Lee: [00:00:03] Welcome to episode 76 of the Stairway to CEO podcast. I'm your host, Lee Green, and today I spoke with Stephen Ellsworth, the Co-Founder and CEO of Poppi. Poppi is a better-for-you, functional, prebiotic soda designed to keep your gut in check. Founded by husband and wife duo, Stephen and Allison Ellsworth, Poppi combines real fruit juice with apple cider vinegar to create nine different flavors of soda that taste amazing and provide real health benefits. In this episode, Stephen shares with us his journey from growing up in Utah as one of six siblings, to meeting his wife, Allison, at a snowboarding shop where he was working, to working in the oil and gas industry, to discovering the health benefits of apple cider vinegar and creating Poppi as a way to make it taste better. He talks with us about how they got their first big break while selling Poppi at a farmers market, why he wishes he raised more money early on, and how he grew the team from just two people to over 50 employees in just 18 months. If you like what you're hearing on the Stairway to CEO podcast, don't forget to click subscribe, or text me at 310-510-6044 to get special discounts from some of your favorite brands or even win free products. So shoot me a text, tell me your favorite brand, or just say hi. I'm so excited to hear from you, and I hope you enjoy this episode.

Lee: [00:02:19] Hi, Stephen, thanks so much for joining us on the podcast today. I'm really excited to hear your story in building Poppi. Thanks for joining us.

Stephen: [00:02:26] Yeah, absolutely. Thanks so much for having me. Excited to jump in.

Lee: [00:02:29] Definitely. Let's dive in. Where are you from originally?

Stephen: [00:02:33] So that's little long-winded, but I came most recently from Salt Lake City, and Poppi is headquartered in Dallas, Texas. We've been there for about six years now.

Lee: [00:02:45] Great. Did you always want to be an entrepreneur or what was childhood like? What was your dream as a kid?

Stephen: [00:02:52] Yeah, you know, I always did want to be an entrepreneur. It's just kind of like how my mind has worked from day one. My mom kind of like, tells me this story of when I was younger and I was tasked with sweeping out the garage. And I thought the traditional way of a push broom or a broom was kind of boring and inefficient. So I took some rope and I got to push brooms and I tied him together, and then I attached it to the back of my bicycle. And I was biking, doing laps back and forth in the garage. Obviously, I don't know how old I was, maybe five or six years old at the time, something like that. Obviously, it wasn't super effective, but that kind of is just like an insight as to like how my mind works. And kind of taking a look at things, deconstructing them. How can we do this better? Is there a better way? And kind of always challenging the status quo. So I think from a young age, you know, that's really what got me motivated and what I always wanted to do kind of growing up is doing my own thing where I could continue to be creative, where I could have an impact on something.

Lee: [00:04:06] Yeah, you're a creative problem solver.

Stephen: [00:04:09] Yeah.

Lee: [00:04:10] Yeah. So did you have siblings?

Stephen: [00:04:13] Yeah, I do have siblings, I'm part of a big family, I'm one of six.

Lee: [00:04:18] Wow. All right.

Stephen: [00:04:20] Yeah, one of six. It's kind of rare these days.

Lee: [00:04:23] Are you on the oldest or the youngest side of the spectrum?

Stephen: [00:04:26] I am smack in the middle.

Lee: [00:04:30] All right.

Stephen: [00:04:31] Yeah. So, you know, I pride myself. I'm a middle child, but I don't think that I have the middle child syndrome.

Lee: [00:04:37] What is the middle child syndrome?

Stephen: [00:04:39] You know, I think the middle child syndrome, from what I've heard is always kind of feeling like you get left out. Like things are never fair, like you're kind of just like, "Ugh, they don't love me enough, "or like, "I don't get enough attention." You're kind of always having to like, you're always feeling like you're having to fight for attention or like extra love or something like that. Yeah, and I guess I just don't feel like I've ever had to do that.

Lee: [00:05:08] So you went to University of Utah. Did you have any kind of early...? What were some of your first jobs or internships that you had?

Stephen: [00:05:17] It's really lackluster there. I just... Me in the corporate world, just just didn't really work out. And I was kind of just stuck doing doing my own things.

Lee: [00:05:35] Well, wait. How did you know that? Tell us about it. When did you realize corporate world wasn't for you? What job was that?

Stephen: [00:05:41] Wells Fargo Financial.

Lee: [00:05:43] Wow.

Stephen: [00:05:43] Well, actually, Wells Fargo. There's two stints Wells Fargo. And one of them, I was in college and it was like pitched as like this internship. But then it ended up just being like this call center. And I went in there, and I honestly think I was there for like six weeks, and we were calling on on delinquent car loans and just extremely exciting as you can imagine. So I was a freshman in college, just kind of doing this in the evenings after school, and I was actually really good at it, but I made this one phone call and this guy was like, "Oh," there's like cheering in the background. He goes, "What are you doing calling on a Super Bowl Sunday?" And I was like, "I know. I'm so sorry," and I just like, clicked like, hung up the phone. I was like, "You're right. Have a good day. Enjoy. Enjoy the Super Bowl." And I just went to my boss, and later that week I just went to my boss and said, "You know what? The pay is good. I'm actually really good at this job, but I just don't feel... I feel worse leaving the building every day after work." I just said, "This isn't for me." And it was kind of the same way at Wells Fargo Financial. Like I said, I like being a creative problem solver. And so there were a few things where I was just told to do them, and I would question them like, "Why do we do it this way?" I would present a solution. "Shouldn't we do it this way? Isn't it better for the business and better for the customer?" And they were like, "Well, yeah." And I said, "Well, how come we don't do it this way?" "Well, because that's not the way we're supposed to do it." I was like, "I'm sorry. This isn't going to work for us, guys. Thank you for the opportunity. But I need to leave." So, you know, as far as my résumé goes, I look really bad on paper. You know, I've got a degree from the University of Utah, which has been great. But I think overall, it just helped me to be a better critical thinker and problem solver more than any sort of like specific professional task.

Lee: [00:07:50] Yeah.

Stephen: [00:07:52] But as far as like what job I worked at and even how long I was at jobs for it, it's just not very impressive. I was just I got too bored and just was fed up with some of the bureaucratic red tape at some of these larger corporations.

Lee: [00:08:08] Yeah. So what did you do if didn't really want to work anywhere or felt like you didn't really fit in in that route? Where'd you go from there?

Stephen: [00:08:18] You know, so part of the reason I went to the University of Utah was to snowboard, right? So they have great snow. I would ski 80 to 100 days a season. I would rearrange my class schedule in the winter, so I could ski, and so I had done some things on the side and had a couple of side hustles going on. And decided I just wanted to kind of take a step back, I'd done the corporate thing, was doing the side hustle, and I was actually just working at a ski and snowboard shop. I was buying hard goods. I was just like living life, trying to figure out what I wanted to do next. And it's actually funny. That's where I was working in the shop as a manager and as the hard goods buyer. And that's actually where I met Allison. She came into the store and, you know, ended up giving her my phone number. I got her phone number and we ended up hanging out. One thing led to another, and now we're married eight years, almost eight years with two kids. And so it was really meeting her, her family is very entrepreneurial, and after we were dating, we were serious, Allison had been a land man working on the road in oil and gas for several years at this point, and her family had an opportunity. They were kind of starting up the side hustle and they said, "Hey, we've got a position. We would love for you to come in and work for us." And so I went in, got into the family business, we were doing oil and gas, and that was probably the longest job that I ever had. And that was because it was very entrepreneurial, like I didn't really have a boss. We were working together really as this family unit. They trusted me. They respected the ideas that I brought to the table. If it was a better solution, more efficient, they were all about it, right? It was just a group of hustlers pulling in the same direction. So we did that for probably three or four years, and I actually really, really enjoyed it. But we were always in these remote locations, and we wanted to kind of have a home base, we wanted to start a family and that's why we moved back to Dallas to kind of establish that home base. But it was actually on the road in these small towns where Allison had her health issues and was going to the doctors and couldn't figure out what was going on. And [00:10:48] she read that drinking apple cider vinegar could really help to detox and reset her body. So that's where this whole concept really came about, [00:10:54] was traveling on the road, doing oil and gas. So it's it was really serendipitous to kind of tell the story of meeting her family, being entrepreneurial minded, and then kind of having it really lead to this other entrepreneurial endeavor.

Lee: [00:11:12] Yeah. So how did it lead to that? So she was drinking apple cider vinegar? I mean, that stuff taste disgusting, right? How the hell did she do that? Don't tell me she was just like drinking it from the bottle. You know, I can barely do a teaspoon.

Stephen: [00:11:25] Yeah, exactly. Well, yeah. She was diluting it in just a massive amount of water and just sipping on it throughout the day.

Lee: [00:11:32] Whoa, that's crazy. Just with water? I mean, she's not even putting like some flavor in it, right?

Stephen: [00:11:37] Yeah, it was so brutal. Well, you know, she got a little crazy sometimes and put some lemon juice in there.

Lee: [00:11:42] That's so crazy.

Stephen: [00:11:45] But for her, it was all about the health benefits, right? And she was at her wit's end with no solutions really to kind of...

Lee: [00:11:54] What was wrong and how was apple cider vinegar helping?

Stephen: [00:11:58] It was one morning she woke up and her eyes were literally like black and blue and swollen shut, and she was just like, "What is going on? I can't see. What's going on?" So she went to doctors and she got like, these allergy tests, and they were kind of just like, "Well, try this medication. This could help with X, Y and Z." And so she just was like, "That doesn't seem like the solution that I want to this. It seems more of like a like a Band-Aid rather than an actual solution and kind of going to the root cause." And so that's where she turned to the internet. And it was like, "Hey, what can I do here? I don't want to take medication. How can we solve this?" And that's when she stumbled upon apple cider vinegar and it can help detox and reset your body. So it was always like a solution to a problem. And so she was on the health benefits and she was straight up apple cider vinegar. She didn't mind it because it was showing to be beneficial, proven to be beneficial. So after two weeks of drinking it, she was like, "This stuff was amazing." All the while, she's like, "Here, Stephen, drink this. It makes me feel so good. You should try it too." And I was like, "Yeah, yeah, that's great. I'll take a few sips just to make you happy."

Lee: [00:13:17] But actually, you want to vomit because it's so gross. {laughter}

Stephen: [00:13:20] Yeah, exactly. So it was kind of like, "Hey, can we make this taste better?" And Allison was on board, too. [00:13:25] She's like, "This stuff is amazing. I feel great. But how can I make it taste better?" She's an amazing cook. And so she got in the kitchen and started working together. She loves to cook, I love to eat, and so she would make these concoctions, and I would be her guinea pig and we would work back and forth to kind of create different flavor combinations and basically turn what is now Poppi into Poppi. So that was kind of how it evolved on the road. It was just like, "Hey, this stuff's amazing. How do I make it taste better because I want to make it taste better, but I also want the health benefits of ACV." [00:14:01]

Lee: [00:14:03] Interesting, so what were some of the first flavors she was like kind of putting together there in the kitchen?

Stephen: [00:14:08] So this was at the time where kombucha was really big and she'd even tried kombucha as kind of a solution. So the flavors were more akin to kombucha. We have like a lavender lemon and we had like an orange cinnamon, and we had a blueberry sage and some of these flavors have kind of even stuck around. They've evolved a little bit. But we had a ginger lime or a lime ginger, which is actually still around today. We had a raspberry rose, which is also still around today. Trying to think of what else was out there... We actually had a strawberry vanilla, which we've kind of toyed around bringing that flavor back. But yeah, those were really kind of our our five flavors that we went out to market with.

Lee: [00:14:55] Interesting, so you guys decided to... At what point did you decide this would be like a business instead of just kind of a side hobby you want to kind of share with friends that come over?

Stephen: [00:15:06] So we were really lucky that it was a hobby. We were doing it on the side, just like you said, and we had put some time and some money and some energy into it. I was still working a full time job and Allison was as well. She was a little bit more focused on this endeavor, but it was literally like our third weekend at the farmer's market. We were selling out week over week. We were just trying to keep up with making the stuff. We were having great response, and actually the local forager was in town visiting her mother and we had a big crowd around our booth. We were sampling a bunch and just engaging. And she stopped by and she's like, "Man, I had to see what was going on. There was so much excitement around here," and she sampled the product. She's like, "Oh my gosh, this is amazing." She's like, "I don't usually do this. I'm not here for work. I'm here to visit family. You guys have to be in Whole Foods." And so that was really the tipping point for me.

Lee: [00:16:02] She was a buyer from Whole Foods?

Stephen: [00:16:04] Yeah, so Whole Foods has like these local forager positions, and that's literally their job is to go out and forage these new ideas in food and beverage and in beauty and work with young entrepreneurs and brands and ideas and kind of nurture them and bring them to life.

Lee: [00:16:23] Hmm. And so she happened to be at that farmer's market.

Stephen: [00:16:27] Yeah.

Lee: [00:16:27] That's kind of crazy.

Stephen: [00:16:29] Yeah, it's super crazy. And the thing is, I actually message her to this day, and it's super fun because it was just like she gave us kind of our first break and our first opportunity. You hear these horror stories where Walmart thinks you've got a great product, they come knocking and they're like, "Hey, we want you in three thousand stores, take it or leave it," kind of a thing. And when she came to us, she's like, "Hey, we'll help you get on the shelf." At this point, we didn't even have nutritional panels on our bottles. It was just so grassroots farmers market-y. And she helped put us in touch with some people and she rolled this out to I think it was like 12 stores that were in the DFW area. And so she worked with us to get into those 12 stores and and really kind of pointed us in the right direction. But I thought it was really cool that Whole Foods has kind of stayed pretty true to this kind of natural entrepreneurial guidance in kind of the natural space. It's pretty cool.

Lee: [00:17:28] Yeah, that's really interesting. So she's one of your game changers. I always call them game changers. Like, there's a few key people in my life that have been like true game changers in changing the trajectory of my life, right? And so, yeah, there's always these people. It's important to keep relationships with them and recognize them and celebrate the fact that they've helped get things in a whole new direction.

Stephen: [00:17:53] Shout out to Kelly.

Lee: [00:17:54] Yeah, right?

Stephen: [00:17:56] Yeah, absolutely.

Lee: [00:17:58] That's awesome. So you worked with her, and it sounds like Whole Foods was the first basically retailer, sounds like, you guys started working with. And what was that process like to get your product from that farmer's market into store shelves?

Stephen: [00:18:15] Yeah, it was a longer process than than I had anticipated.

Lee: [00:18:19] Right. Because you meet this person and you're like, I mean, it can sound like, "Oh my gosh, we could be on shelves in like six months." {laughter}

Stephen: [00:18:25] But yeah, yeah. Well, for me, it was like we could be there in like three months.

Lee: [00:18:31] Right.

Stephen: [00:18:31] But there's this cottage law in Texas, where if you're a certain type of product, you can produce it in your kitchen legally and sell it at the farmer's market. But Whole Foods obviously had different requirements and certifications and passive policies that had to be put in place and things like that. So that was really when I started taking it serious as like, "Wow, we have a real retailer." And at this time from the farmer's market, Whole Foods is like the goal. It's like the farmer's market, you can get into Whole Foods right away. It's like, you know that you have something in an opportunity. And so it was at that point that I quit my full time job and working at the farmer's market we had met this really great couple. He was the head brewer at one of the local craft breweries in Texas, in Dallas. And I worked with him and he helped and told me what a bright tank was, and he pointed me in the right direction. "Ok, I think you need to get this. I can help you build out your facility." And so [00:19:29] not having any idea of CPG or beverage or carbonated beverage, we're like, all right, like just being an entrepreneur, it's like, "How do we figure this out? How can we take this product from our kitchen and put it into a manufacturing facility and meet all of the qualifications and have all of the policies in place? How do we get it done?" So we just got to work. We just jumped right in. [00:19:53]

Lee: [00:19:54] There's a lot of things that are involved in that process. I imagine also from a funding perspective, at what point where you like, "We need to start raising funds?" And how did you approach that?

Stephen: [00:20:08] Yeah, I think as soon as we started building up this little facility, that's when we knew that we needed to take on some funds. We needed money to get some of the equipment. We needed money to buy the packaging and to just to build inventory. So we, like a lot of entrepreneurs do, we were lucky enough to turn to some friends and family. And so it was Allison's sister that gave us our first check. And so we went out and we started buying equipment. And then I went out to one of my friends that I met in college, and he was one of the first four employees of Suja, and so his he and his mom had invested in Suja, and so he linked me up with his mom and they wrote a little check there. But you know, we weren't fundraisers. I don't come from investment banking. And so it was really like, we raised like thirty thousand dollars to get started and it just went towards equipment. And you know, [00:21:11] looking back, I would have raised capital probably sooner. But that kind of just that wasn't the way that I was thinking about it. So we just made do with what we had. [00:21:22] And I think it was really once we started getting traction in Whole Foods, and we had opportunities to expand into other retailers. That's when we were thinking like, "Ok, we need to do something here."

Lee: [00:21:34] How were you thinking about it before that happened? Were you just like, "Oh, we'll see what happens? We'll just little by little do it?"

Stephen: [00:21:44] Yeah. Like, as far as fundraising goes?

Lee: [00:21:47] Mm hmm.

Stephen: [00:21:47] Yeah, I was thinking about it more from like the bank loan perspective, right? Like taking out an SBA loan and doing things on that nature. I was working with banks to purchase equipment because at this time, kombucha was coming up and there was really no manufacturers for kombucha. We're thinking kind of in those terms where all of the kombucha producers basically at that point had built up their own manufacturing facilities because of the fermentation process and the way that it was being produced, and it wasn't a pasteurized product. And so that's kind of the way we're thinking about it is like, "How do we produce more of this?" And so it was getting an SBA loan, purchasing equipment and continuing to scale our manufacturing facility because [00:22:32] early on we had talked to some of these co-packers, and their capabilities weren't there. They weren't willing to work with the product that was unpasteurized. A lot of them didn't want to work with vinegar because they felt like it would contaminate their lines. So being where we are now, obviously we just weren't talking to all of the right people, but that's kind of how we were thinking about it. It was like, "Get equipment, let's scale it. Let's continue to grow sales and then reinvest in the business and continue to kind of bootstrap it." You know, at this point, I had no idea how expensive the beverage space was, though. [00:23:09]

Lee: [00:23:11] Right. I think we all see that. Like, "I had no idea how expensive or hard this would actually be."

Stephen: [00:23:18] It's crazy. It's a very expensive industry to play in, for sure.

Lee: [00:23:24] Yeah. What are some things you learn the hard way?

Stephen: [00:23:29] Yeah, I think we learned everything the hard way. But thankfully, we learned a lot of it the hard way in the beginning. And now we're getting better with the decisions that we make. But I think just kind of talking about opening up our own manufacturing facility. And it's like knowing what I know now, manufacturing a product and building a brand and marketing your product are two completely separate businesses. And so [00:23:58] I was so focused on producing the product and building out our facility, like that's the business that was focusing on. I wasn't building on building a brand or taking it to market or putting together a promotional calendar to incentivize trial and do all of these other things to try and get people to try the product and build the brand. So I mean, that was honestly the biggest thing that I think halted our growth. I also think that I wish we would have probably raised money sooner than we did. [00:24:36] I think that those were probably the two biggest learnings.

Lee: [00:24:40] Well, when would you have raised and how much would you have raised?

Stephen: [00:24:45] You know, I think we had an opportunity. There was this ABC, like a local ABC producer. They reached out to us because they saw us in Whole Foods, and we were getting full end capped displays and the beverage cooler. And like I said, starting to see that traction. They reached out and wanted to do a piece called Shaping DFW, and they were really excited about a better-for-you product coming out of Dallas, Texas, which is kind of unique in and of itself. And so after that piece aired, we had a lot of inbound interest from just local investors. They weren't in CPG. It was just they had been successful in their careers and they were now looking to invest in kind of new up and coming innovative products that they were interested or could be passionate about. So I think for us, the dollar amount probably would have been like 250 to 300 thousand, which is kind of what we were looking to raise initially. But for some reason, and one thing that I've always kind of learned about where we're at sometimes, I feel like I've got a sixth sense in my in my gut. And that's been one of the things that I've learned the hard way is not following your gut because you can overanalyze things. And I think it's hard, maybe not for all entrepreneurs, but for myself to always listen to your gut and just believe in yourself and trust in yourself that it is going to be the best thing long term for the business. But thankfully, even though we were talking to these investors, we had opportunities. I just didn't feel that it was right to take that money. And so I was putting a pause on taking some of those funds, but which actually led to the opportunity of Shark Tank and partnering with Ro and having Cavu come on as an investor. And obviously now we have Poppi and we've seen some early success there, which has been exciting. But I think going back to the initial question or kind of the thought here, it was really like that that 250 is what we would have taken on early on to to just help out and grow the business.

Lee: [00:26:58] Yeah. How much have you guys raised in total so far?

Stephen: [00:27:02] So we just closed a round, and we're just about to announce it. But to date, we've raised about $20 million.

Lee: [00:27:17] All right, and how has that process been? Because clearly that's I'm sure you guys have some venture funding in that. How is that process and what were some of the challenges that you faced in fundraising that amount?

Stephen: [00:27:30] Yeah, I think. One of the challenges is I'm not an investment banker. I'm not a fundraiser. So been a challenge, just for me. I'm very much an operator. I'm a creative problem solver. I have like operations. I like to see efficiencies. So that's just been a challenge overall. It's just how much time I literally spend raising money. So that's been...

Lee: [00:28:02] What percentage of your time did you think you would spend fundraising versus the reality of how much, as a CEO, you're spending fundraising?

Stephen: [00:28:11] Yeah, I mean, listen, I thought that I would probably spend I thought, like once a year I'd spend maybe four to six weeks working with an investor, going through the diligence process, keeping them up to date. And then we'd close the thing, right? You'd believe in the product. You'd sign up for what we're doing here. You give us money and you let us go off and we're off to the races doing whatever we do.

Lee: [00:28:40] But the reality is what?

Stephen: [00:28:42] All the time. All the time. All the time. I literally just closed a round and we're raising it again. You know, because I think it's like it's one of those things, obviously, as a Founder, you hear like the big bad stories of VCs and PE and you know how you're going to get diluted down to nothing. I don't want to say that's like the reality for everyone. But that's obviously like something that you it's a balancing act. It's like, how much money do you take? When do you take the money? Who do you take the money from? Is now the right time to take the money? It's like business partners, investors. It's like a marriage. It's like whether like it or not, you're in bed together. And so you've really got to align yourself with really great partners. And it's a process for sure. And so I am constantly raising raising money, and it's one of those things that it's a necessary evil, but it's not like what I love to do.

Lee: [00:29:48] Right. Yeah, I don't know. I don't think many Founders truly enjoy it. I feel like it's definitely, like you said, a full time job in itself. You mentioned that you are hoping that fundraising would mean four to six weeks a year, or it would be like you'd spend 98 percent of your time pretty much focused on the business and operations and all the stuff that you enjoy. But what percentage is it, really? Do you think it sounds like it's actually like 80 percent of your job is probably focused on fundraising if you're doing it so frequently?

Stephen: [00:30:23] Yeah, I think that's about right. I really do.

Lee: [00:30:25] I mean, what about the runway here? How much runway are you kind of raising for? And can you raise for a longer runway so that you have more time to focus on the business?

Stephen: [00:30:35] Well, we do. Like so typically we raise for like a 12 month runway. And [00:30:45] the good thing and the bad thing is that Poppi is just been blowing up. At this stage of our business, we're growing faster than Vitamin Water did and Bai did. And those both went on to sell for a lot of money, you know, and so we didn't think the business would grow so quickly. And obviously with growth, tremendous growth, comes the need for capital, and then you kind of layer in all of the other challenges with supply chain, especially during COVID. [00:31:19] It's been challenging to say, "Hey, I'm going out raising for 12 months and having it actually raise 12 months when when you have all of these kind of other factors that come on. And then to answer the first, the other part of your question is like in a perfect world, would it be great to raise for 24 months? Like, absolutely. But I think the thing is is kind of going back to being Founders and maintaining some sort of control so that you can have an impact. You know, it goes back to having an impact and making a difference in the company and having the ability to be creative rather than being a puppet. And obviously, the more money you take, typically the more control that you lose and then it just becomes, then a lot of the fun goes away, right? You're having to constantly answer to someone or carry out other people's wishes. And so that's why it's always so challenging and you're raising typically every 12 months, because if you're a high growth business and you're growing a business where you are every six or 12 months is completely different than the previous six or 12 months, right? And so it's just it's kind of a necessary evil.

Lee: [00:32:31] Yeah. Absolutely. And how big is the team now?

Stephen: [00:32:36] So I like to say this because I'm proud of it, but in February of 2020, right before we launched Poppi in March of 2020, it was just Allison and myself. It was just two of us. We had worked with Cavu, who's our lead investor, and that's Rohan's VC, his managing partner at the Cavu, and they have an internal rebranding team. So we worked with them and we rebranded to Poppi. But still, on Poppi's payroll, it was Allison and myself, and this was new because we hadn't paid ourself for years while we were doing Mother. So we were the first two employees of Poppi, which was really exciting. But now we have almost 50, just 18 months later.

Lee: [00:33:18] Wow. Yeah, so 50 people in 18 months. What have you learned about hiring and how do you kind of recruit for the best?

Stephen: [00:33:30] Yeah, it's been challenging during COVID because we hired people during COVID. There's some people that I still have never met in person on my team, which makes me really sad.

Lee: [00:33:49] Yeah.

Stephen: [00:33:51] But as the vaccine has come out and people are feeling more comfortable, I think like breaking bread with the people that you hire is so important. I think that people can put on a happy face and they can talk a big game when they're on a Zoom call. It's almost like an open book test when you're on a Zoom call. You have the security of the mute button you have, like if your camera flickers on and off and you've got to do something, you've got like a notepad next to you. And I don't think that that's the case. But I think it's been so important to just like spend time with these people and kind of understand like what makes them tick. Right? I think the biggest thing that I typically hire for and it sounds weird or cliche, yeah, it's culture.

Lee: [00:34:47] You know, I've only heard that a gazillion times on the show.

Stephen: [00:34:50] I hate to say it.

Lee: [00:34:51] Yeah, right? Because it doesn't really mean much to people that are listening. It's hard for them to kind of be like, "Well, what does that even mean?" But so kind of to the less glamorous side of like hiring is letting people go. How many people have you had to let go and what gets in the way of good people kind of making it to the next level?

Stephen: [00:35:14] Yeah. So we've had to let some people go, no doubt, and it's the worst thing. And I think honestly, sometimes it makes the hiring process a little bit more difficult for me. Because it's especially when you're hiring someone with a family, it's not something that Allison and myself and the leadership team takes lightly, especially for recruiting them from another job and pulling them from a good career. It's like we just want to make absolutely sure that they are the right fit because it's like the worst thing. Have we had to do it? Absolutely. Have we had to do it a lot? I wouldn't say that we've had to. But I think that it just goes back to the cliché statement of culture. [00:36:00] It's like one bad apple can really have a massive impact on the performance of the team. When you have one person on the team that has the mindset of "What's in it for me?" rather than "How can I help the team achieve this goal?" it sours things, right? And so then instead of everybody helping out and coming together and picking up the slack, people start to monitor like, Oh, well, what are they doing? And look at what I'm doing, and it becomes like this comparison. Whereas when you become a family and you're all pulling in the same direction, you don't mind picking up the slack for the other person because you know, when the tables are turned and you need someone to pick up the slack, they're there for you. [00:36:45]

Lee: [00:36:45] Where do you think that comes from? What's in it for me? Where do you think that comes from?

Stephen: [00:36:52] Maybe they're the middle child. {laughter} I don't know where.

Lee: [00:36:59] How do they overcome that? How do people that maybe someone's listening is like, "Maybe what if I've done that? Oh, man." How do they work on that? What did they do?

Stephen: [00:37:11] I think it's a level of trust, right? I think there has to be a level of trust for the people that you're working for, that you trust them, that if you put in your heart and soul and you're working hard, that they will take care of you. Just because you work hard one day doesn't mean you're going to get a promotion the next day. Anybody can work hard for one day. Anybody can work hard for two weeks. Or even six months. But it's having that trust that if you're putting your all into this and you're a team player... Having that trust that someone will take care of you or that your employer will take care of you. And I think that's one thing that I love so much about CPG as opposed to like a different industry, say, oil and gas. Nepotism is completely rampant. It's about who you know, not what you do. So maybe sometimes they were burnt in a position where they should have been the one that was promoted. But because they weren't friends with the boss or for whatever reason, they didn't get the position. You know, so maybe that's a reason that sometimes people feel a little burnt. But one thing that I love about Poppi is we're all about a meritocracy. It's like the people that work the hardest, the people that show passion and show drive and show that they're motivated and are winning for the team and not just for their for themselves or are really the ones who have the most potential for growth at Poppi. We're not about just rewarding someone because they've been here for a year or someone that's been here for six months or two years. I would rather promote someone that's just like crushing it, that lives and bleeds Poppi, that is all about it for the right reasons, I would rather promote them because they're doing it for the right reasons. [00:39:06] It's all about Poppi being a mission driven company rather than a maintenance driven company. We don't want someone clocking in and doing the bare minimum. We want someone clocking in and doing it because they love it and because they see potential for Poppi as a brand, but also for their career path. And I think it's like the same thing in business. Making money should be a result of doing something good. And I think that's the same way. A promotion should be a result of doing something good that shouldn't be your objective. [00:39:41]

Lee: [00:39:41] Right. I agree with you. But I wonder with these people that are kind of "what's in it for me" and you're saying, well, maybe that comes from them being burned at a past company, right? So is there some sort of like with that kind of person because there are companies out there that don't, you know, appreciate their employees, that don't show recognition or, you know, do the right things to kind of keep them motivated. And so they have to they feel like they constantly have to like, fight for better pay or whatever because they feel like they've been taken advantage of, I guess in some way. And tell me if I'm off. But this kind of my assumption of what I'm hearing, so what are ways to kind of solve for that? Because if this person is really good at what they're doing and it's really just this matter of setting expectations, could an easy solution for something like that be to have, you know, "Here's what your growth plan is," or like, how could you kind of tackle... I'm sure you thought about many ways of ways that you could tackle and keep somebody if on if they're really, truly good, how do you help train them? Or like, what do people have a hard time learning?

Stephen: [00:40:51] Yeah, I think you definitely need to set expectations. I think it's hard for anyone to just outright trust an employer, you know, without some sort of like clearly defined objective objectives and a clear path for growth.

Lee: [00:41:07] It's a two way street, right?

Stephen: [00:41:09] Absolutely.

Lee: [00:41:10] Yeah.

Stephen: [00:41:11] So I think like one of the biggest things is you want to make sure that you have those KPIs set, that you have those objectives that clearly for the individual. Basically, like, "Hey, here's what you need to do to cover your bases." But then but then talking to them and honestly empowering them. I think we're seeing the shift with some of these older corporations where it's like, "Hey, listen, buddy, I hired you for this position and that's all I want you to do. I don't want you to think. I just want you to be a cog. I want you to do X, Y and Z. Clock in clock out at the end of the day and go home and we'll give you a paycheck." You know, I just like, don't think that that's fulfilling and provides a purpose. I think like some people are good with it because their purpose or motivation is maybe their partner or their family or something like that. But I think like one thing that's like super important is just like having those conversations of empowering the people that are working for you, being like, "Listen, we hired you because you're great, and we hired you because we think that you want to be even better than where you are today. So how do we get you there? How do we empower you?"

Lee: [00:42:24] Yeah.

Stephen: [00:42:25] And you tell them, "We're going to expect a lot from you. We're going to expect more than just your 9 to 5 position, but we can give you the path to growth," and I don't want to toot my own horn, but I think Poppi has the potential to provide some career defining opportunities for employees. Just with all the growth that we've had. So empowering those people and saying, "We want you to think. We want you to bring things to the table." You know, it goes back to the meritocracy. It's not the president. It's not the president's idea that's always going to win. You know, maybe it's some field sales manager that has this amazing idea. And it's like, you know what? If that idea is better, that's the idea we go with, right? And so empowering those people to be vulnerable, to bring ideas to the table.

Lee: [00:43:18] I think that's actually really tough because I think a lot of times, especially younger, more entry level, maybe employees, they're afraid to speak up. They're like, "Oh, you're the CEO, you're the Co-Founder. I'm not saying anything in this meeting because I don't want to look stupid or wrong," or whatever the thoughts are.

Stephen: [00:43:36] Absolutely.

Lee: [00:43:36] So it's our jobs as leaders, as CEOs and Founders to have them feel comfortable. But even then, they can still feel intimidated.

Stephen: [00:43:45] It's tough.

Lee: [00:43:46] Yeah.

Stephen: [00:43:46] Yeah, no doubt is it tough. And I think like, you know, one thing for me, I've had some tough calls, like when I first got the deal on Shark Tank, like it was mandated as part of the deal that we had to bring on a CEO with a pedigree from CPG.

Lee: [00:44:02] No.

Stephen: [00:44:03] Yeah. I promise you. I promise you.

Lee: [00:44:05] Oh my gosh.

Stephen: [00:44:06] It was a requirement, and I had to step down as leading the company to bring in...

Lee: [00:44:11] Really?

Stephen: [00:44:11] Absolutely. Absolutely.

Lee: [00:44:12] That's crazy. That's for every deal they do? That's like standard norm of Shark Tank is like, remove the CEO and have someone seasoned come in?

Stephen: [00:44:21] No, definitely not. But like I told you, I don't look good on paper.

Lee: [00:44:24] Oh, right. So they were like, "Oh, you don't know what you're doing?"

Stephen: [00:44:27] Exactly. They don't know who I am.

Lee: [00:44:29] Oh my gosh.

Stephen: [00:44:30] And what I'm capable of.

Lee: [00:44:32] Right.

Stephen: [00:44:32] But I was humble enough to be like, "You know what? You guys are the pros. You know what you're doing."

Lee: [00:44:37] Oh my gosh, you did? I would have freaking freaked out.

Stephen: [00:44:40] I did. But the thing is is, it's like, you know, for me, it's like all about pulling, like having one goal, right?

Lee: [00:44:51] Yeah, but I always feel like every time this happens, VCs do it. You know, let's bring in a bigger CEO. Many, many times it's a complete disaster and your CEO now, so I'm assuming it was also a disaster.

Stephen: [00:45:04] I still keep in contact with the CEO we brought in. He's a tremendous guy. He's an amazing guy.

Lee: [00:45:11] I'm sure he's great, but it sounds like it was still a disaster.

Stephen: [00:45:14] Well, I mean, he honestly stepped down because he knew that I was more suited for the role.

Lee: [00:45:20] There we go.

Stephen: [00:45:20] He saw he saw what I was capable of, and he was humble enough to admit like, "Hey, you should be running the show. I'm going to step down and recommend that you be CEO." And that's what happened. I'm still CEO, and that was, I don't know when that was, two years ago or something like that. But going back, I think that's like leading from example, right? Like when we're in calls and someone less senior than me has an idea, like on calls, I'll literally be like, "You know what? You're right. That's a better idea."  [00:45:57]I try not to have an ego because I want people to be able to speak up. And if it's not the best idea, know that we still love and respect you and are just excited that you're bringing ideas to the table as opposed to, you know, feeling like you're shamed because it wasn't the idea that we went with. Right? [00:46:17] So I think it just like and that's another thing when you're hiring for culture, it's like, don't hire people that have an ego. You want to hire people that are willing to do anything to win and to achieve the goal. It doesn't mean that we're going to make them do everything like pack boxes or sweep the floor or something like that. But it's just that attitude, that mentality of just not being above doing anything for the company just to win.

Lee: [00:46:48] Right. So what's been one of those... We kind of talked about... I don't know if you really told a story, though. I still want to hear what did you learn the hard way? I know you mentioned like some of this manufacturing stuff, but outside of that, as a leader, as a manager, what are some of the things that you've had to learn the hard way? What are some of those tough lessons?

Stephen: [00:47:12] Yeah, I think it goes it goes back to manufacturing. I literally I'm a little scarred from it. The facility was in Dallas, Texas and Dallas is just like ridiculously hot in the summer and some of the equipment that you use to cool the liquid, because you have to actually cool the liquid to a certain temperature before you can carbonate the product and you have to keep the product, the carbonated product, at a certain temperature for you to be able to fill it. Otherwise, it's going to foam over. Making a carbonated beverage on your own is actually a little bit more complicated than it seems. And so just like working in this hot warehouse, I was trying to do everything by myself. Running around, I was, you know, I was doing the packing slips. I was shipping product, I was making the product. I was demoing at Whole Foods. I was literally trying to do everything rather than slowing down and bringing in other people that could help support the business. And that was kind of me just being stubborn and thinking that I could do it better and that I could do it all on my own. It was kind of a pride thing. And so that was one of the things that I learned. The hard way is because I wanted to do it on my own. I didn't think that I needed help, and it's just like I was wrong.

Lee: [00:48:30] What was a result of that? What was the negative result that you were trying to do at all yourself? It took two longer. It sounds like it was more... What were some of those things?

Stephen: [00:48:39] Yeah, I mean, it just took longer. Right. It's like we were a product. We were Mother beverage. We were a product before we were Poppi for a couple of years, you know, so it was just slower growth. And Whole Foods stuck with us, and we were doing pretty well in their stores. But it just when we started to expand outside of those Whole Foods stores, it's like, no longer could I produce the product and then demo the product on the weekends. Plus go to the farmer's market and work that and do samples there. And it's just like, you know, it was too much. And so it was just slow growth, right? And because of slow growth and revenue isn't where you want it to be. And if revenue is not where you want it to be, then you don't have cash to reinvest in the business and the people. So I think that that was one of the hard things too. Goes back to manufacturing. We had money. We invested it in equipment rather than investing it into people to help grow the business. It was totally bootstrapped. I was working a second job while trying to do this. And it was kind of crazy. There was this one month where I was like, "I don't have enough to pay our mortgage." Like because Allison and I were working oil and gas. In six months we moved to Dallas, we quit our jobs, we started a business and we got pregnant. So it was like, "Oh my gosh," didn't have enough money to pay the mortgage. And it was just like, you know, by some miracle I got like my tax refund in the mail, like literally three days before the mortgage was due. But anyways, it was like we didn't have the money to hire people. And, you know, so it goes back to just like manufacturing it and putting all of the money into manufacturing. I was running a different business. So I wasn't investing the money and the things that I should have been doing, which was hiring a sales team to really go out and sell the product, to drive that revenue, to be able to have the funds to reinvest in the business.

Lee: [00:50:44] What kind of final things do you have to say in terms of, you know, like people out there thinking of quitting their jobs, starting a business... You know, it always sounds and feels like it's going to be a lot different than it is actually when you're in it. But what advice do you have for aspiring entrepreneurs tuning in?

Stephen: [00:51:06] Each entrepreneur is definitely different. I think that for me, it's about throwing yourself so far in the deep end that the better solution is to swim through the deep end to the wall rather than trying to swim your way out of the deep end back to the shallow end to get to the other wall. It's just [00:51:32] throw yourself in so far that the only path is forward. And [00:51:37] then just make sure that you're doing it for the right reasons. That sounds like so cliche, but you've got to believe in it so much that you can get yourself through the highs and the lows because starting a business is just like a roller coaster. It's like one day you're cloud nine, you're like, "Oh my gosh, we got into Whole Foods. Buyer approached us. It's amazing." And then the next day you're like, "Oh my gosh, how am I going to make this stuff? We don't even have a manufacturing facility. What are we going to do?" You know, so it's like, you've got to choose something that you truly believe in and that you're passionate about that you're like in it for the long run. And then, you know, like I said, just just make sure you're so far in the deep end where you can't turn back.

Lee: [00:52:20] And so the name Poppi, obviously, it's like pop, soda pop kind of thing. Poppi with a Y is what I called my grandfather. But how did you get the name Poppi? What was that moment you guys had where you're like, "That's what we're going to call this?"

Stephen: [00:52:33] Yeah, it was this whole thing. But yeah, it's a play on soda pop. Like, you nailed it on the head. And then we also think about like the colors, and it's just like bright and poppy and super colorful and vibrant. So that was like another piece of it. But it was like this evolution because we were Mother, and we knew we needed to rebrand. There was trademark issues and we needed to refresh, right? So we're going through names of like Mom and Pop or like The Good Pop, like all of these things. But it was really about a play on soda pop. And it kind of just fed into the fact that we were bright and colorful and Poppi. It just clicked. It just clicked.

Lee: [00:53:13] Yeah, definitely. Awesome. Well, what can we expect to see from Poppi? I know you guys are in Whole Foods, Erewhon. You've got amazing flavors. Thanks for sending some product over. It's amazing. I love the raspberry rose and the watermelon are my two favorites, but where else you guys are on Amazon as well? But what else can you share about where we can find Poppi and what's in store for you guys next?

Stephen: [00:53:40] Yeah, definitely. We're glad you got the samples. We're happy to send more. Appreciate the support. But you can find in Whole Foods, we're in Sprouts, we're in Target nationwide, we're in Publix, we're in divisions of Safeway and Kroger. We're in Wegmans. So we've been really blessed and very fortunate to put together some nice distribution over the past 18 months. And so we'll be in about 8500 or 9000 stores by the end of the year and just continuing to grow into 2022.

Lee: [00:54:12] Nice. Any additional flavors your guys are going to pop out soon.

Stephen: [00:54:17] So I don't know if you've tried the classics, we did a little sneak preview on Amazon. They did really well. They sold out, so we're actually bringing those back. We've made a few little tweaks based on some feedback that we've had.

Lee: [00:54:30] Like the cola, you mean? Classic cola?

Stephen: [00:54:32] Yeah, Classic Cola,  Doc Pop. There's root beer. Really going after that soda drinker with those traditional SKUs. But yeah, lots of good carbonation, lots of delicious flavors, so we're excited about it.

Lee: [00:54:48] Cool. Well, Stephen, thanks so much for being on the show. Really appreciate your time.

Stephen: [00:54:52] Yeah, likewise. Thanks for having me.

Lee: [00:54:59] Thank you so much for listening to the Stairway to CEO podcast. Once again, I'm your host, Lee Greene, and if you have any burning business questions, please feel free to reach us at StairwaytoCEO.com. We'd love to hear from you. And if you like what you hear, be sure to subscribe to the show, tell your friends, leave us a review and follow us on Instagram @StairwaytoCEO. Until next time, guys, keep on climbing.

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