0 (2s):
Boom, shake the room, Fire Nation. JLD here and welcome to Entrepreneurs On Fire brought to you by the HubSpot Podcast Network with great shows like Socialet. Today, we'll be breaking down how to make your own luck in business. To drop these value bombs, I brought Doug Bouton into EOFire Studios. Doug quit his law career and led Halo Top Ice Cream to the number one brand and 300 million in sales. Now. Doug is starting over with Gatsby Chocolate, the first ever low calorie chocolate brand. In today Fire Nation, we're gonna talk about this amazing backstory. We'll talk about Doug's experience selling a business. We'll talk about why he's doing it all over again and so much more.

0 (42s):
And a big thank you for sponsoring today's podcast goes to Doug and our sponsors. Speakeasy will allow you to create content for your audience. Live, earn recurring revenue from monthly subscribers, stream private shows for select attendees and more. I am loving creating daily content on Speakeasy, and I think you will too. Visit getSpeakeasy.com to download the app and start rolling. Success story hosted by Scott d Clary is brought to you by the HubSpot Podcast Network, the audio destination for business professionals success story features Q and A, keynote presentations and convos on sales marketing In more. A recent episode on how to protect your business in times of crisis is a must.

0 (1m 25s):
Listen, listen to success story wherever you get your podcasts. Doug, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1 (1m 39s):
What's up Fire Nation? This is Doug. I would say something about becoming successful that most people disagree with. This is a little specific to our industry, the CPG industry, but I'll say brand doesn't matter or at minimum brand matters. Way less than you think it

0 (1m 56s):
Does. And give us the acronym for CPG,

1 (1m 58s):
Sorry. Consumer Package Goods Industry. Sorry. There's too many acronyms in this industry. I get caught up in it. I gotta I gotta stop.

0 (2m 5s):
Hey, some people knew it, some people didn't. Just wanna make sure. Sure. We're talking about the same thing here at Fire Nation and Doug, as I mentioned to Fire Nation in the intro, we're talking today about how to make your own luck in business. And I love your backstory. I mean, you went from a stable law career to a no name startup in the food space, no less. Tell us that story.

1 (2m 29s):
Yeah, it, I always like to say a straight line between taking the bar exam and then then making ice cream with Halo Top. But you know, for me it, I never wanted to be a lawyer, but I, I kind of, I also didn't wanna work coming out of college, so I figured law school would only open doors, it wouldn't close doors. And then I started working at a law firm for a year, only after. And what happened was I met my, my former business partner, the, the founder of Halo, he also was a lawyer at another law firm. We met in a lawyer basketball league. If you, if you can believe the level of competition that was there, I like to think I was one of the better ones, but that might just be my memory. Who knows. At any rate, when I was quitting law firm, cause didn't do it, I talked to my former business, were basketball court warming up, told about this ice cream.

1 (3m 17s):
He that was low calorie, but I actually tasted good and I said that that can't be true, but I tried it and it and joined and the rest is, is history. But that was, that was it. It it sounds maybe a little easier than it was the, the, the debt that I, and the great paying job that there, but I never really thought, thought about it as a risk. I'll be honest. I I just, I took the leap and that'll look back. Well,

0 (3m 44s):
I wanna get a little more specific now because that was a good overview. But I mean, you took Halo Top from literally obscurity to the number one ice cream brand and you beat all powerhouses. We're talking Ben and Jerry's, everybody knows them. That's why we all have a couple extra pounds right now. Hogan Doss, I mean you scaled from 2 million to more than 350 million in retail sales and just two years. So let's get some details on how you did this

1 (4m 12s):
Before we got to that crazy growth period. We had three, four years from 2013 through 2015. We like to call 'em the dark ears where things were not going well. We lost as many customers as we gained. We got discontinued and lost more than half of our stores. We had to make a lot of critical and ultimately, in hindsight, strategic decisions about rebranding, about reformulating. And, and then we, you know, we, we got some lucky breaks, which you're gonna need. We got some, some great PR at the start of, there was this GQ article with the headline, I still remember it. What it's to this magical healthy ice cream 10 days straight where Crazy Ate Nothing but Halo Ice Cream wrote GQ articles of ofs on us, after which we as a brand really the best way to describe it's, we went viral.

1 (5m 5s):
And again, you you hit those numbers from, or went from just that part. So

0 (5m 20s):
You mentioned that you really struggled in the early life of Halo Top, like back in 20 13, 20 14. Let's get real specific. What was one of those biggest struggles that really shook you up?

1 (5m 31s):
The main thing was the product. It, it wasn't good enough. And I kind of just, you know, I don't mean to bury the lead there with, you know, talking about how brand isn't important, but I think you see the stories of like the Red Bulls, the, these lifestyle brands, even the Coca-Colas with like their, you know, their polar bears and their, their Christmas ads and stuff. And you get, at least we got caught up in, you know, being, becoming a lifestyle brand and, and how important that is and how much brand matters. And what we lost sight of or didn't realize was if your product isn't good enough, your brand doesn't matter. And if your product is good enough, your brand doesn't matter. So we, we learned that the hard way cause our product wasn't good. It was chalky, it was too big of a compromise and texture.

1 (6m 13s):
It wasn't mind blowingly good, which is kind the standard we now hold ourselves to both on ice cream and in chocolate. So that, that was the biggest thing for us. And, and when you, you start to lose your store count, when you start to lose customers and when you're burning through cash, I, I tell you, it's a, it gets very, very, to say the least.

0 (6m 31s):
Did you have like a come to Jesus moment with the taste? I mean was there like some situation where you finally sat down and you're like, this is just not working because this ice cream is just not good. Like, was there one of those moments, was it you yourself, was it one of your customers, was it one of your friends, family, people on your team? Like how did that really just get hit home in the moment? Like, I know there was a slow realization, but what was like the moment it all came like as so obvious

1 (6m 57s):
When we lost our biggest customer or our biggest grocery store, I should say. We lost Sprouts Farmer's Market and at the time we probably had about 500 stores of which Sprouts was of roughly 300. And that was the wake up call that was, something's not working here, something's not right. And to your point, there had been a slow buildup, you know, when you sample it with friends and family and you can tell that, you know, they kinda smile at you. They kinda, they don't wanna tell you like, Oh this is not very, they don't be that harsh with me. But you, you know, you can tell so that the slow had been happening, the rug got pulled out from once you get discontinued that that is, that doesn't wake you up.

1 (7m 38s):
Nothing Will.

0 (7m 39s):
Now on the flip side, like what exactly did you do? I mean obviously you went back to the reformulation table, obviously you put quality of, of ingredients at a much more higher level and you know, I know that's one of the things that really brought HOAs to its prominence is really quality of the ice cream and the ingredients. Like what was that for you and like when did you finally know that okay, now I know that we had a good brand with Halo Top and we were doing that and that was where our focus was. But now I think we actually have a good product.

1 (8m 7s):
We spent four weeks reformulating actually at a university at Cal Poly in San Luis Obispo and with, they have a dairy science department, which is the whole thing. And we worked with some of the PhDs there, really diving into the science and the technical features behind ice cream. The ultimate result though, in what we were trying to get to was ice cream that performed like ice cream creamy, no compromise on taste or texture. And for me the standard is 99% of people who try your product, it should retain them. The product should do the retention itself. If that doesn't happen, it's really not worth the time and effort acquiring a customer. Cause it, it'll be like putting water in a leaky bucket. It just won't, it won't help.

1 (8m 47s):
And it's too much time, too much effort, too much money to do that.

0 (8m 51s):
Now of course the name and the brand matters a little bit. I mean, if, if you had gone out with Brown sludge, I mean that may have had a hard adoption but you know, you did actually focus on the branding at the beginning, you know, like you said, a little bit to your detriment. But let's talk about the evolution of Halo Top. Like how did that name came to be, the one that you chose?

1 (9m 9s):
It's a great question and, and I wish I had a better story. I wish, you know, we had gone to Burning Man and you know, had some peyote or something and had this great vision, but for us we actually were called creamery and like Garden former, if you if goes back and grandma's it's homemade know picnic, you know, with your grandparents back in the day it didn't scream healthy ice cream, it didn't low calorie ice cream. So we went back to board and redesigned what it's were of the first brands first just slap calories right on.

1 (9m 50s):
Hmm. Can't that really inspiration Apple, we wanted to be minimalist. If you try to say everything, you say nothing. So we, what's the thing, say let's it a mountaintop and for us know pint than three hundreds. So that's, that's of then the to it, it 7, 8, 5, 5 Halo Top had we had a gold lid. So that was the one thing we said, you know what, that can kinda of be like a halo on top. So that, that was the big thing for metallic gold lid phone number was available. So it's a more practical, in hindsight, I actually, it's great brand name I, there's Legs you can play a health halo.

1 (10m 35s):
I'm really happy with it. I wish we had the foresight to say, you know, this was a deliberate decision and we knew it was great, but it, it was way more, you know, practical matters that kinda took over at the time.

0 (10m 47s):
Yeah, you were definitely ahead of your time there. I mean I, I'm looking at some images now on Google Images and it's just like right there on Halo Top, like 280 calories, 320 calories. I mean it's just, boom, that's the first thing you see is the biggest thing. And then, you know, of course I might make you kinda scratch your head and it's like, well this is 280 calories. Like what's this Pine of Ben and Jerry's like, oh nine 70 or oh 1120. I don't know off the top of my head what it is, but like, you know, it's obviously a lot more and it's just, it makes you kind of like, no. Well let me kind of compare here a little bit. And this is an interesting way to look at things in Fire Nation. We have some really cool things to talk about as soon as we get back from thanking our sponsors. If you're a creator looking for new ways to connect and interact with your audience live, then I'm excited to tell you about Speakeasy.

0 (11m 33s):
A new app made by creators. For creators that is uniquely built to help you monetize your audience, all you have to do is download the Speakeasy app, go live and you'll be connecting with an interactive audience who can comment, give live reactions, join you as a guest, share with their friends and followers and more. You can use Speakeasy in so many ways. Live podcasting, show recordings to upload pictures and videos you wanna share with your audience or to host premium content. People can subscribe to Speakeasy doesn't censor content based on political, religious, or personal views. As long as you're not instigating violence, you can speak your minds. I'm going live on Speakeasy Daily Fire Nation and I know you're gonna love this platform. So what are you waiting for?

0 (12m 14s):
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0 (12m 54s):
If that's the case, then listen up. Customers end up bearing the brunt of this disconnection, meaning a great customer experience is lost sometimes forever. Ready to get your team on the same page. HubSpot transforms everyday conversations, strategic decision making sessions and everything in between into moments customers feel good about. With a lovingly crafted suite of tools, you can seamlessly connect your team so everyone has access to the same data and you're able to focus on what really matters your customers. Learn how HubSpot can help your business grow better at hubspot.com. Doug, we're back and my audience is built up of entrepreneurs, small business owners and the goal of many of them is to one day potentially sell their business.

0 (13m 40s):
Talk to us about your experience doing just that.

1 (13m 43s):
Yeah, so we sold September 27th, 2019 is when we closed. I'll never forget it cuz that's the day the money hits the bank account and that's the, the only day or the first day I should say that I exhaled cuz it's a a very stressful thing to sell your company, especially if you have to sell your company. We, at the time we have to sell Halo Top to get liquidity and to pay off some of our debt. So, but the way it works, I, I learned this so this is all, you know, telling what I learned basically. But it's about a six month process, give or take usually hired investment banker. Most people probably heard that term, I didn't really know what it was, but effectively just like I'm selling a product of ice cream with a halo investment bankers, their products are companies, so they companies to other people, other companies, but they're, and with of a kind of preparing materials, you a sales kind of putting your company together a way that you pitch for sale, a a Rolodex, potential buyers reach out to relationships.

1 (14m 45s):
They, you, you've got this Halo Top, it's looking sell would be in, they drum up some interests, usually do some initial meetings. In those initial meetings you get some initial bids. After that you enter a diligence phase, usually about 30 days. At the end of diligence you are final bids which are binding. You choose which bid you like, you're lucky, get one. And from there you negotiate a purchase agreement, you sign it and then you close. So again, start to finish there. From hiring the investment banker to money in bank account, usually about six months, but it's fairly straightforward once you hire that investment banker, they, they again, really, they have that Rolodex, they've, you know, buy and sell companies is their business.

1 (15m 26s):
So that's, that's, that's how you do it.

0 (15m 29s):
Any regrets?

1 (15m 31s):
No, no. I would say a, a word of caution or, or just maybe bringing it back down to earth is, I think if you can sell a business for $1, that in and of itself is a monumental feat. I think we, we all get caught up in, you know, the, the romanticized nature of entrepreneurship and startups is people are always chasing that billion dollar this or that, you know, unicorn status. I think that does a real disservice to people. If you can sell your business $1 to another business, then then you, you've had one hell of a time and, and what a crazy achievement that is. So it is really, really hard to do that. There's so much outside of your control in terms of the other companies and, and how they're lined up strategically with their cash, with their strategy, with their people that, you know, you, you really, you have to get some lucky breaks.

1 (16m 20s):
It has to be right time, right place to be able to sell.

0 (16m 23s):
What's the biggest piece of advice for someone who's currently running a business that they one day want to sell your ticket to?

1 (16m 29s):
Freedom, in my opinion, or your ticket to sell in my opinion would be cash flow positive and profitability. Get to there as quickly as possible. And all that will do is you'll have freedom and flexibility. So then you can be opportunistic when you sell. So you can sell cuz you want to, not cuz you have to. So I think again, a lot of startups, us included focus on top line revenue and these multiples, you've heard four or six, you know, billion dollar this, billion dollar that as opposed to, you know, what, if you're cash flow positive, if you're profitable, you never have to sell. You can just keep collecting money out of the company, turning money out of the company via the, the cash flow from operations.

1 (17m 11s):
So I think that's critical. And again, most, at least when we were going and when we had started Halo Top in, you know, that was not what you were told. You were told to chase topline revenue, you know, damned and that's great. You're wouldn't count business and territory, territory.

0 (17m 34s):
I've interviewed over 3,700 entrepreneurs over the past decade and a lot of my past guests say that the day they sold their company was the worst day of their business life. Was that the case for you?

1 (17m 48s):
There was no joy in it. It not, not one second, not one else. It was pure relief for me. You know, our, my story, my personal story at least was, you know, we had to sell, if the company didn't sell, it was bankrupt. If the company didn't sell, I was bankrupt at this time. I now had a wife, kids, a mortgage, that kinda stuff. So it wasn't just me anymore. And, and, and then I know we had a five employees, many of whom I recruited the know, personally responsible and you know, I even about now I'm talking, I'm kind of shaking it, it was pure relief, A pure exhale for me.

1 (18m 31s):
No, no joy, no fun, no happiness. So I dunno if it was the worst day of my life, but I I do know my emotion was one of relief in relief only.

0 (18m 41s):
Yeah. And you order a different situation because again, there was that need to sell. A lot of the people that I talked to actually sell for a lot of profit and they don't need to sell, but it's just a great opportunity for them to sell and they think that's why they did it. But then like, it's like their baby's been taken away and now they're like, I have no relevancy in life and now this other person's running my company and xyz. So I think there's a lot of emotions that are going in there on a lot of different levels, but what's crazy is that that's causing you to shake a little bit like you just mentioned, but you decided to try to do it all over again with Gatsby Chocolates. Why did you do this and what's different this time rounds?

1 (19m 20s):
I guess I'm a, I'm a glutton for, for punishment you should say. But you know, I think for me, I, I thought about what I enjoyed the most and what I liked the most and, and what I love the most with those dark years that I alluded to earlier in our conversation where, you know, it was only three of us, but it was the best times and it was also the worst of times, you know, but it was the best times in the sense of there's this intimacy, this camaraderie, you know, we were going to farmers markets, we were slinging ice cream in stores, you know, we were hustling and there's this purity and innocence to, to the grind, particularly for first time entrepreneurs that I think I'll forever be chasing again. So it's kinda my way to chase that feeling and, and to bring along a few people with me to do it.

1 (20m 5s):
Try to do it together again as a team. Again, taking the lessons obviously that I know now and that I've, so that that's what, that's what drove me to get back into it. I I definitely had forgotten how hard it was if, if I be honest there you, I had, I had certainly romanticized in my head, you know, this vision of the good old days in the, and certainly glossed over my memory just, just how hard, it's just how of a grind. It's, and, and just how much goes well.

0 (20m 32s):
So why Gatsby Chocolate? Tell us about this company.

1 (20m 34s):
Yeah, so Gatsby Chocolate effectively is the Halo Top of chocolate, but we sold the Halo Top brand, so can't use that brand name in the US So, but effectively it's, it's, it's a chocolate bar or chocolate products I should say cuz we do a peanut butter cups and Gatsby gyms, which is our m and m item and plenty of other standard chocolate products, but effectively it's less than the calories, it's quarter of the, and I'm telling it tastes just like great indulgent melt in chocolate. So it truly is compromise. It's closer than Halo Top ever was to the Ben Jerrys and Hagans. As good as think Halo was. Gatsby Chocolate is something that don't give to, they'll just, that's great.

1 (21m 17s):
Chocolate Calories Quarter is Standard Mind's and there's no other low calorie chocolates on the market. Literally none. We're the only low calorie chocolate out there of the low sugar chocolates. They're still double the calories. So, you know, for us that was the big differentiator was caloric play and we texture truly melt, indulgent. You know, we could be onto something special here. Let's, let's give it a go.

0 (21m 50s):
Do you ship to Puerto Rico?

1 (21m 51s):
Funny you should ask. We just hired a broker who, who does represent to Puerto Rico. Yes. So we hopefully in 2023 will launch in Puerto Rico, but not yet, but, but hopefully soon, coming soon.

0 (22m 2s):
Fire Nation and love hearing this story and I actually love the direction you're going because I'm a little bit of a health nut myself and just seeing, you know, the health problems in this world and how, you know, sugar is such a leading cause of that and how overindulgence in calories is such a big cause of that, you know, for people to still be able to, you know, cuz people are, they're gonna get their fix one way or the other, but if they can get their fix at a quarter of the sugar and you said less than half the calories, I believe, I mean that's just a fantastic value adding to the world. So this is the kind of thing Fire Nation where I love to bring on guests just like this. So Doug, take the mic, bring us home. What's the one thing that you wanna share with Fire Nation?

0 (22m 45s):
Any call to action you have and then we'll say goodbye.

1 (22m 48s):
Sounds great. You know, I would, I always just like to encourage people, particularly if, if a lot of listeners or entrepreneurs, you know, just take that leap. I feel like a lot of people are still kinda have foot in one foot, maybe not even one foot in, but you know, if you can the monetary value as motivation and, and you just find, find joy in the process. Find joy in the people, find joy in the team building, I think you'll never regret taking the leap and, and even leaving, Mike, I did, you know, a $200,000 a year legal job to, you know, take a flyer on a startup and see what happens. So just take the leap.

0 (23m 26s):
Any call to action for the listeners,

1 (23m 28s):
You know, if you wanna connect with me, I'm, I'm on LinkedIn, I accept every single request. I love talking to other entrepreneurs, helping, mentoring in any way I can. And if you wanna check out Halo Top or Gatsby Chocolate HaloTop.com, GatsbyChocolate.com, Halo Top I believe is available in Puerto Rico and Gatsby. Hopefully next year's. Stay tuned.

0 (23m 48s):
Love it all cuz Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with DB and JLD today, so keep up that heat. Head over to eofire.com type Doug and the search bar, his show's page will pop right up. Doug, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that we salute you and we'll catch you on the flip side. You

1 (24m 11s):
Got it, I appreciate it.

0 (24m 13s):
Hey Fire Nation, a huge thank you to Doug for drop in value bombs and sponsoring today's episode, Fire Nation. What can 3000 of the world's most successful entrepreneurs teach you? How about how to achieve financial freedom and fulfillment? My first traditionally published book, The Common Path to Uncommon Success is a revolutionary 17 step roadmap that will lead you to the lifestyle that you've been dreaming about. This book took me 10 years of accumulating the genius of the world's top entrepreneurs, and you can get it all in one place when you visit uncommonsuccessbook.com. I'll catch you there or I'll catch you on the flip side.

0 (24m 53s):
Speakeasy will allow you to create content for your audience. Live, earn recurring revenue from monthly subscribers, stream private shows for select attendees and more. I am loving creating daily content on Speakeasy and I think you will too. Visit getspeakeasy.com to download the app and start rolling. Success story hosted by Scott D. Clarey is brought to you by the HubSpot Podcast Network, the audio destination for business professionals success story features q and a, keynote presentations and convos on sales marketing. In more a recent episode on how to protect your business in times of crisis is a must. Listen, listen to success story wherever you get your podcasts.