The Truth About Being First to Market

The Truth About Being First to Market

In this episode of Startup Hustle, Andrew Morgans and Christa Cotton, CEO of El Guapo Bitters talk about the excitement and the hardships that come along with being the first company to market in a new industry.

Covered In This Episode

Being the first company to market in a new industry has both pros and cons. This is what Christa Cotton shared in detail with Startup Hustle listeners. Coming from a family of entrepreneurs, she learned what it meant to be a business owner at an early age and carried on the tradition by starting her own business.

Startup Podcast for Entrepreneurs

Highlights

  • The entrepreneurial journey (1:25)
  • From real estate to distillery, to Top Chef, branding and marketing (4:22)
  • The sailing of El Guapo Bitters (8:58)
  • Selling the first product (14:22)
  • Bagging the deal with Costco (22:42)

Key Quotes

I feel like relationships are the most important part of business and if you can build relationships. You can truly do anything.

I don’t think that you’re going to attract (network) until you start doing things, you start taking an action.

It’s scary to put that much money out and to really double down on your dreams. But if you’re strategic about it and you have the right mindset going into it and you can be really disciplined about how you scale in that way, it can be really successful.

Be sure to tune in to this episode to hear about the success and the hardships that come along with being the first company to market in a new industry. Congratulations to Christa and El Guapo Bitters for being recognized as a Top New Orleans Startup by the Startup Hustle team!

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Rough Transcript

Following is an auto-generated text transcript of this episode.

00:01.44
Andrew Morgans

What’s up hustlers, welcome back. It’s Andrew Morgan’s here, founder of Marknology, covering all things e-commerce, Amazon, entrepreneurship. Um, you name it. So here on Startup Hustle. Ah, before we get into who’s my guest today and what we’re covering, I want to give a shoutout to our sponsor for today’s episode Full Scale io helping you build software teams quickly and affordably I’m super excited to introduce to you our guest. We’re gonna be talking about, um you know, being first to market. We’re gonna talk about just, her story. We’re gonna talk about entrepreneurship trolls. We’re gonna talk about all of it today. I think it’s gonna be a lot of fun. And without further ado, Christa Cotton, welcome to the show. No super excited. We were just chatting a little bit before we get the show started like we always do.

00:44.19
Christa Cotton

Thank you for having me. I’m excited to be here.

00:54.80
Andrew Morgans

And have a little bit of synergy between brands. We’re building between things we’ve worked on and between, even some of the mindset stuff. It seems like we’re both going through together. Um, I love getting to start these shows and before we start talking about El Guapo, and you know, kind of the reason even like for us connecting, let’s talk a little bit about Christa. So, um, I know El Guapo is founded in 2017 but I feel like your story starts before that. Um you know when was your first entrepreneurial memory or maybe when did you know you wanted to be an entrepreneur a business owner.

01:25.77
Christa Cotton

So, I actually come from a very entrepreneurial family I grew up in Southwest Georgia and a very small town called Leesburg, Georgia. I don’t think we even had a red light until I was in like the second grade. But anyway.

01:34.43
Andrew Morgans

Okay.

01:42.43
Christa Cotton

So super small town. My dad was an entrepreneur. He started out in banking and when I was five years old, he founded a grocery anchored commercial real estate portfolio and I always said I want to be exactly like my dad. Like you go to school and they’re like, what do you want to be when you grow up, like everyone else is like dentist doctor and my dad.

02:03.29
Andrew Morgans

That’s funny because I was like, my dad’s awesome. But I had a crazy upbringing and I was like, my dad’s awesome. But like I’m gonna be the opposite. My dad, I don’t want to be a preacher. I don’t want to be in Africa, I don’t, you know? so now I’m more like him than ever probably?

02:18.78
Christa Cotton

Hilarious I know so.

02:19.58
Andrew Morgans

But growing up it was like opposite so that’s interesting. So what is exactly a grocery real estate portfolio is that like owning grocery stores or the properties on them or something.

02:29.84
Christa Cotton

Yep, so he bought his first center when I was five and it’s basically that you own the property and then all the tenants that are like the anchor tenant which is the grocery store and then the sub-inor is around them rent from you and it’s you know, just a ah, very basic. You know, real estate business model, but he started with one center and then the goal was 5 and 5 turned into 10 and 10 turned into 20. And by the time I graduated from high school, he had 75-ish centers spread across the southeast and ten states and it was seven point five Million Square feet of real estate. So it’s this massive portfolio. It’s headquartered in Columbus, they have about 30 employees and um.

02:57.50
Andrew Morgans

Wild.

03:07.60
Christa Cotton

You know my dad is still the chairman and still runs the business to this day so and came from that background knew I wanted to be an entrepreneur really actually thought I wanted to go in the family business like that was really where my head was at so I went to Auburn University which is about 45 minutes away from Columbus or the real estate company is headquartered.

03:08.81
Andrew Morgans

Um, okay.

03:25.70
Christa Cotton

So that I could work for the family business and then also be in school at the same time but Hurricane Katrina hit my freshman year. So I ended up spending a lot of time in New Orleans where we have a lot of property and I’d spent a lot of time here in the summers growing up I really had an affinity for New Orleans I actually thought I wanted to go to tulane for school.

03:44.10
Christa Cotton

But I spent a lot of time here and helping restore coastal properties that have been decimated by the storm, because a lot of these grocery stores have been without power for weeks and in some cases months. It’s a very disgusting job but it made me really passionate about living in New Orleans and bringing the city back and realizing its full potential after the storm.

04:00.12
Andrew Morgans

Um, yeah I Love that.

04:03.66
Christa Cotton

So once New Orleans was getting back on its feet in 2007, 2008 and the credit crunch hit—which was another bad situation for real estate. So my dad decided that as a family we needed to diversify away from just having full real estate holdings. So I spent my last two years in college.

04:22.56
Christa Cotton

Helping my dad open Georgia’s first legal distillery since prohibition. Super fun job big, right? turn he actually saw an article about a craft distiller in Atchison, Kansas named Seth Fox and he said.

04:37.35
Christa Cotton

You know, this is what I’m gonna do. I’m gonna open a distillery. And everyone in our social circle and business circle said it’s a midlife crisis. He’s not really going to do this. But he got into his car and drove himself to Kansas and hired Seth as a consultant. And he did it. So you know that was really my first and foray into entrepreneurship from like beginning to end like starting a business and like getting it off the ground.

05:03.59
Andrew Morgans

You did that with dad, like with the the distillery. So you know, we’re in Kansas. I don’t know, we didn’t talk about that. But like, so we’re in Kansas City. And I am in I am in real estate and a little bit like kind of that same thing we’ve just been.

05:20.94
Andrew Morgans

Wanted to get one property and we do Airbnbs and things like that. But I just had, I had friends. Um this community small you know, in a mean mule. So mean mule is like, they’re a fun brand. It’s all about agave and it’s like one of the first distilleries here that’s not tequila, right? It’s agave.

05:38.36
Christa Cotton

I bought it for.

05:40.46

Andrew Morgans
But maybe one of the first of its kind and I’ve watched him do it from a very small distillery. He was like running inside another one and then it’s grown and it’s grown and I have a contract with boulevard birdie. So I haven’t done the whole process but I have been along the journey with a friend a close friend that’s like kind of going through the same thing and um.

05:46.77
Christa Cotton
Abraham.

05:55.69
Christa Cotton

Why you get it.

05:58.78
Andrew Morgans

It’s been cool. So like I did, that’s cool, that your story brought you out here to atchinson. Um, okay.

06:00.84
Christa Cotton

Well, so Seth is in Atchison, Kansas and he has most wanted the vodka brand so that’s who my dad hired and I worked there until I graduated. And then I really wanted to learn a lot about market research and strategy. So I left and moved to New Orleans which is where I really always wanted to be. I worked in advertising for branding firm and all of my clients were hospitality and tourism which I loved I got the opportunity to work in production on top chef the tv show where I learned a lot and formed a lot of relationships with amazing chefs that have really helped put me on the Map. And got me started before I really had any credibility. They really helped me get going in the beginning.

06:38.56
Andrew Morgans

Christa, that’s like, so for anyone listening like and positive for a second because you’re going fast but you’re dropping some amazing information. Number one, um you know, being in New Orleans cleaning it up getting a passion for the city. Getting a firsthand look at your dad building something that hadn’t been done in a very long time or like had a lot of obstacles. You know, um and then kind of knowing what you’re, so that’s completely different than going into branding and advertising right? as someone that’s in that space now. Um, completely different spot. But.

07:15.67
Andrew Morgans

Understanding if you want to do your own thing and you know from an early time that you want to be an entrepreneur. You’re like, well what are all the pieces that I need, right? and so I think that’s for anyone listening I think that’s a really big thing and some early advice I got way before I knew exactly everything I was doing was instead of looking for a second job they were like go find.

07:20.82
Christa Cotton

Um, right.

07:35.25
Andrew Morgans

Ah, way to make a side hustle. Essentially, that’s like furthering your career and what you want to do. So instead of going back to bartending I bar tended it for 6 or 7 years through college and all of that where I could have. I was good at it could have made it easily side money you know, kind of thing I started freelancing for for marketing and branding and in Amazon and.

07:37.66
Christa Cotton
Yeah.

07:54.69

Andrew Morgans
Got me here eventually but it was that first note to go focus on something and spend your extra time on something that’s going to be a skill that you need as you start a business. And like, so I’m hearing you all the things you’ve done way before even got to this point where essentially, almost all the areas inside of a business that you need to know?

08:01.13
Christa Cotton

Correct.

08:14.28
Andrew Morgans
To execute. So that’s really cool. You just went from um the distillery to top Chef and branding and marketing and I was like, Wow That’s a big leap but really cool at the same time. Yeah.

08:23.70
Christa Cotton

Well thank you. So that, you know ,all of that was—I was really just always drawn towards like, I knew what I was interested in and I knew what I didn’t like but I always was drawn towards finding or learning as much as I possibly could because I always knew the end goal was to do my own thing so you know and after.

08:36.63
Andrew Morgans

Um, yeah.

08:40.76
Christa Cotton

Top Chef experience I consulted for a while. I, you know, dabbled and I had like another idea that never really. And I had an idea after doing a lot of research figured out that that probably wasn’t the best plan but you know failures are a part of the story too. So a lot of consulting. Um.

08:54.34
Andrew Morgans
Um, yeah.

08:58.46
Christa Cotton

Really was trying to figure out what I wanted to do and as I was forming New Orleans beverage group, I acquired the El Guapo trademark from a previous owner. And really started with a trademark, an idea for what I wanted the brand, my brand, to embody and become. And you know, really spent probably the first eighteen months doing recipe testing a lot of research and just trying to like, really kind of put all the pieces together and what’s um.

09:25.28
Andrew Morgans

Was that something that you were comfortable? Was that something you were comfortable doing? Kind of like the research and the recipes and everything because of the distillery work with dad and like bringing that to fruit knowing how the process went.

09:34.39
Christa Cotton

Um, yeah, yep. And during my consulting time, I spent a few years kind of trying to really, like, soul search and figure out what I wanted to do because I knew once I committed it was like I was in it for the long haul. I took my first 2 psalm exams and.

09:47.79
Andrew Morgans

Um, in.

09:53.66
Christa Cotton

Like palate is something I’m very strong in and I just understood the market and it definitely started with the distillery, but also just the the food relationships and all the chefs that I know. You know I’m now a James beridge fellow which has been great, but just, all of those connections and the things that I’m interested in like all intersections just sort of led to recipe development and understanding flavor and palate. And I grew up with a lot of farmers in my family. Some of our purveyors that we actually buy stuff from now are family members and.

10:20.79
Andrew Morgans

Cool.

10:23.66
Christa Cotton

Which is great and you know my parents have a farm. They’ve been very supportive. They’re willing to you know, plant additional things to help us you know shore up our supply chain but the the integration of farmers into our supply chain and building our supply chain where we know. As many and we’re we’re working with as many farmers as we possibly can and then also working with single origin spice importers to bring in the absolute best highest quality spices that we can is really what sets our product apart and we know that we’re an upper echelon brand. We’re more expensive. We are better sourced and we understand that we’re going to be in fine retailers and bottle shops and the whole foods of the world were not going to be in the middle to the lower part of the market. But that really was what was interesting to me. And it was trying to figure out a way to marry this. I grew up in a small town, I really believe in regenerative sustainable agriculture. And how do I put all that together with a brand and then also, so I’m so sorry Archie the male person came by. Okay I’m really trying to figure out how to marry sustainability with all of my beliefs and and have that be.

11:35.46
Christa Cotton

Nicely packaged in the brand that I was building is really, you know, where I started. But it’s a work in progress and every single day you know we’re making more progress on this but as a full circle moment. You know there’s a lot that’s happened especially in the last six months with us and I’m sure we’ll get into that. But.

11:37.27
Andrew Morgans

Um, easier said than done. That’s you know it’s difficult.

11:53.42
Christa Cotton

And Seth, the original Distiller from Kansas that was in the Wall Street Journal, is actually the engineer that is building my brewery here in New Orleans right now which is pretty cool.

12:01.49
Andrew Morgans

Cool, and that’s how it works. That really is just how it works. You never know, at least, what in my journey. It’s just been like, I’ve never known that this puzzle piece would fit over here and bring it full circle and the connections that come just from taking action doing your thing. Chasing a dream or chasing a vision or chasing, what’s you know, in front of you coming full circle and now, so that’s working on your stuff. That’s pretty cool.

12:26.32
Christa Cotton

Yeah, I’ll relate. I feel like relationships are the most important part of business and if you can build relationships. You can truly do anything.

12:33.47
Andrew Morgans

True and I think for me, it’s come like there wasn’t a lot of people listening to me. There wasn’t a lot of people at least in regards to the business model that I was trying to do. There wasn’t a lot of relationships to Bill, and so at the beginning I do feel like there’s this amount that’s like, “hey don’t don’t rely on anyone else.” It’s not about, “oh my god. I’m a network. This person’s gonna help.” I don’t, you don’t need help. You don’t need help. You know it’s, go out there and do your thing become an expert at something, research something, get passionate about it. Do your certain level of work. And then you will start attracting the relationships that are the ones for you as you’re doing your thing. That’s what I believe. If you’re not taking any action or you’re not doing anything anyone that’s really of value—I don’t say value as in the money or anything like that—but the type of people that you want to attract. They’re just not going to be attracted to that. I don’t think that you’re going to draw them in. I don’t think that you’re going to attract until you start doing things, you start taking an action. And then you’ll be surprised. Like, who comes and who you meet and who you connect with and so for me, the relationship part has been almost like there was this grind really hard phase. And now, it’s even more relationships than it ever was before. So you know, to each I just like to give feedback to anyone that’s listening and thinking about how do different entrepreneurs get to A to Z. And for some people it’s like their connections have been it from beginning or their relationships from the beginning have been everything. In other industries. It’s like you know make some progress, get that prototype product, or that hero MVP, or that first sampling of your good and start just doing what you can and you’ll see different relationships start to meet you and elevate you to the next level. Or you know, partner with you in some way.

14:09.92
Christa Cotton

Yeah.

14:22.52
Andrew Morgans

Okay, so we kind of just jumped from researching but acquiring El Guapo and carrying the trademark. And starting to research about ingredients and like, how do you source the best stuff and like. So let’s go to 2017 like when did you start selling? when did you start selling your first product?

14:43.45
Christa Cotton

So pretty much immediately. We were testing different recipes and it was the core group of bitters flavors. So there were maybe nine recipes in the beginning, and it was a lot of really trying to figure out within the local market. What there was an appetite for where there were holes and then what was scalable around the country because if you’ve ever been to New Orleans you know that everything here is rich and over the top if it’s not fried and covered in butter sauce. We don’t know what to do with it, and cocktails are the same way, and it’s a wonderful part of our culture and in community. But because things are excessive and popular here in New Orleans doesn’t necessarily mean it’s going to translate to a cocktail bar in Chicago. So.

15:26.47
Andrew Morgans

But so let’s stop there just for a second because that’s actually really big in my world. As an e-commerce agency, as an Amazon agency, the localization piece obviously for international reasons, so like selling on Amazon going international is a big place. A big growth lever. Um.

15:35.88
Christa Cotton

And.

15:45.77
Andrew Morgans

You know a big way to go into a smaller market and be a bigger fish and if you’ve already, if you’re already executing Amazon well on the U.S. side, It makes a lot of sense to go to Canada. But understanding that in Germany, they don’t care about a lot of fluff. They want very direct you know, communication and messaging and in Canada you need.

16:05.56
Andrew Morgans

You know, and you speak to them in french as well as english it’s a respect thing as much as it is a sales conversion thing. And here in Kansas City, local pride is super strong and you’ll just see a lot of Kansas Cityians wearing Kansas City shirts and you know, we’re proud about where we are in our hometown. Our sports teams. You go to St. Louis, or you go to Chicago, and it’s not the same way and it’s not that far you know so there’s these like localization pieces in the marketing that I think um, good to have in mind early, really good had to have in mind early and something that like is being preached very much.

16:34.92
Christa Cotton

Um, right.

16:40.97
Andrew Morgans

So in the e-commerce space about as all these brands are trying to expand like guys, you can’t do the same thing everywhere. You have to switch it up. Okay, so I was just dropping that because like that localization piece I wanted to bring that to that for any of my ecommerce listeners listening like we we call it localization.

16:44.65
Christa Cotton

Now you to work.

16:56.43
Andrew Morgans

But that’s where you were at and that makes a lot of sense because New Orleans is its own bird is its own place. You know.

17:00.94
Christa Cotton

And so it’s interesting. You know people love our product and our branding. It’s very apothecary in style, you know. We don’t even use color on our labels. They’re all craft and it’sa very vintage but specific and intentional.

17:20.24
Christa Cotton
Branding move but it also saves us in money. The black and white printing is a plus. Highly recommend 10 out of 10. So you know, we’ve made smart decisions along the way. But really testing out and trying to figure out in different markets what that would look like. And then also in different environments because what happens in our very high end James Beard and Michelin starred.

17:24.00
Andrew Morgans

Love that.

17:39.86
Christa Cotton

Restaurants and high-end hotels hotels that we work with like the 4 seasons and the Ritz-Carlton. And the you know, in it Little Washingtons of the world versus what’s going on at a whole foods or a fine bottle shop or completely different. So then really trying to figure out by channel what we should be pushing in each place. Um, and trend.

17:54.93
Andrew Morgans

Well, let’s back up there. Let’s back up and maybe I derailed us, but you were talking about wanting to know if it could work outside of New Orleans and I want, I like the real initial things that you’re thinking and what you’re doing cause you just jump to Michelin. Ah. Michelin restaurant, right? And right now we haven’t sold anything yet. So you’re dropping with 9 flavor.

18:11.49
Christa Cotton

So well. So what I did so remember my my previous drop so I worked in advertising I worked on top chef for season 11 which was filmed here in New Orleans met a lot of amazing chefs. So a few of them.

18:24.31
Andrew Morgans
Okay.

18:29.93
Christa Cotton

Championed my brand from the very, very beginning. So at the time Kelly Fields had Willa Jean, which is a bakery here in New Orleans, and Nina Compton came in second on my season and she left Scarpetta in Miami and moved here to open her first. And now she has a second restaurant compare lopen and bywater american betro. They were interested and wanted to create a cocktail using our products so we would you know, kind of work with our chef friends and barn restaurant friends and a lot of them really put us behind the bar and gave us credibility before we deserved it and at compare le pen specifically the number one cocktail on that min.

19:07.17
Christa Cotton

Menu for years and years was made with our rose cordial and those relationships and also just seeing that logo behind the bar repetitively all over town helped people say you know oh we want the souvenir and it’s so great. They would go home and they would order so it’s.

19:22.52
Andrew Morgans

Your New Orleans is a town where it gets a lot of out-of-towners coming in right? So you’re getting people from all over the country, the world really, coming into some of these staple places or these like iconic restaurants seeing your stuff relating that to New Orleans.

19:26.15
Christa Cotton

Yes.

19:32.81
Christa Cotton

Exactly.

19:39.92
Andrew Morgans

I’m sure even in a way and being like this is a New Orleans, like let’s take this home with this. Okay, awesome I’m tracking now. Thanks for sharing. No I think these are just important um makes a lot of like it matters where you are you know and what you what tools you have available and that makes a ton of sense. Um.

19:40.46
Christa Cotton

Exactly, exactly. But.

19:56.10
Andrew Morgans

Kansas City isn’t really that place. Maybe if we were on the—if I was releasing some kind of barbecue type of product, where that’s a lot of people come here to try that, and they would be in those restaurants to try that and you know if you had a product that makes sense. Um, okay so the top shelf thing the top chef um. Kind of like influencer marketing in a way or at least product you know product placement.

20:12.48
Christa Cotton

Yeah, and friends that were really willing to like do us a solid kind of like because they loved me and like we all it was more baked on based on relationships than anything else in the beginning. But then when they started using it. We got a lot of feedback feedback of like okay this really is good like we love you. But.

20:28.78
Andrew Morgans

We also love what you made.

20:32.12
Christa Cotton

This is great. Yes, and then we started getting custom requests for doing things and we’ve dabbled and in different partnerships and at this point we actually did develop a cocktail line for commander’s palace which is arguably New Orleans most famous restaurant and and t martin is a legend. She’s a wonderful female entrepreneur and a great mentor. Ah, but being given opportunities like that and even you’re talking about you in Kansas I just let this past weekend Kansas won the men’s in CA basketball tournament here in New Orleans and yes and capital one hired me to do all of their cocktails in their VIP lounges at the Ritz-Carlton for the entire four-day weekend. So working with the Ritz to come up with custom cocktails that were going to be served in in this you know experience that was being created by um, by the sponsor of this event. Those are the sorts of opportunities that over the years have built and built and built and they used to be smaller and more local. but now I get paid to fly all over the country to put on events for different people and just the relationships that I’ve been able to build have just propelled us to be larger and larger and larger to the point of where we’re now available in 49 states and 3 countries which is pretty cool. For less than five years, that’s pretty awesome I think.

21:48.62
Andrew Morgans

That’s incredible. That’s incredible Christa. I think it’s amazing. Um, and this is a note but I’m pretty involved in the e-commerce industry the Amazon industry as far as events and things like that. They’re always doing. He’s kind of like get togethers. These masterminds you know with these fancy cocktails and flying outs in New York or Miami or l a is where like a lot of the like the they’ll host the conferences with the events and I definitely got to plug you in to to some of to some of them. They’re always trying to do something fun and unique and.

22:19.35
Christa Cotton

Pleased.

22:23.20
Andrew Morgans

Um I would love to make that connection. So I like talking as much as I like. This is how I like to do business. So just make a note and we’ll circle back on that. But okay, so that makes so much sense in regards to how it grew and how I grew so fast was just it. It was getting high level exposure.

22:26.75
Christa Cotton

Um, yeah.

22:42.58
Christa Cotton

Yep, so then I got my Supplier Diversity wec which is basically just a woman-owned certification. So I got that in 2019 and I wanted to figure out a way to do mass retail with a lower, like less expensive product line that was a lower barrier to entry so that more people could enjoy what we had created because as I said before we are a very well-sourceced expensive product and I just really thought that there could be a way to open the market to more people because there was a way to make it more affordable. So I got the opportunity to.

23:17.88
Christa Cotton

Pitch to Costco and they told me at the time, you know fly to Dallas for the day. Don’t have any expectations, you will probably not hear back for a year. It could be 2 years, but just come and do this and like tell them what you’re doing. So in my head I had this idea of, you know, this is what I want to do. But we didn’t really have it available. So the weekend before, I think it was going on like a Tuesday, the weekend before I started playing around in my kitchen and developed a very rough outline of what a pre-diluted mixer’s line would be. So the idea is pour it over ice add booze, or club soda if you want a non-alcoholic experience, and all of these were recipes that I had been thinking about and developing while I was pregnant with my daughter the year before so we put it together. We make some limited batches. We bottle them up. We put them in my suitcase, I fly on my way to Dallas, I pitch my little hard out and I won the deal on the spot. And to this day I don’t think Costco knows they bought something that didn’t actually exist. So then, I’m coming home and I know that I have, you know, ninety days to get all the FDA regulations, all the paperwork, get this whole thing together and my whole team is in like a full on sprint.

24:28.95
Andrew Morgans

I can relate to that in so many ways. The fact though the difference was you brought you had something there to show them I think that that like you know that and Mvp that prototype I was talking about right? which I know the relationship made it came out of order but it’s like.

24:29.45
Christa Cotton

To get this done but we take that out.

24:39.90
Christa Cotton

Yet.

24:47.24
Andrew Morgans

You did something you had something um, wasn’t perfect. It wasn’t you know? Absolutely it wasn’t amazing yet you were like putting it together in your kitchen but you had something um you know to take and then they jumped at it and I think that that’s you just got to take that like leap like for example, I’m in real estate we have um. I have a tiny home container home here in Kansas City and the conversation was so much different because it it led to a lot of um, at least relationships at the very least much less business opportunities.

25:08.93
Christa Cotton

So cool.

25:21.48
Andrew Morgans

But I had one and it was done and it wasn’t perfect but like I just brought it over from China I rehabbed it I’m in it right now. It’s like a little office. It’s been a pandemic office. Um, but I saw how men and women responded to me.

25:29.34
Christa Cotton

Love it.

25:37.36
Andrew Morgans

When I said it wasn’t just showing a container that everyone’s trying to do container homes but I had it done and they’re like you mean you have it done like like let me see it and the conversation changed immediately and I think that there’s something it wasn’t perfect. It wasn’t this. It wasn’t that but it wasn’t just an idea it was something tangible. You know and it changed the conversations for me and I can imagine that that how you felt about your product but then how Costco responded amazing. Thanks for let me share that. So. Okay, so you had ninety days to deliver on a mass order I’m sure if it’s at Costco it’s a very large order and something that in. Ecommerce as these brands scale I’ve overscaed brands we sell too much product and you know they don’t have the capital to go buy you know, kind of what you’re selling. Yeah.

26:21.37
Christa Cotton

It’s so expensive and it’s so hard so we took out you know at the time I didn’t really qualify and I was so proud I didn’t want to take any money from my parents and I still have not taken a penny from my parents. It’s a big misconception that people think that this was bought and paid for by you know, family. But that’s not. How this was bought that. That’s not how this was built and that’s not what actually happened but um, anyway, yeah, but um, it’s just funny to me because I hear that a lot and I’m still like oh that’s so interesting I Wonder how that like got out in the universe. But anyway so.

26:40.31
Andrew Morgans

We don’t owe them any explanations just so you know we don’t.

26:50.51
Andrew Morgans

You know so my my version of that is a little bit opposite but I’ll share too since we’re just sharing. It’s easy for me to say it’s another thing for me to back it up but I am a white male in the middle of of America um, you know and my like my mom’s where as poor as it get.

27:08.69
Christa Cotton

Um, yeah.

27:09.40
Andrew Morgans

How I was raised, you know, um from Poplar Bluff, Missouri. a first get a college degree. Um, you know I think my family mean like combined they were ministers. So it’s a little bit different but you know I think 30 k for a family of 5 and there’s a lot of there’s a big and I’m also come from Africa.

27:22.67
Christa Cotton

Wow! yeah.

27:28.30
Andrew Morgans

So it’s this. It’s convoluted story but people can see me from the outside and you know say 1 thing or there’s people that will pipe up or internet trolls or whatever it might be that will say whatever and people have no real idea. Um, you know what? we all go through.

27:35.59
Christa Cotton

You have.

27:44.34
Andrew Morgans

Imagine having a dad that’s extremely successful in business like think of the insecurities and some of that like pressure to be like Wow you like you don’t want to let my dad down or that’s different than having parents that don’t care about you at all the different kinds of pressures right? So everything’s different. Um.

27:49.74
Christa Cotton

Yeah.

27:56.11
Christa Cotton

Um, personally.

28:01.32
Andrew Morgans

And there’s just like something that I’ve grown in this at first it was a very major deal for me I don’t want to be seen as like how everyone’s just looking at me glancing and making an assessment. That’s not that’s not my story and so it became very much like I gotta tell you it’s not not.. It’s not um and now I’m just like. Very rarely are the same people talking the ones that will listen Anyway, they don’t have listening skills so we just move on. That’s the rule. Okay, so we just move On. Um, but so so you have to come up with this funding tell me how tell me a little bit about that like how did how did that happen.

28:25.34
Christa Cotton
Time totalized.

28:32.39
Christa Cotton

So at the time we were going to do a test implementation and we knew we were going to get two different weekends and it was going to be four day test sales periods at our local Costco here in New Orleans so we did the math on what we thought we needed to manufacture and we took out a ridiculously high interest. Like you know you can get these like loans from you know, Quickbooks or shopify like there’s all these different ones and I don’t remember which one we actually had originally but we did one of those interest rate was ridiculous. It wasn’t as high as a credit card but it definitely wasn’t a bank loan and it’s really all we qualified for because I was doing this all on my own. So.

28:55.34
Andrew Morgans
Um, yep.

29:09.45
Christa Cotton

Um, well financially doing it all amount so we did that we manufactured what we needed and we knew what the goal was so we had like a daily target of what we needed to hit and we superseded that so we passed our test test implementations with flying colors. They put us on their Costco success stories like internal memo. Ah, meeting kind of things and they were like you know this is great. We’re gonna put you on a 24 store deal for every Costco in your region. So for us that was every Costco in Texas, Oklahoma and Louisiana so we were super excited I really thought like check figured this out like I’m gonna be able to just like be a mom and not really like worry about it.

29:37.16
Andrew Morgans

Wow.

29:47.97
Christa Cotton

Well fun story. So then we start manufacturing and we use the rest of the money from that loan to manufacture multiple palettes I think I think we were going for 8 and we had our plane tickets and we were like literally going to Houston and Dallas like we were days away from leaving and starting the first 3 stores. Because it was it was like a it was like a progressive situation. So yeah and opening weekend is always demos. So like we we were prepared. We were ready. Our team was so excited. So I’m in Charleston I’m doing an event and ah stra was at Charleston food and 1 so.

30:10.36
Andrew Morgans

You’re gonna go there. You’re gonna set them up and then go the next one kind of thing. Okay.

30:24.27
Christa Cotton

My Costco buyer set calls and says I’m so sorry to do this to you but and this was on March Eighth so it was right before the shutdown but like things were starting to get weird and people were starting to wonder what was going to happen. So the deal was that they needed to temporarily halt. Our. Supplier diversity deal because they literally needed my palette spaces to stop more toilet paper because everyone was freaking out about toilet paper. No shit that really happened so then pun intended. So then I had manufactured all this inventory I had this loan.

30:50.60
Andrew Morgans

Pun intended.

30:59.91
Christa Cotton

And I had no way to sell it and we were not a high-volume business because all of our stuff is very well-sourcd and expensive and this was our first foray into this so then I’m sitting on all this inventory and I have no idea what to do? So then you know the shutdowns come then we lose all of our bar and restaurant partners across the country because at this point we we know we’re working with a lot of. You know, very well-known bars and restaurants in Chicago and New York and l a and you know Portland all over they’re all closed. So I’m thinking we’re gonna have to fall for bankruptcy I mean I’m cruising bankruptcy websites and also school was canceled so my one year old is like clinging to me for dear life and it was terrible. So then I figured out. Pretty quickly that our internet traffic had ten x itself and everybody was searching for recipes so I spent every minute I possibly could putting as much content and as many recipes on our blog that were attached and linked back to the actual ingredients from our website. And our sales went up eight hundred and eighty two percent if you look at April 2020 over April 2019 and we were able to sell through all of that Costco inventory through our website because I had stuck to my guns about not wanting to do a Kirkland branded product and I wanted to do a guapo like in the store. And it was all fair game because it was our brand so we sold through all of that online exactly and it was all mixers so that there was a five five recipe mixers line that we had created so we had a salted poloma which is like grapefruit and ginger and you know we had.

32:18.40
Andrew Morgans

Um, but that was the cheaper product right? more like consumer friendly, right? The Costco okay.

32:36.60
Christa Cotton

Ah, hurricane recipe that we developed with hibiscus and passion fruit. So you know just different different flavors but easy to drink very straightforward.

32:39.99
Andrew Morgans

I love the pandemic because of the reason that the real entrepreneurs, and and this is a general statement. So you know, I know a lot of people experience pain and some heavy stuff during that time and we are all, were stress but I also got to see a lot of businesses, even in Kansas City, that pivoted and that like their entrepreneurial side came back to life you know and they were just um, you know making it happen. Um, you know and being like instead of just like oh my god what’s going on. Um. You know, still looking for a way to pivot and some of the best opportunities came out of that like we have a we have a brand right now we work with um, give them a little shout out a bar above. They’re an amazing team husband wife team and and plus some that just crush it and they um.

33:16.94
Christa Cotton

Absolutely.

33:31.41
Andrew Morgans

They do at home. They’re like more of like um bar accessories at home high end so premium bar accessories for the bartender at home and so that recipe thing like people were not going to bars and stuff anymore. So they’re having their date nights at home and they’re and the same reason they would buy your items is the same reason they would buy a bar above was like.

33:35.17
Christa Cotton

Nice.

33:49.99
Andrew Morgans

Okay, so we’re not going there. I’m going to learn how to make drinks myself I guess and like you know, Okay, let’s do this at home. Um, so you know just like, just a cool change and a cool like, something positive to find out of it but was like okay, let’s switch. What’s the new opportunity. Um.

33:51.30
Christa Cotton

Like. Love that.

34:03.85
Christa Cotton

Um, so I call it.

34:05.71
Andrew Morgans

Was amazing and if you hadn’t done the Costco brand you wouldn’t have been ready I don’t think the consumers would have bought the same item.

34:09.69
Christa Cotton

So I call it business whiplash because it was like, I thought I had it all figured out and then there’s a giant car accident which is COVID and then, I’m like well actually I’m gonna survive and get out of this car and we’re gonna like go to this other thing. So the ironic part of it was that it was so successful. That we ended up having to hire all of our out-of-work friends that worked in the beverage and food and hospitality industry to help us bottle as many bottles as possible because we literally couldn’t keep up so we had I’m friends with mason from turkey and the wolf and we had his you know his sous chef and then his other. His other susha from Molly’s rise and shine both working for us helping us try to figure this out mean we have so many packages going out and trying to make the the change like we really hadn’t put very much focus into um ecommerce before this I mean we had a website and we had it set up but 30% of our business was this. Amazon website and the other 70% was wholesale and distribution and at the height of the pandemic when the sales were going crazy 92% of our sales were ecommerce so it wasn’t just a shift in volume. It was also a shift of we’re not shipping by the case or by the palette we’re shipping by the individual unit.

35:23.36
Christa Cotton

And trying to figure out the shipping and the packaging and logistics and not break stuff and not kill each other um in the middle of a lot of stress was really hard but I’m so proud of our team. Yeah.

35:30.84
Andrew Morgans

Yeah, just so you know people pay thousands of dollars for that type of advice and strategy. I mean we you know we might help a transition go from that wholesale brick and mortar type of model manufacturer we work with a lot of manufacturers that are going direct. Their brands now on Amazon or wherever and that model of it’s just people don’t understand it because they’re like well they’ve been in business so long while going from where you get paid upfront for your product and then you ship it out.

36:01.84
Andrew Morgans

Versus getting paid for each individual order. But you’re holding the items you don’t or you send them into Amazon you don’t get paid until they actually sell and just understanding and shifting and moving to that kind of model or a hybrid model is is a lot of heavy lifting a lot of strategy. Um, a lot of.

36:20.10
Andrew Morgans

Tweaking you know and optimizing the process and you know we did it with a hundred plus year old company here in Kansas City with faultless brands and you can imagine if they’ve had process and systems in place for 100 years of business. Um getting them to adapt the way they’ve done things to a direct consumer or like you know. Packing 4 packs for Amazon when you’ve usually packed pallets. They literally didn’t have the labor that or the process or even the tables they have massive warehouses and didn’t have the ability to do this so what you guys did on the fly um is is a lot of work. It’s a lot of work.

36:43.45
Christa Cotton

Have processes hard.

36:55.17
Christa Cotton

Yeah, so that was hard and I mean looking back on it I think it’s it’s pretty incredible but in the moment it is like that stick toitiveness of just being an entrepreneur because you know you can figure it out and you actually. Your eyeballs are on fire. You don’t even have the time to stop and really think about what’s happening. You just know you have to figure it out and it’s a lot of long hours and it was really hard with the 1 ne-year-old and but you know I wouldn’t change our experience because it just taught us so much and it put us light years ahead of where we were before the pandemic not just with revenue but with operations and being able to build the team and learning what our opportunities truly were what our strengths and weaknesses were it just helped us in so many ways. So ultimately, we tripled our revenue. 2020 after a very rough and chaotic spring because it mean it was. It was truly like a complete pause in revenue and then the largest jump in revenue in company history. So yep, so we tripled our revenue in 2020 and then we knew like just looking at our numbers and what was happening that we were going to have to.

37:46.22
Andrew Morgans

Um, yep, hockey stick. Yep.

37:58.33
Christa Cotton

2021 just making a plan. So I went through an accelerator and I really worked hard on building mentor relationships on the business. I think it was the idea village x program and I also went through the Tori Birch Foundation

38:06.10
Andrew Morgans

Was it one there in New Orleans?

38:15.96
Christa Cotton

Fellowship program during COVID and that was a real lifeline for me. And if there are any female entrepreneurs listening I highly recommend applying for the Tory Birch fellowship. It’s one of the most transformative experiences that I’ve had as a female entrepreneur and it’s such a great network of women. I love, love, love it. Yay Tori. Thank you so much. Um. So (I) did that and then I did the idea village village x program and I walked away from that with an incredible mentor. He’s now my second largest investor and he created the largest. It’s like Amazon for barbecue grills. But it’s the largest purveyor of barbecue grills and equipment. On the internet and it’s called barbecue guys and it’s based in baton rouge and his extensive knowledge of logistics and operations and building warehouses and the ecosystem that kind of goes into making all this work on the backend was invaluable to me and he’s an incredible mentor. So with his encouragement and then raising my seed series, which we announced in December, I raised about well it was almost one point two million when it was all said and done but raised a bunch of money found a building and we’re 50% operational in our new facility. But it’s almost 12 times larger than where I was pre-COVID. So you know, I’m building my third facility in 5 years. I’m thinking bigger than I ever thought before but a lot of what’s going on behind the scenes is at El Guapo is truly all the credit to the mentors and the people in my network and that really goes back to relationships and people want to see you be successful and they want to see you build bigger. And stronger and it’s scary to put that much money out and to really double down on your dreams. But if you’re strategic about it and you have the right mindset going into it and you can be really disciplined about how you scale in that way. It can be really successful. So you know that’s really where I’m at right now is building.

40:11.60
Andrew Morgans

I love it and I’m just happy to have met you Christa. I think we’re gonna stay connected after this I don’t know exactly how but I feel like it’s just bound to happen and I just love the entrepreneur. Yes, okay deal and I’m coming to New Orleans I’m sure um

40:11.66
Christa Cotton

This massive facility out. Oh Thank you. This is fun. Yeah.

40:24.85
Christa Cotton

I’m gonna come to Kansas.

40:31.00
Andrew Morgans

One of these I’m going to see your brand now. It’s like 1 of those things once you see it you like you know you know you just see it and going through a lot of the same things at the same time ah being in an agency pandemic the pauses the hockey stick. You know you’re just adjusting as you can pivoting dreaming bigger than you ever have. Um, you know we’re acquiring brands and getting equity in brands and exiting brands and doing all of the things that you’re just like wow. Okay, this isn’t anything I had ever imagined. Um I was just a nerd you know like playing video games. So you know things just change and grow and it’s it’s like so fun and um. Think there’s something about entrepreneurial There’s a spirit There’s absolutely a spirit of entrepreneur and you can you feel it when you meet other ones you know and that’s why I love the show I think that’s why we have such a great listenership is just getting to hear people tell their stories and almost there’s so many things that are in common.

41:08.27
Christa Cotton

Um, for sure for sure.

41:23.67
Andrew Morgans

Ah, with entrepreneurs that have created something out of nothing that is almost contagious so I’m super excited I know we’re coming up on our we’re coming up on a hard stop for our episode. But what’s 1 thing as we’re just closing up. What’s 1 thing you would you would say or leave with any like potential. Male or female entrepreneurs that are looking to you know, Chase that dream.

41:47.35
Christa Cotton

You know, believe in yourself and always follow that inner spirit I feel like most of the decisions that I’ve made that I regret or like wish look back on and would have done differently. It’s when I didn’t go with my gut So believe in your ideas and have conviction and like go.

42:03.75
Christa Cotton

In the direction that your heart is telling you to go in because there is something to that.

42:06.28
Andrew Morgans

I love that and I’m um, I’m gonna piggyback on top of that since like with a little bit of transparency. But for me um I started my business after a heartbreak and I just like went all in on e-commerce because I was just like had nothing that was what was working for me. And um so a lot of the emotional stuff I just like put it in a box and redirected it toward business and like grind grind grind and like that worked for me to get through time now later in life I’m working out all of those things you know it’s been 8 year journey or so so not since then but like working through those things. It’s something where I’m tapping more into my gut than even at the beginning because it was something that that gut instinct I would almost resist it cause it’d gotten me in bad situations before right? at least like emotionally relationally so now it’s something that I’m working on almost like eq wise.

43:03.12
Andrew Morgans

Something that I as a business leader am working on eq-wise is like how do I what are all the things I can do to get more in tune with my gut. Um because it is right? You are right? Like if you just trust your gut. It’s the times that I didn’t that I really feel like if I have regret which isn’t really the thing I have it would be those times where I didn’t listen. So. 100 % agree with that. It’s something I’m putting a lot of work into like just like how do I make my gut even more even more sensitive even more in tune even more dialed in so that I can make better decisions because the point of being an entrepreneur or or a business leader. Is about decision making right and and trying to make as many good decisions as you can. Yeah.

43:39.98
Christa Cotton

As possible. So we’re twins because the same thing happened to me and I started my business from that same low point but that’s a whole other podcast episode of what happened, but but um, exactly I re channelled my energy and I really you know, kind of use this business as a way to re.

43:46.96
Andrew Morgans

Episode number 2

43:58.47
Christa Cotton

Start and rebuild my life on my own and on my own terms and thankfully it went well. So here we are.

44:02.52
Andrew Morgans

See. I knew it. I knew it. This is meant to be well. This has been amazing having you on the show and sharing your story. I could have just kept digging and digging into that, I think, for the rest of the afternoon. But thanks again to our listeners for your attention today. Thanks again to our sponsor Fullscale io. If you’re looking to build a software team quickly affordably fools. Go to fullscale.io. It is a great place to startup, I know this, won’t be the last that we hear from you and we will keep following your brand I’ll put all of her information website all in the show notes. So anyone that’s driving you know in their car listening to podcast whatever you’ll be able to find we can connect with. Krista this is awesome. We’ll see you next time. Guys.

44:42.27
Christa Cotton

Thank you Thanks for having me.

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