Boom, shake the room fire nation. JLD here and welcome to Entre Nuezon Fire. Brought to you by the HubSpot Podcast Network with great shows like Social Letts. Today we'll be breaking down how to make your own luck in business.
To drop these viboms, I brought Doug Boats into EO Fire Studios. Doug quit his law career and led Halo Top Ice Cream to the number one brand in $300 million in sales. Now Doug is starting over with Gatsby Chocolate, the first ever low calorie chocolate brand. And today's financial wanna talk about this amazing backstory.
We'll talk about Doug's experience selling a business. We'll talk about why he's doing it all over again and so much more. And a big thank you for sponsoring today's podcast goes to Doug and our sponsors. Speak Easy will allow you to create content for your audience live.
Earn recurring revenue from monthly subscribers, stream private shows for select attendees and more. I am loving creating daily content on Speak Easy and I think you will to visit getspeakeasy.com to download the app and start rolling. Success Story hosted by Scott D. Clary is brought to you by the HubSpot Podcast Network, the audio destination for business professionals, success story features, Q&A, keynote presentations, and combos on sales, marketing, and more.
A recent episode on how to protect your business in times of crisis is a must listen. Listen to Success Story wherever you get your podcasts. Doug, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. What's up Fire Nation?
This is Doug. I would say something about becoming successful that most people disagree with. This is a little specific to our industry, the CPG industry, but I'll say brand doesn't matter. Right?
Minimum brand matters way less than you think it does. And give us the acronym for CPG? Sorry, consumer package goods industry. Sorry, there's too many acronyms in this industry.
I gotta stop. I gotta stop. Hey, some people knew it. Some people didn't.
I just wanna make sure we're talking about the same thing here, Fire Nation. And Doug, as I mentioned the Fire Nation in the intro, we're talking today about how to make your own luck in business. And I love your backstory. I mean, you went from a stable law career to a no-name startup in the food space, no less.
Tell us that story. Yeah, I always like to say a straight line between taking the bar exam and then making ice cream at a tabletop. But, you know, for me, I never wanted to be a lawyer, but I kind of, I also didn't wanna work coming out of college. So I started law school with only open doors, it went closed doors.
And then I started working at a law firm for a year, only after, and what happens, I met my former business partner, the founder of tabletop. He also was a lawyer at another law firm. He met in a lawyer basketball league, if you can believe the level of competition that was there. I like to think I was one of the better ones, but that might just be my memory, who knows.
At any rate, when I was quitting the law firm because I didn't wanna do it, I talked to my former business partner, we were on a basketball court woman up. He told me about this ice cream he created that was low calorie, but actually tasted good. And I said, that can't be true. But I tried it and loved it and joined him in kind of the rest of his history.
But that was it. It sounds maybe a little easier than it was, given the law school debt that I had and the great paying job that I had there. But I never really thought about it as a risk. I'll be honest.
I took the leap and I'll look back. Well, I wanna get a little more specific now, because that was a good overview. But I mean, you took Halo Top from literally obscurity to the number one ice cream brands. And you beat all powerhouses.
We're talking Ben and Jerry's. Everybody knows them. That's why we all have a couple extra pounds right now. Hagen Dass.
I mean, you scaled from two million to more than $350 million in retail sales in just two years. So let's get some details on how you did this. Before we got to that crazy growth period, we had three, four years from 2013 through 2015. We like to call them the dark years, where things were not going well.
We lost as many customers as we gained. We got discontinued and lost one and a half of our stores. We have to make a lot of critical and ultimate land-highing strategic decisions about rebranding, about reformulating. And then we got some lucky breaks, which you're gonna need.
We got some great PR at the start of 2016. There's this GQ article with the headline. I still remember it. What it's like to eat this magical healthy ice cream for 10 days straight.
We're this crazy dude. Ain't nothing but Halo Top ice cream. Literally nothing but Halo Top for 10 straight days. And then wrote an article for GQ.
An article kind of went viral and put millions of eyeballs on us, after which we, as a brand, really the best way to describe it, we went viral. And again, you hit those numbers from 2016, and it went from 2015, we went from 2 million to more than 350 million in 2017, just this hyperbolic broker that was absolutely incredible to be a part of. So you mentioned that you really struggled in the early life of Halo Top, like back in 2013, 2014. Let's get real specific.
What was one of those biggest struggles that really shook you up? The main thing was the product. It wasn't good enough. And I kind of just, you know, I don't mean to bear to leave there with, you know, talking about how brand is important, but I think you see the stories of like the Red Bulls, these lifestyle brands, even the Coca-Cola's with like their, you know, their polar bears and their Christmas ads and stuff.
And you get, at least we got caught up in, you know, being a coming to lifestyle brand and how important that is and how much brand matters. And what we lost sight of or didn't realize was, if your product isn't good enough, your brand doesn't matter. If your product is good enough, your brand doesn't matter. So we learned that the hard way because the product wasn't good enough, it was too big of a compromise on taste and texture.
It wasn't mind blowing the good, which is kind of the standard we now hold ourselves to, both on ice cream and chocolate. So that was the biggest thing for us. And when you start to lose your sort count, when you start to lose customers, and when you're burning through cash, I tell you to say, it gets very, very nerdy, the same as it was. Did you have like a come to Jesus moment with the taste?
I mean, was there like some situation where you finally sat down and you're like, this is just not working because this ice cream is just not good. Like, was it one of those moments, was it you yourself, was it one of your customers, was it one of your friends, family, people on your team? Like, how did that really just get hit home in the moment? Like, I know there was a slow realization, but what was like the moment it all came, like, as so obvious?
When we lost our biggest customer, our biggest grocery store, I should say, we lost Sprouts farmers market. And at the time, we probably had about 500 stores of which Sprouts was roughly 300. And that was the wake up call. That was something's not working here, something's not right.
And to your point, they're gonna slow build up. You know, when you sample it with friends and family, they don't wanna tell you like, oh, this is not very good. They don't wanna be that harsh with you, but you gotta know, you can tell. So the slow build had been happening.
I think the rug got pulled out from under us once you get discontinued, that doesn't wake you up in the world. Now on the flip side, like what exactly did you do? I mean, obviously you went back to the reformulation table. Obviously you put quality of ingredients at a much more higher level.
And you know, I know that's one of the things that really brought Hagen-Dosto, it's prominent, it's really quality of the ice cream and the ingredients. Like, what was that for you? And like, what did you finally know that okay, now I know that we had a good brand with Halo-Tob, and we were doing that and that was where our focus was. But now I think we actually have a good product.
We spent four weeks reformulating actually at a university at Cal Poly in San Luis Obispo. They have a whole dairy science department, which is the whole thing. And we worked with some of the PhDs there, really diving into the science and the technical features behind ice cream. The ultimate result though, and what we're trying to get to was ice cream, that performed like ice cream, creamy, no compromise on taste or texture.
And for me, the standard is 99% of people who try your product, it should retain them. The product should do the retention itself. If that doesn't happen, it's really not worth the time and effort to acquire an ecosystem, because it'll be like putting water in a leaky bucket, which just won't, it won't help. It's too much time, too much effort, too much money to do that.
Now of course, the name and the brand matters a little bit. I mean, if you had gone out with Brown Sludge, I mean that may have had a hard adoption, but you did actually focus on the branding at the beginning, like you said a little bit to your Dutchman, but let's talk about the evolution of Halo-Tob. Like how did that name came to be the one that you chose? It's a great question, and I wish I had a better story.
I wish we had gone to Burning Man and had some pay out here, something that had this great vision. But for us, we actually were formally called Eden Creamer, and Eden, like the Garden of Eden, and our former branding, if anybody goes back and looks at it. It looks like grandma's ice cream. It's like the ice cream you would churn and make homemade, you know, at a picnic or, you know, with your grandparents back in the day.
It didn't scream, healthy ice cream. It didn't scream, low calorie ice cream. So we went back to the drawing board and redesigned it to be what it is today, where we were really one of the first brands, if not the first brand, to just slap our calories right on front, can't miss it, with branding that we really took inspiration from Apple. We wanted to be minimalist, if you try to say everything, you say nothing.
So we said, what's the one thing we want to say and let's scream it from a mountain top? And for us, you know, this entire pint is less than 300 calories. So that's kind of what we did. And then the name itself, just to get to it, it was seven letters, one, eight, five, Halo Top was available.
We had a gold lid. So that was the one thing we said, you know what, that can kind of be like a Halo one top. So that was the big thing for us, was where this metallic gold lid. The phone number was available.
So it was a little more practical in hindsight. I actually think it is a great brand name. I think there's a lot of legs. You can play like with a health Halo and other things like that.
So I'm really happy with that. Wish we had the foresight to say, you know, this was a deliberate decision and we knew it was great, but it was way more practical matters that kind of took over at the time. Yeah, you were definitely out of your time there. I mean, I'm looking at some images now in Google images, and it's just like right there on Halo Top, like 280 calories, 320 calories.
I mean, it's just boom, that's the first thing you see is the biggest thing. And then, you know, of course I might make you kind of scratch your head and it's like, well, and this is 280 calories. Like what's this pint of Ben and Jerry's? It's like, oh, 970 or 1120.
I don't know if that's my head what it is, but like, you know, it's obviously a lot more. And it's just, it makes you kind of like, no, let me kind of compare here a little bit. This is an interesting way to look at things. And Fire Nation, we have some really cool things to talk about as soon as we get back from thinking our sponsors.
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Learn how HubSpot can help your business grow better at HubSpot.com. Doug, we're back, and my audience is built up with entrepreneurs, small business owners, and the goal of many of them is to one day potentially sell their business. Talk to us about your experience doing just that. Yeah, so we sold September 27, 2019, is when we closed.
I'll never forget it, because that's day. The money hits the bank account, and that's the only day, the first day, I should say that I exhaled, because it's a very stressful thing to sell your company, especially if you have to sell your company. We, at the time, we have to sell halo to it, get liquidity, and to pay off some of our debt. So, but the way it works, I learned this, this is all, you know, tell me what I learned basically, but it's about a six-month process, give or take.
Usually, hire an investment banker. Most people probably heard that term. I didn't really know what it was, but effectively, just like I'm selling a product of ice cream with halo top, investment bankers, their products are companies. So, they sell companies to other people, other companies, other funds, but they're your sales broker.
And so, you get with one of them, they spend about a month kind of preparing materials, you know, with sales deck kind of putting the company together in a way that you can pitch it for sale. And then they have a relative potential buyers. They reach out to them, they have relationships with them, and they say, you know, hey, you got this great company halo top that's looking to sell. Would you be interested?
They draw up some interest, usually do some initial meetings, and those initial meetings, you get some initial bids. After that, you enter a diligence phase, usually about 30 days. At the end of the diligence, you sell it at what are called final bids, which are binding. You choose which bid you like, if you're lucky enough to get one.
And from there, you negotiate a purchase agreement, you sign it, and then you close. So, again, start to finish there from hiring the investment banker to money in your bank account, usually about six months, but it's fairly straightforward once you hire that investment banker. They again, really, they have that relative, they, you know, buy and sell companies as their business. So, that's how you do it.
Any regrets? No, no, I would say a word of caution or just maybe bring it back down to earth, is I think if you can sell a business for $1, that in and of itself is a monumental feat. I think we all get caught up in, you know, the romanticized nature of entrepreneurship and startups is people are always chasing that billion dollar this or that, you know, unicorn status. I think that does a real disservice to people.
If you can sell your business $1 to another business then you've had one hell of a time and what a crazy achievement that is. So, it is really, really hard to deal. There's so much outside of your control in terms of the other companies and how they're lined up strategically with their cash, with their strategy, with their people that, you know, you really have to get some lucky breaks. It has to be a right time, right place to be able to sell.
What's the biggest piece of advice for someone who's currently running a business that's, they one day want to sell? Your ticket to freedom in my opinion, or your ticket to sell in my opinion, would be cash flow positive and profitability. Get to there as quickly as possible and all that will do is you'll have freedom and flexibility so that you can be opportunistic when you sell. So you can sell because you want to, not because you have to.
So I think, again, a lot of startups, us included, focus on top line revenue and these multiples you've heard, four x, six x, you know, billion dollar this, billion dollar that, as opposed to, you know what, if you're cash flow positive, if you're profitable, you never have to sell. You just keep collecting money out of the company or turning money out of the company via the cash flow from operations. And again, most, at least when we were going and when we had started Halo Top from 2013, you know, that was not what you were told, you were told to chase top line revenue, you know, profit be damned. And that's great if you ultimately able to sell, but I wouldn't count on it.
I would count on yourself and count on the business and get to that cash flow positive territory. I've interviewed over 3,700 entrepreneurs over the past decade and a lot of my past guests say that the day they sold their company was the worst day of their business life. Was that the case for you? There's no joy in it, not one second, not one ounce.
It was pure relief for me. You know, my story, my personal story at least was, you know, we had to sell, get the company, didn't sell, it was bankrupt. If the company didn't sell, I was bankrupt. At this time, I now had a wife, kids, and mortgage, that kind of stuff.
So it wasn't just me anymore. And then we had about 125 employees, many of whom I had recruited to the company. You know, I felt personal and responsible for it. And, you know, even thinking about it now, I'm talking about it, I'm kind of shaking.
But yeah, it was pure relief, a pure exhale for me. No joy, no fun, no happiness. So I don't know if it was the worst day of my life, but I do know my emotion was one of relief. I can really call it.
Yeah, and you were in a different situation, because again, there was that need to sell. A lot of the people that I talked to actually sell for a lot of profit, and they don't need to sell, but it's just a great opportunity for them to sell. And they think that's why they did it. But then like, it's like their baby's been taken away.
And now they're like, I have no relevancy in life. And now there's other persons running my company in XYZ. So I think there's a lot of emotions that are going in there on a lot of different levels. But what's crazy is that that's causing you to shake a little bit, like you just mentioned, but you decided to try to do it all over again with Gatsby chocolate.
Why did you do this? And what's different this time rounds? I thought about what I enjoyed the most, and what I liked the most, and what I loved the most with those dark years that I alluded to earlier in our conversation, where it was only three of us, but it was the best times, and it was also the worst times. But it was the best times in the sense of, there's this intimacy, this camaraderie, we were going to farmers markets, we were slinging ice cream in stores, we were hustling, and there's this purity and innocence to the grind, particularly for first time entrepreneurs that I think I'll forever be chasing again.
So it's kind of my way to chase that feeling and to bring along a few people with me, to try to do it together again as a team, again taking the lessons obviously that I know now and I've learned. So that's what drove me to get back into it. I definitely had forgotten how hard it was, I gotta be honest, I'd certainly romanticize in my head, this vision of the good old days and the early days, and I'd certainly glossed over my memory head at least just how hard it is, just how much of a grind it is, and just how much goes well. So why Gatsby Chocolate, tell us about this company?
Yeah, so Gatsby Chocolate effectively is the Halo Top of Chocolate, but we sold the Halo Top brands, they can't use that brand name in the US. So, but effectively it's a chocolate bar, or chocolate products I should say, because we do have peanut butter cups and Gatsby Jins, which is our M&M item and plenty of other standard chocolate products. But effectively it's less than half the calories, it's a quarter of the sugar, and I'm telling you, it tastes just like great, indulgent, melt-in-your-mouth chocolate. So it truly is no compromise.
It's closer than Halo Top ever was to the Benadiers and Hagenazis as good as I think Halo Top was. I think Gatsby Chocolate is something that, I don't have to qualify it when I give it to somebody. Though this is a big chocolate, I can say, you know, by the way, less than half the calories, quarter of the sugar, can you believe that? And you know, it really has met that standard of mind lonely, good, and there's no other low-calorie chocolates on the market, literally not.
We are the only low-calorie chocolate out there, of the low-s sugar chocolates, they're still double the calories. It's a very caloric play, and once we hit the taste and the texture that was truly melt-in-your-mouth, truly indulgent, we thought, you know, we could be on something special here, let's give it a go. Do you shit to Puerto Rico? Why don't you ask?
We just hired a broker who does represent to Puerto Rico. So we hopefully, in 2023, will launch in Puerto Rico, but not yet, but hopefully so. Come and see in Fire Nation, and love here in this story, and I actually love the direction you're going, because I'm a little bit of a health nut myself, and just seeing the health problems in this world, and how sugar is such a leading cause of that, and how over-indulgence and calories, and such a big cause of that, for people to still be able to, cause people, they're gonna get their fix one way or the other, but they can get their fix at a quarter of the sugar, and you said less than half the calories, I believe. I mean, that's just a fantastic value adding to the world.
So this is the kind of thing, where I'd love to bring on guests and just like that. So Doug, take the mic, bring us home. What's the one thing that you wanna share with Fire Nation, any call to action you have, and then we'll say goodbye. Sounds great.
I would always just like to encourage people, particularly if a lot of listeners are entrepreneurs, you know, just take that leap. I feel like a lot of people are still kind of have one foot in, one foot out, or maybe not even one foot in, but I, you know, if you can remove the monetary value as motivation and you just find joy in the process, find joy in the people, find joy in the team building, I think you will never regret taking a leap and even leaving my idea, you know, a $200,000 a year legal job to, you know, take a flyer on startup and see what happens. So just take a leap. Any call to action for the listeners.
You know, if you wanna connect with me, I'm on LinkedIn, I accept every single request. I love talking to other entrepreneurs, helping mentor in any way I can. And if you wanna check out Halo Top or GatsbyChocolate.com, Gatsbychocolate.com, Halo Top I believe is available in Puerto Rico and Gatsby hopefully next year Satan. Love it all, cause Fire Nation, you're the average of five people you spend the most time with.
You've been hanging out with DB and JLD today. So keep up that heat, head over to eophire.com, type at Doug and the search bar, here's your page, we'll pop right up. Doug, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side.
You got it, I appreciate it. Hey Fire Nation, a huge thank you to Doug for dropping value bombs and sponsoring today's episode. Fire Nation, what can the 3000 of the world's most successful entrepreneurs teach you? How about, how do I achieve financial freedom and the fulfillment?
My first traditionally published book, The Common Path to Uncom Success, is a revolutionary 17 step roadmap that will lead you to the lifestyle that you've been dreaming about. This book took me 10 years of accumulating the genius of the world's top entrepreneurs, and you can get it all in one place when you visit UncomandSuccessBook.com. I'll catch you there, or I'll catch you on the flip side. Speak Easy will allow you to create content for your audience live.
Earn recurring revenue from monthly subscribers, stream private shows for select attendees, and more. I am loving creating daily content on Speak Easy, and I think you will too visit getSpeakeasy.com to download the app and start rolling. Success Story, hosted by Scott Declary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals, success story features, Q&A, keynote presentations, and combos on sales, marketing, and more. A recent episode on how to protect your business in times of crisis is a must listen, listen to success story wherever you get your podcasts.