Introduction

Patrick: [00:01:16] If you'd told me a year ago that I'd be learning critical life and business lessons from the founder of a ketchup company and that 30 to 50,000 people would like to our conversation, I would have told you that was impossible. But the fact that it's true, proves many of the points laid out by this week's guest Scott Norton, co-founder of Sir Kensington's, which was recently acquired by Unilever. Sir Kensington's, which makes "condiments with character" is no ordinary ketchup company and Scott is no ordinary founder. We talk about the most elemental aspects of business, product, relationships, sales, marketing and culture.

I love that we can do so through the lens of such a seemingly simple product, something we use all the time with our families at a barbecue. Scott's observations on culture, the importance of relationships within sales and competitive edge are all memorable. But above all, I'll remember his line, seek to learn that which cannot be taught and I will continually return to the mental of the temple of Poseidon. Oh, and as a bonus, we also talk about biking around Asia, which like all of Scott's stories comes complete with thought provoking lessons. Enjoy this unique conversation with one of the most interesting people I've met on this journey.

History of Ketchup

We begin with the history of ketchup. I don't know anything about the history of ketchup other than it's ubiquitous and you grew up with it. But where did it start and what was one of your favorite aspects of the story?

Scott: [00:02:43] It's a wonderful question because I love the history of ketchup because it's one of those kinds of things where we take America for granted in a lot of ways. We think things are American but we're a melting pot of a country. We're a very diverse country. Ketchup is actually a Chinese word. It comes from the Southern Min dialect of what is now Fujian Province in China and ketchup was originally a fermented fish sauce that was used to put on things like tofu and rice that didn't carry much flavor. Of course, back in the day, meat was rotting, all of these kinds of things weren't fresh. You needed powerful flavors to cover it up.

That's why pepper, all spice, clove, these things were so coveted by the Europeans. The British and the Dutch that were traders in Canton, in the South China sea and Malaysia and Indonesia, they discovered this sauce, ketchup, this fermented fish sauce. They were like, "This stuff is great." So, they brought the concept back to England and they started using other ingredients that were high in glutamate, other than fermented fish. Like oysters and mushrooms and glutamate by the way is what creates the savory flavor. It's what gives the meat sensation. If you've ever bit into a perfectly roasted portobello mushroom, that's great flavor of umami.

Around the same time, this was about 400, 500 years ago, Hernan Cortés, the Spanish explorer, discovers new to the Europeans the tomato, outside of the capital of what is now Mexico, Mexico City. Tomatoes came in all sizes, from tiny little berries to the giant ones that we know today. The heirloom varieties that the Mayan's would revere. So he brought that back to Spain. That then trickled into Italian cuisine, which of course gave the red sauce pasta, was a relatively new thing in Italy and in Europe. At some point, this is where it gets hazy. At some point either in Europe or America, somebody said, let's make ketchup with tomatoes and birthed this tomato ketchup that we all know today. It then started showing up in Prairie cookbooks in America in the early 1800s and then over time it became something that became part of American food culture, became part of fast food, the hamburger, the French fry, things like that.

Patrick: [00:05:04] That's a fascinating fact story. Were there other moments, catalytic moments in the US history of ketchup-

Scott: [00:05:13] Yeah.

Patrick: [00:05:13]… that are interesting?

Scott: [00:05:15] Absolutely.

Patrick: [00:05:15] I'd love to her that. There's always this human tendency to extrapolate back and forward what currently exists to having always existed and will always exist in the future. But everything has an origin story. So, maybe with Heinz specifically or just generally, what were the big milestone moments in the history of ketchup in the US?

Scott: [00:05:35] Well Heinz actually did something really amazing and they transformed ketchup. Because, I don't have the dates on it specifically but I believe it was the early 1900s. Sodium Benzoate was a very commonly used food preservative, and it came out that sodium benzoate would cause all these health problems. So, instead of using sodium benzoate in ketchup, what Heinz did was, we said, "We're going to dial up the vinegar, which is acidic and which is a natural preservative. So our ketchup is going to be pure, it's going to be free of sodium benzoate and it's going to have a more vinegary acidic tangy taste instead.

Instead of putting it in an opaque copper bottle, we're actually going to put it in a glass bottle to show the purity of it." So, really the approach that we have to food now, using whole real ingredients, using real food, not using synthetic preservatives or anything like that, that was really Heinz's big position. That was Heinz's big innovation back nearly 100 years ago. There was that same ethos. It's funny how things change over time and how things are cyclical. But that was really an important part of the evolution of ketchup.

Origin Story of Sir Kensington's

Patrick: [00:06:47] I would love to begin by hearing your story of the brand itself. By telling us what exactly the story of Sir Kensington is.

Scott: [00:06:55] People often ask me, especially when I have my big mustache, "Oh is he your grandfather?" The truth is that, in any consumer market and in food particular in 2017, this year, or even 2008, 2010 when we were first getting started. It's all about an attention war and you need to win the attention war if you want to win customers and if you want to bring a product to market. Because as a couple of young scrappy college kids and entrepreneurs, we didn't have any reputation, we didn't have any marketing budget, we didn't have any experience in advertising or any way to do that. So we knew that our packaging would have to be what attracts that attention.

In a blink of an eye it would have to immediately make people do a double take and recognize this is different, this is better and I want to give this a shot. So, we said to do that, to attract that attention, let's be dramatically different. Whereas the big commodity ketchup's were all in the exact same squeeze bottle, with the same shape and the same positioning and made of plastic, we said "Well actually let's make ours glass and let's go a little bit more premium. Let's use the language of a high end European preserve and our packaging to signal this premium elevated nature."

Likewise too, every other ketchup, especially the big one Heinz, was really synonymous with Americana and the roadside diner of the 1950s. If we said okay well if they're synonymous with Americana, let's be British and let's tell the story of Sir Kensington who is this Victorian naturalist, a botanist, a spice trader, a knight, a philanthropist. A most interesting man in the world who had a really quirky and eccentric side and an obsession with condiments. I think creating that and bring that story to life and being able to tell the story through a character, was really important for building a brand.

I think specifically for your listeners and really going back to this conversation about the entrepreneurial lingo of all this, our mission as a company is to bring integrity and charm to ordinary and overlooked food. I think that this something specifically in the ordinary and overlooked area that really fits into an investing framework and investing mindset. Understanding, okay, what is the contrarian view on this? When everyone else is zigging, how can you actually benefit by zagging? It's ultimately when you're looking at the things that are ordinary and overlooked, that you avoid the crowded trades, so to speak. There are a million different snack companies out there.

There are a million different beverage companies out there and you see absolutely very successful beverage companies grow and exit and there are a lot of rewards if you get it right. But there's a lot that you don't see too. It's in those areas where it's more competitive to get shelf space. It's more competitive to get mind share to get the buyer's attention. So, by working in the ordinary and overlooked in condiments and things that people thought couldn't actually be any different or get any better, that we were actually able to cart out a nice niche for ourselves and really compete, not in a highly efficient competitive market, but in a market that was dominated by monopolies that were really right for some disruption.

Patrick: [00:10:28] You can already tell in your first answer, and I hope people listen for this, where yeah, we're talking about ketchup, but really we're talking about entrepreneurship and business and strategy. This idea of contrarian or a mismatch between supply and demand. I'm so enamored with just this simple idea of think about supply and demand and build products that address some weird mismatch in those two things. I think your early experience was, okay there's this tidal wave of demand in the food world in general for better quality, more interesting, better tasting.

In all areas except this one. For whatever reason this one area just wasn't getting the same support, maybe it was the dominant player in Heinz or Hellman's in mayo or whatever the case may be, it was an opportunity. I would love to hear with that as the framework, what the early days were like. What was your mindset in terms of creating the product, testing it, getting it into the first shelves that I think were here in New York City? The early story and struggles I think are really important in all this, because any good contrarian idea is likely going to be wrong for a while, or appear wrong from the outside and hard to convince people to buy into. The early days are fascinating. So let's go there.

Scott: [00:11:48] Absolutely, yes. It's very much a time of challenge. The framework I think about for myself and then I urge other entrepreneurs to think about is, you're wrong, it's just a matter of degree of how wrong you are and how quickly you can get less wrong. When we started though, we recognized too, that we were not experts. To mitigate that, we didn't take the approach of saying, okay well we're going to make the world's best ketchup and we're going to put it on the shelves and put it in every store overnight and try and market the hell out of it and force it out there. Instead, we really took an approach and I've done a lot of just thinking about what business means in our culture and a lot of the narratives around it.

A lot of the narratives around corporation and career and all of these kinds of things. I think people may think that business is fundamentally competitive or competitive balance to it. But I believe that business is fundamentally creative. One of the mental models that I really enjoy is the design thinking process. Design thinking is really a field of thought that starts with, well, let's actually look and understand what are the problems that people have are, and how do we prototype solutions to solve those problems?

Not just diagnose and prescribe, but actually do some investigation. What we did was, we actually learned about the history of ketchup and we created eight different ketchups that were different by ingredients, different by recipe, different by flavor, by color, by texture. We threw a party. We put invitations in our friends mailbox that said, Sir Kensington invite you to a ketchup tasting. People thought we were crazy, but they came over, they listened to music. They tasted all these different ketchups in a blind tasting scenario and they gave this-

Patrick: [00:13:36] What was the medium for the ketchup? Was it fries?

Scott: [00:13:38] It's funny, because we wanted to make sure that the quality of the carrier didn't dictate whether people liked it or not, so we did a sampling. We had French fries from a local restaurant. We had French fries that we baked. We found those dinosaur shaped chicken nuggets, all sorts of different things that people could dip in. We probably also got them thoroughly tipsy too, which probably increased the scores on these. But afterwards, we were able to see, okay well, what were the ketchups that people didn't like and what were the ketchups people did like? Because we knew that if we had one and we invited all our friends, they would be like, "This is amazing, I love it. It's so special.

This is great. Go for it." But instead, we were actually to get them to force rank it. Tell us, did it taste good? Did it taste healthy? Did it taste like ketchup? That allowed us to bring something to market that we could at least feel confident in. Also, very importantly, now we've co-created it with an audience of our friends. They can all point to it and say, "Oh yeah, I helped build that. I helped give them feedback. I helped rank that ketchup." That effect is very powerful of co-creation. When your customers are also your creators, that builds a very important tribe and community.

Patrick: [00:14:50] One of the most interesting aspects of this book on negotiation called Getting to Yes is that exact idea, which is one of the most effective ways to negotiate is to include your counter party in structuring the terms. Basically create a buy in from the beginning because there's that endowment effect that is incredibly powerful and sounds like you've harnessed that for ketchup.

Scott: [00:15:11] Absolutely. That's part of I think, the design thinking process. There were these researchers and I wish I had more specifics around this. But they gave people in this experiment, a chair from Ikea and a month later they went back and said, "Hey, we'd like to actually buy this chair back from you, will you sell it to us for $20?" People said, "Yeah. You gave me this chair, I have it now. It's not doing much. It doesn't match anything else in my house. Here's the chair back. Give me $20." They gave the same number of people the Ikea chair, flat packed. They sat there and they said, build this chair, we'll give it to you for free.

A month later, after these people had built it, put it in their house, the researcher says, "Okay, well can we give you $20 to buy this chair back from you?" People said, "What are you talking about? I love this chair. I built this chair." This gets to a very important notion which is, we like to think that we're rational people, but we're actually really good at rationalizing. When we put our emotions into something, we value it that much more. When we're emotionally invested in a decision, as you call it that endowment effect, what was dubbed now as the Ikea effect after this, is that people when they help build something, they want to participate in it, they want it to succeed.

Application of Key Business Principles

Patrick: [00:16:31] So you talk about the very first eight ketchups. I think this idea of iteration in startups and new businesses is a real interesting one. Getting feedback, incorporating it. How many stages to that? Were there and, as an example, within the eight ketchups, how different were they? As I understand it, ketchup is a couple basic ingredients. What were the levers that you're able to pull and push to make the range wide enough to actually get real feedback versus just all flavors of the same thing?

Scott: [00:17:02] That's great. We're getting now to the technical, organoleptic questions. Ketchup is one of the few foods that has all five basic tastes and balance. That's sweet, salty, savory, bitter and sour. If one of those is off, then it doesn't taste like ketchup or it'll taste like marinara sauce or it'll be too acidic. We played around a lot with that balance to find the right balance there. Texture is an extremely important one. But I think more to the root of your question about iteration, we're still not done. We have always taken this approach of kaizen of continuous improvement. Not only our products, but in our processes and in our people too.

I think fundamentally we have a growth mindset when it comes to the philosophy of the business. We have changed our ketchup recipe in non-insignificant ways, probably three or four times since starting this business. We were lucky to get extremely valuable and critical feedback from chefs, who were the customers that we had that wouldn't hold back. Specifically, we had to get it to stick to fries. Because fries stickiness is one of the very important utilities of ketchup. If you dip it in the fry and the viscosity is not enough that it carries a lot of ketchup, well it doesn't really seem like ketchup, does it? People love fries as a delivery device for ketchup.

So, it had to stick to fries properly. Even bottle shape is an important thing there that helps signal in a supermarket context, what is ketchup and what is a special higher end sauce that maybe you would only buy once a year? Because if you want to actually earn your place in culture, you can't just be a niche product or something that's only brought out at dinner parties. You have to be something that's part of a daily use item. We've always been working towards, how do we bring that familiar? How do we bring nostalgia and novelty together? Such as something is an item that people are enjoying in their daily lives, but also feels special and feels like a bit of an adventure.

Patrick: [00:19:03] Can we take a quick aside and you mentioned a term which means a lot to me and governs my behavior as much as I can make it, which is kaizen? Can you describe how you came to that principal and maybe for our listeners, describe what that means?

Scott: [00:19:16] Sure. Well, kaizen is, and maybe you know more about this than me, but my understanding is basically the Japanese concept or Japanese word, of continuous improvement. When I was in college, I read the Toyota Production System book and learned about their approach of asking why five times. If something breaks, don't just say, okay then why did it break and solve that problem, actually find the root cause of something by asking why over and over again until you can find the over arching reason. I think that approach of kaizen is about noticing and recognizing that everything is a work in progress. That we are all works in progress. We are all in beta.

There's a forward motion that you can put into your work and into the culture of team building that will allow you to always be asking this question, what's working about this and what's not working about this and how do we make it better? I think that's fundamentally part of the agiler iterative development philosophy, that a lot of Silicon Valley companies espoused and I've spent some time working in software as well. We bring a lot of these either Japanese concepts or something I'll talk about a little later, more Scandinavian business principals. Our Silicon Valley business principals to a category like condiments that maybe have been dominated by a more America centric way of thinking.

Patrick: [00:20:37] You peaked my interest, so I want to go straight there. Describe this Scandinavian because that one I'm going to be completely unfamiliar with.

Scott: [00:20:43] Wonderful. Well, I think this universal, but I think the Scandinavian companies tend to be a bit more progressive about this. In working in finance and working at Lehman Brothers and recognizing the limitations of the cultural impact and just the general impact that I could have in that role. Thinking about how we've chosen to organize our society, implicitly or explicitly around capitalism and around economic activity and economic framework. What really dominated the 20th century was shareholder capitalism. Maximizing shareholder returns and understanding of capitalism that basically it's the shareholder that you're maximizing benefit for.

I'm still a young man, but the longer I spend in business, the more I realize that the model I think works for us and the model that I think is good for society, is stakeholder capitalism. That's a longer term perspective. I think stakeholder capitalism simply put, is that shareholders are one of many groups that will be providing resources to a business to succeed and that actually receive the benefits of a business. Obviously in capitalism, they're providing a lions share of those resources. But upstream, meaning whether it's ingredients are purchased or services are rendered, there is an environment that's providing resources to a business that succeeds as well.

If you over fish an ocean or you over fish a river or lake, you're going to run out of fish. You have to think about the long term. That environmental context of the upstream, they're an important stakeholder. You also have the downstream, which is actually the customers of a business, especially in food, in what we do. We make something that becomes part of people's physical bodies and it gives them the energy that they need to live their lives. It's part of what they espouse an identity to. That's a really big responsibility that we have and our consumers absolutely stakeholders in that. Then of course, there's our team.

The people that devote their passion and their time to making this realization happen, to executing this vision. We owe them more than a paycheck. We owe them development. We owe them challenge. We owe them the ability to achieve mastery and self motivation. I think that that stakeholder mindset, that is something I think that the Nordics have a bit more progressive approach to and the Japanese as well. I think now in America, as we see that businesses that are purpose driven before profit and for purpose, tend to grow faster than businesses that only for profit and really espouse that shareholder model. That I think is starting to wake people up to a new way of doing business. Especially with the younger generation of Millennials.

Patrick: [00:23:36] As you've grown and are now pervasive, since we've met a while ago now, I noticed the products everywhere I go. You're everywhere that I shop, anywhere that my family shops-

Scott: [00:23:50] Well, Patrick you live in a bubble.

Patrick: [00:23:51] I'm well aware but products can thrive in a bubble. Have you noticed, now that you have been acquired by a big food company and have wider distribution, more penetration across different markets and geographies, that there are downsides or challenges to that stakeholder model when you're arguably up against other players? Your direct competition literally on the shelves in the same product category? I don't know if this is true for sure, but my guess is Kraft-Heinz is more similar to the shareholder model than the stakeholder model? Know your bit about 3G. Any challenges that you noticed or changes, now that you've scaled up so much?

Scott: [00:24:31] It's a wonderful question. Last month we were acquired by Unilever. A company that was founded over 100 years ago with a focus on the stakeholder model. This is a company that was making soap and pioneering new ways to make soap at the exact same time where Victorian England was recognizing that actually bacteria caused infection. With every bar of soap that they sold, with every time they educated a hospital or a doctor to actually wash their hands before performing surgery. With every bar of soap they sold, they're making a net positive impact on society and the stakeholders down stream. They also, in founding Levers soaps, the Lever brothers actually built a town for their workers.

This is a time where workers rights and worker protection of course, the industrial evolution was something that is famous from Triangle Shirtwaist Factory to Upton Sinclair's The Jungle. This is a very progressive company that built a city called Port Sunlight. Built a town for their workers. We were acquired last month. We have grown. It hasn't been a massive explosion yet because things in consumer goods don't happen that quickly. But what I'll say is, is that we've learned that the more that we lean into that sense of purpose, the more we lean into the stakeholder mentality, the faster our business grows. I think that's because that when people, and I'm not saying that's always going to be the case.

I'm not saying that people don't care about price at Walmart. I'm not saying that people don't care about price in a restaurant scenario. But what I will say is that there's plenty of ketchup and mayonnaise out there. There's even an organic version and natural version of pretty much any food that you can think of. But what we've realized is that when people are inviting something into their life, when they're choosing to buy a product, they're making a statement about the me I want to be. You think about, I use the analogy of Tesla. Tesla has, obviously there is some challenge that they have a limited range on the automobiles that they sell and you need to have a special charger where you go to charge your Tesla.

Now, if they came out and all of a sudden says, "Yeah, actually we're going to make these hybrids. We're going to make Tesla hybrids and it's going to solve this problem of range. You're going to be able to fill up your gas tank and you're going to be able to charge when you have a charger." That would be devastating for them. Be devastating for their incredible lofty valuation and stock price. It would devastating for what everybody participated in when they bought a Tesla. Of saying, this is me at my best. Not only am I in this sexy car that represents contemporary techno luxury, but also I was doing something in a progressive way that communicated what I believe the planet deserves, which is a future with less carbon footprint.

Less carbon impact. When people see that they can purchase a product, that in purchasing that product, they're participating in a flywheel of conscientious business, of actually contributing to society. That is a form I think of very, very micro activism that actually can create growth for your products. Would Toms have taken off if they didn't give a shoe for every shoe that they sold? I think there are plenty of businesses that have examples of a way to either to give as a fundamental part of their business model or even a related foundation that I think customers and consumers respond to very well.

Patrick: [00:28:19] You bring up a topic which is very interesting to me in the sales and marketing world, which is an appeal to identity. Doing that, basically saying if you buy this, you'll be more of what you think you are. I think that's how you phrased it.

Scott: [00:28:32] Yeah. The me I want to be.

Patrick: [00:28:34] The me I want to be. It's better when it rhymes. Is far more powerful than a list of rational, logical reasons for doing something. That simple idea is a powerful one in any business. Right?

Scott: [00:28:47] Extremely powerful.

Patrick: [00:28:48] I'm always fascinated by the use of outside capital. What point did you realize you needed it? What was it for? And did it work out the way you expected it?

Scott: [00:29:00] When we started, we didn't really have any money personally. So, we went to the three F's, friends, family and fools. I'm sure that's one you've heard before.

Patrick: [00:29:09] Haven't heard the fools part.

Scott: [00:29:10] It was actually the fools that wrote, in those first early years, the bigger checks. Because they were friends of friends or friends of family. People that are in the investing community, that are angel investors. The way that I always thought about it was, yes you're selling a piece of your business. Yes, you're diluting yourself, but ultimately you're getting more people invested in your success. From the very beginning our approach was, yes, we need to capitalize this business and we need to invest ahead of our growth, make sure we have the right people in place, the right programs in place that we can grow.

But also, in bringing in this capital and bringing these individuals, what is the strategic insight that they might bring? Might they have connection to other retailers or an insight into how to sell to restaurants or how to recruit people? We did as much as we could to gain a brain trust around with that. Then slowly but surely that involved into a board that we put in place. Then two years ago, we raised our first institutional round from a family office called Verlinvest, whose been extremely helpful in bringing sophistication to our business, to our governess, to our planning.

They've invested in great businesses and brands like Vita Coco, famous for coconut water, Hint Water, brands like that that are in the space. That was at a point where we said, okay we are willing and ready to bring on this institutional capital because we are past the concept risk phase. We're getting through the market risk phase and we know that we have a model that when we plug resources into it, those resources generate a return. Those resources can actually grow to create durable growth and high quality revenue. That was the decision that we made that ended up allowing us to bring in an outside capital.

Patrick: [00:31:07] You find this opportunity nine years ago. There's this stale evergreen brand that you disrupt in your own way. What was the most memorable story or narrative from those early couple years? You guys are aggressively incorporating what you're learning into the product, into the sales process. Maybe we can even focus on the sales process because I have no idea how one might get a condiment into a store shelf like Whole Foods.

Scott: [00:31:34] Yeah.

Patrick: [00:31:35] What were some of the memorable ideas from those early days?

Scott: [00:31:39] Well, I think to get a little vulnerable here, there comes a time that I think in every entrepreneur's life, where they go, oh crap I'm actually a sales guy. I need to learn how to sell. I'm a sales person because that is what is growing a business. Now of course, if you have a platform business or anything like that, maybe it's more marketing driven. But I think in most businesses, it's about getting other people's customers minds from point A to point B and that's really fricking hard. So we would get these introductions from people, "Oh yeah you should meet this chef. Go into this restaurant, it's a perfect fit. They serve local produce, better burgers.

They charge $20 for the burger, they should serve a better ketchup. Makes a ton of sense. Better food, better ketchup." We go in there and we'd be like, "It's made with whole tomatoes and it has less sugar and it's verified non-GMO and it's all natural. Yeah, it's more expensive but that's because the ingredients are more expensive. Want to buy it?" They'll be like, "We'll get back to you." They never got back to us. We would send these emails, "Hey Jake, just checking in." No response. We'd leave voicemails. I'm like, "This is crazy. People that we are introduced to by mutually trusted source are just ghosting me. What is wrong? What am doing wrong?"

That's when I realized that again, it is really about this emotional connection. You're not going to be able to achieve a sale by pointing out the rational features. Benefits are important and this is a different story, but you can't justify your pricing based on features. It's got to be on benefit. Very importantly, people are not going to be willing to hear the benefit unless they trust you first. That trust is a very human thing. This just goes back to Dale Carnegie's book How to Win Friends and Influence People. It goes back to that co-creation mentality and the Ikea affect. It taught me to recognize that even if something makes sense for someone, you can't just skip right to that logical point. You have to spend the time building trust, building a relationship, building common ground and building an emotional bond. Develop an open pathway of communication and then start learning about how you can solve their problems.

Patrick: [00:33:55] Sticking with that example of a restaurant or a chef. What does that actually look like? How does one do all those things you just described with someone that's making a better burger? I intuitively don't know what that process would look like. Is it more about asking them questions, what matters to them and then trying to fill that hole? What-

Scott: [00:34:15] Absolutely.

Patrick: [00:34:15] … was the sales process that ultimately started working?

Scott: [00:34:18] Yeah. We're a company of food lovers and you don't go into the food business, especially in restaurants without being a food lover. It is a really tough business. It's a 24/7 business. It's highly competitive. If you're a chef especially, you're working in a windowless room at weird hours and you've made a decision to reject a normal path in life. There's a bit of a misfit or an outsider attitude that I think we very much have when we have these food lovers and we had to train ourselves to go in there and actually be our true selves. To talk about a love of food. To have a curiosity.

To understand why it is they do what they do and have those conversations before we got to the meat of the benefits and the features. It's really about finding that common ground, developing that relationship, asking the right questions and understanding what are the challenges that are actually facing this chef or facing this business. Then how does that open doors for me to talk about solving this chef's problems? We still haven't cracked the nut. It's still very difficult to this day. It's still a longer sales cycle. Very high touch. But its extremely powerful when we get it right and when someone can sit down at the table at a restaurant and see Sir Kensington's ketchup or mustard or mayo because it says a tremendous amount about both the restaurant, the restaurant cares about what it's serving. That it cares about the details. That it signals quality and also shows really well and rubs off on us that this chef has chosen to feature and to curate our products.

Patrick: [00:36:02] I think what you just described is the way to sell anything. I still underestimate how important relationships and trust are in any sales process. I think everyone does. As someone who's sold on things by others all the time, it's amazing how infrequently someone starts with you. With asking, what do you do? What do you care about? What are problems in your life? Versus here's my product, here's the list of features. Do you want to buy it? It's shocking how all that works but how common it is.

Scott: [00:36:37] It does blow my mind and I have to stop myself sometimes. If I do get a telephone call from a telemarketer or somebody shows up at my door or someone's on the street handing out something. I have to actually stop myself from being like, "You're doing it all wrong. You need to start with questions. You need to think about this." Because I don't want to be that guy. But it's again, one of those things that's like persuasive communication is fundamentally, extremely valuable skill to have that's not taught in schools. It's really that concept of relationship development is crucial but it's not taught in traditional education.

Frankly, a lot of startups that are sales heavy, don't have robust sales training programs. I think a lot of them fail because of that. I think great organizations and developed organizations, the Fortune 500s are known for having really robust sales training programs that talk about the value of emotions and relationships and all that. The flight schools so to speak of sales. But most of the startups that I've seen, tend to have pretty bare bones programs and it's only the people that are naturally talented, that actually rise to the top.

Culture

Patrick: [00:37:45] You referenced culture before and it's a good sales process, given it's not just you and your partner. It's not just you guys doing the sales anymore, you have a sales force, et cetera. You've obviously scaled up the organization in terms of people. I'd love to hear your thoughts philosophically, practically on culture. How you thought about it in the early days when it was just a couple of you and how you think about it now. What competitive advantage that can or has created for you?

Scott: [00:38:12] That's an excellent question. Culture is this word that's thrown around a lot. Everyone gives lip service to it. Everyone thinks it's important. People define it differently. People say, oh it's like ping pong tables and bean bag chairs. But really culture is about values. Culture is about values and it's also about a shared sense of purpose and mission. That we've gotten really intentional about. In terms of a journey, we've had to really surrender the ego. I'll admit, when I was starting this business as an entrepreneur, I thought I was the center of the universe. It was all about me and it was all about my vision. I failed at a lot of things because that mindset hindered me.

What I came to realize over time was that my role was to be a high priest of what we're doing, but to train my team to be the clergy. To bring more people into the community and into the flock. Wasn't just to teach them what the vision was, but it was to teach them how to teach others about what this vision was. For us, we've now become very intentional about culture and about what is the behavior that we actually promote? What is the behavior that's unacceptable? How do we link that to a really codified form of values? We, for the longest time, felt like we were a mission driven company and a values driven company, but we hadn't written down that mission.

We hadn't written down those values. For you and for those out there, our values are very simple. There's four of them. First is that our secret ingredient is people. The second is that we act with honor, even when no one is looking. The third is that we make condiments with character and the fourth is that we think long term. What we try and do is every major decision, every policy, every inflection point, we try and illuminate how these values actually guide us to the right answer and to the right decision. We encourage people to use these values to make decisions in their everyday professional life.

They don't sound like they have anything to do with the business of making condiments specifically, but coaching people in a framework to think about what are the shared things that we look at together and how do we make decisions? I think that's a really fundamental part of culture. The best part about culture and the best part about all this is that it's free. As an entrepreneur or as a manager, as a leader, it's free for you to show up to work on time or 15 minutes early. It's free to give extra effort. It's free to write down your values and teach them to people.

It's way cheaper than bean bag chairs or ping pong tables. That's something I think a lot of people forget. They think about marketing or culture as, or anything to grow a business, like money in, money out. What are we allocating to this? Are we marketing better if we're marketing more? The great thing about culture and value is that it exists in this very emotional interpersonal space and it requires a lot of leadership commitment, but it's very powerful. I think the great organizations have great culture.

Patrick: [00:41:18] I think the unifying theme between your answer on culture and the idea of kaizen is this potential for great, positive, unexpected outcomes. In any business there's some component that you can plan for. You can think long term. You can even invest in very long term projects as a source of competitive advantage. But in my experience, I'd be curious to see if you agree, a lot of the most interesting outcomes are unplanned and are a function of mindset and/or culture versus tactics and strategies. It's become a very common theme. We were talking about, like conversation with David Salem before he started recording, which has been really popular I think for good reason. One of the key insights I think that he had about David Swensen at Yale and the perversions of the endowment model is that people try to mimic his tactics, whereas what really worked was his mindset.

Scott: [00:42:18] Yes. He calls it in the phrase that's used is reasoning from first principles. That's again, looking at the ordinary and overlooked means thinking independently and thinking for yourself and not just pattern matching and copying what other people do.

Patrick: [00:42:33] I think a good rule of thumb that I'm learning is true more and more, is you want to look for things where there's no manual. Where there's no playbook. Where someone hasn't figured out, here's the process for how to do it. Because usually that means there's too much competition. Usually that means this area is colonized, it's not a frontier. It sounds like from your stories and when we've talked before, that you realized that early on. That there is a frontier here, you said it's hard in the physical space. It's not like AWS where you can just click a button and have your cloud service and infrastructure set up. It's much harder and you have to learn on your own. There may not have been a playbook. I'm curious therefore, now you're part of this big company, what that frontier is now. Assuming that you agree that the real competitive opportunity is feeling your way at the frontier, what is that frontier for you guys now? What has you and partners and your team most interested? What are you exploring and learning about today?

Scott: [00:43:36] Yeah, well I'm going to answer your question, but I also want to just make a note on that. I think it's a really important thing that you touch on and I have this mantra in life which is, seek to learn that which cannot be taught. Figure out what it is that you can teach yourself or that you can invent. I think for the listeners out there, I'm going to share what it's like to work with Unilever. But I think one of the really challenging things is actually having a cognition to know when you're going into an area that is unknown and noticing the fear around that and recognizing, what a minute, am I trying to avoid this fear and trying to go where it's safe?

Or am I actually pushing through this fear? A great analogy for this, a friend of mine is a sailor and he sails summers in the Mediterranean and in Greece. When you leave the port of Athens you go for a while in a very safe sound along the land. Then right before you pop out in the Aegean Sea, you pass the temple of Poseidon. The temple of Poseidon was this place that's right on this promontory point that the ancient Greek sailors would and the ancient Greek Navy, would recognize and at that moment, they realized, okay now we have to pray to Poseidon, the god of the weather for clear weather, for clear skies, the god of the ocean.

Then it's at that moment when you recognize, I'm going from the known into the unknown. I'm passing that temple of Poseidon and saying a little prayer there. I try and encourage myself and other to be aware and recognize when are you pushing into that unknown? When are you finding that temple of Poseidon? So that you can mentally prepare yourself to not be afraid or to be the right amount of afraid and to push on. That's very much. Right now is the temple of Poseidon moment. Because here we are, this 29 person company and we're now part of this giant global organization with many, many different product lines, with 100 plus year lineage and history.

They have multiple departments for every employee that we have. There's no single marketing department there. There's no single operation's department. It's highly complex. It's a lot for us to think about what are all the ways that we can actually unlock value here and very importantly, we're aligned on them and our question is not what's the playbook here? It's how do we write the playbook? How do we write the playbook for how a big company and a small company can work together to unlock this value?

Because they're as a value driven company and a sustainable living driven company, they recognize that if they break our culture, then they break the business. That's one of the reasons we decided to partner with them, that they recognized that. But luckily, there is a shared understanding that this is about critical thinking and independent thinking from first principles about what to integrate and what not to integrate so that we can have the right amount of independence and autonomy and that we can ultimately give our customers what it is our customers want and not lose sight of something because of operational efficiencies.

Traveling Into Unknown

Patrick: [00:46:51] How often in your history have you experienced periods of complacency or comfort? Which are the antithesis of this idea of past Poseidon or the frontier or fear. How often do you continually find yourself needing to course correct and push yourself towards fear of the unknown and how do you do that? How do you monitor that in yourself? It sounds like it's a key component of your culture at your firm. Are there ways of doing that or is it just something that you build with experience?

Scott: [00:47:24] That's a wonderful question and I'm a very happy guy. I feel like I'm one of the luckiest people in the universe. Sometimes I'm really hard on myself, but it can be easy for me to be complacent. I think that's all relative, but I'm actually really lucky that I have a tremendous partner in Mark, my co-founder, who obviously a very optimistic person as well. We're both incredibly optimistic. But he has an extremely critical eye for seeing around the corner and seeing around the bend and bringing things up that are challenges of saying, hey, we pat ourselves on the back for doing this thing, but that was just the plateau we're on now. Let's get to that next plateau.

I've been tremendously lucky to have someone that pushes me and pushes the organization in the way that I think we do actually need to grow, because the potential is that much higher. I would also say, surround yourself with inspiration. Surround yourself with inspirational people. Read books and understand what the creative process has been like for other people and recognize too what other people have done that have made a lasting impact on the future of our society, on generations, and ask yourself this question, what is the impact that you want to have? Because when you start asking this question, how do I want to use my life? What is my purpose? What is the impact I want to have?

What's going to live beyond me? You stop thinking small and you start thinking about okay, if I'm here now, who is the person I need to be? What is the mindset that I need to have in order to achieve these things? The point of that is not to say you're inadequate or I'm inadequate or I'm not good enough, it's that there's a growth mindset and a possibility for here's what I can achieve. Here's what I can learn so that I can have the impact that I want to have. It can be a double edged sword because you don't want to have that negative self talk. You don't want to feel like you're inadequate, but you want to also recognize that there's still head room and there's still room for growth.

Patrick: [00:49:20] Several things you have said are going to make me ask one of my usual questions out of order. Which is to ask you what the kindest thing anyone did for you in the nine year process to this point outside of the company. So someone that wasn't partner or an employee, what was the kindest thing that you experienced in the first nine years?

Scott: [00:49:42] That's a good question. I think that the kindest thing that someone's done for us is, one of our now board members and a very, very early investor in Sir Kensington's really took a bet on us. His name is Keith Miller and I often refer to him as the godfather of our business. Here's someone that had no business meeting with two guys making ketchup. He works in a private equity firm in a fancy office in Midtown. He's an entrepreneur, CEO, board member of public companies. When you walk into his office, he's got pictures that he's taken on Polaroids of Kanye West and the Olsen twins. Here's someone who, before we had any social proof.

Before we had any really evidence that we were going to be successful, he saw something in us and that was very personal to him and I think he took a shot on us and through thick and through thin. Whether we were beating budget or whether we were missing budget or whether things were looking up or things were looking challenging, he was just relentless in helping us get to that next level. Above and beyond what the responsibility that he would have as an individual was.

Witnessing that kindness was inspirational and has been inspirational for me, because it goes along with this great piece of advice that my grandfather says which is, "If you want to be successful, don't be a go getter, be a go giver." It helped me recognize that not only do you get a personal benefit and an emotional satisfaction from being able to provide for others, but it's really necessary to help create the future and to be an innovative category as an innovative businesses where is no traction or proof. Or when there is, it's too late to be part of that early stage. Keith's been tremendously kind to both of us and he's been a role model for me.

Patrick: [00:51:48] Isn't that something that a lot of people have said, which is that the go getting mindset is a short term type investment. That it can yield certainly results, but that not unconditional but somewhat unconditional giving is often a fantastic long term investment. Again, back to this idea that it will produce unexpected positive outcomes that you can't plan for ahead of time. You just have to have a leap of faith that that will happen. This idea of karma, there's a lot of ways of formulating the same idea. But it's just true. It just seems to be a rule of the universe-

Scott: [00:52:25] It is.

Patrick: [00:52:26] … and the only way to know that, because it's not the most rational or logical idea at face value, is to start doing it just randomly, like random acts of kindness or whatever you want to do. Then you'll realize it. It may take a couple of years, but you'll get that experiential feedback loop and then you realize this is literally the best investment I can make. Is helping other people without what's in it for me right away.

Scott: [00:52:53] Exactly. That's part of surrendering your ego. That's creating community. That's welcoming people in as family and friends and not seeing it as a tit for tat. Moving away from that scarcity mindset. Patrick, have you seen this movie Supermensch? They call me Supermensch?

Patrick: [00:53:08] I've read the book.

Scott: [00:53:09] Oh, you've read the book. Okay. I think Shep, who actually met last weekend is a great example of that mindset. He calls them coupons. But when you deliver these benefits for people and you help them out, you create this karma and you create this positive energy and everybody wants to be around him. That's one of the fundamental paradox is the best thing you can do for yourself is doing good things for other people. That's why I've loved having a baby. Having a baby boy and moving my sense of self and my sense of value from within my body to now part of something that's shared between my son, my wife and myself. Moving to that family unit. That's part of I think surrendering the ego. It also goes all the way back to Buddha's philosophy. Surrendering ego, recognizing that we are all this collective energy. It's the same kind of thing. I think there's a lot of truth to it.

Patrick: [00:54:05] Can you describe who Shep is just for people that don't know?

Scott: [00:54:08] Yeah, Shep Gordon, he was in Southern California in 1968 and he was selling drugs in a motel in Hollywood. Jimi Hendrix was one of his customers, asked him, "Well, if the cops come, what are you going to say that you do? What's your cover?" He's like, "I don't know. What should I say?" Jimi Hendrix says, "Well, are you Jewish?" He goes, "Yeah." Jimi says, "You should be a manager. Here's some bands to manage." So, starting his career he began managing and really created the act of Alice Cooper. Briefly managed Pink Floyd.

Then later in his career as he began producing independent films and representing acts like Luther Vandross and Teddy Pendergrass, he discovered that he had a love and a passion for cooking, the culinary world and food. He created the concept of the celebrity chef and he started representing chefs like Emeril Lagasse, he was his first manager and started getting chefs and culinary figures remunerated for the work they were doing on behalf of companies, brands and things like that. To this day, he only represents Alice, but he's known for representing musicians and chefs and being as, people call him the Supermensch.

Patrick: [00:55:32] Fascinating. Must have been a fun conversation. You did something which is one of my dreams. Which is-

Scott: [00:55:40] And he's a big fan of Sir Kensington's by the way.

Patrick: [00:55:42] That's very good. Good fan to have. Which is you biked around Asia.

Scott: [00:55:48] Yes.

Patrick: [00:55:48] On a foldable bike.

Scott: [00:55:50] Yes.

Patrick: [00:55:50] For, how long was it?

Scott: [00:55:52] 10 months.

Patrick: [00:55:53]10 months. When we first met, I knew you had done this because a mutual friend who had introduced us told me. I love travel and specifically I love that part of the world. I've had some of my favorite life experiences there. But the way you did it is the way someday I hope to return and do it. When we first met, I intentionally said, "Let's not get into this because I want to hear about it for the first time here." I would love to hear that story. Why you did it and maybe some favorite stops along the way. But more importantly, what you learned through that 10 month process.

Scott: [00:56:30] That's a lot and great questions. I've always loved riding a bike. I think riding a bike is an amazing way to see a city and it's the right pace to go. When you're walking, it's a little too slow. When you're in a car, you're very removed. Bicycles are a great way to get around. It's a friendly way to transport yourself and it's a great way to work up an appetite and get some exercise too. A friend of mine, a guy named Woody Schneider was one of my best friends. In college, every Sunday we would get on our bikes in the morning and we would ride around the Providence and go outside of Providence, Rhode Island and have these weird adventures and discover things.

At some point, I was telling him about my experiences, an internship that I had in India working for a social entrepreneur and my time in China. He was telling me about his time in Russia. What we called what we did, biking around, meandering and wondering, we called that wheeling. We were like, oh we should go wheeling in Asia after we graduate. We did that really briefly. Then we went to take full time office jobs. After doing that for close to two years, we said, "That was so amazing what we did." At the time we went from South India to South Korea via Western China and our approach was, it's not about stamina. It's not about distance.

Its not about miles traveled. We wanted to explore cities as magnets of culture, so we had bicycles in these cities. Then we would get on trains, occasionally planes, boats. Then we would go from city center to city center and then ride a bike around there. So we said, "Let's do a bigger trip. Let's make it last 10 months. We'll brand it Asia wheeling. We'll create a website that's a blog that has all of our stories and pictures and all the food we eat, our itinerary and everything like that. Explore an area that was very new to us with really open eyes. Asia is roughly 60% of the population of planet earth currently. As geographically defined, most humans are Asian.

In our lifetime, Asia will go from relative poverty to relative abundance and there's going to be massive, there already is massive cultural shifts that we've seen in China and in India, across Asia. Really, I think an important thing to understand and to learn about. On top of that, we didn't expect, but what we learned was that, when you're in one environment, when you're in one city one day and you bike around. You get to know it. You don't necessarily have a map, you don't speak the language, but you learn how to get around, how to pantomime and facilitate yourself. Then the next day, you move on. We would spend very little time in each city.

Maybe one day, two days, three days. But we were on the move. We went to 23 different countries, 100 different cities over 10 months. What you realize is that you start to be at home with the world and at home without having a routine. Because there is no morning routine. There is no ritual to that. There's no morning commute. By getting really familiar with the unknown and inventing your own luck everyday, I think you start to become more and more comfortable with that temple of Poseidon moment. Okay, I'm in the unknown. Yes, you have algorithms and you have ways to tackle these things. We luckily had these amazing, what we call bureau chiefs that were individuals that were partially responsible for helping guide us in each country.

Patrick: [01:00:05] How did you set that up?

Scott: [01:00:08] What we did is we called up our friends and we called up friends of friends and we're like, "Hey, if you bureau chief for us and you help us know what we should do, we'll print you some sweet business cards that say bureau chief on them." We would send people these business cards and they would look so cool. They had Asian wheeling in all these languages. Then people would say, okay, eat here. Don't go here. Do this. Take this train. Beware of this. Meet this person. Go to this restaurant. That was really cool. I think some of my favorite places, it breaks my heart, but this was 2010, we went to Syria before the war and Syria was an amazing place.

Damascus, Aleppo. Beautiful ancient cities with the nicest, most welcoming, warm people. It's such a travesty what's happened there. Syria was really amazing. Also, we went all the way West as far as Turkey. We started in Indonesia, went all the way West to Turkey. We went North to Siberia. Again, geographically in Asia. We took the Tran Siberian railroad in the summer, which was an amazing experience. Because in Siberia, it's cold for 10 months out of the year, so in July and August, people are thrilled. They're dancing in the street. Siberia was an incredible experience. As was, I love traveling in China. I love experiencing the deeper parts of China.

Ancient capitals and seats in Southwest of China specifically. There are some great places there. I'm trying to think of the name. Right in between the border of Vietnam and as you go up towards Kunming in Yunnan Providence. This would be unknown to foreign tourist, but an awesome experience where restaurants that have these communal grills where you use an extra large pair of chopsticks to grill and flame broil your own blocks of tofu on this giant shared grill. These experiences, the whole thing costs a dollar. Really special things. But I highly encourage people to check out the website and to spend some time in the unknown.

Patrick: [01:02:22] You have accomplished and I know obviously your journey is continually unfolding and you're not going to stop. But you've accomplished what I think a lot of young entrepreneurs think of as the ideal. Had success. There's a ton of people I think that listen, looking for insight into mindset, which we talked a lot about. But in closing, if you could offer just a bit of orientational compass like advice for say someone in their early 20s that's maybe the person you were in your college dorm room 10 years ago or whenever that was. What would maybe some closing thoughts be for that kind of person?

Scott: [01:03:07] Every day is really meant to be enjoyed. The journey is the reward. I don't really feel fundamentally different now than I did before I had sold my company or even before I had started my company. The growth and the true happiness that I've had comes from family. It comes from giving and surrendering your ego. In any entrepreneurial process or really in the process of life, there are going to be setbacks and the journey from point A to point B, you think it's a straight line, but it's going to be all over the place and you've got to learn and have the perspective to enjoy that journey.

I think that's the other thing that I recognized in traveling across Asia and spending time in India, that if you're listening to this podcast, you are one of the luckiest people on the planet and you have to keep that into perspective. You have to realize that you have been given an incredible gift and you're very fortunate. Get in touch with that sense of gratitude on a daily basis. Google gratitude meditation. Keep a gratitude journal. If you're remember and you write down why you're so lucky and what you're so happy for, you will naturally enjoy the journey that much more.

Patrick: [01:04:25] Well Scott, this has been by far the best conversation on ketchup that I've ever had and likely will ever have.

Scott: [01:04:32] Yeah, just a vehicle for something greater, Patrick.

Patrick: [01:04:34] Right, exactly. This has been extremely fun. So thank you for your time, can't wait to continue the conversation.

Scott: [01:04:40] Well, I really enjoyed this and I'm honored. So thank you so much.

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