First Time Founders with Ed Elson — ft. Andrew Benin and Allen Dushi of Graza

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1:28technologists who understood finance, kind of kept the trains running on time. And I was sort of the front man. So in sum, what makes a great co-founder is someone who is not you.

1:51Welcome to First Time Founders. I'm Ed Elson. My next guest launched their online company in January 2022. Within their first week of business, they generated$100 ,000 in revenue. By their second month, they were at half a million. And today, they're at eight figures annually. Now, the product they sell might surprise you. It's not a software tool or an enterprise platform. It's something very simple, something you probably use every day. Olive oil. Co-founders Andrew Benin and Alan Douchy have shaken up the olive oil market with their extra virgin olive oil brand, Graza. And from day one, their MO has been product differentiation.

2:31The first big change was packaging. Instead of using a long glass bottle like we're used to, they opted for a plastic squeezable one. They also split their product into two. There's the drizzle oil for dressing and the sizzle oil for cooking. These were all changes consumers didn't even know they wanted. Now, Graza is one of the hottest startups in the CPG space. They're available in more than 8 ,000 stores across the country, including Whole Foods and Target, and have even built their own subscription service for their olive oil. So without further ado, I'm excited to introduce Andrew Bennon and Alan Dushi, CEO and COO of Graza.

3:10Thanks for coming on, guys. Thanks for having us. Yeah, thanks for having us. Andrew, take us from the beginning. when and why did you decide to start an olive oil company it's genuine product obsession honestly i think that a lot of times you're traveling you're looking for a new career you get connected to something and the difference between getting connected and starting a business and getting connected and just being passionate are monumentally different but uh i had aspired you know through working for entrepreneurs my whole life to do something um thankfully do something with someone i dearly love and alan um but i have ties to spain and i was out there my wife is from spain um i was working at magic spoon at the time pretty successful cereal company uh and i tried some amazing olive oil and my first thought was like i'm gonna do it i'm gonna bring the best olive oil from the Mediterranean to New York.

4:13I'm going to bring jamoni barico. I'm going to bring the nicest cheese and the nicest vinegars and just be another bougie distributor of European pervade foods. Thankfully, I got reeled back in by people like Alan, by chefs that I'd worked with in the past saying, actually, we don't need another one of those. We don't need an unapproachable, unattainable Tuscan olive branch,$40 a bottle kind of bullshit company that no one can participate in. You actually need something for everyone. That's kind of how our forces came together. And we decided to make this as universally beloved as we could. Were you working at Magic Spoon when you had this idea?

5:01Were you on a sabbatical? What was going on? Yeah. No, I would like bring olive oil to the office and do tastings at the office. And eventually - You were like the olive oil guy from a young age. Eventually I got fired because it was like, you just are not focused on cereal or anything that is in your job description. We're doing our third olive oil tasting of the quarter at the office. And it was just kind of obvious, you know, but I was kind of jack of all trades there, first employee. I think people that get into those positions, these generalists, they want to start something. They don't build up the courage or the capital or maybe they start something and they fail.

5:42It's frustrating to want to be an entrepreneur but not do it. It eats at you every single day. That's the situation that I was in. So Alan comes in and gets involved. How does that happen? A mutual friend put us in touch. I had the same itch of wanting to do something. I also worked for an entrepreneur for my entire career, but I always wanted to start my own thing and was just kind of like networking around, hearing what opportunities were there. Honestly, just trying to meet a partner because I'm not the idea guy. Andrew's the idea guy. And I was just looking for someone who wanted to like lock themselves in a room until we came up with an idea and was ready to quit their jobs and go for it.

6:22Andrew was 75 % of the way there when we got connected and it happened really fast. It happened in two weeks, I think, where we agreed on doing this together and taking the leap. I knew him personally, so I felt I was comfortable with that. And then when I heard the idea, I was in in 30 seconds. It didn't take much longer than that. I had known about, you know, the olive oil fraud and all that stuff that you read about where— Hold on. I don't read about that. What is olive oil fraud? You don't read about that? You don't read about that. You know, most olive oils that you're going to buy in a supermarket are low quality.

7:07It's pretty well known. You know, there's a big misrepresentation in the market. a lot of the American consumers think that all good olive oil comes from Italy. So the three biggest brands in the country just have really Italian names, but what's actually inside the bottle is from five different countries and of poor quality. And, you know, when I heard the idea to put, you know, the Casper and Magic Spoon spin on this industry, my only question was, can we take this to retail or is this an online thing? And my value that I wanted to add to it was making this accessible. As much as this is going to be an Instagram brand and a Whole Foods brand, this has to be a Walmart brand and a Costco brand also for it to be a business that I would get excited about.

7:58And we were aligned on that. We thought it was going to take a lot longer to achieve that. But, you know, the brand hit really fast with consumers and with retailers as well. What was the journey from incorporating the company to actually launching the product and selling it? It was a long one. It was in the works for two years prior to launch. I think that obviously raising capital and we can get into that was a big part of it because for us to do what we do we actually use our capital to acquire inventory significantly ahead of time and we knew that going into it um we're not working with a co-manufacturer where we're getting maybe competitive terms and getting po financing right out the gate like we were taking bets and finding people that are willing to take bets with you who are those people who's down to bet on olive oil yeah because it's not VC, I assume.

9:00I don't think they bet on olive oil at that stage. I think, well, olive oil actually has like growing CAGR year over year for 40 years. It's a pretty big market. It has 49 % household penetration. So if you want to like de-risk it in a sense, you can build that case pretty easily. You're investing in something that every single apartment in lower Manhattan in this zip code has inside of it. Yeah. Right. That's not what people are pitched frequently. It could be a market builder or something new or a SaaS company that has zero customers. So like, I think it was less about that and more about why are you the people to do this?

9:44So we'd raised around 230 grand just on safe notes early on off the Y Combinator website, I just printed it off and sent it to some people and got some people interested. That was enough to... Sorry, what do you mean off the Y Combinator website? Like, if you know nothing about raising capital, like you go to Y Combinator. Oh, as in that's how you learned how to do it? You download a template and you pick an arbitrary valuation cap. Okay. And then you send it to 100 high net worth people. When was your cap that you chose? 5 mil cap. 5 mil, okay. No discount at the beginning. We've been no discounted at the start.

10:25Yeah, just like, this is it. So we got 230K in the door, and that was enough not to pay ourselves. It was enough to actually build the brand. I have some deep connections to the Casper founders, and their advisory has been a big part of the early days of this. And it was like, well, okay, it's all about momentum. So now that you have 10K in the door, that means you'll get 50. That means you'll get 100. That means you'll get 200. And now what are the steps of getting from 200 to 2 million in the door? It's showing something tangible. It's having a launch date. It is being able to send product to people.

11:00It's being able to show that the brand is visceral and real and not just a amorphous idea. And we chose the route of working actually with a pretty expensive, highly regarded branding agency after evaluating a lot of different ones. We worked with Gander. They're an amazing agency here in Brooklyn. And it's not cheap to work with talented designers and talented brand builders. You get your money's worth, right? I think that the likelihood of having success at scale is significantly influenced by having a strong brand built for you to operate, distilling all of your thoughts and distilling your ideas into the ones that are going to resonate most with people, capturing emotion in an illustration, which for us has gone a long way.

11:49Sizzle has Sizzle Woman on it, and no one knows who she is or what she's doing or what she's wearing, but it's emotive. And then Drizzle has an olive spout spigot. And that is priceless, actually. They're these identifiers of Graza. It's iconic. It's iconic, and that was what we asked them to do. So they always mention to us that we build the car that eventually you're going to have to drive, and you'd rather be driving a car that's a Toyota that's going to go for 400 ,000 miles than secondhand, you know, whatever. That could break down. It's not the key to your success, but for us, it enabled us big time.

12:29How would you describe, I mean, if you look up the company, and I've seen all the olive oil bottles, and they are beautiful, how do you direct the branding agency to capture this strangely, like, casual approach to olive oil that I've just never really seen before. So, I mean, to me, it's simplifying the decision of what am I going to buy, right? A big part of what we wanted to do was take this aisle that if you stand in front of it and you don't know what you're looking for, it's overwhelming. It's really intimidating. I kind of felt like I was in a wine shop when I was going to buy olive oil before this.

13:12I had no idea what I was looking for. This one's from Spain. This one's from Italy. This one's from Greece. This one's$8 and this one's$40. And like, I made the decision like everyone else did. I'm just like, eh, like I'm not going to spend eight. That must be crap. I'm not going to spend 40. That's insane. Oh, this one is$18 and it's on sale for$12. Like I'm going to buy that one. And you know, what Casper did was the same thing. You walk into Sleepy's and there's a hundred brands and you don't know what to buy. And one is$200 and one's$2 ,000. And we're just saying, we made the decision for you.

13:47We perfected it. This is what you need to buy. And that's what we wanted to do with Graza. Walk in, sizzle, drizzle, where it's from, doesn't matter. It's just a really big misconception about olive oil. As long as it's fresh, as long as it's a good varietal, it's going to be good. Like there's better and best, but that doesn't really matter to most people who are just trying to cook dinner for their family every day. Giving them a better product was a huge win for us in simplifying that decision. I think that's what we did. When you launched, it sounds like it was pretty much a hit from the get-go.

14:22Is that an accurate description? Yeah, for sure. How soon did you know and what were your guys' emotions when this thing started taking off? And what was your strategy on launch? Like, was it just going for Instagram ads? Did you, you know, hire PR people? Like, how did you get this thing in front of consumers? And how did it just start, you know, selling? We launched, we pushed play on our website, you know, the night before our quote unquote launch day, just so that we can troubleshoot and make sure that everything was clean. And we started getting orders immediately, which we didn't, we didn't expect at all.

15:00Um, you know, we had a PR firm. Um, I was, I was of the mindset of - Did you, did you spend heavily on PR as well? We did, we did. And like, like the medicine for me was, you know, if we do this for four months and have the as featured in this, this, this, this, this, like that we can put on our website and put in our sales deck and, you know, investor deck eventually like great. We can cut it off then, but it's, it's delivered. You know, you only get launch press. once. It was a great investment early on. We got a ton of press on our launch day and in the next week about it. We also seeded pretty heavily to influencers, big and small.

15:47Andrew was flying back from Spain with five liter jugs of oil and we were hand-filling bottles and sealing them and putting stickers on and handwriting notes and sending, I don't know, like 25 boxes out a day, um, without paying anyone, you know, we didn't have budget to pay influencers to post about us like that would have been too risky, but we kind of took a bet that these people are going to use our product in their videos because they're making so much cooking content and olive oil is in all of their videos and our bottle is going to like be recognize you know that little green and yellow nozzle in that shot of oil going into pan like people are going to see us um and that paid off you know we we had a couple of really big hits um with influencers on our launch day and right around our launch some that we expected some that we didn't and it really drove the sales big time and you know within 24 hours of launching we had a DM from a Whole Foods buyer on Instagram saying, like, love your product.

16:55Are you guys interested in going to retail? Like, blah, blah, blah, at WholeFoods.com. Email me. And I fell out of my fucking chair. Yeah, we were over the moon. And she saw it on an influencer's account. It wasn't Grazi. There's two sides to this, right? There's the branding side, which you guys have killed. And then also there's the quality side, which you guys care about that. Yeah. A lot. So, right. So, you know, that Whole Foods buyer, do you think she or he has tried the Graza product before? Or are they just seeing the product and they see the branding and it looks cool and it's an influencer they like?

17:31Why is Whole Foods down for you guys? I think that's step one. Like, if you have digital resonance, I think you're going to pique a lot of people's interest. But I think the product has to follow up pretty strong. Unfortunately, that's normalized now because it's really hard to get taste across without sitting down and doing a tasting, right? A brand that says, we are the best or we are the tastiest or we have the best olive oil. Like, it's hard to back that up unless you've gotten people to try your product. A common way in the D2C playbook to do that is you send out samples. There's companies that their entire business platform is sending out samples to garner pre-launch reviews or reviews in general.

18:15Sending out product for free, letting people try it, and then convincing them to buy it. We did not want to do that. Because it's too expensive? It's too time-consuming? Because if you evaluate the value of a customer, someone that buys the first time is so different than someone that doesn't. Needs to be convinced. Exactly. So I think we thankfully have the follow-up. We work hand over foot in Spain to bring incredible quality olive oil. And there is defensibility in it because it is single origin. It is single varietal. The varietal that we pick wasn't widely consumed in America because American food brands from Europe, I think the common thinking was we're going to provide something to the American consumer that we think they want or that we know they want.

19:07So they were providing olive oil to the marketplace that fit that mold. We were like, no, we're not going to follow what we think the consumer wants. So we're just going to provide the best quality product that we can find, frankly, a product that we like consuming and bet on our ability to convince people that this is the good stuff. It's so funny hearing you guys talk because it feels like one of your main strategies is like honesty in a way, just being upfront about what the brand is, what it can provide and being honest with yourselves about like, yeah, this is this is what our product can do.

19:42and we're not going to embellish beyond it just tastes great and it's fun. And that's fine. That's what olive oil can be. And Scott had an interesting line the other day, which was when we were recording one of our markets podcasts, which is the truth always has a nice ring to it. It just always kind of sounds right. And the reason I want to bring that up is because there's this great story, which, Andrew, I'd love for you to take us through, which is you pulled off one of the greatest corporate apologies of all time. And it was so good that there was a full Wall Street Journal article about this apology that you gave to your customers.

20:21So can you just tell us the story of that and how that happened? Credit where credit's deserved. Like, that wouldn't have happened if Alan didn't greenlight it. Because I had emailed investors, advisors, hey, do you think this is a good idea? No, don't bring attention to something that's not necessary. People might not be even thinking about this. and we have such a good relationship that alan was like honestly if if you want to do this wait so let's let's hear it from your perspective from my perspective um you know it was our first holiday season and the e-com business just exploded you know we we didn't do any facebook or instagram ads for the first nine months uh we had just turned it on in october of 2022 so we just started spending and it was working we had our first and only sale of the year and people really were just like oh my god i can get this product for 21.74 off like great i'm gonna stock up and then we started getting gift guide hits so like our econ business 10x overnight and we're having like a lot of small issues right like it was taking six days to ship an order instead of one day.

21:38Some of the bottles that we were receiving were dented because for the first time we were shipping in cold weather in November and December and the oil would freeze and it would, you know, kind of suck the oxygen out. And when it got delivered, it was bad quality. And I look at every customer service email and we were getting a lot of angry emails. I was trying to give this as a gift and, you know, you ruined my Christmas and just a lot of very small things that were piling up um i didn't honestly think much of it but when andrew was like i think we should just email everyone and apologize because i don't want to have any negativity like around the brand um i was like i i trust his communications like a part of our relationship is trust and he had proven over and over again that his instincts with this kind of stuff are 99.999 of the time right and so I was just like, yeah, of course, do it.

22:38If you feel that. I love when he talks to the customers. I think his voice is our brand's voice. When it feels like it's coming from a person instead of from a company, people love that. We get great responses. Most of them are just like, I had no idea this was a problem. Thanks for answering. I'm going to support you guys even more because this is great. A lot of them are like, I can't believe someone yelled at you for their quality oil coming a little bit out of shape for Holiday and would take that out on you. Like, I support you guys. I really think it all stems back to we are not like a founder-first company.

23:16And I think for us, that type of vibe has become a little bit incessant in the sense that like how many founders' faces are we all just going to see all the time? How many manufacturing facility walkthroughs are we going to see that you're trying to give the American consumer the vibe that you know where this product is coming from. Like, it all to us felt a little bit disingenuous for our brand. Like, the brand is bigger than Andrew and Alan by a long shot. We're just happy to be working on it. It's a really happy company. What's the alternative to Founder First? Because, I mean, from my understanding, your strategy is kind of Founder First in a way where it's like you're building in public.

24:00Like, Like, you're being open and forthright about, here's what it's like to run this company. We fucked up this. We fucked up that. We're sorry. We're a company. And I'm a dude. But I think the fact that that happens infrequently is kind of our nature. Like, taking people on the journey would be publishing something every single week about improvements that you made or design you made or something you launched and you were the reason it happened and showing the videos of the team and the development and us on the farm. Like, this was the first time I'd spoken to customers in five months, and they've never seen my face.

24:37It's only been through email communication, through raw human connection, right? I would previously send SMS messages saying, are you having a shitty day? I know that I am, so here's$2.32 off. Maybe it'll cheer you up. thinking that I'm not the only person having a shit day at work. And maybe someone that follows Graza is going to resonate with that because it's something that has nothing to do with being a founder of first company. It just has to do with human-to-human communication. I think for a long time, our marketing was the same way you would tell your friends in a group chat and iMessage about Graza is how we were speaking to 40, 50, 60, 100 ,000 people.

25:20That was our thinking. And that's what came through in this message where it wasn't pleading for forgiveness. It wasn't conversion oriented. It was just saying how it is. There are numerous issues that happened. I'm going to list them out. I'm going to tell you that we're going to work our hardest on improving them over the next few months. And we really appreciate you even buying Graza once in your life. Like that means so much to us. So yeah, it didn't come from a video of me and, you know. Yeah, it's basically like what would, sounds like the thing that guides you guys is what would I like?

26:01Would I want to see the founder of the olive oil that I consume taking a walk through Olive Grove? No, I probably don't give a fuck about that. I'm sure as a founder you can get sort of, or at least what I've seen with founders is you get so, your understanding of reality gets so warped by the fact that that is your life. That's all you know. And so you think that it's more interesting to other people than it really is. It's all that you can talk about. But it sounds like for you guys, you guys are pretty... We have kids. Yeah. We were looking up the train how to get home to our families as quick as possible, not our Shopify sales walking into here.

26:39Would you say that that is an advantage? I was just talking to a founder last week who said that one of his advantages is he's single. So he can go, he's working on the company all the time. He doesn't have dinner with the GF on Thursday night. Would you say that it's actually different? I hate the hustle culture. I really do. We're not a tech company. We're not doing anything that hasn't been done. We are manufacturing a product and selling it to grocery stores. That doesn't take 20-hour days. Occasionally, it does. But if there's something fundamentally wrong, If you have to work, I think, 100 hours a week over and over and over again, something's not clicking.

27:20You either can't scale up fast enough or you're trying to force demand, which like, that's great. Like, it has to happen from time to time. But if things are going well, I think you have to run and grow a company that is, you know, sustainable and happy to work at. And that's part of the duality, I think, that worked in our favor because I've worked at those types of places before that where people are on our backs. We have to grow as quickly as possible. We've promised like this type of growth to our investors. We have to expand internationally, even though we're not really ready chasing growth for growth's sake.

27:59I think Graza doesn't chase growth. I think that we address growth opportunities that are presented to us, but we're in this for the long haul. There's a longevity to it. And I think that our team benefits from that also. I think they know it's not a race to the bottom. We'll be right back after a quick break. Thank you.

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