The Business Pivot That Led to More Customers and Happier Suppliers

0:00You don't need pesky contracts to get people coming back, right? Like, why shouldn't you think about and engineer your product in a way that they cannot live without it every week? Hey, everyone. Welcome to Shopify Masters, your companion for starting and building a business. I'm your host, Shuang Esther Shan. Keeping your customers and suppliers happy can sometimes feel like two different jobs. Divi Oja figured out a solution that worked for both customers and farmers in the grocery business. Divi is the founder of Odd Bunch, a delivery service for boxes of produce that don't make it to the grocers.

0:41He's here today to share where he's learned to make Odd Bunch a successful company with more than 50 ,000 customers in Canada, all while reducing food waste. Thanks for being here, Divi. Thank you so much for having me. I'm really interested in how you started Oddbunch because you were still in university first year in the summer and you were fixated on the idea of finding a solution to the food waste issue in Canada. What made you want to build a business around it? It never really started as a idea that I wanted to turn into a business. It was more so just my curiosity kind of led me down that path.

1:20I remember I was in my first year of university here in London, Ontario at Western University. And food waste had been sort of something that come up on the news a handful of times. I'd read a couple articles. It just kind of dawned on me that, you know, it is a big problem. And at the same while, there's so many people who are food insecure. So that didn't add up to me and I started to basically deep dive into the causes and it led me to what Odd Bunch is today, which is a lot of fruit and vegetables in our country go to waste for cosmetics and imperfections which have nothing to do with quality.

1:58So we're essentially connecting any grower or distributor that has that product that retail simply would not accept to people like you and I that don't mind something which is slightly blemished or undersized or oversized for up to 50 % less than what they can find at the grocery store. So you have the concept of connecting produce that's perhaps a little blemished or imperfect for grocery stores to customers directly. How long did it take you to build out the first box? It was a very short turnaround time. It's a bit of a blessing. The more you get into the nitty gritty of business and, you know, this could go wrong, perhaps that could fail.

2:39You start doubting yourself, start second guessing your decisions. And the next thing you know, you never actually take the most important step, which is the first step. So I think, yeah, my naivety at the age of 18 helped a lot. So it took about seven weeks really to go from, I want to do this to us actually sending out our first boxes. I still remember we had 87 new signups in that first 10 days that we delivered to in our first week. And it was a menace. I mean, it was very difficult because we had no systems, no processes, as you said, dive right in. It's got its pros, but it's got its cons.

3:16But once it started going, we were able to put our heads together, myself, my cousin, and really solve and troubleshoot as we went to basically build what you see today. Yeah, that's crazy impressive. Less than two months to ship out the first box. What were some of the things you did in the early days? I think first things first, I always had a hunch that if I could create a reasonable amount of value for the end consumer in savings. so you know we're talking 30 40 50 percent cheaper than the grocery store i had a hunch that demand would not be a problem right that's that's the gut feeling i had so for me it was the first few weeks were all about trying to lock in supply trying to build those relationships uh speak to as many people uh on farms you know the people that work at greenhouses people who work at uh the big produce distributors in our country to try and validate that the problem that i was hypothesizing existed truly did exist, right?

4:17That was my first starting point. So that's what I did. I drove from London every morning, I would wake up at six or seven, and I would drive to Chatham, Kent, and Leamington, and Windsor-Essex. I printed off a neat handy little guidebook, which was I think, buy local, buy fresh. This was in July, right? So it was great. Local season was very much in swing here in Ontario. So I would literally, you know, go to every single farm because it had the address there and I would try to speak to the person who owned it. I think after I did that a few times, it kind of got irritated of me and they're like, here, what do you want?

4:52Right. What is it that you're looking for? And soon enough, I think I had enough of validation that yes, this is a problem, but I kind of discovered my next challenge, which was, well, we do have product from time to time, but it's inconsistent. It's volatile, right? I might have something one week and I might not have anything for you for the next a month so that was kind of our next problem was to try and create multiple suppliers for each commodity and before I knew it I had almost like a big database going of okay I could have told you all the farms that grew pears in southwestern Ontario so that was step one and everything else came after put together a Shopify website took us you know two days I called my friend who at that time was in soft at Waterloo, a super smart guy.

5:38So kind of helped him move his stuff. He was going back home to Richmond Hill. So I gave him a free ride, moved his stuff in exchange for him making a two-page website. So it was very, very scrappy in the early days, very scrappy and unconventional. Yeah. It sounds like a cinematic scene of you taking this giant road trip and trying to convince people to sell them produce and fruits. I mean, that sounds also kind of intimidating, right? as someone who's like 18, 19 years old, where were you pitching the different farmers to actually establish a relationship and get them excited about your idea?

6:14I still remember, and I think this was probably one of the smarter things I did. I did pitch them the very first time that I went to see them. I would go and I would just talk to them about how long they've been doing it. Was it a family business? You know, how do they get into it? What do they sell? What are some of the challenges? And I would just buy like 20, 30 bucks of stuff from them as like, I appreciate your time. And I would just leave. Like, I wouldn't actually, you know, try and pester them about, oh, I'm starting a business. Like, this is what I think I'm doing. And so it wasn't until the second or third interaction that I actually started to ask probing questions and said, listen, I have an idea.

6:52And I'd love your feedback. Like, do you think this could work? And I think by doing that, there was already a report built. so they were far more open to actually suggesting you know what they thought versus I think there was a couple that I went in sort of very cold turkey hey like this is what I'm doing can I buy stuff off you and they were like they were very cold um and sort of closed off so that's one of the biggest unlocks I think early on but it was intimidating nonetheless it was always a challenge but I think understanding that you kind of have to build that relationship first made everything so much easier for me.

7:28That's such a good advice because you kind of have to build the rapport over time. You sometimes just can't go right off the bat into a business relationship. Right now, the company has grown so significantly, but you actually scaled quite fast. I believe you're fulfilling about 5 ,000 orders pretty fast after launching. So how do you scale something that is so labor intensive. Yeah. And that's partly true. I mean, I think, so we're in sort of what I call our second iteration of the product, right? So the first iteration was called Food Fund. It still runs today, but it's not at the forefront of our business.

8:05And their scaling was very slow. So it was actually very much the opposite of what you suggested. Because I launched as I was a student, we only really ran it for one week before I had to go and start my second year at Western. So that really threw us off quite a bit. I didn't really see it coming. I really should have. I really considered at one point also just dropping out and focusing on it entirely. And that would have probably not been a great decision. So right up until I graduated, things were very slow. Like we played it very, very slow. For context, like, as I said, we had 87 signups in our very first week.

8:43And at the end of our first year of operations, we were still only doing about 250 orders a week. Now, sure, there's growth, but it's not spectacular growth. We could have done probably a lot more, but I was time-strapped and it was just not feasible. So we slow played it for the first three years, really only operated in London surrounding areas. And at one point, I think we got to about 600 or 700 orders each week that we were fulfilling. This was probably at the beginning of 2020. So I was just about to graduate. The business was doing probably$60 ,000 a month in Topline. And sort of I had that decision to make, which was, do I continue with this full time and try to see where it goes?

9:33Or do I actually try and get a job? Right? Is this going to work? Is it not going to work? Because I mean, almost four years in and it was not really a, you know, big, huge business that a lot of, I mean, that's partly the problem of school as well, right? When you go to a business school, you're doing these cases and all these numbers and all the spreadsheets are always in billions and millions and you kind of get, it normalizes those numbers for you. So when you start something of your own and there's nothing really there, you know, there's no money really, there's no cash flow, others, you're always resource strapped, it almost makes it feel like what you're doing is just not worth it, or it's totally insignificant when that's just not the case.

10:14Like it's perspective, right? Some of these companies that we study and idolize have been around for a century, like it's not a comparable. Anyhow, I mean, I didn't really have to make a decision because the decision was made for me because about a month after that is when COVID hit. And that's when we saw sort of our first sign of what growth really means. We went from fulfilling about 600 orders a week to our peak, I think was about a 32, 3300 orders a week. And that happened in about a month. Wow. So it really just completely blew us out of the water. Like all of our processes broke down. It was a mess.

10:51And of course it had to be at a time where I was writing my final exams in March and April of my final year. So it was just not great timing. We got through it and got into sort of scaling the business and we hit a lot of roadblocks. And one of the biggest sort of moral conflicts for me was because we had a sort of a grocery store-like model where you could pick exactly what you want and it would show up to your door. The more we scaled and the more people we spoke to, we started realizing that we're not actually set up in the most optimized way. to reduce food waste. Because there was times where we would be offered a certain commodity that we would then put sort of on our website and hope for the best that people would buy it.

11:35The only lever that we had to control was price. And that's not the most effective lever, right? You price something way below market. And now there's a sense of like, oh, is this product still good? Like, should I still buy it? It's way too cheap, right? So we weren't able to actually sell through the product that was the most prone to be wasted. And that kind of hit home for me. And it just didn't make sense. And that's when we decided, okay, you know what, we're going to have to iterate and we're going to have to change the way we operate almost entirely. And that was the beginning of Odd Bunch.

12:08And that was May of 2022. So it's insane to think it's not even been three years. And we've obviously, you know, taken the business from doing 2 ,000 or 3 ,000 weekly orders to far, far beyond that into the tens of thousands now each week. But it's become much easier to scale because we're controlling what's in the box as opposed to the customer. Our entire process is very, very optimized. And we can also say yes to more products that are offered to us as opposed to saying, no, listen, we can't help you with this, which is sort of against the whole purpose of the company. Yeah, I mean, what an interesting inflection point, right?

12:47Because the decision to actually offer a mystery box of sorts, that was also probably pretty nerve wracking because you had to take a bet and hopefully trust that the community actually are okay with this. When you were making that decision, was it scary to make that call? It was. It definitely was. I think what helped was that we had sort of started to plateau and almost started to essentially decrease. The graphs were looking, instead of looking up and to the right, they were looking down and to the left. right we were losing subscribers week on week um our frequency had gone down our impressions had gone down it was a sign that i think the consumers were communicating that they're not very happy with the product they're not necessarily happy that everything is individually priced um and that you know they have to go in and choose exactly what they want each week it feels almost like a or that was mind blowing to me because my hypothesis was exactly the opposite.

13:50You know, I was thinking that's something that people are going to love, that if they can go in and pick what they want as opposed to, you know, eating what some people decide for them each week, that makes no sense. So it was nerve wracking because my logic was telling me something that was in complete contradiction with what the consumers were telling me. And we decided to go with the consumers. like sometimes you know you're just one person yeah your perspective is off one person and if thousands of people are sort of guiding you in a certain direction it may not be a bad option to consider it seriously so we did what we do best um we iterated quickly we whipped up a different website in about a week less um you know rebranded called it odd bunch um and the idea was that you'd get a bunch of odd looking fruits and vegetables in a box sent to you every week it was as simple as that for a price that you knew wouldn't change and it was a fixed price so if you bought a small box you'd pay 20 bucks and shipping to your doors three bucks or four dollars and it would just work like clockwork it'd come to your door every week and i think the first hour or two of us launching that i think we signed up about 200 people just in a couple of hours and i said okay that's more than we've signed up on food fund in the last two weeks i think we're on to something here.

15:11I think we should really start to shift our priorities and go all in on this because it's working. And we never really look back from that point on. Totally. Feedback is so precious. Okay. So you validate that this new idea for Oddbunch is something that customers really resonate with. You go from hundreds to tens of thousands of orders a week. On the backend, What are you doing to make sure the logistics of everything lines up for this giant scale-up moment? Yeah, that's a big one. I think it really just comes down to how simple you can keep things and how simple you can keep your processes. We're hosted on Shopify and we work with a few other plug-in apps that they have on their platform to simplify all of our reporting and our shipping logistics.

15:59So it's not, I mean, once a process is dialed in and once a process has been vetted, it's really built to scale. So we're capable of with our current e-commerce processes and systems to deliver 100 ,000 orders a week as well. So the biggest mindset shift comes in depending on a system versus depending on people. I think in the early days, you can get by with memorizing a couple of things and, hey, I can speak to so-and-so and they will do this and eventually we'll get it done. Once you get past a certain scale, it just doesn't work, right? And at the end of the day, consumer experience is broken and that trust is lost.

16:45So we're quite lucky to work with some great partners on the tech side that do a lot of the heavy lifting for us. And our warehouse operations sort of work hand in hand with the information we get from them so that our ordering is to the T. We're not overbuying or storing more than we need to and those kind of things. So yeah, we're very happy with how things have panned out and are in a good position to continue pushing forward. You scaled exponentially during COVID and now there's 80 suppliers you work with. How are you managing those relationships? Yeah, it's one of the most important pieces of any business, I think.

17:23And I would say to any founder or even any senior role personnel at any young company is stay involved with those roles and responsibilities as much as you can. It's very glamorous in a way to not be the first point of contact when someone reaches out to your company and you have to go through six people to finally get a hold of you. Yeah, it's cool and it maybe makes you feel important. But at the end of the day, you have to realize that it's, you know, it's your business or you're an important person in this business. So it matters when you show up, right? People do take to it differently when you take their calls or, you know, are available to meet with them in person and really show that you are prioritizing what they and their company have to offer.

18:14And it goes so far. I mean, in the world of produce, it's almost inevitable. You can't avoid it. It's an old industry. It's archaic in some ways, right? Like salesmen in this industry are still working with a pen and paper and they will literally scribble, you know, your order and give it to you that you would then need to take and give to the order checker. And like, it's, it's, it feels like you're in the 1950s, but because of that, it's a common place to, you know, go to your supplier and sit with them in the morning over a cup of coffee and discuss your order, you know, and in the first 10 minutes, you're not even talking about the business.

18:49They're talking to you about, you know, there kids hockey and what they did in the weekend, what plans they have, they're going away next week. That's like the low points and sort of the non-business points of those communications are where those relationships are truly built. And we have been working with, I mean, some of our oldest suppliers have been working with them for week one. We've never really had to look beyond them in certain commodities because they've always been there for us. And we've gotten through, I mean, we've gone through a global pandemic. We've gone through now we're going through a very interesting time right now even um with tariffs and things that may affect the food supply chain and um it really just goes such a long way when you can really put that that foot down and say listen like i'm i'm here to do the groundwork as well and i will show up um for you guys yeah that's amazing and i i think like especially when you're mentioning an industry like this this is like such a great opportunity to go in there to create something new.

19:49And we talked about that pivot from Food Fund to Odd Bunch where you're taking customer feedback. So I guess like over the years, has there been other customer or supplier feedback that you've incorporated into the business? So we had a very specific set menu. It was built based on our communications with the suppliers beforehand. But even then, there were things that would spring up very last minute, right? And maybe the quantities were not high enough for us to actually run them as a standard item in all the boxes. So we came up with something that we call a surprise item. Now, what that allowed us to do is almost every box will have a surprise item, which we don't disclose to the consumer.

20:33It allows us to be far more reactive and responsive, right? And so much so that you could, you know, we were fielding calls and emails from suppliers that found out that they got something that same morning, And it was in our boxes by the evening because we were able to take that product off their hands, use it as a surprise item, reduce the amount that goes to waste and still have a good value offering for our customers. There's just one example of taking feedback from suppliers can actually improve your business. I mean, this wasn't our idea. One supplier was like, well, why don't you have like a mystery item?

21:10Why don't we have a surprise item? And then based on whatever you can find in the market, you could just fill the box with that and you can use these deals. And that was genius. So that's just one example. There's countless more. We're always learning, whether it's through our delivery partners, whether it's through our farms, greenhouses, whether through its own staff. I mean, they're on ground zero in our warehouse. They're the best suited to identify things that can be done better. So we always have our eyes and ears open to try and iterate and keep improving. Yeah. And a big part of that also, you know, like the mystery items grew to odd bunch and also each order is kind of a surprise today.

21:56When you were communicating with customers on this like new model, how were you managing customers' expectations and also like communicating the value that you're offering as well? I think it was very simple. We went in with the idea that you'd have to give something up to gain something else. And I think for the customer, they were giving up a little bit off the customization piece, but gaining a lot more on the affordability piece. So it was really a trade-off that we presented. and and there's I mean there's there's a good chunk of our users that will admit to us that they don't actually they don't actually look at the menu for the week and they really enjoy the aspect of it coming to their door and then then discovering what's in it but a good chunk of them do follow along sort of on socials and our website so they have an idea of what's coming and they've gotten so dialed in with the system or they're, because we would post what's coming on Mondays and let's say, you know, they get their box on Wednesday or Thursday.

23:03They're creating full meal plans ahead of time before their box even shows up, right? Because they know what's in it. They know their food preferences. They know what their family consumes. And they do a little bit of effort beforehand to even, you know, work with ingredients that they may not have ever used, Like a couple of weeks ago, we had artichokes. A lot of customers wouldn't go out of their way at a grocery store to buy an artichoke. It's, you know, it's not a common vegetable. It's also$4 a piece. So it's... Yeah, it looks a little intimidating. It looks like something that belongs on a tree.

23:37Like, you know, yeah. Yeah. So it's those things that really, you know, we need to keep front and center of the business and make sure that we're catering to their needs as best as we can. and just be clear, right? Just don't pretend to offer something that you're not offering. During the transition, we knew that we were taking away a lot of that choice. And we did try to sugarcoat that, right? We did try to make it seem like they weren't losing that. We were very honest. We said, look, this is what we're doing and this is the benefit. Sure, you're not able to choose exactly what's in the box, but you're able to make one substitution each week free of cost.

24:21So if you have allergies, if you have preferences, there's something there for you. But by and large, you're going to be much better off. And I think that's what resonated. Also, there's a big debate about how subscriptions, the industry itself is on the decline because people want to unsubscribe to a lot of things. So you're in a very interesting position as well. Yeah. And I almost, I don't even necessarily think of us as a subscription at this point. We're a service provider that operates on a weekly cadence. But there's really nothing that's stopping anyone from ordering a box as and when they want.

24:58I mean, we've got no contracts. We don't have minimum sort of subscribed periods of time or minimum spends. So you can really run Oddbunch for you the way you want to run it. And we see it all the time. We see people who are on bi-weeklies once in three weeks, once in four weeks. we see people who'll you know come only for the winter time and then in the summer they're not even in the country so they're gone like our job is to make sure that the platform is as flexible as we can make it so that most people can can derive value from it and i'm i've always been a firm believer that if your product is good enough and your service is good enough you don't need pesky contracts to get people coming back right like why shouldn't you think about and engineer your product in a way that they cannot live without it every week.

25:51They must get a box every week, right? And I think if a lot of companies started to think about that, I think they would have better products, quite simply speaking. And that in and of itself would improve that customer retention and customer reorder rate. Because at the end of the day, I think the value you provide really fuels the business model to be sustainable. And to your point, you're able to be financially independent, fueling your own runway and build the model that's sustainable, both on financials and also the products themselves. Well, I think I want to also zoom out a little bit because at the top of the show, we mentioned this is an idea you had while you were in university.

26:36You were actually in a pretty prestigious university in Canada, known for business. You actually had an internship in banking and you essentially had to perhaps convince your parents to take this big risk and go into entrepreneurship. What's your advice there when founders have ideas, they're taking a risk, and I think a lot of the factors are pushing against them? That's a good question. I think the more glamorous and fun and fancy and controversial answer is to just sort of, you know, drop everything and focus on your business. You know what you're building. You're going to be great. Everything's going to be good.

27:14I think that's what a lot of gurus on the Internet will tell you to do. Right. And that's kind of what's cool. And but in fact, I would argue that's probably the worst thing you can do. Right. I mean, I'll take myself for an example. I was deeply passionate about the idea that I had. I had no doubt in my mind that it would work. I had strong conviction, but I wasn't blinded by it, right? I wasn't so married to it that I was ready to throw something else that I had going for me that I also loved to the wayside, right? And sure, it's tempting sometimes, right? You always will have those days, whether it is, you know, you're balancing work and trying to do something on the side, or you're actually in school or college and you're trying to do something on the side, one of those will stress you out to your max one day.

28:07And you will say, you know, let me just get rid of this is this is not helping. Let me focus on the other thing. I think that's the time where you really have to put your head down, right? And you have to understand the thing that you're trying to trying to achieve isn't something that most people can achieve in their lives. Like being an entrepreneur isn't for everyone, not purely because of interest, but it's bloody hard, right? Like you're going to have to work twice as hard for one fifth of the compensation for years. Most people's first business fails. So it's like you do all of that only to not succeed.

28:48So you almost have to keep yourself in check, right? And know that if this is a path that you want to take, it's going to be hard. And you just have to accept that, right? So you're just going to have to get better. People always say things get easier. Things don't get easier. You just get better, right? So if someone were to say, oh, now, you know, things are easier for me at 26, the business has been running for eight years. No, they're 10 times as hard. But I like to think that I've been able to sort of reskill myself and upskill myself over these years to be able to manage things without it going into chaos.