David Hirschkop – Taking over the Press with Insanity Hot Sauce

Founder of Dave’s Gourmet – David Hirschkop

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Dave started with his first hot sauce as a joke. Then he started being known for it.

Learn how he gained countless press mentions with wacky ideas like presidential hot sauce, and adjustable heat sauce in a crowded market!

Resources Mentioned in the Podcast:

• The 4-Hour Workweek by Timothy Ferriss
• Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne

Go to davesgourmet.com for more info!

Thanks so much for listening!

Any questions or comments on the podcast let me know!

Transcript:

Welcome to the Eventual Millionaire podcast. I'm Jaime Tardy and today we have David Hirschkop on the show. Dave is awesome. He owns a website and business called Dave's Gourmet and they sell like crazy hot sauce and really cool food and I have to read this because, on his website, he has got testimonials from a crazy number of places. One is Dave's condiments and sauces are legendary from the Washington Post and the hottest culinary experience known to man from the New York Times, which is kind of amazing. I'm really excited to have him on the show and tell us all the ins and outs of what he has been doing in business. Thank you so much for coming on today, Dave.

DAVID HIRSCHKOP: Thanks for having me. That's a great introduction.

JAIME TARDY: Try to make you sound as cool as humanly possible, when you come on my show, so that way you want to come back later. What I want to do is first sort of start at the beginning for you. When did you start and how did this come about?

DAVID HIRSCHKOP: As it already says, this is a result of a strange joke. I used to have a restaurant in College Park, Maryland, which is the University of Maryland and it was kind of a unique wrap Mexican and burrito place and we got a lot of drunk people in there. I don't like drunk people so we would mess with them by making really hot sauces. Then I figured out a way to make sauces hotter than anyone else and went on a mission to create the world's hottest sauce, which I did, and we called it insanity sauce. I went to a trade show with it for fun and it just caught on like wildfire. I sold the restaurant and kept doing sauces as a hobby until the hobby got too big and became a business.

JAIME TARDY: That's a really great story. I love that you were trying to play a joke on drunk people. I think that's hilarious. Have you always liked hot sauces? Was this something that you've always done and liked since you were younger?

DAVID HIRSCHKOP: Yeah, I like hot sauce. I like everything, well basically except for Brussels sprouts. I'm an idea guy so I always have fun sort of creative ideas and that's really what I love. To me it was funny. It was just like wow this is fun. I just kind of went with it and it just kind of blossomed. Initially with insanity sauce, why would you serve this sauce? It's so hot you must be crazy. No, it's insanity. Then I wore a straight jacket at trade shows. We just went with it and played sort of like a game.

JAIME TARDY: I don't know when, you said you started this in 1993?

DAVID HIRSCHKOP: ?93, yes.

JAIME TARDY: Was the market for hot sauces, like now the market for hot sauces is kind of crazy. There is so many different kinds. Were you sort of one of the first and that's why it sort of took off like wildfire or how did that go?

DAVID HIRSCHKOP: I don't think anyone realized it at the time. Early '90s you had people eating a lot of habanero sauces and people were really getting into the specialty and super hot sauces. There was nothing in the magnitude of what I created. Mine was five times hotter than anything that existed and so I created this whole little niche called the super hots and they're based on extracts. It was this pent up demand, which just sort of shot out. Unfortunately the niche is self-limiting but it was fun. It was a great starting point and there are some people out there that I think are made of asbestos.

JAIME TARDY: First, how did you figure this out? How did you make a hot sauce that's five times hotter than everybody else's?

DAVID HIRSCHKOP: Well, I figured out that hot sauces were limited by the chili you put in. Gosh, how do you get around that? What makes the chili hot? I thought whatever is in the chili that's hot is much hotter than the chili itself. Just bear with me on this. I figured if you could take the hot part of the chili out and just use that, you could make a much hotter sauce and in essence that's what I did. It's the same ingredient, you know, the pepper spray. I think Ginger Ale uses a little bit of it. I think a lot of times people make things too complicated.

JAIME TARDY: I was going to say. You weren't the first person that's ever done that, right, but you were the first person that sort of made it a thing.

DAVID HIRSCHKOP: Yes, we were the first person to do that with a hot sauce. By just sort of knocking it down to the basics and thinking it through a tiny bit we were able to do that. We did it for all the evil purposes.

JAIME TARDY: For comedy. All in the name of comedy, it's fine.

DAVID HIRSCHKOP: It's an important motivator.

JAIME TARDY: That's awesome. So you have this hot sauce, you think that there's a niche, did you go in, I mean you didn't go into going this is a really cool niche, but you found it that way, right? Usually, I've interviewed a lot of people and a lot of the times they say you need to find the people and then solve their problem. But it sounded like you found the product first and then decided to go sell it. Is that how it sort of went?

DAVID HIRSCHKOP: Yes. I think if you're doing cool stuff that business can find you. That's sort of more our model. We just make really cool stuff and business finds us as often as we find it. If you're focused on finding business, too many people try to find business by bringing out mediocre products or with me too stuff or average stuff or a lot of things are already out there and it's sort of like you're banging your head against the wall. It's so much harder to do business that way. If you do something that's actually special and desirable then it makes business a lot easier.

JAIME TARDY: You had that crazy niche that you sort of created on your own. Tell me about the growth. When you went and you said it went like wildfire when I went to a trade show, what does that mean?

DAVID HIRSCHKOP: You saw the New York Times picked up on it right away and a bunch of other media. There's all these specialty stores across the country that were starting up to do specialty hot sauce and so forth. They started just placing orders and I was just some guy in my living room, had a little bit of sauce and was trying to market it. It just led to people coming to us and us figuring out what are we going to do with sauce. I can't store it all in my room. It just jumped off and within I think three years we were at a million dollars in sales. Not really even intending to be a business, just sort of like hey this is fun.

JAIME TARDY: I love that. Where did you go from being in your home and trying to figure out how to make as much hot sauce, as you were getting orders for? What did that growth look like in the first three years?

DAVID HIRSCHKOP: I think that we did it pretty intelligently. I often say "we", it's sort of like the royal we. It really was me.

JAIME TARDY: You know my people.

DAVID HIRSCHKOP: My people; me and us and me, my other personalities too. I sold the restaurant because that was just a grind. That was sort of an independent thing and then I got a job. Did the sauce on the weekends and at night. I just work at my job until the hobby was too big and I had to quit my job to do the sauce. I think a lot of people kill their business because they are so dependent on it they're sucking cash out of it and it just sort of collapses. In my living for a year; I had someone making the sauce for me. I found a guy who worked for him who would take my sauce to his mother's house. Her garage was my warehouse. She would ship orders UPS for me.

I set up an 800 number so people would call. I can't remember if we even had, I think there was email in '93. People would just basically send me orders either fax or phone-in orders and I'd get them over to this woman and she'd ship them. It worked and that was like a year and then we got a small warehouse of our own, which was three doors down from the packer who made our sauce. I had two employees. A couple years later went to a bigger warehouse. Sort of the normal growth path but, you know, it's those baby steps where you keep expenses very low. That's one thing we've always excelled at was keeping expenses down.

JAIME TARDY: That's really important. Let me go back for a second. You had a job. Why did you quit the restaurant? It's funny, I just interviewed a guy who created 22 restaurants in 6 years. The person from last week, Doug, he's a great guy, but it is one of those things where it does seem like a hard industry to be in. What made you decide to quit your restaurant instead of trying to be more the owner of your restaurant and not necessarily working it so you could do your thing on the side? Selling your restaurant and then finding a day job seems like kind of a crazy thing to do.

DAVID HIRSCHKOP: Hindsight is 20/20, right? It's like gosh if I only had - The restaurant, that's a good example of where we didn't work on the restaurant as much as we worked in the restaurant. I think we were just getting burnt out. The hours were incredibly long, smelled like an onion all the time and really it was just tough. We didn't do a good job of stepping back and saying, "What do we have to do to the menu? What do we have to do to our marketing? How do we make this more of a break even, less of a break even enterprise and really like a successful thing?" We were sort of along the lines of a Chipotle grill.

JAIME TARDY: Nice, Chipotle is doing really well too and this was back in '93. You could have been doing well in that too.

DAVID HIRSCHKOP: I think that the difference is that they executed really well and we didn't. Conceptually I think our stuff was actually a little more creative than theirs but that's where a great idea is great and I think necessary but execution is pretty darn important. I think we made the right move because I don't think we were going to step back at that point. I think you have to recognize when it's time to step away from something and I think we did a good job of stepping away.

JAIME TARDY: That's awesome. Now you wouldn't have gone back and changed it. I know you're like there's somebody in here, that's fine; that has happened before.

DAVID HIRSCHKOP: I was motioning to her to shut the door. They open the door and they're banging around in the next room. It's like wait a minute, that's pretty darn distracting.

JAIME TARDY: No problem at all. We are totally cool with it, as long as we can hear you, we can hear you fine. Bang whatever you want. So you're there. You quit your job. You deal with your day job. I need to ask about this because I know I have clients and I get emails from people that are trying to work their day job. I know this was a long time ago for you but they're trying to work their day job and do something on the side and they're ripping their hair out because it's ridiculous how much they're working and you have split focus; it's really difficult. Do you have any tips or advice on that?

DAVID HIRSCHKOP: I hate to recommend the four-hour work week but Tim Ferriss has some good points and there are some good ways to leverage time in there. I think you have to think about how can you leverage your time and where are you getting the highest return to value on your time. Understanding security is also an issue. I think those are things to think about. I think also people can tolerate some pretty tough stuff for short periods of time. Are you making progress?

If you're working your business on the side and you can see some sort of growth path and you can really see your future, then you can probably deal with that for a year until you can start making a move. You need to sort of mentality map it out like how is this going to go because no one wants to do that for four or five or six years because then you're just going to get totally burnt out.

JAIME TARDY: Did you set goals when you were in that point of going okay in a year I am going to quit or anything like that?

DAVID HIRSCHKOP: No. I am a pretty ADD kind of disorganized guy. I can't tell you the number of times I have written lists and plans and projections and then lost them and had to redo them. It's sort of like ah man. I think the thing with business is people that are successful don't all succeed for the same reasons. I have seen businesses with very mediocre products very successful because they're just amazing sales and marketing teams or they're amazing at executing and they under price everyone or they have great relationships and they are able to leverage those.

People succeed for different reasons. We succeed because it's all about the product stupid. Our sauces, we won best pasta sauce in the industry two different years. We don't make the same things as other people, in terms of like our flavors are actually different. Some of our sauces are actually orange they're not beet red. If you look at the pasta sauce category it's all just red. We know why we're successful and we sort of stick to our secret sauce and we try to improve in the other areas but everyone now feels this pressure like I have to be good at everything. Oh my gosh, that guy is good at social media, I've got to do the best at that. That guy is good at his employee practices, I must have the best employees. You can't be great at everything.

JAIME TARDY: That's a huge important part that every entrepreneur thinks they have to do everything the best. So you being able to say that is huge.

DAVID HIRSCHKOP: It's like what's your secret sauce? What can you do? Where can you excel and how would that translate to something meaningful for the consumer or your customer whoever they are.

JAIME TARDY: Did you just know that? You were like the product guy. You're really good at this and that's why you went that path? How did that work? How did you find that?

DAVID HIRSCHKOP: I think it's sort of my DNA to do that. I did it and I started seeing success and it's sort of natural to follow what works. Maybe I was ignored as a kid or something and so I am like "Hey, look at me, look at me." That made me sort of good at marketing in a way because I like to ham it up with the media and do interviews. That worked. The product along with the cheesy marketing was just an effective combination for us.

JAIME TARDY: That's really good. Let's talk about some cheesy marketing then. You owned a restaurant before but had you ever done marketing especially for a product?

DAVID HIRSCHKOP: No. I was 23 I think.

JAIME TARDY: How did you learn? Like you said, you've been in business for almost 20 years. We said that before we got on live, but I really want to know. What have you learned this whole time in marketing, especially because I think the landscape has probably changed a bit for you with online, I mean there was barely email. There were faxes when you started. Tell us a little bit about that growth for marketing and what's changed for your business.

DAVID HIRSCHKOP: Marketing is like a tool kit. Marketing is about getting attention. Sales is about closing, closing sales and marketing is about getting the leads in the door and figuring out how to get better turn and more sales and all this stuff. Sales becomes kind of perfunctory if you're marketing is really fantastic. I mean every salesperson's dream is to have an awesome marketing team where customers are just coming in the door asking for business.

JAIME TARDY: Yes, please. I'll give you money and every single time. Yes, that's what every sales person wants.

DAVID HIRSCHKOP: Sometimes you have these salespeople who think they're awesome but the marketing is so good it's like catching a fish in a barrel.

JAIME TARDY: It's not you, buddy.

DAVID HIRSCHKOP: So marketing is this tool kit. You have to pick. You've got advertising in there and trade shows and social media. You could do direct mail or direct email or whatever. You have to look at your tool kit, look at what you're selling. You might be business to business. You might be business to consumer. Then look at your strengths. How much cash do you have? What are you good at? How do you want to spend your time and you have to start picking through your tool kit. Some people are just amazing on Facebook and Twitter and so forth so social media is their thing.

Some people are great bloggers or do great interviews and do that. For us, we like to do things that were kind of interesting. We knew the media would pick up on those and so our thing became about PR. PR was the thing in our tool kit that we knew we could do well. Whether it's the million dollar sauce contest or the presidential hot sauces or pumpkin contests or whatever it was, we could just create things that were interesting, you know, $1,000 reserve hot sauce. It was just in our DNA then to ham it up and get the media excited. We sort of got it.

The media has patterns and if you sort of understand their patterns you can sort of slip in there pretty well. They have to fill space. If you do something interesting that fits in their space and you're able to get the knowledge to them that you have that, then you'll be given an opportunity there.

JAIME TARDY: Let's talk about this. I actually just did a webinar yesterday on PR. I've gotten quite a bit of PR and I researched and figured out how a lot of people get PR but mostly for service-based business. There wasn't that many product-based businesses so I really want to find out as much as I possibly can from you on this. How do you go about creating something like that and what are those patterns? First, let's start off with how do you go about creating the million dollar sauce contest or the $1,000 hot sauce? Do you sit and brainstorm? What's sort of your thing of going about and creating these crazy ideas?

DAVID HIRSCHKOP: Most of the PR stuff you hear is for like if you're a consultant or something. Go become an expert and get the media to recognize you as an expert and blah, blah, blah. That works sort of with products but not nearly as applicable. I worked something out that I call revenue positive marketing. The idea is what if I could create a product. Let's back up. Marketing costs money. It's usually a cost center, right. You spend money and get a certain amount of eyeballs and a certain percentage of the eyeballs become leads and a certain percentage of leads become customers. Sales and marketing is very mathematical at its core.

We said, "Gosh, we don't have that much money." What if there is a way and we didn't think this through up front. This is like being able to look back at what we actually did and now dissect it. What if we could create something interesting that we could sell and actually make money and get PR at the same time? Revenue positive; we're selling something, we're getting money for it and the media thinks it's cool. Back in '94 I created the hand numbered, vintage dated, reserve sauces in a wooden coffin. We upped it in a few years to a very limited realm with etched bottles. That was great.

In this election cycle and the previous one, we did presidential hot sauces. We made caricatures of the candidates and made funny jokes on the label. It was a race so whichever sauce sells the most is the winner and we do a tracking poll. The media operates on predictable patterns. Every election cycle they need to write election stories. Some of them are going to be more human interest oriented like funky merchandise or some kid who campaigns along the neighborhood.

Every Christmas they need to write gift stories, holiday stories. Every Halloween they write Halloween stories. You sort of can get the gist of it all. Then off of special occasions, human interest people still need to write human interest stories. The most extreme is a trend for years now - the most extreme this, the most extreme that. Social media kind of operates and viral videos operates sort of on some of the same basic patterns of what do people find interesting. People want to feel superior so they want to see idiots. That's one trend. Oh my gosh, I can't believe that guy did that. What a moron! Hey honey, look at that guy. He's an idiot.

You've got that pattern and then you got the fuzzy bunnies and the kittens and the dogs. Oh my gosh, isn't that cute? Did you see what that baby did? Look at that baby wearing the hot sauce clothes or whatever. You have to just sort of identify these basic patterns and the timing. You have to understand with the media too. A magazine you've got to work three, four, five months out. Newspapers have a shorter time frame. If you're going to do video, you have to have something that's actually good to look at or interesting. If you're going to have an interview, you have to be able to speak and sort of get your message out there and also be able to respond and sound like a half competent person.

PR and media have these patterns that if you can put out you can do well. Then the other piece, which I think is probably one of the things you're very good at, is sort of like okay well how do you get from I got this great thing, I'm sitting in my room with my great thing, but the media is out there and how do I connect with them?

JAIME TARDY: Exactly what my next question is going to be. I don?t even have to ask the question, great job!

DAVID HIRSCHKOP: You've got to do your job.

JAIME TARDY: I know, I'll just sit here. I won't say anything.

DAVID HIRSCHKOP: You have to ask the question, come on! Let me hear it.

JAIME TARDY: How do we approach them and actually connect with them?

DAVID HIRSCHKOP: That's a great question! I've been going back and forth on that actually. I find that trade shows have been very helpful. Sometimes you won't have great media relations yourself but you can piggyback on others that do. Trade shows sometimes have really great media people attached to them. Certainly PR agencies, if you find the right ones, they can be very effective. You can pay a retainer and a monthly fee and not get much out of it. We have gotten much more media on our own than we ever did through PR agencies.

JAIME TARDY: Me too.

DAVID HIRSCHKOP: At the same time, if you don't have the time or focus to do it, then they can be a good way to leverage in because they have relationships with some media. You might have to scale back your expectations a bit. There's also a lot of tools now. I think you guys were talking to Yaro the other day. Help a reporter out. I met you because of Trent. I got Trent from Yaro.

JAIME TARDY: Oh really?

DAVID HIRSCHKOP: Yes. Yaro can be cool. You can look through and find an appropriate story. You can use focus and tap into their media databases. I know you're big on conferences so you can go speak at conferences and do things like that. Basically it's just sort of nurturing the media. If you have something really cool you reach out. That's something proven pretty effective. The wire services are pretty effective also so that PR Web and three or four other online wire services you can tap into.

JAIME TARDY: Can you take me through, because I love this, right, this is a whole huge thing. We could go pretty deep into this. Can you give me some examples? From idea to actually getting it and tell us what you ended up getting at the end so that way someone can sort of follow what you guys went through and what success you had. I'll put you on the spot.

DAVID HIRSCHKOP: Okay. Our adjustable heat hot sauce?

JAIME TARDY: Adjustable heat hot sauce?

DAVID HIRSCHKOP: Adjustable heat hot sauce, it's pretty cool. You can actually turn the top of the bottle and it changes the heat of the sauce that comes out and it's a pump spray. In the end, actually, it hasn't been a successful product for us because it was too expensive, but really cool. We have this item. We go to the fancy food show, put press release in. I know the coordinator who runs media there. I talked to her, make it clear and she'll have like a top six list or something of her own. Then from some years of dealing with the media, I have some contacts in my database.

I reach out to a few of them. I deal with her. I can't remember if we used a PR agency on that one but I'll get back to that. Time Magazine writes this is something really cool. BBC wrote top ten innovations of the year. I think it made either Today Show or Good Morning America, a bunch of newspapers pick up on it. It was really cool. When I came out with my cookbook, then we did use a PR agency. There are some PR agencies where you can do a pay for performance model. You may not be able to say it but you can do it.

That's a model where hey I'll pay $5,000 and I'll get X number of interviews of radio stations of X size. That was really cool. I went around and did radio interviews all over the nation by phone except for NPR interestingly. They won't do by phone interviews.

JAIME TARDY: Really?

DAVID HIRSCHKOP: Yes, they don't like the audio quality. It has to be this pristine audio quality for them so you actually have to go to an affiliate station to do the interviews.

JAIME TARDY: That's interesting.

DAVID HIRSCHKOP: I think, for us, we've broken the mold a little bit on some of these items because media has found us more than in most cases. You're pulling or pushing, right? If you have a heavy object, is it easier to pull it or push it? You're science teacher tells you pull. Pulling is easier than pushing. So business is actually the same law applies. Something really interesting pulls you. You have this incredible item, people find you and it pulls you out.

Otherwise, you're pushing your way into the media's living room. You're constantly pushing into like sales pitches and it's much harder. We used this PR agency in Florida that did that radio campaign for the book. That got 30 pretty sizeable radio stations, got some buzz around the book.

JAIME TARDY: What did that do for you? We talk about buzz and stuff like that. Did that sell books? Did that change rankings? What did that for you tangibly? Did you have any measurements on any of that?

DAVID HIRSCHKOP: That's the thing about marketing.

JAIME TARDY: That's why I ask.

DAVID HIRSCHKOP: They will sell you ads. Well you can't directly measure it and then ad people are even tougher because it's like not one ad, no, no, this is about consistency.

JAIME TARDY: I know, right? That's what they always say.

DAVID HIRSCHKOP: That's right. You need to really stay with it and then you still can't measure it. We've always been willing to commit part of our resources to just sort of the baseline awareness. Our brand recognition, if you go down the street and ask 100 people, have you ever heard of Dave's Insanity Sauce or Dave's Gourmet, you'd be surprised how many people have heard of us considering the size of our company. At some point, we'll do a better job leveraging that but that's what it's really about with the eyeballs and so forth. Look at someone like Dollar Shave Club with that, have you seen that video?

JAIME TARDY: Oh yes.

DAVID HIRSCHKOP: That's just hilarious. What did that video, they got 3 million viewings, do for them? They're an online business so it's a little more directly trackable. Doing something inherently interesting and shooting it out there, sometimes can be measured in direct sales and sometimes you can't quite measure it direct sales because you've gotten buzz but your item mix is wrong. Your items are too expensive so you've got the buzz but you're not going to quite get the sales until you find that one item that is actually priced better or your items are not just positioned right or the packaging is kind of off.

That's where you sort of got to look at the whole mix of your marketing might not be the problem. It might be something else. Or the person that answers your phone or your website or whatever the interface is kind of feels rude or feels sort of off putting. You have to think it through. Sometimes the thing you think is the problem is not really the problem.

JAIME TARDY: That's what I think is really important to note too. When I talk about PR, my friends did a viral video online. They have 50 million views online. They were on Letterman and all this stuff and I think it's really funny because you go out and you have all this press but that doesn't necessarily turn into anything. They were on Oprah and Ellen and they were like hmm we don't really have a ton to show for it because they didn't have a product that they were selling or anything like that. I think that's really huge. People just assume well I was in the New York Times now we've made it. Now we're huge and that sort of stuff but, like you said, there are so many pieces or parts.

Before you try and get PR personally, you should really make sure that your systems beforehand are going because if you throw money at this PR device or whatever it is to try and get more things but you're not selling anything to begin with, make sure that sort of the processes behind it are working okay. Sometimes you can't know. Like you said, sometimes you can't know for certain when it's going but it's really interesting to sort of hear that side of things too.

DAVID HIRSCHKOP: Yes and you can't underestimate credibility. We've been on Good Morning America a few times, the Today Show, both are fantastic but a couple of the times we were on it was like crickets. Where's the phone ringing off the hook? Where's the 1,000 orders? I think we got one order. I think this guy ordered like $32. Man, that's awesome. I like that guy, he's a good guy. You can then say well we were on Good Morning America three times so when I go to meet with Safeway, well I've been on New York Times, Today Show, Wall Street Journal, blah, blah, blah.

I've been called a legend in the industry like five different times by huge media outlets. That's pretty important. That's credibility. Then the awards are the other part of that. So it's like people are willing to talk about you. People say well why are they talking about you but then you have to sort of convince them that it's actually because it's something positive.

JAIME TARDY: Not something negative.

DAVID HIRSCHKOP: Not because you're wanted in nine states.

JAIME TARDY: Wait a minute! Tell me how big are you guys right now? We're talking 20 years from when we were talking about before and the first three years you were at a million. What are you at now and how many employees do you have now?

DAVID HIRSCHKOP: We're about seven times as large as that now. We only have like nine employees. Everyone measures things by employees and it's sort of I don't want to have a lot of employees.

JAIME TARDY: No, you don't. Usually you don't.

DAVID HIRSCHKOP: It's a lot of headaches. My employees are great. I think I have a great group but management just takes time and things happen.

JAIME TARDY: Overhead too. More employees, more money you have to spend. That's really interesting then only nine employees. What does it look like? Who are the people that you have? I am assuming you have a manufacturing facility and stuff like that.

DAVID HIRSCHKOP: We outsource all manufacturing. We formulate our own items and do our own R&D. We have a full time R&D guy who works with me. We just have our first marketing person we hired and then we have two contractors that work on sales. One employee that works on sales and then everyone else, I don't know, it's four or five other people are all operations people making sure orders get in and get out and we get paid.

JAIME TARDY: Awesome. It's funny because I was checking out your website but you said you're not a heavily online business, you're mostly through distribution I am assuming?

DAVID HIRSCHKOP: Mostly through distribution. We actually had a website in '95 so we're sort of early on it but we sort of stepped in and didn't really step in. Pasta sauces, which are heavy in glass jars, aren't ideal to ship all over the country by UPS. The logistics don't work as well. We're like 1 percent internet and mostly we're in stores. We're in Safeway, Publix, Kroger, Williams Sonoma, Whole Foods, Costco, you know, we're in a lot of the big retailers. The grocery business is kind of a tough business though. You get on the shelf and you pay a lot of money to get on the shelf usually but then you got to get off the shelf and the competition is pretty brutal out there. When your sauce costs three times as much, you have to really give consumers a good reason to spend that money.

JAIME TARDY: Tell us about that, because it's not as though, all you have is your label, you know what I mean? It looks like it's more expensive. You can say New York Times or whatever on your thing but you've got the same shelf space, the same everything and they might not know anything about you so how do you stand apart in something like that?

DAVID HIRSCHKOP: It's tough. Our best seller is our butternut squash pasta sauce. The sauce is kind of orangy looking, right. So you walk in the store and you look at this massive set of pasta sauces. Let's say there are 120 pasta sauces you're looking at. It's like well gosh, our labels standout in a simplistic white. It sort of attracts attention but then you've got the sauce that's a different color. This sauce won best sauce in the industry. When people taste it, the responses are amazing. It's totally different. If you get heartburn it's better because it's not as acidy, really versatile.

So people are looking at this set, how are we going to get them to buy? You can't do anything in store really because it's just too expensive. Those tasting demos people like, those things are ridiculously expensive and so you can't really do those as effectively. You play these games with the stores, because they want your money and all these expensive programs. You're after a little tag, because when you get a little tag, it doesn't matter what it says, you know, $1.00 off, $0.02 off, this is natural or whatever. You're after a tag. Anything to get their attention, because a lot of the people make decisions at store level.

This is where we all focus, where we want you or 7,000 other people on the web or media to say this stuff is great and someone to clip that out or put that on an electric list or somehow remember it so when they get into the store they're like oh that's that stuff I heard about. It's hard because you've got people like Ragu or whoever, who make an okay product but it's nothing special who are spending $100 million a year convincing consumers that hey Ragu it's your friend. It's like childhood. It's like old Rome except well the ingredients are different and the formula is not the same.

Business has a side I don't like because marketing should be giving information to consumers so that they can make the decision that's in their best interest which should be buying the best product at a reasonable price for a good value for that product. But marketing is really not that at all. It's a sales process to deceive consumers into buying whether it's good or not.

JAIME TARDY: It's amazing. If a company is really good a psychology and learning how to get inside the heads, even if they have a crappy product like you said, they can still sell it, which is kind of crazy and sad.

DAVID HIRSCHKOP: Look at beanie babies. Where's the benefit? I guess there's some entertainment value or something. By and large, in most stores, the products that sell the most are not the best products.

JAIME TARDY: See, I really want to try your product now though. You're talking about it sounds really different. It sounds like something that I would be interested in but of course I've never seen it or noticed it or anything like that. That's a hard thing.

DAVID HIRSCHKOP: Shoot! One new consumer!

JAIME TARDY: You got one, sweet! That's really cool and I would love to chat with you a lot longer. It's funny, I just looked at the time and realized that we have been chatting for a really long time. What can you give us for advice, like I know you said The Four-hour Work Week, are there any books or anything that have sort of helped you in this journey that have really made a difference?

DAVID HIRSCHKOP: People who are like ADD that are in and out really fast, but I did just finish The Blue Ocean.

JAIME TARDY: I was wondering. I was going to say that because we talked a lot about niche and stuff like that. I wondered if you read that book before.

DAVID HIRSCHKOP: I really enjoyed that book and it's sort of along the lines of what we do except from a much more intelligent person.

JAIME TARDY: So read that book.

DAVID HIRSCHKOP: We sort of just do it and he sort of like tells us what we're doing. We're like oh yeah okay that's what we're doing.

JAIME TARDY: No, that just means you're smarter than you realize. We're actually doing a strategy. We didn't even realize it until we read the book, right?

DAVID HIRSCHKOP: A luck is a powerful force.

JAIME TARDY: Oooh, do you believe in luck? Do you actually believe in luck?

DAVID HIRSCHKOP: Yes, I do. If I created super hot sauce at a different time period, people may not have been into it. I had friends who owned a mortgage bank a few years ago. Immensely successful, sharp guys and then bam, what happened to the marketplace? I mean they went bankrupt. I had seen a lot of successful people, smart people, in that industry, who went belly up and it wasn't because they didn't do a good job. How can you succeed in that industry, at that time period? I mean the best of them had some reserves and were conservative enough and treaded water for a couple years there and stuck in it.

I think there's an element of luck in it. I mean specialty food sales, as an industry, is really growing now and people are moving to food experiences and realizing there is a lot more out there and a lot of cool things to taste. It's a good time to be in that industry. Yes, I think that definitely helps.

JAIME TARDY: Awesome. Definitely. Foodies. I know too many of them and I am one of them myself so it's really interesting to sort of see the different and new stuff that's out there, that even I don't know about. We have to wrap up. I want to have you back on at some point too. I am sure there is a lot more that we can end up talking about but what's one action that listeners can take this week to help move them forward towards their goal of a million?

DAVID HIRSCHKOP: Wow, big question.

JAIME TARDY: I know, right.

DAVID HIRSCHKOP: Deep thoughts. Was that Saturday Night Live? Deep thoughts. It's all about the product stupid. I think the one thing they could do is step back and think what could they make or what service could they provide that is not being done or is not being done well. Often times this relates from people's personal experiences. If you're trying to find something and you can't find it or if you have trouble with a product or type of product all the time, like gosh this thing is so hard to figure out, that should be you're ah-ha moment, where you're like wow.

Let's look around and see if anyone does this in a way that's good and that would work and if you can't find it, then maybe that's something you could do. It's all about benefit to the customer and benefit to consumers. If you're not willing to take that extra step and make something that's better, then you are sort of setting yourself up for a tough journey.

JAIME TARDY: I like that. Start with that so that way you set up the whole rest of your company instead of like you said pushing something that's really heavy. You'll get really tired after awhile.

DAVID HIRSCHKOP: Yes, it's much easier. We all sort of have a sort of laziness. In fact, a certain kind of laziness is inherent in a lot of entrepreneurs. It's like procrastinate the stuff that isn't important so that you can get to the stuff that is.

JAIME TARDY: I don't know how many people have said, on my show, I have ADD. I'm so ADD and stuff like that. It's a common trait. It's kind of funny. It's kind of amazing. Thank you so much for coming on. Tell us your website. We'll definitely link it up. If we can find you on Facebook or Twitter or anything like that, go ahead and tell us where we can get all your stuff.

DAVID HIRSCHKOP: Cool. Davesgourmet.com is the website. Finding us on Twitter is pretty darn easy and Facebook and Pinterest and all the other places. Take a look. We have some fun stuff on the site.

JAIME TARDY: Awesome. I'll definitely make sure to link everything up too and now I am going to have to go to Whole Foods and try and get it. Maybe I'll do a little review or something like that, at the bottom, if I can find some close.

DAVID HIRSCHKOP: That would be awesome. Thanks and buckle down for the upcoming storm.

JAIME TARDY: Oh yeah, thanks. Hopefully it won't be too bad on Halloween. We're recording this a little earlier so hopefully we'll know by the time this comes out. Thanks so much for coming on, Dave. I really appreciate it.

DAVID HIRSCHKOP: Thanks for having me. I appreciate it, Jaime.

Just to note, you can download the top ten tips from these millionaire interviews on the blog.

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Tags: business strategy, David Hirschkop, millionaire interview, Physical Products, press

Categories: All, Business, Business Model, Entrepreneurship, Marketing, Millionaire Interviews

Hi I’m Jaime. Each and every week I bring you the top business advice from the people who know best.

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