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Backstage Interview With John Stepiani

Welcome back to the backstage. I'm Rick Silvestri. Me Joining me now is the CEO and co founder of Crave Jerky. Mr. John Sebastiani. Thank you for joining us. Thank you for having me. Uh, now, I I invited you to be here, and I'm super excited. You could join us. I happen to be a huge fan of crave jerky personally, not only the product, but also your your story. I routinely have, like, two or three bags and my refrigerator, and they don't have to refrigerate beef jerky. Bless. Right. But I like Teoh. Um, So I was introduced to you. I took entrepreneurship class at the University of California, Berkeley School of Business, and the professor, Steve Blank told your story in a really amazing way. Give us a little bit. Uh, would you mind telling that story and kind of your own words about how you came up with the idea for crave what the sort of early early steps were to develop this product and it it's delicious, like it's really love. Sure. So the company was founded and really your classic ...

disruption effort and what we identified was this very stale category of jerky this category that was thought about as something that was a product with riddled with nitrates. It didn't have really any prestige that had a negative stigma. Yet it was a pretty big categories, a $4 billion US category, and when we looked into it a little bit deeper, there were really four companies that had an 85% market share. So it was really that moment of Wow. Here's an opportunity to be very different very quickly in a pretty big category. So I was U C Berkeley as well in Steve Steve Links class, and we had a prototype. We had the idea generally, but it hadn't been tested. It hadn't been invented. And we haven't We like you and a couple of other co founders, you know, actually, me and a co founder kind of Germany. The idea. During the course we had, I had two team members that kind of help during the process. And this is an entrepreneurship kind of lab. That's right. Yeah, that's right, Cool. So we really wanted to test the thesis that here was a product that was by and large a gas station afterthought and was the consumer ready for something of more quality, with more sophistication, with more flavor, a little more glamour to it. And so we kind of walked in the Steve Blank's class and started identifying was where we a Whole Foods customer was that Was that the only person we were looking for? We're looking for women where we looking for men and basically to summarize a lot of detail in our findings by getting out of the building, you probably recall hearing that. Sure, Ah, and doing endless surveys. We spoke with Safeway, and we basically brought the Safeway this this hypothesis that their consumer was looking for a product, that we were a possible solution to kind of enhancing this stale category. And by and large, they gave Tapio literally within days after and so quickly so issued us a check in advance towards the P O. So I was able to go to Steve's class and sort of review what we had done that week, and I was able to take a photo of a $500,000 check and show it up and kind of say this was my customer discovery for the week. Yeah, very cool moment that it's super inspiring. And so now that that's it. An overnight success. But it was like a great idea, really. Ah, lot of work in a very small amount of time to identify a customer, understand the marketplace and then get something Teoh potential buyer on execute over the course of ah, very short period of time. Yeah, but I won't go back a little bit before that. Like disruption as a concept within food within, you know, jerky. You know, what was the reaction when you worked and walked into class and said, I want it. I want to disrupt beef jerky. I think there was There is a lot of, ah, little bit ah, laughter under underneath the undertones. You know, Certainly people don't immediately, uh, think of beef jerky is something that you want to aspire to to get involved in. It's it's an afterthought. And you know, the thinking, from my perspective, was what easier way to be different then, to approach a category that big that is so stale? Yeah, And so, you know, the disruption in our minds was was not so much a quality. I mean, we have eight flavors. The major difference, and some of our of our approach is really three full. We have sophisticated flavors, whole flavor profile of the general consumer trends that the new generations air looking for better 40 products. They pay attention to the ingredients they're looking to be, you know, pleased with with newness in their in their flavor profile. So we have flavors that are very different. We use all natural gluten free ingredients so that it's a very healthy snack. But the real the disruption was not only just in the category but really taking something that was an afterthought. And our focus is going after snacking trends in the US And so we go after cliff bars and pretzels and chips and any other snack that you would otherwise think is a healthy snacks. Or we're trying to reintroduce jerky gotcha as part of that. And so you kind of to sort of scent picked your competition by a stale category. That sort of seemed like an afterthought, actually, was a great opportunity to Teoh innovate and to select competitors that were maybe a little complacent. Like four companies, 85% of the markets correct. They're not incented to be competitive, so you can come in with something a totally different perspective and catch them just like it's not a little little bit off guard. That's right. And I think I think we did catch them off guard. And we have since received some feedback from them that we were making a dent in the market. It's three years later. We're the number two brand in Nielsen ratings in Northern California, Coast to coast were number three in Boston. We cannot have distribution is not fully mature at this point, but it's mature enough for us to make some some serious gains in the space. Plus, suddenly, there's attention to this category. We've been featured in the front page of the business section of The New York Times on Oprah. We've had areas in the Today show, so suddenly we're bringing all this new attention to jerky as a healthy snack, right? So the whole category is growing right, and by introducing new flavors for ah, more discriminating consumer, you can expand the category for everybody going after these. The cliff bars, which is perceived to be healthy snack, may or may not necessarily be the case, but with jerky high in protein, low in fats like it's Ah, it's my favorite favorite snack food. One of the things that we do is is like Gary Erickson. The started Clif Bar is. We put the product where activity would associate high protein, healthy snacks. So we sponsor a U S. Olympic marathon runner. We're beginning to sponsor sports teams. We put our field marketing folks at the finish line of marathons and triathlons and bike rides. We sponsor casual, just runners that want to run their first half marathon. So we really try to associate herself with this fitness. Yeah. I mean, the running ah logo on the package kind of indicates that we're, you know, interested and better for you, right? Health. And that's when I discovered the product. When I was making a dietary shift, I was doing a basically trying to re focus my life around more nutrition, more activity and needed, like high protein snacks to keep me going after I taking up boxing as a sport. There's a whole other crazy thing, Um, and this was a great after workout snack tea. Get the protein that I needed for recovery. Um, so that's all super interesting. From my personal point of view, let's go back to understanding the consumer. So one thing that Steve Blank talks about in that in the course we both took at different times gain outside the building and talking to your can Consumer. What was that process like for you? And what is that? What does that mean? You go a little bit more detail for the folks across the Web, so literally I took it at its meaning, which is is talking to customers. And for us, our customers were were twofold. I mean, we're in the distribute where the food category that's distributed so our customers could be a Safeway, a retailer that if they don't care, and they don't believe in the thesis that the consumer their consumer is actually going to reach for a product will never get out of the batter's box. So we got out of the building and we talked the whole food sort of the natural first step that one would expect, Ah, category to be elevated in and and that's we talked to Safeway. We talked to a lot of different retailers. We did in store demos where we basically say we're gonna give you the product for free. We just want to prove your customers want. This will allow us to come in. We'll give you the product in will conduct the four hour demo, and we would sell more jerky that in a given four hour period than they did in the past week. And then we went out and tried to discuss who are customer was and what message points they really wanted to hear. Did they want to hear about the flavor? Did they want to hear about the differences of ingredients, or did they just want to hear that it was good where the first time the jerky is actually good? So we did have a few pivots in terms of not trying to be the next gluten free cam Boucha sold in Whole Foods. We were a snack food that people were familiar with, that we wanted to focus on women. We wanted to focus on just being good. Sure, so the definition of a customer is really important. A lot of people make that mistake Your first customer people actually buy the product from you directly. Are the supermarkets, the distributors, the end consumer is who they're selling to. That's correct. So you have to understand who's actually going to give you a check. Safeway. And then how they're gonna turn around and and you need to market your product for them to the end consumer, which are two very different things. Very different motivations. Two very different things, but obviously is a brand we have to think through and plan for both scenarios. Because not only do we need that retailer to believe in our message points, but then we'll obviously have to do the legwork to have the pull off the shelf tohave the consumers come in. Most people don't have an awareness of the type of jerky that we've got, so we have to teach them right. So you've done deep understanding of your end consumer. What motivates them, what messaging points are going to be more effective versus others, and that takes a ton of time. And, you know, that's something you talk about talking to people face to face. Why face to face versus just throwing a survey out there. Well, I think the believability factor. There's something that about our brand that is is very exciting and very passionate. And while we're jerky, the brand in the message points that we try to convey or all about that's something that's going to be trendy that you need to pay attention to. If you create a sense of excitement, people will actually listen to what you have to say. So the packaging itself, just the design, the colors, the people that we hire, we we've begun hiring field teams. So Vitaminwater did a very good job short of changing the face of beverage. And in many ways, that's what we're doing. So talking. I just don't believe that, especially a category like jerky that sort of needs so much reeducation. You need that interpersonal ability to speak not in that required in all events, but also to see what people respond to you like look in their eyes and see their body language as opposed to just kind of, you know, black and white data on a spreadsheet. Absolutely no humanity. So you know we want You've obviously been hugely successful in a brief period of time, but we don't want to sugarcoat it and pretend like it's all sunshine and rainbows. What's the hardest day that you've experienced? as an entrepreneur, you share that with folks. I think the hardest states for me were the early days. Um, you know, jerky is a great example of an idea that off the lip doesn't sound that exciting. It took a tremendous amount of sort of belief and really in a perseverance to get over the fact that we were going to disrupt jerky. I think those early days of really pioneering the mission and the thesis that we were gonna that we were going to go after. And you're a highly educated got you're gonna business school at couches with top business school. And you're like, I would be the jerky guy. That was a fair amount of fear. No, no doubt. I mean a lot of fear. I did not tell my wife that I was going to do this until about three months after I even had the prototype. Just because I wanted the freedom to kind of retreat if if didn't even tell your family. So it was It was the idea again. This is sort of the The challenges is really having the courage to believe in an idea that most normal people, when they first hear it are not gonna go. Wow, that's exciting. More. But you It wasn't just the courage to take a step in that direction. It was the next step. The actually testing that idea going out and seeing like is this something that the marketplace is actually going? Teoh react to you? You don't throw a Hail Mary pass. You had an idea. You believe in that idea. Then you tested the idea rigorously and you tested food, which is not the website. It means Steve Blank's class was a great incubator for me because obviously I was surrounded by technology and, you know, clean energy ideas. And here I was really the only food related concept. And I think some of the plans that we have were very easy to understand their very easy steps. Talking to the end consumer, talking to mom who's making healthy decisions about her Children. Those were easy things for people to understand. Um, and I think, you know, we were able to kind of take each win and spin it and then propel it, You know, a ton of three acts to the next to the next deal. That's awesome. Um, what advice would you have for entrepreneurs there? They're just starting out. Well, I think. I mean, Courreges is certainly one that I've said a few times in perseverance. Of course. Two of the most common Lee's words just Teoh, you know, kind of ah, greet challenge with enthusiasm. I would say Find your early team quickly. I was very lucky to find, you know, a co founder with me who was instrumental in the early days to not only support some of those moments of time where you question the entire plan, not to mention to add some credibility in the early fundraising. And so for So I think you're early team perseverance, Um, you know, and coming from an academic setting, Teoh, I was able to, you know, for example, you Steve, who's on our advisory board and continued to expand my network through his, which has been tremendously beneficial. Terrific. So early team of colleagues, co founders to keep one other motivated bounce ideas off of early customers identifying those and then early advisers. Influencers can help you get access to you. The supermarket change that you had to get into can can help you gather other resource is that are necessary for success? Yeah. Terrific. So let's tell the folks where they confined, uh, crave jerky. Your your local supermarket. Your locals who were Safeway Target Costco, depending where coast to coast were in Canada. Now we're lots of independent stores. There were not in gas stations. That's sort of where we draw the line. Okay, We're not in Walmart, but you should be in most other grocery stores. Fantastic. John Sebastiani. Thank you so much for stopping. Really appreciate it.