined. Hey, what's going on? Benjamin Gottlieb here, and you are watching Shopify on location from Los Angeles. We're meeting with two of the three co-founders of Ghost Town Oats, Michelle Johnson and Ezra Baker. I don't see anyone talking about how Black people and people of color are more lactose intolerant than anybody else.

0:43That is like, to me, such low hanging fruit for a demographic that you can sell to. Their oat milk company is doing something that many brands dream of. They're bringing healthy ingredients, healthy food to folks who want it and they need it. We didn't have access. We had to like make do with what we had. This marriage of social change and good product is at the heart of why we're chatting with them today. Michelle, Ezra, welcome. What's going on? So happy to have you and what a treat to be here in this space here in Los Angeles. Let's start with this. Entrepreneurs are problem solvers at their core.

1:20So, Michelle, why oat milk, of all things? It was a very natural progression for us to choose oat milk. And at least for me, the story kind of dates back to my own childhood. I grew up very, very poor underneath poverty, if you will, back in D.C. We lived in a lot of homeless shelters, motels, other people's homes, really. And those food boxes that we would get from like church donations and stuff like that, that was a lot of what we had available to us for food. And then when we would live in our own apartment, we were always walking so far to get to a grocery store. and oftentimes like with you know the food stamp card that we had available 7-eleven was the closest thing so that was where we ended up going to get most of the things at least just like the basics like milk cheese eggs ho-hos you know to have for the house uh so from there you know my becoming a barista later on not only was that like an opportunity for me to kind of take myself out of that situation but it introduced me to better quality just ingredients to make beverages and that's where I was like, oh, well, I knew that there were good things out there.

2:32But this whole like specialty coffee world that I'm now finding myself stumbling into, like my mom doesn't know anything about this. My family still thinks I work at Starbucks. Like this is just like, okay. And these memories of walking what probably seemed like miles and miles and miles as a young child. Absolutely. This sits with you. Yeah. I mean, I'm the oldest of five children of my mother's kids. and we are all born within five years. So it wasn't just one of us going, it was all of us going. Or my parents were sending me and two of my siblings to go walk on our own at all hours of the day and night.

3:09I have memories of literally going to the store to get things for the house at like nine, 10 o 'clock at night by myself. I mentioned earlier that entrepreneurs at their core really are problem solvers. And I'm curious, Ezra, when you hear Michelle's story, are there things that resonate with you? Did you have a similar experience? Kind of, but mine was more geographic, I guess. You know, I'm from rural South Georgia. The closest store was like 10 miles away or so. My goodness. So we didn't have access. We kind of like, as like, we couldn't get to somewhere really quickly. We just had to like make do with what we had.

3:48So I think we, you know, we were always problem solving. being like, okay, how can we have better access to eggs? So my grandma would raise chickens and we would get the chickens. I'm like, how can we have vegetables year-round and not have to go to the store? Oh, you plant a garden and you freeze. And the worst part is shelling and picking them. Like we would, you know, a complete summer day would be like, you know, waking up at 7 a.m., picking peas, then shelling peas all day long. Oh, my God. And then so my mom could freeze them and put them up. That's why I live in the city. Yeah, we have a deep chest full of peas.

4:34So it was like, yeah, you're right. It's like everything is problem solving, like, constantly. Well, my daughter is one-year-old, and she loves peas and pea pods, although that sounds like it's a little bit more difficult than what we would be. Oh, no, it's like thousands and thousands and thousands of peas. So I'm hearing a couple things. I'm hearing self-sufficiency. I'm also hearing resiliency. Let's bring that together with you two, bringing both of these experiences and skills together. How did you two meet? And when did this idea of starting your own business together come about? Well, all of my life, I had to fight.

5:08I showed up to work. And Michelle was there. Where were you working? At a coffee shop in New York, in like the west side. And Michelle was there. And I said, hi, you wrote that article. This is actually very true. And us sitting together like this on this couch is very much exactly how it was in that coffee shop. So I'll fill in here. I was in 2016. I had just left from working as a full time barista and going forth into the world of having my own creative blog called The Chocolate Barista. Now, I was not trying to be disruptive in any way. I thought it was funny naming it the chocolate barista because people would come into the coffee shop and say very outlandish things about how they wanted their coffee, like their women, tall and dark and Ethiopian.

6:03I'm not that. You know, that's also not specific to you. I will. I've had that to do too, and I'm like, shut up, 475. For sure. but when I named it the chocolate barista people asked that I was like no I just think it's funny um but I did write a blog about my experience being a black woman in the coffee world and it had blown up I mean just like completely taken over the specialty coffee industry on a worldwide scale and Ezra read that article Ezra read that article so I walked into this coffee shop in New York I was on my way down to DC to go visit my family and Ezra literally sat down and was like hey, you're that girl that wrote that article.

6:43And I was like, yeah. And he was like, cool. And then we didn't say anything. And then after about a couple of minutes. I was having my me time before my shift. He was about to work. I was about to leave. And that was it. But we did end up cultivating a relationship, mostly online. And it wasn't until maybe about 2019 that I was playing. I used to play in these parties called the Chocolate Barista Party at the annual Coffee Expo. Okay. And the one in 2019 was in Boston. And I just came back from Australia from having a whirlwind of a time down there. And I was like, I need to plan this party. But we got two weeks.

7:20And Ezra was like, I got you. I'll be there to help. And in two weeks, we raised like$25 ,000 for the party, got sponsorships, merch designed. um and for this event yeah and Ezra was like you know if we ever worked together we would be really really good and I was like yeah okay and then just went on with my life yes and then 2020 ended up happening pandemic um we're all just kind of at home not doing much you weren't working at Stumptown anymore I wasn't working at Red Bay Coffee so we're all just kind of coffee consulting freelance on the side. And there is a third co-founder, Eric, who also was just like, had just moved to LA right before the pandemic.

8:03And so when the idea for an oat milk came to us, it actually came to us through a consulting project. And the thought that I had was like, you know, that's a really good idea, but it can't just be what we already see in the plant-based milk space right now. Like, I don't see anyone talking about how black people and people of color are more lactose intolerant than anybody else. And that is like, to me, such low hanging fruit for a demographic that you can sell to. Because the problem isn't that people aren't going to spend the money, it's that they don't have access to it to spend that money. And you're lactose intolerant yourself.

8:42And I'm very lactose intolerant. Or also they don't know that it's a product that is accessible and is available to them. and even they can experience this thing that they only see like, you know, yoga moms enjoy. Sure, of course. Right, so the idea is there. The relationship is there, which is super important if you're going to start a business with someone. But then comes execution, right? You could have an idea. You can be the best of friends, get along great, but then you have to sit down and execute. You had this experience putting on that party, that gala. It worked out well. I would imagine that you two have spent hours and hours tasting weird liquids that would eventually turn into ghost town oats.

9:29One time I drank so many different oat milks that like I almost threw up. And I was only taking like sips. And I was like, oh, my God, I'm going to throw up if I have another sip of oat milk. So we literally tasted every oat milk that was available in January of 2021. And, yeah, we knew what we hated and what we liked and a lot of what we hated. Because, you know, we're baristas. We're trained to, like, think about. It's not pretension. Like, that's the thing. I'm very pretentious. People think it's pretension, but it's not. It's like you have a vision or like I feel like I have a vision and I know what I want to taste.

10:16And I'm like, okay, it's problem solving. It's like what is it that I don't like and what is causing what I don't like? And you pick those things out and then you solve to get rid of those things or make those things better. And that's what we do all the time as baristas. When you dial in a coffee or whatever, you're drinking something and be like, what do I not like about this? and what do I hate about this? And then how can I manipulate all the variables and figure out how to get something that I like? Because I know if I like it and other people will like it. Which very much was like the thought going into this process.

10:53It's like we know that if we like it, tons of other people are definitely going to like it. We've just been doing this for too long. Right. And like we have tastes. Like we come from families that are cooks and come from areas with very good food. So we just wanted to bring all that together because this wasn't going to just be any other oat milk that we have already seen and worked with in the coffee shop space. It was going to be something that had to be inclusive of a demographic that had been spoken to. And that demographic wants some good taste and stuff. They certainly do, just like anyone else.

11:25And I love, Ezra, that you're buying what I'm selling, this idea of problem solving, because I can hear it right there in your retelling of finding the proper product. But for folks who are entrepreneurs who want to create their own food product, not necessarily milk or milk alternative. What advice might you have for going through that process and finding the right recipe for your product? Same thing. You know, if you have a product and that thing exists, say I want to make applesauce. Love applesauce. Think about what do you like about applesauce and what do you hate about applesauce. Write all those things down.

12:06and then think about each thing you hate what affects that each thing that you like what affects that um and then start iterating uh single out those variables and change one variable and be like oh this tastes better but then it makes this taste weird so like how do you make that not taste weird and just do it until you get a product that you love so so if i can parse what you're saying it's focusing on what tastes or resonates with you that's the most important yeah like i will i was always taught like i like i like some weird stuff with the weird i was always taught that if you think something tastes good then other people think it will take the taste good um like we're not as weird and particular as we like to think um we just have to get people on board with what we like.

12:57And, you know, people just need to know what to expect, what they're getting. That's the big thing. So. Michelle, when did you know you had the product that you wanted? Actually, when Ezra did the sign off on it, because when we got the final samples to LA, they were overnight shipped and they're supposed to be cold. They did not tell me when they were shipping it. So I was not home and it was the summer of 2021. So they were bad. Yeah, they were They're just frozen jugs. Pretty much. In a thermal packaging. But Ezra was there at home and got the final. And, like, I trust Ezra with a lot of things, including the formulation of this oat milk.

13:37So I was very anxious for about seven months not having tried the final product. But Ezra's like, no worries. I got it. It's fine. Because Ezra's a Q grader, which is like the sommelier of coffee. So I was like, okay, all right. that's fine. But once I finally got like the blue sample carton and I tasted it, I pretty much almost cried. Like I couldn't believe that we had from a distance with a team just kind of back and forth across the country had been able to formulate an oat milk in under a year. You guys kind of postal service the, uh, so, okay, let's go back now. So this is 2021, one, right?

14:18You've got this killer product. You're both happy about it. It didn't come to you in the right shape. We trust Ezra. Eventually you taste it, emotional about it. Now comes getting people to drink it, right? Distributing it, right? So you two called on your coffee connections to get this stuff in cafes all across town, especially here in Los Angeles. I think you launched with what you thought would be four to six months of inventory. Yeah. And it went much quicker, right? Two months. Yeah. Two months. So how did you do that? Well, to back it back up. Let's back it up. We are the baddest bitches in golf.

14:57People love us and people trust us for all those reasons that, you know, we've already gone over. So when they all found out that we were making a product, they're like, I'm sold. and we didn't really realize that until we launched our WeFunder, which is like a, how do you explain WeFunder? It's like a crowdsourcing. Yeah, yeah, equity crowdfunding. Equity crowdfunding, that's right. And we were like, oh, we'll get like$50 here and there or whatever. But in like two days we were already at like, or four days we were at$100 ,000. Sure was. And, you know, we got up to what,$250? We got up to$250 and then, you know, they got the platform fees and stuff like that.

15:39So we took away$210 ,000. And so we were like, oh, damn. How much time? It was like four days. We were already at the plateau point. Entrepreneur's dream right there. Yeah. We closed it within a couple months. We got some investment outside of that because of the WeFunder campaign. And so— Jimmy Butler was one of the original supporters, right? He's a stan. He's a big stan. Loves it. And so then we knew, like, oh, people believe in us. People want to support us. Right. People have expectations. Yeah, but we were still a couple months away from launching at that point. So it was just like, I believe that it was, we still didn't quite, you know, feel like, oh, this is going to be super, super successful, even though money is quite a big driver of success.

16:27But, you know, for us on the team, we're like, we need the physical product. We need it to be in places. and some of the conversations that we had been having with our coffee connections is that, you know, they were really excited, but they were really hoping it didn't suck. We were like, same, same. So then came June 2022, which is when we finally launched. And we had two distributors here in L.A., one in Chicago that were the first ones to sell it. And that like eight weeks to sell out six months of product was nothing that we could have ever imagined. Yeah, it was so fast that it was like, oh my God.

17:02We didn't even have any. Like, where's my stock at home? Ezra, let's move now to scale. You talked about this idea. You brought up your first WeFunder campaign, netted close to$210 ,000. How did you get that started and what made it so successful? We like really, really thought about what messaging we wanted to put out and what it wanted to look like. And that was mostly Michelle, who's the writer, and Eric. Because I will say, my writing is like, I will say, it's great. Period. So they're the more like, you know, floral, really, floral, like, sweet topics. We know how to tell a story. Sweet topics, yeah.

17:45Should I direct this question to Michelle then? Well, I can tell you what they did. I was there. I witnessed it. But so they put together a very good video that was like, what, it was like five minutes? Yeah. They like basically distilled everything that Michelle talked about, about her past and everything that we believe in as a company. And, you know, showed some local baristas. Oh, they went to Bloom and Bloom. Bloom and Bloom, of course, is a big coffee shop here in Los Angeles. But go on. And Sip and Sonder, also big in L.A. And yeah, it just captured, you know, our whole vibe very clearly.

18:29Did you focus on some of the big societal issues that are relevant to folks who are doing something similar to you? Yes. Would you say that, Michelle? I would say yes, but still with it being very centered around what we were hoping to do just at Ghost Town. like the idea not even the idea the very real concept of food deserts and that was talked about in that video and just like connecting that past experience that I had with you know here's this girl who is gathering up with her friends and they're all baristas creating this oat milk that is like barista quality the best that you can think of out there and trying to connect it back to people who deserve it and therefore feed those people.

19:15And that video really captured this full circle that we were trying to build, that even though we didn't have product at the time when the WeFunder launched, it still found a way to show this is going to be something that you'll be able to see very, very soon. And funnily enough, a lot of the coffee shops in that WeFunder video are current accounts of ours now. We're still trying to get bloom and bloom. Well, that's so interesting. And I think really relevant for any entrepreneur or someone who's interested in starting their own business, this idea of interjecting your personal experience into your brand, into your video, into your marketing.

19:51Yeah, yeah. There's, I believe in, like many people believe in manifestation. And there's also, when you're injecting your personal story into what it is that is your work, you are essentially creating those full circle moments to happen, whether it's just an idea, or it's something that you're already a few years into the process. like there are still things that are going on at ghost town, uh, weekly that I'm like, wow, this actually taps into, you know, something that happened to me back in the day. Like, you know, for instance, we're going to be filming something at a, at a coffee educational studio later this week.

20:30And that coffee education, coffee educational studio. Uh, yeah, I'm, I'm distilling that it's counterculture coffee, but I, my specialty coffee experience was brought to me by counterculture coffee back in 2012. And so it's like these moments of like, there's always going to be an opportunity to share your story and to share little tidbits, even if it's not a part of the founding story. But if you are so deep into what it is that you do, then, you know, it's like you're going to be in the fabric of the being of the company. So like, keep sharing that, keep getting that out there. Yeah. And I think, yeah, like you said, people like to see a real person to a brand like it means more to like our peers in the coffee industry that we made the milk versus like anyone else they're like oh actual barista like we did this one um meeting with a coffee company and the baristas were so excited that we had actually worked as baristas and we made a milk and you know that's something that they their their gears are turning like what can I do?

21:38Exactly. You know, being behind the bar, like, how can I turn this into something else? And I think that's a lot. People miss that. There's like so many with coffee. There's so many directions you can go as career wise. You just have to like, you know, open your eyes and like solve the problem. What do I what do I want to do and how can I do it within the context of what I'm doing now? And that's the beauty of entrepreneurship is you get to create that box. Yes. There is no box. There is no blueprint, which is also one of the hardest things about entrepreneurship, because there have been days where I'm calling Ezra like, I think I'm, I think I'm gonna cry.

22:16And then I just start crying on the phone because I'm like, I just wish there was someone who could just tell me what to do. Like, I've never been a CEO before. We've never ran an oat milk company before. We've managed coffee shops and like manage, you know, barista teams and stuff like that. But this is, this is on another level where we are competing with oat milks that we have used on bar now. And so like, where's the playbook for that? And we're blessed to be in this position where it's kind of like we're writing it as we're going. And that's not just for oat milk. That's for any entrepreneur.

22:48You are writing your own playbook and that story is meant to be out there. Right. And I kind of thrive on chaos and madness. That's true. Well, that's useful. So I'm like, I wake up and I'm like, what's going to happen today? What fresh hell is going to come to me? Let's do it. Well, when you find yourself in those places, Michelle, where whether it's imposter syndrome or you're just overwhelmed or you are dealing with the real reality of being an entrepreneur, there are no days off. You don't work. You don't get paid, right? How do you pull yourself out? Well, you're speaking to Michelle yesterday.

23:24Hi, Michelle. Yeah, who literally had to pull herself out. That support system, you need it. Build it ASAP. and just make sure it is with multiple people who have just something different that they can offer, but it's all still like love, care, and compassion. Like between Ezra, Eric, the rest of the team at Ghost Town, I got a coach, I got a therapist, and I have a loving partner at home. And if anything else, something that I have an issue with is isolating. And I know that I can lean on those people to pull me out of that. There are plenty of signs where it's just like, oh, we haven't heard from Michelle in a second.

24:07Where is she? What's going on over there? And Ezra often has to, he's the one that reminds me like, hey, at the end of the day, this is just a job. Like, it's okay. Like, it is not life or death. My partner often says, you're not going to die. And I'm like, okay, these are things that do help me, you know, to kind of bring myself back down to earth. You know what I would say? What are they going to do, beat our ass? Yep. No. I have that on a sticky note at my desk. and it works because it's true like who's gonna come for you unless you're in the mob that's the type of entrepreneurship we're not going for so kind of not giving into the fear of it all and then also being willing to ask for for some help yeah speaking of helping you both do something and the company does something that's really interesting i think innovative when it comes to getting folks to help out correct me if i'm wrong but if you invest $100 or more, you actually get a piece of your company.

25:02Where did this idea come from? And why even do that? So at the end of 2021, WeFunder reached out to us because I'd never heard that there was a platform where there could be investors that aren't accredited in any way. An accredited investor is anyone who has over a million dollars in assets. Now that cuts out a lot of people and so many of the people that we have worked with it cuts us out and you know the people that we want to serve so the idea to move forward with that for being a lot of our fundraising was to create this community-centered brand like we don't want to just use the fact that this is the experience of a community who doesn't have access to things to sell you than a product like how about you get to capitalize off of this too?

25:51And so that is very much a part of the fabric of our company. I mean, so many of our friends, baristas, old bosses are investors, which is really cool. And it also allows for us to lean on them for support when we need it. And, you know, the goal is that we get to take this company to some very big heights and pay them back. Another thing is a lot of the older companies, you know, they made their money and they built their brand off our backs back in like, you know, 2015 to 17. And we had nothing to show for it except some T-shirts and some pins and stuff. So, you know. Are you talking about the coffee companies you worked for?

26:32Yeah. Well, not coffee companies, but like oat milk companies, plant-based milk companies, you know. They kind of built that off our backs. Off the backs of baristas. Yeah. Yeah, we made them popular because, you know, say for instance, the editor of Vogue is always in our coffee shop. So when we have this product and they see that and they're like, oh, this is the best new product. There you go. So, you know, we wanted to bring in baristas so they too can actually benefit from our success. So they can also benefit and you're doing something that supports them as well. which I think is really, really interesting.

27:13Why not go for VC for venture capital instead? Well, we want to build a community, though, first. Yeah, we did want to build that community first because that community, especially early on pre-product, was the traction. That's all we had to show for the fact that we had an inkling of success ahead of us. Now, once we had product and started to have coffee shops and all these other people hop on, we did try to go the VC route. But we also found that it was a lot more fun going after really interesting angel investors like a Jimmy Butler, who are just like, look, y 'all don't have a lot of background to prove that you could build a multimillion dollar plant based milk company like that.

27:55That's for sure. But he believed in us enough and believed in, you know, our coffee experience and the fact that it was a very good oat milk to invest in us. But now in 2024, as we're beginning to look into the future of scaling and not just being, you know, just based here in L.A. and Chicago and a few other markets, we really want to become nationally distributed. So that is requiring some bigger dollars. And I think that we're up for the challenge of bringing on VC money and, you know, taking hold of the responsibility that that comes with, because that's something that scared me for sure in the past.