799 Raj Alva: Co-Founder of Whiskey JYPSI

0:00Kara Goldin:I am unwilling to give up, but I will start over from scratch as many times as it takes to get where I want to be. You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be, go focus on what you can control. Hi everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Support for today's episode comes from Collective, the all-in-one financial solution built exclusively for solopreneurs.

0:50Kara Goldin:Let's be real, you didn't start your business to spend nights Googling tax deadlines, worrying about quarterly estimates or wondering if you're overpaying the IRS. But for a lot of founders, that's exactly where the dream starts to feel overwhelming. Collective changes that they handle your back office so you can stop playing accountant and start focusing on actually growing your business. Because at some point, your side hustle stops feeling like a side hustle. Money's coming in, your tax bill is going up and suddenly you're asking yourself, is my business even set up the right way? Collective helps you make sense of the jargon, whether that's forming an LLC, adding an S-corp election, or just knowing you're making smart decisions instead of guessing.

1:41Kara Goldin:And with tax season right around the corner, this is not something you want to do alone. Collective keeps your business tax ready all year long, capturing every deduction, keeping clean books, handling quarterly tax estimates, and preparing both your business and personal tax returns so nothing slips through the cracks. Their AI-powered bookkeeping is backed by real experts, and your membership also includes invoicing, plus seamless payroll for S-corp owners, which can unlock thousands in self-employment tax savings. And maybe best of all, Collective gives you community and support so you can finally take the solo out of solopreneur.

2:26Kara Goldin:If your business is getting real, it's time your financial setup did too. Check out Collective and get back to building what you love. Right now, Collective is giving you 50 % off your first two months when you go to collective.com slash Kara Golden. That's 50 % off your first two months at collective.com slash Kara Golden. Collective.com slash Kara Golden. Hi, everyone. Welcome back to the Kara Golden Show. Super excited to have our next guest here today. The conversation is going to be about building when there's no clear playbook, having the conviction to move anyway. Raj Alva is the co-founder of an incredible brand.

3:11Kara Goldin:that I just ran across called Whiskey Gypsy. And Raj is a builder in other industries, but decided to jump into this industry, the spirits industry, and really find the disruption and make the impossible happen. So not an easy feat, especially in the spirits industry. So So Whiskey Gypsy has challenged a lot of assumptions in the whiskey world, and it doesn't follow the traditional script. It happens when storytelling and craft and purpose are actually aligned, and that's exactly what Raj and his co-founder is doing. His journey is shaped by earlier experiences, as I mentioned, in other industries.

4:01Kara Goldin:And today I cannot wait to hear more about what it takes to not only build brands in other industries, but in the spirits industry and what he's seeing with his co-founder. So Raj, welcome to the Kara Golden Show. So excited to meet you. And I absolutely love what you're doing. I appreciate that. I appreciate that. It's always fun building things. Yeah, definitely. Start with Legos, type the kid, and end up building businesses when you're an adult. Support for today's episode comes from Collective, the all-in-one financial solution built exclusively for solopreneurs. Let's be real. You didn't start your business to spend nights Googling tax deadlines, worrying about quarterly estimates, or wondering if you're overpaying the IRS.

4:50Kara Goldin:But for a lot of founders, that's exactly where the dream starts to feel overwhelming. Collective changes that. They handle your back office so you can stop playing accountant and start focusing on actually growing your business. Because at some point, your side hustle stops feeling like a side hustle. Money's coming in, your tax bill is going up, and suddenly you're asking yourself, is my business even set up the right way? Collective helps you make sense of the jargon. whether that's forming an LLC, adding an S-corp election, or just knowing you're making smart decisions instead of guessing.

5:31Kara Goldin:And with tax season right around the corner, this is not something you want to do alone. Collective keeps your business tax ready all year long, capturing every deduction, keeping clean books, handling quarterly tax estimates, and preparing both your business and personal tax returns so nothing slips through the cracks. Their AI-powered bookkeeping is backed by real experts, and your membership also includes invoicing, plus seamless payroll for S-corp owners, which can unlock thousands in self-employment tax savings. And maybe best of all, Collective gives you community and support so you can finally take the solo out of solopreneur.

6:16Kara Goldin:If your business is getting real, it's time your financial setup did too. Check out Collective and get back to building what you love. Right now, Collective is giving you 50 % off your first two months when you go to collective.com slash Kara Golden. That's 50 % off your first two months at collective.com slash Kara Golden. Collective.com slash Kara Golden. Exactly, exactly. So for listeners who maybe haven't heard of Whiskey Gypsy yet, it's spelled J-Y-P-S-I. What makes it fundamentally different from most whiskey brands that we find on the shelves today? Yeah, so when Eric Church, my business partner, and I were thinking about getting into this space, he was already partnered with Jack Daniels.

7:10he was the second person ever to have his name on a bottle frank sinatra being the first and it was a barrel pick um so basically straight whiskey bourbon into a barrel actually not it's tennessee so whiskey um straight into a bottle and i said eric if we're going to do this because he this came up on a golf trip where we were way too over served and um talking about different businesses He was asking about Grayson, which is my other business I was a founding investor in. And I said, if we're going to do this, we have to do something different because it's a pretty tough space to break into. There's a lot of players, a lot of big players, a lot of small players.

7:51And so we spent a couple of years really honing the plan. I want to say we started the idea in 21. We launched in early to mid 23. So it took that long buying the liquids. so what i would say what we did differently and it was interesting when i was researching the the field i had a lot of connections which i didn't realize uh in the the industry um joe magliocco is the owner of mictors which is my favorite brand um i called him uh he gave me kind of some parameters of what we would be looking at he actually told me not to do it he said to own rickhouses. And then I had some other friends, Whistlepig guys in the high west.

8:35So, and they were all great. They were sharing information, but every time I would ask why they did things a certain way, the answer would come back. Well, that's how we always did it. And I said, it was kind of an aha moment. I said, okay, let's figure out how they've always done it and see if there's something else that can be there. And that's why if you look at our product categories, Every one of them is different. We have one tier, which is a blend of world whiskeys. We have another tier that's finished in woods. We have a third tier that's a grain story. And, you know, traditionally people look down on blending and finishes.

9:09But if you look at the largest whiskey company in the world, Johnny Walker, it's a blend. And so we saw an opportunity there. And I think people are now starting to see, you're seeing a lot more finished products come out. You're seeing not blends as much, but some. And so, you know, we really went a different direction. I think people were expecting us to come out with these single barrels similar to what Eric had. And our first product, which was a world blend, ended up winning double gold at San Francisco World Spirits, which is the highest award you can get. And then our third product also, which is a grain story, we found Cherokee White Eagle Corn, which is the grain used by the American Indians when they were teaching the settlers how to make spirits.

9:55We use that in our entry price point, and then we double barrel it, and that one double gold at the world spirit. So I think we're on the right track. We're seeing a lot of growth, and we've got some pretty interesting new products coming out. Again, all non-traditional Finnish products. So it's a different category that we have really dove into on the whiskey, bourbon area.

10:24Kara Goldin:Support for today's episode comes from Collective, the all-in-one financial solution built exclusively for solopreneurs. Let's be real. you didn't start your business to spend nights Googling tax deadlines, worrying about quarterly estimates, or wondering if you're overpaying the IRS. But for a lot of founders, that's exactly where the dream starts to feel overwhelming. Collective changes that. They handle your back office so you can stop playing accountant and start focusing on actually growing your business. Because at some point, your side hustle stops feeling like a side hustle. Money's coming in, your tax bill is going up, and suddenly you're asking yourself, is my business even set up the right way?

11:12Kara Goldin:Collective helps you make sense of the jargon, whether that's forming an LLC, adding an S-corp election, or just knowing you're making smart decisions instead of guessing. And with tax season right around the corner, this is not something you want to do alone. Collective keeps your business tax ready all year long, capturing every deduction, keeping clean books, handling quarterly tax estimates, and preparing both your business and personal tax returns so nothing slips through the cracks. Their AI-powered bookkeeping is backed by real experts, and your membership also includes invoicing, plus seamless payroll for S-corp owners, which can unlock thousands in self-employment tax savings.

12:00Kara Goldin:And maybe best of all, Collective gives you community and support so you can finally take the solo out of solopreneur. If your business is getting real, it's time your financial setup did too. Check out Collective and get back to building what you love. Right now, Collective is giving you 50 % off your first two months when you go to collective.com slash Kara Golden. That's 50 % off your first two months at collective.com slash Kara Golden. Collective.com slash Kara Golden. So the name Gypsy spelled J-Y-P-S-I. Where did you come up with that? So Eric has a song where he talks about drawing cards with a whiskey gypsy and so we had a bunch of other names that we were thinking about but it kind of stuck and we wanted something that was easy to say if somebody's at a bar and they say hey i'd like a gypsy and coke or a gypsy old-fashioned you needed something that was easy to remember um we wanted to spell it differently because the word gypsy can have some negative connotations in some places and from The reality is we are a new generation of the word gypsy, right?

13:17We're not the tradition. We're doing things differently. We're exploring the world, which is, you know, we're travelers and we're taking risks. But at the same time, we're not the old way of doing things. So we want to spell it differently as well.

13:31Kara Goldin:So how crowded is the whiskey industry overall? all and just to give people some, you know, scope of how big this is. I think they only need to walk into a liquor store and see how many brands there are. I had a similar experience when we started Grayson Clothiers. So I don't know how much you know about the golf clothing industry, but it was probably 2015. I met Charlie Schaefer, who's our founder, and he had a business plan and he was pitching. and I said, okay, well, let me take a look at that. I love the concept. Peter Millar just been sold to Richemont and Ralph Lauren was really de-emphasizing golf clothing.

14:15I saw a window and the timing was perfect when he pitched me. And I said, all right, this is, I like it. I like what you're doing. We can start with golf and we can build it to a lifestyle brand, which is where we are now 10 years later. It's been a huge home run for us. But I remember going to the PGA show that year and saying, okay, let me see how our brand fits in. There was hundreds of clothing companies and I panicked. I said, what did I just get myself into? I mean, this is crazy. It was similar when I went into the first liquor store that was a decent size. There are so many whiskey brands and I want all my competitors to do well, but there's a lot of them that just don't have a reason to exist because they're really just bottling somebody else's product and putting it on a shelf.

14:59And we don't distill our own product. We find distillers who we can partner with. They use our grains, they use our yeast strains. And so we use their equipment basically, but, but we, we don't have our own distillery, which really with the overcapacity and then industry makes no sense for a small company. So when I walked through the aisles, it's another reason it took so long. I said, we have to have something different. And I would tell you the average liquor store probably has 50 types of American whiskey, maybe more, sitting on a shelf. Total wine could have 100 plus. If I had to guess how many are out there, total brands, 1 ,000.

15:40Wow. And yeah, but the main producers, there's probably only three or four who produce, you know, MGP in Indiana, you can tell the label they're required to say where the product came from. So if you see Indiana, you know it was MGP. If you see Kentucky, it's probably Bardstown or Dickel or some of the other guys who sell the third-party producers. If it's Tennessee, it's probably Tennessee Distilling Group. So if it's North Carolina, it's probably Southern Distilling. So there's a lot of third-party producers who will produce for other brands, and they make excellent product. But, you know, for us, we want to do something with that excellent product, not just put it in a bottle.

16:21Kara Goldin:Yeah, definitely. So your packaging is beautiful. And I would imagine in the spirits industry, especially when it's sitting on the shelf for the consumer to make that decision, maybe they're not familiar with the brand name, But the packaging has a lot of weight. So can you talk about that and what your experience was in building that? Yeah, you hit the nail on the head. So we went around and we looked at all the different bottles we saw in the industry that we thought were interesting. And this was a long process. It's funny enough, I actually have one of our prototypes sitting right here. But we went through 50 to 100 different bottles that we said, okay, this could be interesting, that could be interesting.

17:10What do we like about that? What do we not like about that? And we hired a person who had made some of the ones we liked as a bottle. There's a specific bottle designer. And what we decided was we weren't going to limit this based on cost. So I think our bottles, if I had to guess, are probably twice the cost of any traditional bottle you're going to see on the shelf. we only found one group who could actually make it we even went to italy to a group that makes these custom bottles they couldn't figure out how to do it it's basically a hammered copper still but in glass so you know whiskey's distilled in copper stills in the old days and you know they're hammered typically so they have these little indentations so that process that bottle process took one full year to design that bottle.

18:00And you hit the nail on the head in terms of the visual, we call it the bar cart test. If it's sitting on your bar cart, does somebody see it when they're walking by? Well, it's even worse when you go into a liquor store because all the facings I told you, 50, 100 bottles, is someone going to see it visually? When they walk by, did it stand out? And so from that standpoint, we had to get that right, even though it costs a lot more and so we've actually won a lot of awards for the bottle as well the bottle design it's very hard to make um we've found one more group that can make it we're switching to them they've been able to cut our costs back a little bit 40 probably so um but it is uh it is the key to me either your label bottle or both has to stand out when you're walking by an aisle and you know i would say this with any consumer product you know shelves are crowded and what's going to make that person come up and actually look at the bottle or look at your bar or whatever it is, you need to have something that's going to catch somebody's eye to get them to look at it.

19:03Kara Goldin:Yeah, definitely. I remember when we were launching Hint and we had a clear label and what we didn't take into account was the lighting in the stores and the light was coming through and we wanted everyone to know that it was clear, right? That there wasn't dyes being used and it wasn't tainted in any way with any type of color, but the consumer couldn't see it. And so when we actually were forced by a New York tax law that changed quickly or we were going to have the bottles pulled off the shelf, we changed to a white label because we couldn't get the clear labels right away. and 10X our sales.

19:52Kara Goldin:And we were like, what happened? Yeah, we just couldn't believe it. No one saw it. No creative team. No one saw what the issue was until that happened. Yeah, and so... And that's the eye test, right? The consumer walks through the aisle. Shells are crowded. What are they seeing? And again, I see that in the clothing world too with Grayson. When I go through a pro shop, I try to see what is our clothes... How are they putting it up and displaying it? what does the consumer see and does it stand out? And if it doesn't stand out, they're going to walk right by. The ones who are going there purposely to buy your product will buy it, but that's not going to grow your brand.

20:34You need people who are there and don't know your brand or might know a little to see it, pick it up, look at it, and then ask the questions if they need and walk out. So yeah, the eye test is failed. And again, I tell anyone who's listening to this, Go to a liquor store. I promise you 75 % or more of the bottles just blend right in. So it's hard. It's a hard, hard way to do it.

20:59Kara Goldin:Yeah, definitely. And you talked a bit about this, but the three-tier system is something obviously that you have to adhere to. And I tell founders this all the time that it doesn't really matter who you know. I mean, maybe to get an introduction, it matters on who you know in the industry, but you have to have a lot of different elements. You have to have a great product. You have to have a story. You have to have the labels. You have to be able to deliver the product. And otherwise, all the introductions in the world go out the door. what has been the most challenging for you in actually getting the product launched?

21:50Yeah, so the three-tiered system is definitely, to me, it's archaic. So I'm not sure why the league, we're going to have it anyway. We need the distributors, we need retailers, but it really makes a brand very hard to build profitably because even if you called me to buy a product, I still have to pay the distributor. I still have to pay the retailer, right? It's the wine industry has found a way around it. We have a little bit of a loophole in some states where we can do some direct shipping, but it makes it very hard to build a brand. And I don't know if that's great for a consumer. Um, but from, so that the profit side was hard, is hard.

22:32Um, fortunately, Eric and I have deep pockets, so we can get through that. Um, but you know, we've been blessed that he and I have pretty good connections. So it does open doors. Um, if I was coming in blind without knowing, I have friends who own some of the big distributors. Um, funny enough, we actually didn't go with them. We went with some of the smaller distributors and because of Eric's name, uh, we've been getting inbound calls. Um, a lot of small brands haven't been able to get distribution. We've been getting inbound calls. So, um, I think that the challenge, there's so many challenges starting a brand in this industry.

23:11The challenge I think we're having now is just getting the word out because we didn't want it to be a celebrity brand. We consciously didn't put Eric's name on it. So we get all these great reviews. Now it's the marketing side. How do you target market? We're only in a handful of states. We didn't want to go nationwide because, you know, you want to make sure in the states you're in the products moving on the shelves, because if it's not moving, the retailer is going to, you know, stop carrying it. The distributor is going to get angry. So wherever you're going, you have to make sure it's moving.

23:41So you have to spend marketing dollars. And so without pulling too much on Eric, because if we use him too much, it becomes a celebrity brand. That's where we're, you know, we're at that stage now of getting targeted marketing and we're seeing great growth. But that's the harder challenge for me. It's keeping one hand tied behind my back because I have a celebrity I can use, but we don't really want to use them because you don't want the brand to get tainted.

24:09Kara Goldin:So you've been involved in Grayson and other brands as an investor versus actually operating and rolling up your sleeves. So it's a little bit different. I have that right, right? That you haven't. Well, Grayson, I'm actually a founding board member. And when we started, we were so small, I was rolling up my sleeves. So, Carly and the team, you know, 99%, 90%, whatever it is, but they were, you know, really leaning on us because he was a creative guy who did some operations. But, you know, we helped bring in the COO, found a new CFO, CFOs, you know, there's small companies, the people who are coming in don't have the same experience.

24:49So, they're leaning on you. So I'd call it active board management, right? You're not rolling up your sleeves the way the team is, but you're pretty involved. I mean, we're about to do something fairly exciting. Grayson and, you know, Charlie and I and one other board member are kind of negotiating, structuring the whole thing. So it's a little bit different. On this one, I have brought in a CEO recently because at the end of the day, at a certain scale, you need to bring more structure in. And I think some founders make that mistake where they wait too long to hand the reins off a little bit because they don't want to lose control.

25:35But I think the smart ones, when you're scaling fast, you're going to make a lot of mistakes if you don't bring people in underneath you who've kind of dealt with that. And so I saw that happening here and brought in a CEO who had been at two companies that had grown in the spirits industry, grown and sold for big numbers. So he's really helped me figure out the launch plans, how many states we should go and how we should launch in them. And so, you know, you check your ego at the door and you do what you need to do.

26:05Kara Goldin:Yeah, definitely. So, I mean, that's, I think, maybe lessons learned along the way. But also, when you think about, I guess, instinct and trusting yourself a little bit more that maybe your younger self you would have ignored. Anything like that come to mind when you think about how you're viewing building the company today? I mean, you mentioned one point where you brought in a CEO pretty early, which is great. But also, I think just looking at the landscape and recognizing that not everything is going to go right, right? That you've got to, you know, you've got to, if you're forced to go right, then, you know, you've also got to figure out what else can you do to make up for it.

27:06Kara Goldin:point. Yeah. There there's, you're always going to make mistakes, right? There's just, you just have to realize there's going to be mistakes made. It's, can you minimize the damage those mistakes due to you? Right. And then do you learn from them and pivot quickly? How quickly do you catch those mistakes? And we made plenty of them at Grayson. We still make mistakes. Right. Um, and so if you, if you don't fix them fast, they can be fatal. And so, you know, for me, having smart people around me, bringing them in a little earlier than I probably would have, I wouldn't have done that when I was younger.

27:38You know, when you're younger, you think you can do everything. And so for me, it's, I want the smartest people in the room. I've heard the expression, you know, A plus CEOs want A plus people around them. And, you know, B CEOs want C plus people around them. Right. And I've seen that in the corporate world, which I did M &A for a long time. And I can tell you that the best CEOs were the ones who just surrounded themselves with very smart people and wanted to hear their views. And they're going to make the ultimate decision, but they want to be surrounded by talent. And that's my view at this point in building businesses.

28:12You want the best talent you can get because, and they might challenge you, but listen to them because they've experienced it before. And if I was in the same business for 30 years, I might have a different viewpoint, but I'm starting different businesses in different industries. And there's people who know a lot more than I do. and so you know bringing that talent in early it's really valuable to avoid those mistakes