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Justin Fenchel_Beyond 8 Figures_Scaling Success with an Employee-First Company Culture

Scaling Success with an Employee-First Company Culture with Justin Fenchel, BeatBox Beverages

January 11, 2023

If your company culture is strong, your business is well on its way to scaling success. So, don’t just think about what your team can do for you, but also what you can do for your team! In this week’s episode, Justin Fenchel, the co-founder and CEO of BeatBox Beverages (which makes “the world’s tastiest portable party punch), shares his advice on successfully scaling a business. 

About Justin Fenchel:

Justin is a disruptor in the alcoholic beverage market. Before starting BeatBox Beverages, Justin spent five years as an equity analyst. Now, as the CEO of a company that combines two of his favorite things, music and parties, he is in his element. 

Episode highlights:

  • Getting from stage one to stage two in business is completely different from getting from stage two to stage three (and so on). Each step of business growth is unique, so find mentors who have been through these stages before so that you can learn from their experiences. (07:29)
  • People often think they can’t talk about their ideas because someone will steal them. Justin has a different opinion: don’t hide your ideas; shout them from the rooftops because collaboration is vital to the success of an entrepreneurial venture. (08:56)
  • Create a culture of sharing bad news, not just good news. When you’re scaling, you can hide in the things that are going right. However, to build a sustainable business, you need to address what’s going wrong. (11:57)
  • Ensure that your team members know that you value them by understanding their goals and helping them reach them. When people feel valued, they will be more motivated, and a motivated workforce will allow your business to thrive. (20:51)

Justin’s best advice for entrepreneurs:

“[Our team] feel valued. They’re not a number. They all have their own desires and goals, and we are doing the best we can to help them to get there. And that’s allowed this machine to move really fast forward.” (20:51) 

Connect with Justin:

Follow Beyond 8 Figures:

Transcript

[00:01:19] A.J. Lawrence: What’s really gonna be kind of cool when we talk to Justin is looking at how his background came out of finance, financial analysis and how he kind of uses this to look at opportunities around business and what can be done, and how he kind of built his career of different companies and then moving into being co-founders of different types of companies to now this really just fun, fast growing brand.

[00:01:45] He will talk about the importance of learning. Now, he moves and we all talk about creating the learning organizations and processes and stuff. Justin will go into a little bit more about creating it, making it a little fun, because the importance of leveling up is really something that’s important. Because in his beliefs, each stage is gonna be different so you have to approach each level differently.

[00:02:12] And the way about doing this is to find mentors and people who’ve achieved these levels that you are looking to and to be open and honest about your difficulties, approaching them, so you can get valid feedback. And then kind of pushing that into the organization and supporting that type of growth from your own employees. So it’s really kind of cool way he talks about this.

[00:02:35] Also just talking about your ideas, everything from starting the business to different ideas to move forward. So often people wanna cloak everything into secrecy and keep it to themselves in their own little personal hothouses until it’s ready to go out. And Justin will kind of share about how cool it is to actually go and shout it from the rooftop and get people to either partner with you early or to just be excited and help support your own growth.

[00:03:07] Two other things I found really cool in this conversation we’re about to hear: how he promotes the culture of sharing bad news, not just good news within an organization. Especially when you’re growing quickly and you’re leveling up and all this, you really wanna make it so employees aren’t worried about having bad news. You wanna make sure that no one’s worried about shooting the messenger or being shot as the messenger, I’d love to say this appropriately. But also just that you treat it as this opportunity to evaluate and learn.

[00:03:41] Going back to that learning environment, well, part of that is supporting bad news as just part of the business. And then figuring out if there’s opportunities to make changes and pivot as need be. It’s really kind of cool how we talked about supporting that as part of their overall growth and just being, overall just being more nimble. So look, I really enjoy talking to Justin and I hope you enjoy listening and learning from him in a second. So let’s go talk with Justin.

[00:04:12] Hey Justin, thank you so much for coming on the show.

[00:04:16] Justin Fenchel: Happy to be here. This is fun stuff.

[00:04:18] A.J. Lawrence: You have such a great story as an entrepreneur. I think when I took my MBA course, now this was the early 90s and entrepreneurism wasn’t as hot in any shape or form. I was like one of two students who signed up to do a project, and I think we developed a distribution company.

[00:04:36] So not sexy or fun in any way, but I just love the story of BeatBox. But before we get too much into that, with the growth of BeatBox Beverages and what you’ve been able to do with it, where do you see yourself as an entrepreneur these days?

[00:04:52] Justin Fenchel: It’s been a journey, right? Starting actually at the McCombs Business School, MBA program in 2011, to now. So over 10 years of working on this thing.

[00:05:01] I think where I’m at now, when we started, you’re just figuring. You’re doing everything, right? You’re the lawyer, you’re the accountant, you’re the manufacturer, you do all of that, which is different now where we have close to 80 full-time employees.

[00:05:18] And so the position of of an entrepreneur kind of pivots from the doer, of course, you’re doing things and you’re strategizing, but more of a leader and almost like a people manager and culture leader. And our company culture is so strong, but how do you keep it that way as you are in this hyperscale mode?

[00:05:39] So myself, Amy, and Brad, the other co-founders here, our job is to make sure that the team we have, that we’ve brought in, these amazing experts in their fields from some big companies, some small companies, but they’ve all done really incredible things, how do you keep them excited and keep them motivated and give them the tools and resources that they need to do their job day in and day out?

[00:06:04] So I would say it’s pivoted from in the weeds every day doing everything to okay, how can we put this puzzle together the best way possible and accelerate things?

[00:06:14] A.J. Lawrence: That is that kind of classic move. But it is kind of cool to see it in this concept because once again, fun drinks are a business structure. Being able to go from, hey, we have crazy Kool-Aid in the back, and I’m trying to remember what we used to charge like 50 cents or mud buck whatever back in the day, in our dorm to like a full-on growing national business. It is kind of cool to that structure.

[00:06:44] What’s helping you the most in this as you transition to helping support your team and forcing yourself to then give them the capabilities? What helps you the most improve that capability for yourself? What helps the most?

[00:07:00] Justin Fenchel: It’s fascinating, right? Cuz I say this to our team all the time, is this is new for all of us. I’ve never led a company that’s gone from just a couple million in revenue to close to $40 million this year. So you’re talking about two years growing from 4 to 40, right? So this is new for all of us. And it’s amazing and we’re lucky to be in this position to even be talking about this.

[00:07:21] But, we’re all learning how to manage that and the concept of kind of leveling up, right? What got you here won’t get you there. From my perspective, managing a business that’s doing 2 million in revenue versus managing one that’s doing 40 is completely different. Every six months the company is different than it was six months before.

[00:07:42] Twenty new people, you have new systems, new processes. And so it’s a lot of relying on mentors and folks that have scaled business before that have helped us put in systems. One example being we had an investor that’s big in the entrepreneur’s operating system, the EOS framework, and so setting meetings that way and creating scorecards and all of that is really, that’s one example of leaning on people that have been there before to help us think through things.

[00:08:10] We’re very collaborative. This is not, like we never proclaim that we know all the answers but we’re going to get together and figure it out. So the combination of just being kind of empathetic to everything that’s going on, understanding that it’s challenging, our team is stretched, we’re doing a lot.

[00:08:28] Acknowledging that it’s hard and that we have not been here before and there’s going to be things that are frustrating and there’s going to be things that are tough. But, we’re gonna figure it out together and then using those mentors and other folks that have been there to help see us through.

[00:08:43] A.J. Lawrence: Maybe let’s talk about picking up how do you go about finding the right mentors? What are the things that you know for you make it? And then let’s talk a little bit about how you interact with them.

[00:08:55] Justin Fenchel: Yeah, I mean, like from day one, I think people get into the misconception that they have some idea and they can’t tell anybody about it because someone’s gonna take their idea, right?

[00:09:06] That’s like this other thing I hear is like, well, I can’t tell you this idea. And I think that’s the wrong way to do it. My personal opinion and my experience was we shout it from the rooftops, right? We were three kids in our mid 20s that had no alcohol experience and were trying to do something, with no idea.

[00:09:24] And it’s funny. Tito of Tito’s Vodka, who is a mentor of ours from Austin, early on we had a chance to sit down with him and he said, you know what I love about you all is that if you had any experience in alcohol, there’s no freaking way you would’ve started. Right? But that’s what I love about it. That’s why you’re gonna succeed. Because if you had any experience, there’s no way you’re making neon boxes of this.

[00:09:44] And so I think telling everybody we knew about what we were doing, and then someone’s like, oh, I’ve got a friend that was a lawyer for a beverage law firm. And it’s like, okay great, like let’s talk to them. And then it’s, oh, I had a friend that runs a 7-Eleven franchisee or something, whatever it is, right? And then all of a sudden you’re like, okay, continuing these conversations and asking them, Hey, like, can I pick your brain? And people early on, especially in Austin, were very willing to help out. It’s very collaborative entrepreneurial city, and I’ve tried to pay it forward too when people reach out to me.

[00:10:18] People are really willing to help. No one’s trying to take your idea. If someone was able to take our idea and do it better and faster and quicker than us working on it as much as we were, then we shouldn’t have been in business to begin with. So I think that was the start of it.

[00:10:31] And then from raising money, we have got, if you include all of our crowdfunding investors, it’s over 2000. But bank investors, individual in the cap table, close to 90 people. And it’s keeping them in the loop, making them a part of the process. We are very, very diligent. Every single quarter we send a very robust investor update, asking for things, we’re following up with investors. I’m constantly fielding investor questions and calls and maintaining those relationships and making them feel connected.

[00:10:58] Obviously it helps when you’re winning, like we are. They’re much more willing. When you’re winning, it’s much easier. We were struggling for several years, so we had investors that were like, oh, I know this, or I used to run a company that did this and here’s my thoughts. And you take all those little things and you apply it to your own situation and see what works. So it’s worked for us.

[00:11:17] A.J. Lawrence: Before talking a little bit more about the mentors, I love that you did quarterly cuz I was an angel investor in a lot of things. I jokingly have told people like, oh, when the updates get bars or they stop doing it, it’s time to downgrade the investment value because everyone gets embarrassed to talk about the negatives versus the flow.

[00:11:39] I believe those types of updates, as someone who’s gone through the process trying to sell my own company and have sold a few, those updates, the good, the bad, and the ugly, that kind of key that we talk about telling everyone. But it also keeps you honest in a sense.

[00:11:56] Justin Fenchel: Yeah. It was after Shark Tank. We got a deal with Mark Cuban on Shark Tank, which is amazing. And his request, so we’re, part of our deal was to update him every week. His number one thing was, I want bad news first. Do not send me an update without telling me what’s going wrong first, otherwise I won’t read it. And we kind of have used that with our team, right?

[00:12:20] People don’t wanna tell you the bad, but that’s what we wanna hear. That’s the only way we get better. And the only way you can help is if you know the bad. So that, we’ve implemented that across the board.

[00:12:29] A.J. Lawrence: I like that. Yeah. I’ve always used the stoplight red, yellow, green, boom, boom, boom. But yeah, I like that. That’s a cool way of doing that. It’s a simple, yet very difficult to continue ongoing.

[00:12:46] Justin Fenchel: It’s very difficult, but it’s necessary if you’re gonna grow. Because when you’re scaling like we are, you can easily hide in all of the incredible things that are going on, but then you don’t think about the things that aren’t going right. And we’ve done, I think, so far a good job of listening to our team and quickly, that’s our advantage over Anheuser-Busch and Molson Coors. Those are cruise ships that have to turn very, very slow.

[00:13:12] And we have to be that jet ski that’s like, okay, this is what we’ve seen. Boom. We’re shifting and we have made changes in the organization within a day or two that have really impacted us. And that’s how we’re gonna continue to win.

[00:13:24] A.J. Lawrence: Okay. Then to a certain degree, that capability from a leadership point of view is part of that scrappy like, all right, let’s figure out how to get this done whatever way. I always call it the blood, sweat, and tears approach. Until you get further along, you build that process. You were talking about keeping on mentors, reaching out, finding people early on, but now as you are growing and you were talking about building process and supporting, how do you make sure though that you are capable of remaining nimble, remaining innovative as you also continue to build structure?

[00:14:00] I was just reading some articles about your growth and like switching over to the beer distributors alone. I mean, there was just this quick sentence. But like the numbers that changed, that had to change a complete process on the backend for your whole system of how you were doing things, cuz those were big numbers to switch quickly.

[00:14:20] Justin Fenchel: Yeah, that switch to the beer networks was bigger than anything we had ever done. Right? So we had a five liter bag in box, an 11% box of party punch. It was great, but it was expensive. It was $20, $25. Not everybody needs the equivalent of seven bottles of wine, right?

[00:14:39] It was made for large parties and we needed a trial size. So we launched the single serve, which has done really well in convenience stores, but in alcohol you have two different paths to market. One, well, you have to go through a distribution company, not like e-commerce or anything. We sell, our customer is a distributor. And there are two paths, you can fully go through a wine and spirits distributor or a beer distributor.

[00:15:04] So wine and spirits distributors, there’s two huge ones, Republic and Southern Glazer’s. They are dealing with very expensive cases of tequilas and fine wines and whiskeys and vodka, et cetera. On the beer side, you have the Anheuser-Busch and Miller Coors networks that are distributing beer. And they are fast moving, they’re selling to 7-Eleven, Circle K, right? That’s their bread and butter is the convenience channel and grocery channel.

[00:15:30] And so with the single serve, we were with the wine and spirits network. But they don’t have the infrastructure to support the convenience store channel as well as the beer, simply because they don’t sell that much wine and here in Texas you can’t even sell spirits in a convenience store.

[00:15:46] And so, we then switched to the beer networks that was fundamentally game changing to us. But even that decision was driven by one of our investors who used to run sales for a very, very large vodka company, Deep Eddy Vodka. And he loved our brand.

[00:16:03] And he said, look, I know what you guys are doing. I love the brand, I think it’s got a ton of potential. But I know the folks at your distributor, which is Republic Nationa. They were wonderful to us, they just weren’t the right fit for that product we launched. And so he said, I know those folks there. They love you all, but they won’t be able to service these accounts like you need. So I’m only gonna invest if you switch to the beer networks.

[00:16:25] And we said, what is a beer network? Like we didn’t even know. We had this moving so fast, right? And we got with this wine and spirits network, then we went on Shark Tank and things were just going. We didn’t even have time to think, is this the right distribution network? It was just like, let’s go. And so that was the biggest decision we had ever made as far as like allowing us to scale. And that came from a strategic investor who helped us out.

[00:16:49] A.J. Lawrence: When that happens, you know, I love that kind of like, oh, that’s possible. I’m in the middle of having sold a few agencies, I’m now kind of diving into the acquisition entrepreneurship, and it’s like I keep finding one, everyone has their own vocabulary. So it’s like, wait, what is this? Oh, it’s that. Oh wait, but it’s like, there are these things. Oh my God, that saves me a gazillion, like it’s a snippet of work code. You can kind of just move into your process.

[00:17:20] Okay, so this happens. That’s wonderful that you’re able to all of a sudden start selling more, but you have to produce market. Like yes, it may be incremental, your infrastructure requirements, but it is still significant especially with those numbers. How do you change the organization to adapt to that type of growth? What helped you in that process?

[00:17:42] Justin Fenchel: We like to say none of it works unless all of it works, right? And so finally on the sales side, we had the right distribution, the right product, the right distribution, and we started to hire people from the beer industry.

[00:17:53] But if those folks sell it into the stores and no one’s pulling it off the shelves, that doesn’t matter, right? So you have to have the right marketing machine of what works for your specific brand. And then if you have the marketing team killing it and the sales team’s doing great, but you don’t have the backend operations to produce it all, then none of it matters anymore. So all of it has to run together. And if you don’t have the cash to do all of it from the finance side, then what? You’re not even in business.

[00:18:19] And so, all of those have to work together. I think we found a wonderful manufacturing partner. It took us a while to find one. Our first one was, we had some challenges with. But we found one actually in Mexico. And we have built an incredible relationship with them. And so, if you’re not owning the process of manufacturing, which I would not recommend if you don’t have to, like we’re sales and marketing people, we are not. And so by pulling that out of it, we can focus on what we’re good at, which is sales and marketing. Right?

[00:18:51] So contract manufacturing, we found it’s hard to find really good ones that you can grow with. We found one that’s invested with us, that’s gotten our margins better. They’re installing a second machine, retrofitting a third machine. So they are like all in with us. It’s much more of a familial relationship now as we’re growing together. So that was really important.

[00:19:11] I think from the personnel side on our team, what’s really allowed us to be successful is I really look up to Jeff Hoffman and we’ve seen him speak a couple times. Founded priceline.com, amazing philanthropy, entrepreneur, everything. When he was growing Priceline and he was looking to scale and hire lots of people, he’s like, well, I don’t know about hiring. I wanna learn from other companies that hire.

[00:19:40] And he went and he applied to all these different jobs in the text and he sat through the interviews and he said, the running theme of all these interviews was everyone’s asking me how I can help them. They’re like, what can you do? Like we’re trying to do this, we need this, we need this, we need this. Can you do that?

[00:19:58] And he’s like, well, what about me? What about my goals and my dreams? And he started to flip the script in the interviews and he would ask people, what can we do to help you and your career? Like we are a platform hopefully for you. You’re human, you have goals, you have dreams, you’re passionate about things.

[00:20:15] And so we started to implement that on the interview side. And it’s like, look, the company does have needs, there are roles and responsibilities and things that we need to get done. But before we get to that, what do you like to do? What gets you excited to wake up every day? Where do you want to be in a few years in your career?

[00:20:32] And if you’re telling me you love competition, you love adrenaline and excitement, and you love selling and all these things and you’re not getting ’em outta your other job, well that’s what you’re gonna get here. It’s fast paced, it’s crazy, but if you like that, you’re gonna thrive here and then you match that with the skillset.

[00:20:48] So everyone that’s coming in, I think some of the feedback we get from our team is they feel valued. They’re not a number, right? They all have their own desires and goals, and we are doing the best we can to help them get there. That’s allowed, I think, this machine to move really fast forward. So that was a fundamental shift in my perspective as a manager of just flipping the script in the hiring process and following up.

[00:21:13] And I do one-on-ones with our sales team at minimum once every three months, oftentimes more. It’s a lot of time, but it’s worth it because, you know, feedback. They feel a part of the team. The Ray Dalio Radical Candor and Transparency, we try to tell everybody what’s going on all the time. All of those little things I think have led us because it’s very easy for things to go off the rails if you don’t have a tight system as you’re scaling.

[00:21:39] A.J. Lawrence: It’s interesting because I agree completely, as someone who did go through like two years of doubling each year but pretty much keeping the same infrastructure that I had before and getting my ass kicked. Restructured, regrouped, but like lost my passion and I realized it was like, oh, you know, lots of little mistakes in there, that system.

[00:22:06] But you brought a couple of really interesting things that you started integrating, the EOS, the Radical Candor, were there certain points in your growth where they made more sense? Cuz I know there are people who swear from it from the moment they think of a business concept. Two, people swear you can’t do it unless you already have 20 people and blah, blah, blah, blah, and all this.

[00:22:29] So maybe we talk about that and then the radical candor one, because that’s also another difficult thing. I know people who start with that concept and do it, but to truly kind of follow into that and the processes that it requires, a lot of times, I believe you have to build into it. But for you guys, what was it like? Like when did it make sense for you?

[00:22:51] Justin Fenchel: When you’re just figuring everything out, I don’t think the EOS system makes sense. And I will say even though we do use EOS, we are not like a robotic EOS, like this is the only way to do it. And even that person that helped us kind of think about it was like you are scaling too fast to slow down, right?

[00:23:10] Because you know when you’re going as fast as we’re going, you don’t have time to bring everybody in and building from the scratch on these systems. But things like a level 10 meeting with an issues list and focusing on that, that’s super easy. You don’t have to have a whole EOS system to start thinking about things from how do we solve issues and all having a scorecard for by department.

[00:23:31] You don’t have to have a whole T EOS thing to have scorecards for every department and putting together rocks for the quarter and the year. Those are little things from EOS that we’ve implemented that have helped us. But I wouldn’t say we’re like, we don’t have like a full-time EOS implementer or some of those things.

[00:23:50] So we’ve picked the parts that really have added value. And same with the Radical Candor. It is a lot. It is a whole other system to do that through and through like recording meetings for everybody, like all of those things, or having baseball cards about who you are. We are very open about when we’re fundraising and what that means in cash positions.

[00:24:12] It’s like anybody that asks me anything that’s going on, I’m going to answer them. Right? And I have those conversations. We have this top to bottom open door policy, where we keep everybody in the loop as much as we possibly can. I wouldn’t say we’re like all in on this one system of radical candor, right? So I think it’s picking those moments from it.

[00:24:31] A.J. Lawrence: And did you find that approach though, even if you’re not fully implementing. Let’s just talk about when I was at like 15 to 20 people, I approached that type of effort and long conversations and engaging and da da da. Then all of a sudden I started realizing we had 40, 50, 60 people and I was still kind of being very long winded and all of a sudden was like, wait, why am I spending three days a week talking about you know.

[00:25:04] Were there points where you realized, okay, in utilizing this, it helps accelerate my ability to engage and motivate and support the team and therefore you changed that approach?

[00:25:18] Justin Fenchel: When we had 10 salespeople, it was very easy for me once a month to talk to everybody. Now we have 40 sales people. I can’t talk to everybody each month. Look, I’m still gonna talk to everybody. So we changed it to certain people once a month, some once every two months, and some every three months. But we’re still doing it. It’s just kind of like tweaking it a little bit with the realities of the number of people. So those are the little things that we’ve done to try and keep the culture and the transparency and the connectivity to me and the other founders, but knowing that it can’t be all the time.

[00:25:55] A.J. Lawrence: When you go about looking at all you guys are doing, and I know you have much larger plans, but you know, it’ll be fun to kind of little bit talk about that. Do you have your own definition of success for yourself as an entrepreneur? Not BeatBox per se, but just new Justin. What is success for you going to be as an entrepreneur?

[00:26:21] Justin Fenchel: Sure. I was inspired at the age of 10 years old. My dad was let go from a bank and had a side hustle going at the time. And he was doing some clothing diverting to the big Club stores back in the early 90s and started it. Went all in because he was like, all right, I’m just gonna go for this with a couple partners. Out of our garage in our house growing up and has over the last 30 years turned that into an amazing global logistics company.

[00:26:51] Watching that process from the garage to where it’s at now has been super motivating and inspiring to me. And so I know for my dad, success was providing this amazing life for his family. And now I just got married, actually a couple weeks ago, but he’s got a few grandkids from my sister. And so providing this life for them and all of his employees that he has is motivating for him.

[00:27:17] I think for me, my background was finance. I was an Econ major and worked as an equity analyst for five years, wearing a suit and tie every day coming in, and using all my brain power to figure out if this stock was gonna outperform this stock. And at the end of the day, and the net result was, would I help someone make more money or lose less money? Right?

[00:27:35] I had a salary, it was fine. But for me, it’s so easy to say of like finding what you love to do, what your passion is, and what gets you excited to wake up every day and then figuring out a way to make money from that and then doing that. And I think for me, obviously there’s financial motivations. It’s easy to say, oh, I don’t do it for the money when you’re making enough.

[00:27:56] But you know, now that we are making it up to live a very comfortable, great life. To me, what is success is I get to wake up every day, it does not feel like work. We started this because we love going to music festivals, we love bringing people together, being inclusive. I was always the one that was hosting the pregame before the music festival, and I get more energy from being around people and creating those moments of shared experiences.

[00:28:22] So to do that at scale and to go to these festivals and watch people discover BeatBox for the first time in the moment that it was created, is just so awesome. And then to be able to curate my own schedule and have that freedom, flexibility. If I wanna sleep in on Monday to 10 AM then I’m gonna sleep in on Monday till 10 AM and I’ll work later if I need to.

[00:28:45] But for me, that is the definition of success is waking every day, loving what you do, working with people that you love to work with, creating this amazing environment for other people to fulfill their dreams all while having the flexibility that if you wanna hop on a plane and work from a different city, you can do that. And that’s really cool.

[00:29:03] In my finance job, it was in the office at 5 AM on Monday outta the office at 5 PM on Friday. And you tried not to think about it on the weekends and it was a job. It was fine, but this is way, way better. So if you can do it, that to me is how you become successful.

[00:29:18] A.J. Lawrence: I like that. You obviously with Mark Cuban is definitely a sophisticated investor and then having raised funds and the crowd funds and all that, you do have financial requirements. You have a typical work, but you still are optimizing for your personal direction, your needs within that environment.

[00:29:42] And that’s always that extra layer that I think many times we kind of miss out as entrepreneurs cuz it’s like, oh, we’re just gonna grow. I’m just gonna do whatever it needs. And then it’s like, oh wait, why am I divorced and no kids? I’ve seen that happen too many times. I got lucky I didn’t do that. Yeah.

[00:30:01] Justin Fenchel: We’ve raised a lot of money now, right? Starting with Shark Tank, so we have investors to answer to we have to grow to find eventually liquidity for all of those folks, right? That is something we have to do. But I think that a lot of times people see the Snapchats, the Facebooks, the IPOs and they’re like, I need to do that.

[00:30:21] I need to be in this national, global thing and I have to raise VC money and I have to scale when it’s like, that’s not necessarily true. You can create something that you love to do. And there’s lots of studies, once you make over 80-90K a year, probably a little bit more with inflation now call it a 100K a year, and you’re doing something you love, your happiness level will be as high as it possibly can be.

[00:30:46] And so you don’t have to raise a bunch of like- if you can create something and be profitable immediately and grow it organically and have fun doing it and make enough money to live a very comfortable life, you’re gonna be a lot happier than trying to play the game of I need to do more, I need to raise more, I need to have that star on my name because I raised from this group.

[00:31:06] There’s nothing I would change about our path and where we’re at now. We are as lucky and happy as can be. You know, if we were starting today, maybe it’s different. Maybe it’s like, Hey, we can create this business, we can make some money and scale it and live a lifestyle business and there’s nothing wrong with it.

[00:31:21] A.J. Lawrence: No, and it’s funny, I’m seeing more of this movement towards more sophisticated, not that, anyone that runs a business, the level of complexity is always, no matter what, even the most basic t-shirt selling business, once it gets to any type of size, the amount of work is more than I think anyone outside the space realizes.

[00:31:42] Justin Fenchel: You become a victim of your own success. Now, you need more capital for more inventory. Now you’re betting on everything on this next production run, and then you need more people. And what was exciting about doing that t-shirt business before? You’re not running a t-shirt business anymore. You’re running t-shirts thing that sells t-shirts.

[00:31:58] A.J. Lawrence: Yeah. I mean, when you have a business that does X versus you do X for business. It’s that weird sort of transition. But you’re seeing more people who are, a good friend of mine has a workflow security SaaS. I mean, he was 20 years a security consultant in all the big firms, and he just kept thinking, oh my God, we do all this work tracking and flow and the thing, I jokingly call it the puppy that poops gold, it grows 40% year over year, 78% net margins.

[00:32:31] Justin Fenchel: Yes. Those are great margin businesses if you can get enough customers.

[00:32:35] A.J. Lawrence: And no investors. Yeah, he kind of, he just dinged. His big thing now is like, I have money. What do I do? Do the same thing you were doing when you didn’t have the money and you’ll be fine. Don’t worry about it. But okay, you may have done things differently if you had the chance, but you do have a really good business. This is growing. Do you have like a BHAG or what is sort of like big, big, big goal you wanna take this to and how do you kind of come to that concept?

[00:33:06] Justin Fenchel: When we first had the idea for BeatBox, we said we want to be the Red Bull of the alcohol industry. I remember I was in Prague, Czech Republic doing a study abroad in 2005 and there was an event called Crash the Ice, it was a Red Bull event. Now, Red Bull was still pretty new to the US at the time, but in Europe it was pretty big.

[00:33:26] They did this Red Bull Crash the Ice, which was a downhill ice skating race, and people would fall and it was crazy. You’re like, this is nuts. There was no Red Bull in it other than Red Bull was the presenting sponsor and then you have a can of Red Bull and you’re like, I don’t even own ice skates, but I feel like I could go downhill on ice skates. Right?

[00:33:44] And so the brand of Red Bull was those moments, these action sports, this I can do anything, I have wings, I can fly. The product backed that up, right? And so that’s what’s so cool. And I think with us, right, the brand is of BeatBox is togetherness, inclusivity, it’s fun, it’s music. All of those things.

[00:34:04] It’s getting together with your best friends, your old friends, meeting new friends, and sharing these amazing moments connected around music, not just in the US but around the world. And then the product kind of backs that up, right? It’s got a great flavors, good alcohol content, it’s priced right, and it’s meant to be consumed in shareable situations with other people.

[00:34:23] It’s also eco-friendly, resealable. It’s great for festivals where you can dance with it and not spill your drink. And so all those things. But people become connected to the community of BeatBox, not because of the product. Anybody can put anything in a box. How do you connect with them on this human, authentic level?

[00:34:40] And that’s what real brand is. And then, so we’ve wanted to re- no, we’re alcohol. We can’t throw Red Bull cans off trucks or a tailgate, right? We look up to them and what they did. And so for us, we see the BHAG, if you will, or the next five years is near term, we are on a race to a 100 million of revenue in the US.

[00:35:00] We are still only in 9% of the wine license accounts in the US. We got a long way to go here, and so our team is focused on getting more distribution, getting into more accounts, selling more flavors per account and all that. But once we get to that level of being in half of the accounts in the US, doing well over a hundred million in revenue, we want to break BeatBox is not a craft beer out of Seattle, right? Not a local vodka.

[00:35:25] This is a global brand centered around bringing people together around music and fun experiences, which is universal. It not just in the US. And so bringing BeatBox, like to say, from the warehouse parties in the UK to the beaches of Brazil and everything in between, we see BeatBox being this global brand that can connect people across the world.

[00:35:43] And so that’s where once we get to what we need to, again, you gotta be focused because there’s so many shiny objects anywhere you go. It was Mark’s constant. Every time we would say something, he’s like focus, focus, focus, focus. And so we’ve been doing that. But once we do that in the US, then it’s putting the pieces together to scale this thing across the world.

[00:36:02] Crazy to say like we wanted to be the next Red Bull, we will be the next, the Red Bull of the alcohol industry. That’s what we wanted.

[00:36:08] A.J. Lawrence: Very cool. And it was so funny cuz early on I was like yeah, this sounds a lot like listening to the story of like the Red Bull and this. And then all of a sudden it was like when you said, I’m like, well, perfect.

[00:36:20] I have two teenagers, so this is not marketing advice in any shape or form. It’s anti, but I could still still see this being like the drink when you’re a teenager. But that’s different. I mean, in Europe, yes. It is funny my kids are very disappointed we went from a place where it was 18 but no one cared to 21 and they’re like, what’d you do to us? This is not fair.

[00:36:44] But even more it’s like that is a great concept to bring up because you do have separating it from the extreme sports and the handing it on the beach and all that. You do have the framework of sort of how the brand was perceived and the growth of that brand to then model once you reach that goal, which is also amazing.

[00:37:05] Because it’s like too often I hear like, oh, we’re gonna be this but they don’t realize the infrastructure they need to get to that point before they can support that type of brand identity. You’ll need significant resources to be able to do that. That will be very cool to see from you guys and I can’t wait to show up at a concert and be like, sponsored by, or you know, you’re the new Coachella.

[00:37:32] Justin Fenchel: Yeah. No, there’s so much we can do and it’s very exciting to think about it, but you’re right. You have to stay focused in the industry to try and launch in a new continent is not like you just get to do that, right?

[00:37:44] I mean, you have totally different flavor preferences, totally different laws, totally different consumers, and so. But we’ll figure that out as we get to it. But for now, as I said, it’s we got a lot of room to grow here in the US and to continue the mission we’re on and we’re gonna keep doing it.

[00:37:59] A.J. Lawrence: No. Cool. All right, so other than checking out BeatBox Beverages, what’s the best way for people to get in touch with you? Check out what you’re doing other than going to their local beer distributors of choice and picking up a case.

[00:38:14] Justin Fenchel: If you wanna try it, we have a store locator on our website. You just put in your zip code, and it’ll pull up all the stores near you that carry it.

[00:38:22] But you can always, we’re very active on social media, whether it’s Instagram, Twitter, TikTok. Follow us at BeatBox Beverages, on Twitter @beatboxbevs. I’m on Twitter @wellthisjustin, and you can always engage with me there. LinkedIn as well. Feel free to connect with the brand on LinkedIn or find us at your next festival.

[00:38:40] We sponsored over 100 music festivals this year, and we’ll probably do more like 150 to 200 next year. So we want to be, you know, what Bud Light is to football, BeatBox is to music. There’s never partying without music, and so there should never be a party without BeatBox.

[00:38:55] A.J. Lawrence: Beatboxing at BeatBox. True. Well, Justin, thank you so much for coming on the show.

[00:39:00] I really, this was fun and I love the brand. You have an amazing brand, and even cooler and cooler company you’re developing behind it. So thank you.

[00:39:11] Justin Fenchel: Appreciate it.

[00:39:16] A.J. Lawrence: This episode of Beyond 8 Figures is over, but your journey as an entrepreneur continues. So if we can help you with anything, please just let us know. And if you liked this episode, please share it with someone who might learn from it. Until next time, keep growing and find the joy in your journey. This is A.J., and I’ll be talking to you soon. Bye-bye.

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