00:00An entrepreneur has to be somebody who will not accept failure or defeat, right?
00:05Will do anything they can, just never giving up.
00:17Troy Vondi, thank you so much for joining me.
00:19Thanks for having me.
00:20I am so excited to learn about how you raised millions of dollars for pasta sauce.
00:25Give me the story. What is the origin of Saws?
00:31Yeah, yeah. Well, my co-founder and I went to USC together.
00:35We were sophomores at USC when COVID broke out.
00:38And I was interning at a merchant bank, lower middle market tech media telecom.
00:43He was at a real estate fund.
00:46We were sent home, both from Pasadena.
00:50And, you know, we were kind of like, we wanted to start something.
00:55We had kind of this entrepreneurial drive.
00:56I don't know why.
00:57I think probably by virtue of not having much else to do.
01:00And ended up sourcing from Shenzhen, China, a hand sanitizer dispenser with a built-in infrared thermometer.
01:05So you could take your temperature, it would display it, and you could sanitize your hands at the same time.
01:10And, you know, we sent a cold email to a local school district.
01:14That night we had a signed PO for like $24,000.
01:18We demoed the product with them.
01:19They loved it.
01:20And from there, we kind of had a business.
01:21I mean, we would cold email as many school districts as we could.
01:26And we'd sleep in this office.
01:28I'd sleep on the couch, my co-founder on the floor.
01:31And there was a single stovetop burner in the office.
01:34We'd cook pasta like four or five nights a week because it was quick and cheap and easy.
01:38And we'd go to like local grocery, Whole Foods, Sprouts, Ralph's, Target.
01:44And after like two weeks of cooking tomato sauce, we were tired of it.
01:47It was old Italian, tan label, cursive writing, you know, visually nothing appealing.
01:52And by virtue of that, we defer to flavor.
01:54And on the flavor side, marinara, arbiata, tomato, basil, roasted garlic, like totally commoditized, right?
02:00So, you know, we figured we knew the COVID-based business wasn't going to last.
02:04We got really lucky.
02:05We scaled it almost to seven figures in like 90 days.
02:08It went straight up and it came straight back down.
02:11But, you know, we knew we had to do something else.
02:13Either I was going back to banking or we were taking another shot and hoping that it would work, right?
02:19And so somehow we felt like tomato sauce was the lowest hanging fruit.
02:23You know, there was clear opportunity on brand to appeal to a younger generation of consumers.
02:28And on product, it was wide open.
02:31Like we could do anything, right?
02:33Yeah.
02:33And what is that?
02:34Anything?
02:34What makes sauces unique?
02:37It's really flavor innovation.
02:39I think we are like more so than anything, an innovation business.
02:43Like we are looking to push the boundaries of what consumers know and love in our category.
02:48And for so long, they've only known marinara and tomato basil and roasted garlic, right?
02:55We feel like the core problem that we are solving is that consumers today expect experience in grocery.
03:04And when they enter our category, the aisle that sells tomato sauce, they don't expect anything, right?
03:12They've been totally trained to buy a commodity.
03:16And to us, like we have this incredible opportunity to decommoditize a commoditized category with flavor.
03:22Yeah.
03:22What are those flavors I might find in the aisle now?
03:25Yeah.
03:25Well, we launched with a hot honey marinara and a summer lemon marinara.
03:29We now have 11 flavors.
03:31We've got a miso garlic, a cracked pepper parmesan, a wild rosemary marinara.
03:37We've got two pestos, three alfredos now.
03:39So think like really flavor trends that we've identified cross category that are familiar enough
03:46that we don't necessarily have to go educate consumers on that we can bring to ours.
03:51Hot honey was everywhere, right?
03:53It was on pizzas.
03:53It was at every restaurant.
03:55Mike's hot honey was killing it in retail.
03:57And so we try to identify trends that we're not reinventing the category in some certain way.
04:05Like we don't want to have to go educate the consumer about the flavor we're adding to a product they know and love.
04:12But we're really pulling trends, bringing them to ours, and then ideally being able to communicate some level of familiarity.
04:18That sounds delicious.
04:20I myself love a spicy pasta.
04:23I have to ask, do you have Italian roots?
04:25I don't.
04:26I don't.
04:26My co-founder does.
04:27His last name is Alfieri.
04:28So he's like as Italian as it gets.
04:30I don't though.
04:31So I get that question always.
04:33I'm like, no, no, I'm done.
04:34I'm Danish and I don't know.
04:37Honestly, I don't know where I'm from.
04:38Yeah.
04:39How do the Italians feel about this pasta sauce innovation?
04:43Do you think they'd be on board?
04:45No.
04:46You know, it's funny.
04:46We actually contracted early.
04:48We tried to contract a famous chef in L.A.
04:52And, you know, you probably know his name if I told you.
04:56And we sat down to them and we told him what we wanted to do.
05:00And he said, I like tomato sauce.
05:02I like the category.
05:04I like the opportunity.
05:05But what do you want to do different?
05:06And we told him, we want to innovate on flavor.
05:08We want to put hot honey and lemon in a marinara.
05:13And he said, you put hot honey?
05:15And he was so mad.
05:17Like he was like viscerally angry at us.
05:19And he said, no way.
05:20It'll never work.
05:21Right.
05:22And so we ended up having to kind of innovate on flavor ourselves.
05:26And we couldn't really.
05:27We wanted somebody with a deep culinary background in Italian foods to do it.
05:31But it was like the antithesis of anything he'd ever been raised to cook or he'd ever cooked.
05:36So I think there's a little bit of tension in the beginning.
05:40But I guess the solution there is when you try it, he's tried it now.
05:44And we still keep in touch with him.
05:45He loves it.
05:46He's a big fan now.
05:47But there's definitely, it's unapologetically Californian.
05:55You know, its roots are not Italian.
05:57Yeah.
05:57I mean, the famous chef might have said no initially, but investors said yes.
06:03You have $22 million.
06:05That's a lot of money.
06:07How did that happen?
06:10Yeah.
06:10You know, I mean, I think we, it's been a long time coming, but we launched in Air One
06:16in Southern California in 10 stores, the place to see and be seen.
06:20It's, you know, it's like the influencer hotspot.
06:23And pretty quickly, I mean, we started with two single facings in the top right corner.
06:28Like you could barely see us.
06:30And after a couple of months, we were the top selling tomato sauce brand with like the
06:34whole shelf at Air One.
06:36Right.
06:36I think the, you know, we, like at that point, we'd proven that we could sell product in LA,
06:44New York, Miami, and Chicago.
06:46But the real test in the beginning in fundraising, there was a ton of investor pushback on whether
06:52the product could scale outside of the two coasts.
06:55Right.
06:56And I think what we've done and what really influenced us to think more so about everybody
07:03in between LA and New York is that when we think about innovation, we're actually curating
07:09innovation for the palette of the consumer shopping at Target in Toledo.
07:14Right.
07:14Like I'm looking at Wingstop.
07:16I'm looking at Buffalo Wild Wings.
07:17I'm looking at the Chick-fil-A sauce menu.
07:19And I'm trying to innovate in a way that actually will appeal more so to middle America, to conventional
07:26and mass grocery than it will, you know, Whole Foods and Sprouts.
07:30And so I think the beautiful thing there is that we are a better for you, great tasting, healthy product
07:37that can win and we've proven can win at Air One and in Natural.
07:42But, you know, we've been able to build this brand that in comparison to most in the category
07:48has huge TAM implications.
07:50So, like, innovation for me is actually an opportunity to expand TAM and whereas in most
07:56other categories, it kind of shrinks TAM.
07:59I think venture has bought into that for sure.
08:03And we've also built a product platform unlike anybody else in the category, right?
08:06Everybody in our set is playing in Italian foods.
08:10We're a sauce brand, you know, and we think about it often.
08:13We won't do it in, you know, the near term.
08:16But we could go launch a barbecue sauce tomorrow and it would kind of fit the brand ethos.
08:20We could do a miso garlic barbecue and consumers would love it.
08:24And so I think, you know, building an incredible data story, being able to curate data that is
08:28best in class, not only in L.A. in the bougiest grocery store in the world, but also in middle
08:36America at Target and kind of rewriting the playbook of fundamentally shifting consumer
08:42expectations in the category and being able to be incremental in the sense that we're
08:47not pulling dollars from the others.
08:50We're actually bringing new dollars into the set.
08:52And that's where, you know, real money can be made.
08:55Yeah.
08:55So you landed Shelf Space before you got funding?
08:58Yeah.
08:59You know, we self-funded with the previous business.
09:01We put everything on the line.
09:03And we really did kind of risk every dime we had to get Shelf Space at Erewhon.
09:11So it was funny, even like it's stereotypical of young founders, but we the first product
09:18run we had, we printed the labels.
09:20We were running like 20,000 jars of product, a big production run because we had to meet
09:24minimums.
09:26And product came out, came off the line.
09:29We saw it in store for the first time and every label was torn up on the front, right?
09:35And so we called our manufacturer.
09:37We said, what happened?
09:37He said, what do you mean?
09:38They came off the line perfectly.
09:39I put them in the cardboard boxes.
09:40We sent them out and there they were.
09:43The label manufacturer had forgotten to varnish the front of every label.
09:47So every time they hit the cardboard boxes, they would just be destroyed, right?
09:51And so it was funny.
09:52We lost probably half of the cash that my co-founder and I had contributed off the bat because we had
09:59to scrap the first production run, but we did.
10:02We self-funded until probably our first, you know, we took a little bit of venture before
10:09we landed at Air One from Palm Tree Crew, which is Kygo's venture arm.
10:14Interesting.
10:14And they were early.
10:15I mean, they took a big bet on us, right?
10:17We were, we had product and that was really it.
10:20But after that production run that had kind of scrapped a bit of our dollars, we knew we
10:25had to go out and raise some money.
10:26Yeah, but if you were able to, you know, bootstrap your way into Air One, why do you
10:30need $22 million?
10:32That's a lot of money.
10:33Yeah.
10:34Well, I think, one, I think the implications of what we're doing are far greater than tomato
10:39sauce alone.
10:40Okay.
10:40And that's, that's one point.
10:43Innovation is not cheap.
10:46And, and the other is that, you know, we want to do all that we can to drive trial.
10:50Like, we are so confident that we've built this flywheel of reacquisition by virtue of
10:55having incredible product, experiential product.
10:58We joke that like, whether a consumer tries hot honey marinara and loves it or hates it,
11:04they're never going to forget it.
11:05Yeah.
11:06Right.
11:06You go buy another, a basic marinara and you compare it to another on shelf, they're forgettable
11:12in many ways.
11:13Right.
11:13And there's a lot of great brands that we compete with, but it's difficult to differentiate
11:17in, in that way for us.
11:20Like we are as different as anyone could ever be.
11:24And so, you know, a lot of it will be costly innovation, some skew expansion, door count and
11:32distribution growth.
11:33And then I think you'll see more celebrity integrations and a lot of influencer, a lot
11:38of marketing spend that we otherwise, you know, now we have the firepower to really market
11:42the brand.
11:42What we've built today up until now is, is almost entirely organic.
11:47Right.
11:48So we'll see.
11:50It's exciting.
11:51You, you talked about your entrepreneurial drive earlier.
11:55Do you feel like Saws has itched it?
11:59You know, I think so.
12:01But, but in a, in a strange sense, like it, it's funny.
12:06I go to bed at night, like worrying about so much of what we're doing and I wake up in
12:10the morning so glad to be doing what I'm doing.
12:12Right.
12:12It almost keeps me up at night, but it wakes me up.
12:15I think it's there.
12:17There's these, I feel like we plateau in, in many ways.
12:21Like looking back, if you told me two years ago, we'd be where we are today.
12:24I'd have been shocked.
12:25I mean, it was everything we'd ever dreamed of.
12:27And I don't think we smell the roses as much anymore.
12:30Right.
12:31I mean, there's so much more to do and I feel like we're just getting started.
12:35So I think it's actually, I don't think it's itched it really at all.
12:39I think there's, there's, even though I love what I'm doing, I think there's so much more
12:43to do.
12:43Yeah.
12:44What, what do you think gave you the entrepreneurial drive in the first place?
12:47You know, what were you doing before starting businesses?
12:51I'm curious.
12:52Well, I mean, I was a sophomore at USC.
12:54I was interning at Merchant Bank.
12:56I wanted to go, my dream was to be a banker in, in tech, media, telecom, in either San
13:02Fran or New York.
13:04And then after starting the first, you know, the drop, effectively the drop shipping business
13:08during COVID, I, you know, I, we were just bit by the entrepreneurial bug.
13:12I mean, we, we'd seen, because I had just finished an internship at a merchant bank where
13:17I was up until, you know, 1, 2 AM building models.
13:20I'd have my managing director call me telling me to build a SIM by 9 AM.
13:23It was hours on hours on hours of work that like my, my favorite part of being in the
13:30banking world at the time was meeting the founders.
13:33We worked on one brand.
13:35We were selling a business that was a predictive weather systems business.
13:39So it was like radar technology to predict the weather that was then licensed out to
13:43news stations and, and foreign militaries and foreign governments and like meeting this
13:48founder.
13:49I mean, he was crazy.
13:50We all thought he was crazy on the banking team, but we ended up selling his business
13:53for, you know, just ungodly sums of money that, that he felt we could get.
13:57And we never thought we would get.
13:58And it happened.
13:59Right.
13:59Um, and so I think I, I really, I did not love the, the part of banking that had me feeling
14:08like I wasn't creating value, that I was just almost pushing paper.
14:11Um, but I loved seeing and meeting the founders who had created all of the value.
14:16Right.
14:17And so I think that's what led us into starting that first business.
14:20And then after we'd had a piece of it and we realized like we, we are capable, like we
14:25can build something that can fundamentally change a category or an industry.
14:31Right.
14:31I don't know.
14:32You could never go back, you know?
14:33Yeah.
14:34It's one thing though, to have a great idea, but it's another to run a business and be
14:39a CEO.
14:40How's that treated you?
14:41Yeah.
14:42Yeah.
14:43It's been, I think there's been a steep learning curve, right?
14:45Especially with all the funding that comes in the growth.
14:49I mean, you know, I look, uh, we had a board meeting a few months ago.
14:53We were 14 and a half X year over year, right?
14:56It's a ton of growth first two quarters of last year to the first two quarters of this year.
15:01Um, and then managing a team, you know, we, we've gone from a team of three a year ago
15:05to a team of 11 today.
15:08Um, there's a lot to learn.
15:09We know what we don't know.
15:11And there's so much that we still don't know.
15:12I think surrounding ourselves with investors and advisors and, and team members, you know,
15:17my, my VP of sales knows a lot more about sales and consumer goods than I do.
15:22Right.
15:23Yeah.
15:24And so I learned from so many on my own team.
15:25Um, but I think it's, it's up to us to be the nucleus that keeps everything moving
15:31you know, and everything functioning in a way that drives the business forward.
15:35So it's definitely been a learning curve.
15:37Is there one business lesson, a key lesson, whether that's from your investors or from
15:43your advisory board or just from the earlier business you started that you've kept with
15:49you, that you hold close?
15:52Yeah.
15:52I mean, it might sound cliche, but there have been so many times where our back has been
15:56against the wall and we thought it was all over and we were done.
16:00Right.
16:00And I think having this like insatiable will to win is what will get you there.
16:08Just never giving up.
16:09Like, uh, uh, an entrepreneur has to be somebody who will not accept failure or defeat.
16:17Right.
16:17We'll do anything they can.
16:18We'll, we'll create something to avoid them from seeing failure.
16:21I think ask, being willing to ask questions, knowing again, where your weaknesses are.
16:27It's so important as a founder.
16:29Um, but you know, being able to, you have to have a propensity to absorb risk and to be,
16:39you know, we get punched in the face every day.
16:40You have to punch back.
16:41You've got to be willing to punch back.
16:43Yeah.
16:43I love that advice.
16:45Long-term, what's the goal with sauce?
16:47You know, in the food and beverage space, we see a lot of acquisitions, a lot of sales.
16:53Kabu, which is one of your investors and is a huge investor in this space backing,
16:58you know, Vital Proteins, Poppy, Oatly.
17:02We see a lot.
17:03Poppy, for example, just sold for $1.9 billion for PepsiCo.
17:06It's amazing.
17:08Is that the goal at the end of the day to sell sauce or what do you imagine?
17:12I know it's still too early.
17:13We try not to think about it too much.
17:14I think for investors, of course, it's no secret.
17:17That's the goal, right?
17:19When Kabu is deploying capital, I think they feel they see a clear vision to an outcome,
17:24an amazing outcome, like what they'd seen with Poppy.
17:29I think from the founder perspective, it's a little bit different.
17:31Like, we have to look directly ahead and not 10 steps ahead at all times, right?
17:37It can be distracting to think about, you know, the parachute at the end.
17:41But that's not, you know, we're passionate about innovation, about, you know, I love nothing more
17:48than being in the store and talking to the grocery teams and talking to the consumers and being able
17:53to bring excitement to a category that has had none of it for so long.
17:57We try not to think about it.
18:00So I think the best answer is there's, I don't totally know.
18:04I think there's plenty involved that want an incredible outcome.
18:08And, you know, our team does too, but we're not focused on that being the goal quite yet.
18:12Yeah. And, you know, you mentioned that you talk to consumers a lot.
18:17One of the things that has come up a lot in this, you know, space and, you know, with our generation
18:24is we care a lot about sustainability.
18:26So how has that, you know, been a factor for SAWS?
18:31Yeah. Yeah.
18:32You know, I think it's funny, even on the supply chain, we care a lot about sustainability.
18:39Of course, I mean, we use glass and everything is recyclable in our packaging,
18:45both at the wholesale level and at the retail level.
18:47But I think where we almost make more of an impact is on the marketing end,
18:51we really push for consumers to use product, emptied product,
18:56in ways that maybe they never would think to.
18:58We see a lot of UGC content of like flowers being held in a jar of hot honey marinara
19:05and like jars themselves being reused in ways that you might not otherwise think to
19:10if it was some sort of traditional tomato sauce that isn't a beautiful thing to look at in your
19:16living room. Right.
19:18But across the board, I mean, we really do push on packaging primarily because we see a lot of
19:23I mean, I see it firsthand when I walk the floors of manufacturing facilities and distributors.
19:29I think there's been a big push across the entire value chain to be as sustainable as possible.
19:36Yeah. And I have to ask, just because it's such a hot industry.
19:39Yeah.
19:40Have you been using AI at all at SaaS, whether that's on the marketing end or in the back end
19:46for your business, any sort of integrations with that?
19:50You know, we're just onboarding a new ERP system, which is like resource planning
19:54across the entire business, really from filling POs to booking freight that is driven by proprietary AI.
20:02So I can't speak on it too much quite yet because I haven't had enough time to be able to say if
20:07it's fundamentally changed the way we do business. But I think also on the marketing end, it's funny when
20:12it feels like now, anytime we're in a meeting as a marketing team and we hit a wall or a roadblock and
20:20thinking about how to ideate, we go to GPT, right? And I think whether it gives us the answers or not,
20:29it allows us maybe to think in ways that we otherwise wouldn't be.
20:33And so we do. I mean, I think it's been interesting to see the evolution of the team
20:37and when we feel like we're stuck, we do go to GPT sometimes to figure out if there's a solution
20:45that maybe we haven't thought of quite yet. I love that. Yeah, that's a good practical use.
20:50I almost forgot the most important question. Who's cooking the sauce?
20:53Oh, I know it's not, it's not me and my co-founder anymore. I will say we had early on,
20:59we had committed to this. It was like a big event at a club in LA and they wanted 100 jars of sauce.
21:07And we couldn't, we didn't produce in time because all the jars that I told you were destroyed,
21:11we had to throw out. And so we actually did one time hot fill 100 jars of steam capped product
21:18in the kitchen. And it was the most difficult thing we've ever done in our lives. So we,
21:23we grew a respect for a certain level of respect for the manufacturers on the floor. But we, you know,
21:28we cook in most of our products cooked in the US. A lot of it is also cooked in Italy and Sicily.
21:34Nice. So yeah, it's, you know, it's definitely authentic in that way, but it's all over. I mean,
21:41up in the Northeast and then out in Sicily. Yeah. My last question for you, as a startup that's
21:48successfully broken into retails and has landed shelf space, what is your advice to other young
21:56founders who are trying to land that shelf space? Yeah. You know, I think the key really is
22:02innovating in a way that, um, it offers you an opportunity to communicate more value to the
22:10consumer, right? For us, we're in an innovation business, but innovation is what really gives us
22:17the opportunity to provide more perceived value to the shopper, right? The shopper looks at a regular
22:24marinara versus a hot honey marinara on shelf. And I think there is this level of value created by virtue of
22:30flavor innovation in our product. And that's really the key to unlocking for us distribution. I mean,
22:36it's the opportunity to communicate to the retailer that, you know, we can drive incrementality. We can
22:43be more incremental than anybody else in this category ever has been. We can bring new dollars
22:47to the set. We're not going to take dollars from, we're not just going to cannibalize dollars,
22:51existing dollars in the category. Um, we're going to bring new dollars in. And ideally it's, it's a
22:57consumer that otherwise wouldn't be shopping the category. Generally it's Gen Z millennial, uh,
23:02majority female that we're engaging digitally and we're activating to bring into store. So
23:07I think it's about really building, um, product that is just innovative enough to communicate outsized
23:13value and pairing it with brand that truly does resonate with a new consumer that you can bring
23:19incrementally to store. But how do you communicate that? Like, how do you get your foot in the door?
23:24Is it cold emailing? Is it going to the store, just talking to someone? What does that look like?
23:29That's what I want to help. Yeah. In the beginning, in the beginning, it was like knocking on doors
23:33effectively, right? It was going to Erewhon and figuring out who we had to talk to. Um, today we
23:39have a sales team, of course, and so it's much different today and there's traditional reset
23:43periods and submissions. Um, but in the beginning, just like the first business we ran, every dime
23:49of revenue we generated in drop shipping, this sanitizer product was, was via cold email, right?
23:56We would draft emails all day and we'd send them out in the morning. And next thing you knew we had a
24:01$700,000 business in, in three months. And so, um, in food, it's a little bit different. I think the
24:07barriers to entry in retail are much higher outside of the independence, the one, two,
24:13three store mom and pop shops that you can walk into and you can say, I'll give you a case of
24:17product. Let's see how it sells. And if it sells well, you'll buy some more. Um, but it's, you know,
24:23you, you, it's, you, you kind of, there's stepping stones to the point where, you know,
24:28you'll have retailers coming to you. Target approached us in the beginning, right? We, we didn't,
24:33we had not expect to gain target distribution when we did, but I think if you can communicate this
24:38vision of being able to grow a category in an outsized way, any retailer is going to resonate
24:45with that. Right. So, well, thank you so much for joining me. Thank you. I'm very excited to go
24:50try some hot honey marinara. You got a lifetime supply. I'm happy to be here. Thank you. Appreciate it.
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