Why Did Her Brand Fail? There's Not Just One Reason.

23:31Catherine Smart:And that grit sort of bit us in the butt because you can't succeed if you don't have any awareness, you know. For the millionth time on this podcast, I'm going to say something, which is something that a founder told me getting on shelf is the easy part. Getting off shelf is really the difficult part of building a CPG brand. And yes, getting into 240 target stores is a big moment for not just, but how do you get people to know it? It's there. How do you get people to care that it's there if they see it on shelf? How do you do trial and demos? There are many more dollars than the Good and Gather and all these other brands that can discount at a way that you can't.

24:07Catherine Smart:And when I say we didn't have product market fit, like you said, like the product was great and people liked it, but, and maybe I'm just cynical at this point, but I don't think there's people running around their lives being like, God, if only I had a better pasta sauce, like my life would be better. In some places, I think, yes, I think discovery is big in some channels, in specialty, in natural, not necessarily in Target. I think maybe, you know, the Target buyers will probably claim that, yes, we want to be a store. We want to be a chain of discovery. We want people to come in and feel like there is always something new on their shelves.

24:43But I mean, I think most people go to Target, not necessarily to buy food. This is just, maybe the Northeast, our perception is a little bit skewed. But if I go to Target, and I'm going there for like a pillowcase, you know, or some, you know, some paper towels or something like that. Yeah.

24:57Catherine Smart:No channel strategy. This is actually a little bit revelatory for me because I've picked apart like so many things that we did wrong, but I'm like, maybe, maybe we should have thought about channel strategy a bit more. And also just like with my background as a food writer and like, I feel very kindred to a lot of the specialty brands, buyers. I'm very in that space. And so there is some regret of like, did I overlook a place that we could have, you know, succeeded. Well, it's hard. You said it. Your investors wanted to see some progress. They eventually want to get their money back. I've talked to founders who talk about this very candidly, which is we feel a lot of pressure because these people gave us money.

25:35Catherine Smart:Oh, my gosh. People gave us their money that they worked really hard for and they want to see something out of it. And even though we told them it's probably possible, it's probably likely that you're going to lose every dime. Yeah. They don't believe that. You know, they want to believe that this is going to work out and we pick the right people to run this brand or to start this brand and to see it through. But how much money did you end up raising? Yeah. So we raised over the like eight years, we raised 1.7 million in smaller chunks. And I would just say that by far was both the hardest part for me, like emotionally, spiritually, existentially, and our biggest downfall when you were talking about should you have shut down earlier.

26:15Catherine Smart:I had never raised money before. A lot of the folks that we raised money for were private chef clients of mine. And even though, just like you said, we said, you're going to lose it. And they knew that, right? Like as one person said to me, like Catherine, nobody writes a$25 ,000 check for a pasta sauce brand who's going to be hurt if they lose it. Like they're doing fine. When we did finally shut down, I didn't have the capacity to go through my own grief about it because I was so distraught about my investors losing their money. Like that was something I just could not fathom. I would not allow myself to believe.

26:50Catherine Smart:The business itself, by the end, I looked at it as like a dog that was riddled with cancer. And you're like, we should have put you down a long time ago. You're suffering. But it took me a really long time to come to terms with the fact that we were not going to get their money back. So we got into the situation where we had taken not insignificant amounts of money from some people. And, you know, we still had to keep the business running. And the other thing that I said from the beginning, and I still stand by is by the time we were working full time, both Jackie and I took a salary, not a big one.

27:23Catherine Smart:And I still would get up at four in the morning and personal chef on the side so that I could, you know, afford to live in Boston with two children. But we talk a lot or maybe not enough, but it comes up that CBG is a relatively homogenous space. There's not been a ton of female founders. There's a very few number of black and brown founders, especially that get funded. And we can't talk about having a more robust, diverse space. If you're saying you can only do CPG, you can only start a company if you don't have to worry about paying your rent, buying groceries, paying for daycare. And so there was a situation where like in order to keep trudging along again through the pandemic, through all of that, we still needed to pay ourselves a small salary.

28:06Catherine Smart:You know, we would have had more runway if that was not something that we needed to do. So I'm grateful that our investors were on board with that. But it did mean that when things were slowed down, we still needed more cash coming in. And we can pick apart my fundraising strategy and capabilities. We can blame investors. Like, however you want to cut it, we needed more money for more time. Was there an opportunity where you could have raised a larger amount of money? I mean, you mentioned feel like it. I mean, I say I would have raised more. But the reality is, like, I was trying to then. Right.

28:42Catherine Smart:I was learning on the job. I mean, it was the first time I'd ever raised money. I remember the first phone call I made was to Zach D 'Angelo at rodeo when I was like, I really want to do this because I interviewed him when he was that little duck for the Boston Globe. And he said, OK, you need to raise like three to four hundred thousand dollars, like just to start. And he might have said three million dollars. And it was the same amount of money to me. Like it was so wildly out of my understanding. You know, now that I'm through this, I look at investment very differently. I can think about the dollars with a lot less emotion attached to them.

29:15Catherine Smart:But I think sometimes we don't talk enough about depending on a founder's financial background, upbringing, baggage, like a million dollars can mean wildly different things to different people. And so I think I didn't swing for the fences enough in the beginning. And some of it I think also was like, not unwise for an investor to look at a first time founder in a crowded category and say, No, I don't want to reach a big check. So I don't blame them for that. Well, there's also the chicken and egg here, right? You're in 240 Target stores, which gives you a story that you can sell to more investors and say, Hey, look at all these stores that we're in.

29:50Look at the traction we're getting or might get. And that's another way to raise your next cranch of money, which I can see the pressure is just, it's such a strange pressure, right? Because you have to support your launch with money. And then you have to use essentially that money to get more money, which is just wild to think about, but not necessarily wild if you're in CPG. Yeah. You also, as you mentioned, you sold other products other than pasta sauce. Was that something?

30:20Catherine Smart:That was the distraction. That was also the distraction. The distraction was not, because I've been thinking the media thing I want to go back to really quickly because where I think we weren't wrong and I actually kind of wish we'd doubled down on it more is I am a big believer in whatever you're doing. If you're an entrepreneur, what can you do uniquely well? Like what can you do better than anyone else? And I felt like with my background, I can create content, which now content is huge. It was not quite as big in 2017. I can create content better than anybody else organically because I've, you know, done TV, I've done magazines and newspapers.

30:52Catherine Smart:So that was like sort of the idea for the marketing strategy. As I mentioned, that did not go sort of the way we wanted. But what was a distraction was our original idea. We were in the height of direct to consumer. I should have done two things differently. I should have listened to my husband when he said no one buys pasta sauce on Instagram, because we were looking at these DTC companies that were just like buying Facebook ads and, you know, making money hand over fist. Meanwhile, we had a food product in a glass jar that was very heavy to ship. When did your husband say that? Like day one, like to this day, it's one of the few things where I'm like, Artie, you were right.

31:22It's strange. It's strange to think about that, because I would have said the exact same thing. And then you look at a brand like SAUZ, S-A-U-Z. I know. Which essentially is an Instagram or started out as an Instagram. But people are buying it.

31:32Catherine Smart:They were in mass. Like, I don't know how many people are buying it via Instagram ads. I think a lot of people are going to store, but I could be wrong. It's the millennial or early millennial, late Gen Z brand where people have a little bit more to spend. It feels like their own. It's like a generational. Totally. And they're doing an awesome job. And obviously I'm green with envy when I look at their path. They've also raised a ton of money. Well, that was the other part of it. Yeah. But anyways, the other part of it was the category. And that's where we ignore people and we shouldn't have. So our idea was like, we want you to have this packet kind of like a CSA or like a beauty box where you can, you know, have everything you need.

32:09Catherine Smart:So we originally had a pesto, a caramel, one salad dressing, and one pasta sauce. And it was like great for discovery. It was great for getting written up. We got a lot of earned media. No paid PR. It was just like us pitching. But what a mess when you're talking to a buyer. Like we knew that we needed to be on shelf. And they're like, so you have five products in five different parts of the store. You guys have no money and you're trying to stretch everything across like five categories. That is something that we should have listened when people were telling us that was a bad idea. Because again, all great products.

32:40Catherine Smart:And you have those fans who are like, where's this? You can't not make this. But like, you know, a few hundred devoted fans does not a successful CBG company make. Vibrant Ingredients is the natural ingredient partner powering food and beverage innovation, delivering flavor, function, and protection through a science-backed portfolio. Vibrant delivers purpose-driven solutions that help brands create extraordinary experiences. Discover what's possible with Vibrant today. Visit VibrantIngredients.com. As business grows, financials get more complex. We put together a free guide in collaboration with Belay Solutions to help founders better understand margins, inventory, and cash flow.

33:29Download it now at tasteradio.com slash belay. That's tasteradio.com slash B-E-L-A-Y to help your business make smarter financial decisions. Again, this is Hindsight. and sticking to your guns at the time was your decision. There are so many people with so many different opinions about what you should do with your company. And you have consultants who want to get paid, who will offer some advice or say they'll offer some advice once they get paid. There are investors, there's retailers, there's folks in the media like me who will tell you, this is what you should do and not do. It's hard to try to discern what advice to take or if I should just stick to my guns.

34:13In the case of just sticking to pasta sauce, okay, maybe listening to others would have been the right path. Maybe, who knows. But were there other instances where it was difficult to figure out which advice you should take about the direction of the brand, about a particular part of your business strategy?

34:30Catherine Smart:Oh, yes. So I think, I mean, in the end, it always feels kind of like it came back to money. But through the whole thing, Jackie and I were the only two people on the payroll. And we worked together really well, but we're very different people. You know, she was really focused rightly on the finance and the operations and wanting to spend there. And I was focused on the brand and the marketing and wanting to spend there. And we're getting advice, you know, from our own advisors. And to be honest with you, Ray, none of it was bad advice. It's just that we had no resources. And so sometimes I think it just always felt like we were stretched, you know, a little too thin.

35:06Catherine Smart:And it was a constant push-pull of getting operationally up to snuff. You know, like if Jackie was here right now, she has her own horror stories of, you know, the time our co-packer had a baby temper tantrum in the parking lot and decided that he wasn't going to do our sauce anymore because a line got clogged. or the time that, you know, the labels that we had been promised would come on right came out wrong. So we're dealing with sort of those very basic things and you can't have a company if your operations are not right. Meanwhile, I'm being told, oh, but you guys need to be working with a designer on that.

35:40Catherine Smart:And like you need to have a more robust social strategy. So I think it was that that was the hardest part. I don't feel like we got a lot of bad advice and I'm really grateful. I feel really lucky that we were able to work with so many people in a fractional way that we're all just like such good, talented, trustworthy people. Yeah. I'm glad to hear that you got good advice and that you had a team of advisors that could help you along the way. And I think that's really critical because when you're in those dark moments and you need someone to turn to and need someone to be honest with and say, we're in big trouble here.

36:14What should we do? You don't want to be alone.

36:16Catherine Smart:No. No. Shout out to Jamie Bortek. I mean, Jackie and I are still good friends and like talk constantly. And I'm so grateful for that. Like, I think a lot of people go through this and I don't know, but I think I'm sure she would say the same thing. Like Jamie Bortek worked with us for a while and he got us through both the super nitty gritty, like tactical in the weeds details and also just like coaching us to keep going because it can get really dark. You'd also told me that there were a number of potential exits or at least the ones that you had in discussion with people. Oh, God, yeah. Just kidding, Ray.

36:54Catherine Smart:I have so much more advice. Listen up, guys. Well, it seems like from what you told me that these folks could have been more honest with you. Oh, my God. That is my plea to anybody who does roll-ups, who, you know, scoops up failing companies because there's a lot of them, is be decisive. And actually just investors in general. Like, don't drag people along. So there did come a time after that situation happened and we knew that we had to close up shop, I was very much like, we got to just shut it down and cut our losses. And at that point, Jackie, and this is so funny, like our relationship, there's always one who's willing to keep going, like you pull each other up, which is generally an awesome thing, but can be tough at the end.

37:33Catherine Smart:I was done at that point. And she was like, no, I think we can get our investors a little bit of money or at least wipe out all our debt if we do one of these sort of roll up sales. And so I did not have a lot of faith, to be honest. And we did set a date of like, okay, if it hasn't happened by X, then we're just shutting it down. So I would say if you are going to go down this route, like do set a date where you're just done. But what happened was six months of meetings and follow-ups. And this is so interesting. This is so great. And in the end, it was all the same, which is like, you're too small.

38:05Catherine Smart:And what was frustrating is we were so transparent. We were so forthcoming. We were like, here are our books. Here's the situation. and I will never understand the logic of these people who don't just give you a quick no. Because that dragged it on. And it's like every month, you know, we were paying someone to help us wind it down. We're having to not be able to focus on getting new full-time jobs ourselves. Like it's just such a tough thing. And there's no upside for the company. I mean, maybe there is and I'm not thinking of it. But I would just say like investors, give a quick no. Be merciful.

38:40Yeah.

38:41Catherine Smart:But like us pushing it past the point of being able to save it didn't get anybody their money back. And also all of those people are okay. This is a business. They made that choice. There were moments, there wasn't necessarily moments like that, but there were moments where I was like, this is not what I'm supposed to be doing at the end. To be very candid, I remember being at one trade show and I was just desperate to get into this account. And I remember we are like three espresso martinis deep and it's like me and my wingman sales guy and we are just laying it on thick to a retail buyer to a retail buyer and he was eating it up and i was like like this is gonna be my life and i love to schmooze i love to go i am fine with that being a part of the job but i had this moment where i'm like this is it and there were a couple of those times when things were going really bad and i felt so desperate and i would just implore people to like listen to that gut thing where if you're like if I'm feeling desperate and nothing is working and I am willing to like go to lengths that I wouldn't normally that feel not it's not sitting right with like my integrity and like who I am as a person like listen to that because you exist beyond your company and like no investment and no company is worth you know driving yourself it's your life when did you start to think about getting into podcasting again.

40:05Catherine Smart:Yeah. So it's been a funny circuitous thing. So I knew what did help me is that I did have the sort of other previous life in food media and it always called to me and it was like always something I knew I wanted to do in some capacity. So when we shut things down and I was sort of licking my wounds, I reached out to an agent at UTA who'd reached out to me about ghostwriting for some of her TikTok stars for their cookbooks. That didn't work out. Yeah, that's a whole other. We got we got to pause there for a second, which is another just another indication of how fake social media is for the most part.

40:39Yes.

40:39Catherine Smart:So these are huge TikTok stars and they have a lot going on to their credit. They have a lot going on. But she had read some of my writing and was like, I think you'd be a great ghostwriter. Didn't end up moving forward with that. But we really connected. And she actually has an awesome whiskey brand called Boss Molly that everybody should check out. OK, but we stayed in touch. And so I went back to her And I was like, Brandy, I know it's probably not the right moment, but I do want to write a book. I promise I'm getting back to the podcast, but this is all part of it. I was like, I know it's probably not the right moment, but I really want to write a book.

41:07Catherine Smart:And like, what do I need to do in this like media moment with a big five publisher? Like, what are my ads? And she's like, well, you should have a million followers on TikTok. If you don't, maybe you could do a single subject book that a publisher just wants, you know, written, like maybe a chocolate book or a kimchi book. She's like, or if you have a very specific, very sellable idea and you're the person to write it, then sure. And as a joke, I was like, I should write a cookbook for people with ADHD. It's so hot right now. And I was diagnosed in third grade. And I like see the money signs in her eyes.

41:37Catherine Smart:And then I got immediately defensive. And I was like, no one needs that book. I'm not monetizing my trauma. This is so stupid. I'm a generalist. And she's like, chill out. Why don't you just go write? So I went and I wrote a proposal and it just like poured out of me. because I realized that all these things that I think of as like personality quirks or, you know, just learned experience or tricks or tips. Like those are strategies that I have developed for my ADHD brain in the kitchen and running a business. And I know lots of entrepreneurs have ADHD, so this might resonate with them. And so we sold that book to Penguin Random House.

42:11Catherine Smart:It comes out next year. Hugely exciting for me, a dream I've had for like 20 years. What's it called? It's called Not From Concentrate. Okay. So this is a book. And then part of my marketing plan, because when you, and this is again, like full circle, how this was business school, part of a book proposal. Because if you write a cookbook, what happens is you sell a proposal. You don't actually sell the full work. If it's a fiction book, you're selling the whole work. And in my marketing plan, I said, listen, you hire people like me to write the books for your TikTok stars. I'm going to take the advance and I am going to use those resources to build my platform because I don't have a million TikTok followers and I can to write my own book.

42:48Catherine Smart:And so I poured my advance into launching a podcast, launching a sub stack. And I'm really looking at it as like, that's my investment. That's my startup money. So the podcast also called Not From Concentrate. It's also about food. And we talk to different chefs and authors and neurodivergent food lovers. And depending on the week, there's more or less sort of ADHD of it all, but it's really about creativity, you know, calming chaos, sparking creativity and like putting our attention where it matters through the lens of food. So that's what I'm doing these days. I'm happy to say it's done pretty well.

43:25Catherine Smart:We broke into the top five food podcasts on the Apple charts. There's no celebrity attached. I decided not to raise funds. I was going to, and then I got cold feet and said, screw it, I'm going to bootstrap this time for a little while. and it's just been, it's been a really, really fulfilling, crazy adventure. And if you told me a year ago and I was like sobbing on my kitchen floor about nachos, like I would not have believed you. I think it's really smart to get back into what you love and food has been your life for so long that sharing the passion in any capacity you could, whether it's a cookbook or a podcast, was the right thing to do.

44:02And maybe subconsciously you knew that this was something you could fall back on. I'm making a lot of assumptions here about you, Catherine. Yeah, no, no, for sure.

44:10Catherine Smart:And I think about it a lot. And something else I wanted to share, because if I'm listening to this, I can imagine many people being like, well, good for her. Like, she already had this other career and she already had this passion. Like, what are you going to do? She's not here. So I want to be careful. But my co-founder, Jackie, did not have that experience. She did want to stay in the industry. She, like me, struggled for a while with what she was going to do. And the moment she put herself out there, she's now doing consulting through Tenacious Ops is her brand, like the outpouring of people who want to work with her, the joy, like we had lunch and she looks like five years younger because she's thriving, she's helping people, she's making good living.

44:48Catherine Smart:However you're leaving your company, like you have learned a lot. And once you can get through the grief and the stress and the shame, if that's a part of it, like you got to be really tactical about what did I learn and how can I take those skills? And I think seeing a career coach can be a great idea. But yeah, there's lots of paths there. And I would also say like, trust yourself because there were, I can think of at least four smart, well-meaning people with my best interest at heart that were like, Catherine, do not do a podcast. That is crazy. It's so saturated. There's no way. Bad idea.

45:23Catherine Smart:Don't do it. And I said, I'm going to do it. And it's going pretty well. Well, for folks listening, check out Not From Concentrate on Apple Podcasts or Spotify. It's a fantastic show. And maybe you'll feel some solidarity in that show in all the great things that Catherine's doing and maybe extend your brand to food media, which now that I look back on it, actually not to keep this going, but like, you know what? That was a good idea, actually. I mean, I wish I had doubled down on it, to be honest, because you just see like so many brands have their own content studios. I swear, Ray, I felt crazy, but I saw it and I wasn't quite able to make it happen in that capacity, but I don't think I was totally off.

46:01I don't think you're off at all now that I'm here at the very end of our conversation. Catherine was right about every damn thing. That's why I'm here.

46:10Catherine Smart:I just want to be told that I'm right. Thank you, Ray. I really appreciate it. Thank you, Catherine.

46:17That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt. And our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski. And our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. And of course, we would love it if you could review us on the Apple Podcasts app or your listening platform of choice. Check us out on Instagram.

46:52Our handle is BevNetTasteRadio. As always, for questions, comments, ideas for future podcasts, please send us an email to ask at taste radio.com on behalf of the entire taste radio team thank you for listening and we'll talk to you next time