You're listening to Cubicle to CEO episode 243. Are you misallocating your company's resources on a product thats stunting your growth? Today's case study investigates this dilemma. Michelle Razavi, CEO and co founder of the gut friendly food company, Elavirecently faced this roadblock head on. After successfully launching the company in 2020. With collagen protein bars, she made the tough decision to cut this entire product line, giving up $100,000 in guaranteed revenue in the process, in favor of going all in on their new and more promising products line of dessert cashew butter spreads.
Mere months later, Elavi desert butters were picked up by retailing giant Costco, and now they're on track to generate $1 million this year. It's not easy to let go of something you poured your heart into. But what if doing so could open the door to a new million dollar opportunity. Michelle walks us through how she came to this decision. The pitching strategy that got Costcos attention and y this pivot 10x their revenue.
Welcome to Cubicle to CEO the podcast where we ask successful founders and CEOs the business questions you can't google. I'm your host, Ellen Yin. Every Monday go behind the business and a case study style interview with the leading entrepreneur who shares one specific growth strategy they've tested in their own business exactly how they implemented it, and what the results and revenue work. You'll also hear financially transparent insights from my own journey bootstrapping our media company from a $300 freelance project into millions in revenue.
Hey friends, welcome back to the show. Today I have with me Michelle Razavi, who I actually got to meet in person recently at South by Southwest. She came to the Cherub pop up shop and was so supportive and kind and we did a live podcast there as you know, with Shannon Davenport and Bridgitte Mallinson. So if you haven't listened to that episode, we'll make sure to link in the show notes.
But Michelle actually gave me a sample of her amazing product line, which we're going to talk about today and the case study around why she chose to let go of a $100,000 product line in favor of something that wasn't for certain, but now has the data to show that it's going to track about a million dollars. So I'm really excited to dig into the details. But before we do that, Michelle, can you share with us your Cubicle to CEO story? What was that catalyst that led you into entrepreneurship?
Oh my gosh. Well, thank you so much for having me. First of all, I am a huge fan of you and your podcast. So it is such a delight to be here. But yeah, kind of just taking a step back into how we got here. I was working at Sephora corporate prior to starting Elavi. And I was working on the innovation team overseeing a couple different things from glean beauty to AR VR consumer journey, and also overseeing the entrepreneur incubator program that they have internally. And while I was there, it was so fun and interactive and a great experience for me to really put my previous background experience in E-commerce and digital marketing into consumer. But my passion is not in beauty. If you meet me, I barely wear an ounce of makeup I'm usually in wearing.
Still so so beautiful, glowing.
Thank you. And it was so fantastic to be working for one of the largest beauty retailers because I learned so much but it wasn't really aligned with my heart of health and wellness. I was just counting down the minutes to go teach a workout class at Equinox or was just super obsessed about you know, creating these like healthy food products to really fuel my long days between working in the office and teaching fitness classes. And that's really where Elavi was born. I was really struggling to fuel my body and also had a previous eating disorder where I was afraid of food because I had so many gut health issues from the current products in the market. So I really struggled to find food that was gut friendly as a lot of food products in the market had dairy sugar, alcohols, additives, preservatives that you know prioritized the profits for big food but didn't think about the consumer health at the end game.
And a frustrated consumer myself I started to create these low sugar clean ingredient protein products to really nourish me throughout my days would bring them to Sephora would bring them to the gym at Equinox and share it with friends and they loved it. They were asking about it. And that's when I knew I really had something there in terms of seeing this white space for wanting to really fuel our bodies with real ingredients. This love for food that I was trying to bring back into my life out of having fear for so many years, and really just bringing the fun and joy into eating as well in that equation. And so from There I, you know, took a leap of faith in myself, I was at a stage of my career where I was either about to go to graduate school or get my MBA or you know, take the next leap.
And you know, at that point, I was like, you know what, if I'm going to do something big, now is the time I don't have kids, I don't have a mortgage. So you know, let's just dive into the deep end and really took this idea down the rabbit hole and kept just taking one step after the other, not really thinking that it would lead to a full blown company. But this curiosity is what kept me going and brought on my co-founder, who was also in a similar stage in her life and her career, also had some more pain points with food. And we personally co-invested our own capital into starting Elavi.
Since then we've pivoted over the past four years, multiple times with different product lines, different brand names, we got national distribution we recently got into Costco, and the journey throughout has just been such an exciting experience and continuous evolution as both professional and personal. Yeah, so kind of fast forward to today, I'm the CEO of Elavi. It's such a joy to bring products out into the market that consumers love and enjoy as well. And to really bring representation into the food system where not many founders and CEOs look like me, but that I can be, you know, that representation in our retailers in the overall ecosystem of founders that aren't usually Middle Eastern women. So it's an honor to be here.
Wow, I am so impressed with what you've created. And I gotta say, I got to, like I said at the beginning, I got to try a sample of Elavi, and it was this bold, beautiful blue color, like not something you would expect necessarily for a nut butter. And it was so good, like just the right amount of sweetness. You can drizzle it on like your granola on your smoothies on your like just all your bowls like whatever you want to create with it. So anyways, for our listeners who have not had a chance to try your brand yet, can you just give us the quick context like what is Elavi what kind of products you guys create.
Elavi produces low sugar protein rich, dessert inspired snacks. They are protein rich and designed to provide that nostalgic joy about food that we grew up with in the 90s. And yeah, we're just so excited to bring products that are made with integrity, the products that you try the blue vanilla frosting, cashew butter, it's all naturally colored with blue spirulina, there's no food dyes in our products, no dairy, no artificial sugars, no added sugars, but all them tastes really incredible. So we're on a mission to really bring that joy back into our food system. But more more importantly, that integrity in the ingredients.
I stand behind that mission 1,000%. And one one thing I wanted to actually ask you on before we get into some of the details around why you decided to cut this $100,000 product line you had written somewhere, I think it was either in your case study submission, or maybe in your bio, and I just thought it was so interesting.
So Jared Smith, the co founder of RX bar, I'm sure any of you listening, we've probably all had an RX bar seen RX bar, you know, they're really well known in the natural food space. And he gave you this sage advice, quote, our job as a C-Suite team is to think about resource allocation.
Can you explain how you view resource allocation in your business? And at the time of you making this decision to cut the $100,000 product line? Where did you feel that your resources were being misspent?
Yeah, that's a really great question. And Jared has been so fundamental in our business as we think about scaling, because he's, you know, a great industry legend. So to answer your first question of how we think about resource allocation, there's a couple different things. One is the capital, that's a resource. Two is time, that's also a very, you know, finite resource, and team or talent. That's a resource, right? And so when we think about our business, or when anyone thinks about their business, it's like you're in the business of allocating your resources properly.
And especially when you're an emerging brand, you don't have that when you have resources. And so, for context for the audience, we started with a collagen protein bar line, when we first launched the company, early 2020. The world was different back then we didn't know we were going to inherit a global pandemic, just two months into launch. But here we are. And, you know, in that time, we still did a lot we did national distribution, and we got into Google offices. They were selling at major fitness locations across the country Equinox lifetime, so they were doing well.
But when we launched the second product line of the desert cashew butters, you know, we started to hit a crossroads where the two products were competing with each other in terms of resources, you only have a certain amount of time, a certain amount of capital, and you know, our team is very lean. And so as these two product lines were growing and they were starting to pull from each other. And from there we had a decision to make of, you know, we're not going to get to the next stage of growth with these two product lines, it's just too much for a two person team with the limited resources that we had. And so when we were chatting with Jared about this, you know, crossroads, he was like, this exact so this is exactly he said, You are in the business of resource allocation. If you need to cut one product to scale another, that is your job.
No investor, no retailer will ever judge you for making a smart business decision in cutting something to allow something else to flourish. And right now you're holding back this new product line from flourishing, because you still feel attached to this other product line that is doing well but not well enough. And that was the kick in the pants that we needed to really take a step back from our business release, ego release expectations release emotional attachment to our first baby, and really make a decision based on our fiduciary responsibility to our investors. Our goals aligned us as founders and operators to build a business that has stamina and growth capacity.
And from there, yeah, the the decision was pretty simple to make, difficult but simple. And so this protein bar product line, you know, we had to cut it pretty quickly, we had $100,000 easy that we could have made by keeping it on for an extra four to six months. But instead, we made the difficult decision to cut it swiftly. Because the time and the capital that we would have spent to make that 100k could have been reallocated to a better product line that is on track to make a million dollars in revenue in the next year. And so when you put that into perspective, we ran the models, we did our data analysis of what could the business look like with different decisions?
Once we saw that written out? For us? We're like, we'd be stupid not to make this decision. Right. And so yeah, that's that's how we made it and and it was that advice that was in the back of our heads throughout that really helped us get there.
So I am wondering here, okay, so walk me through this. At this point in time, you had these two product lines, like you said, the cashew, the dessert, cashew nut butters were the newer wine. Were the sales from the dessert butters already exceeding or over performing compared to the protein bars is that what kind of gave you that first indicator? Like, hey, maybe we need to evaluate the situation, or what was that catalyst that made either yourself or your advisors, Jared, whoever point out and say, Hey, you should be looking at this, maybe potentially letting one of these go?
Yeah, I'm so glad you asked that. Because it wasn't just one thing that went into that decision, it was a couple things. The primary thing was that we got the attention of Costco for our dessert, cashew butters with just three months in market for the cashew butters. And that's really what Jared said, he's like the fact that you got Costco to pay attention to you and reach out to you and want to bring you in, lean into that. So that was the primary mover was seeing a massive retailer show interest in a product line.
The second thing was, you know, we're really open to feedback, we listen, I think that's women's superpowers. And going out into the fundraising world, there was way more excitement for the desert cashew butters, than the protein bars, protein bars are challenging. It's in a competitive category. So that was one data point that was very persistent in the back of our heads. And lastly, consumers, that was a huge data point for us where we're seeing so much excitement, both from like a qualitative standpoint of consumers just reaching out saying how much they love this product, how excited they were, and a quantitative data point and that our repeat rate was higher, our Amazon business was doing a lot better for that product line.
So there was more revenue quickly, outpacing in the desert cashew butter line over the protein bar. So it was this amalgamation of all these different data points that came together to help us make that decision.
That is super helpful. I feel like I need to ask, you know, three months catching the attention of Costco, that's huge. Was that something that you had tried to get in front of them? You would pitch them had you previously tried to pitch your protein bars and they just weren't interested? Like, how did you catch their attention in such a short timeframe?
Yeah, so I never even thought Costco was even an option in the near future. And I'm very much into like manifestation and mindset and expansive mindset. And I had this conversation with one of my really good friends who's also founder and he called Pitch Costco. And when we were talking about I was like, That's it. You just emailed them. He's like, yeah, I just emailed them. And I was like, well, if you can do it, so can I there's nothing stopping me. And so that Aren't didn't even cross my mind.
Usually in the in the food space, you need a broker you need to go to a expensive trade show to make those connections, I never would have thought that just emailing could get you in front of a major retailer. Now that is to say it doesn't work all the time I cold pitch all the time and never get through. I think it was a combination of Right Place Right Time right product. And our Costco buyer happened to be looking for innovative new products. She has an affinity for women owned minority owned businesses.
And we had enough sales at that point enough Amazon reviews a digital presence, retail distribution for that line and other channels that when I presented the desert Kashi butters to them, they could do their diligence on us and see, okay, this is a legitimate brand, they've been around for a couple years, they know how to build a brand, they have traction. And when they were looking at us, they're like, this looks really cool. Let's give it a shot. And so that's really, you know, kind of all the different things that go into it is is it the right product that you know, pique their interest? Do we have the the the traction to let them know that we know how to execute on a Costco rotation? And yeah, the right champion that really wants to take a chance on us.
Amazing. I know some of our listeners who have product based businesses of their own who may be Costco is a dream retailer for them. They're gonna be like dying to know, Michele, well, how did you find the right person to pitch? Where did you go to find this email address? Can you give us any insight, any insight or detail on on how you went about finding the right person. And even if you remember, like, how you worded the pitch, or what the pitch subject line is, I know the hardest part is actually to get someone to open your email in the first place. So anything you could share there, I know, our listeners would super appreciate.
Yeah, so honestly, I guessed it right. And you can google like email formats for different companies. And they could try to show you the format, whether it's like first name, last initial or first name, dot last name, or whatever that formula is, it's not perfect. It happened to get through at the right time. Sometimes, if you're emailing during summertime, or spring break or the holidays, that can get lost in the shuffle.
So you want to kind of time it on the right date to of making sure it's not being lost in the shuffle, because I'm sure they get inundated a lot. And in terms of the pitch, I'm trying to remember what I wrote for the subject line, I think I made sure to highlight that we are women owned. I know that's an initiative for a lot of retailers to bring diversity onto their shelves. And I think I said the word innovative as well. Because specifically Costco, and I would say other retailers as well, they want to bring in innovation, because you want to present a pitch as, hey, this is a benefit for you.
Not hey, listen to me, here's what I have to say. But here's how I can help you bring more innovation to your set. So that I can drive more consumers to your store and drive more value, right? It's like what's in it for them. And that's the mentality you should have for any pitch for retailers, for PR for investors, it's this is the opportunity that I can create for you not, hey, take a chance on me. And that mindset has always been fruitful for me in crafting anything. And then lastly, make a concise, I can't tell you how many emails I get that are just like full blown essays. And I'm like, I'm just gonna delete this. I can't.
So yeah, you want to be empathetic to the person on the other side, they get inundated. So keep it concise and lean and hit with the major parts.
I really want to echo what you said about this isn't just like a charity athlete, please take a flyer on me, right? It's like, Hey, I bring value to the table too. Of course, I've never pitched actually, that's not true. I have pitched a product buyer before I'm forgetting this in my in my first job as an employee, I actually pitched a like an apparel, headwear line to a couple retail stores locally. So on a much smaller scale, but I forgot I like that. No, that experience escaped me.
But what I'm trying to say is on the pitching side of things, like from my own experience, like as a podcast host, for example, I always tell people, hey, when you're pitching to be on other people's shows, don't just say like, Hey, here's why I'm such a great guest and why my story is so good. But tell them like if you have me on your show, here's my promotion plan for the show. Here's how I'm going to leverage my audience and community to drive new listeners to your show because I feel like to your point if you can make a case about like I'm actually bringing the demand with me it's not like oh, if I land in Costco, you're generating all the demand right? So I love that tip. It's so underrated. I really wanted to pull that out for our listeners.
One more question on this before we get back to the case study. It seems like you kind of had a specific buyer in mind because you knew that like she was it I don't know a woman I think I heard you say that wanted to invest in women owned minority owned brands and also really valued innovation. And then you kind of use the formatting of the email to guess what the email was. But how did you find out who the actual right person to pitch was Did you just go on LinkedIn and search like Costco buyer? Or was this someone you had heard of maybe met at a previous trade show? Any insight there?
Yeah. So I actually didn't know who our buyer was. And Costco buyers are notoriously very difficult to get a hold of, they make their emails hard to guess. They keep a low profile intentionally, like, why would they like not because you know, everyone's trying to pitch them. So I actually took a long shot, I was just like, here's an angle that I was going to go for it could go, you know, arrived, and nobody cares that we're women owned, but I was going to lean into it, because that's authentic to us. And that's what's worked for us in the past.
So my approach to pitching is, do whatever you can to stand out and do what has worked in the past and iterate on that. And so if one person doesn't respond to you try to find someone else maybe more senior to go above that maybe the person who is always constantly getting pitch has a full inbox. But maybe someone more senior is not normally getting those pitches, or vice versa. Maybe you go for someone more junior, when I am fundraising, I actually go for the associates, I don't go for the fund managers, who are the ones usually making the decisions. I go for the associates because less people are reaching out to them.
So they're more likely to answer and then they could champion you up. So there's a bunch of different strategies, depending on you know, what is working for you, but try them all?
Yeah, and I will agree to that. So many times the gatekeepers are the people who are not the public facing figure, it's like, even again, I'm just relating it back to my show, because that's really all I can, you know, offer from lived experience. But like people are often like pitching me to be on Cubicle to CEO, and really, our producer, Sabrina is really the person mostly booking the guests on our show. And so it's again, it's that who can you get to to, like you said, champion you up. I really like the way you phrase that. Thank you for kind of going on that detour with me. So anyways, Michelle, going back to this decision of cutting this product line. Did you at the time that you made the decision to say, Okay, we could go another four to six months and make another 100k? We're not going to do that? Did you have any leftover inventory? Like what were you going to do with all of the protein bars that you already had in your hands?
Great question. Yeah, we did, we had a significant amount. And we decided to be very transparent with our community. And it actually ended up working in our favor. We had, arguably one of our biggest sales day ever, where, you know, we communicated with saying, Hey, we're making this decision. And we had a full PR plan of every single person from our customers who are retailers, who are investors and advisors have like, kind of tearing out who we're going to tell. And when. And we said, look, this is happening, don't worry, we have another protein product line in R&D. This is an exciting thing. This is like for our growth. So we weren't positioned, we were very intentional to make sure we weren't saying we're going out of business, we're making a strategic pivot.
And I think this is a great springboard to jump off of where, you know, especially women owned businesses, there's not always the permission to fail or pause or take a step back. And it was very instrumental to our business growth. And we wanted to bring our customers along for that journey. And so we said, hey, we're planning to discontinue this line so that we can focus on growing an even stronger line, this is exciting. We want you on this journey with us. We're gonna do a flash sale, get the last ones before they're completely gone forever. And they sold out within like five hours. It was wicked fast.
Wow.
Yeah. And it was one of our record sales days. And it look it was validating that we created a great product. And people are sad, of course, but they were for the most part championing us and understood. And we're grateful that we were very transparent about it. So yeah, we we ended up just going straight to your direct to consumer customers did a little bit more on Amazon and sold out really quickly of our remaining product.
Congratulations, that's huge. Five hours is no small feat to sell out of all your inventory of a line. I know that the reception was for the most part, like you said positive. But of course, in any sort of change, like we as humans, sometimes resist change, right? And I'm sure there were some customers who were unhappy about the decision, or I remember you even sharing that some of your advisers were not necessarily on board and pushed back against this this decision, while others were very strong advocates for it. So for our listeners who may be thinking about going through a public pivot themselves, how did you navigate some of those more challenging situations where people may have publicly or privately voiced disappointment or, you know, concern?
Yeah, no, that's a really good question. That was something that we were very scared to confront, and you kind of don't know what to expect until you're in it. So from a consumer standpoint, there were some people that were upset but the We we positioned it, you couldn't fault us for it. And, you know, it was more so confusion more than anything, it no one was like very angry with us, they were just more so sad. And I think for us, we were like, you know, look, this is for our growth, we have other product lines in the pipeline, we're going to create even better things for you.
So kind of getting them excited about what this meant kind of helped bring them to a better, you know, mental state about it. In regards to our advisors, yeah, there were some that you don't didn't understand, or Yeah, they were emotionally attached to the first product line, especially if they were investors too. And with that approach, you know, we brought a very data driven approach to really walk them through the story of, here's where we're at, here's the opportunity, here's all the data that's showing why we need to make this decision. Here's what we have in pipeline.
And that really helped paint the picture and the vision for them to bring them on board. And I think also, at the end of the day, it's our business, right, like, that's why I'm the CEO. That's why my co founder, like, you know, we love this, it's like, we are the ones who make that ultimate decision. And we have great advisors and investors that you know, they'll voice their opinion. But at the end of the day, it is our company, and they just had to trust in us. And now they're the ones who are like a little on the on the edge of it. Now they're so excited for you know, all the growth that we're seeing.
So you have to have conviction in yourself as an operator and a CEO to know that, you know, you yourself know your business best better than anyone else. And surround yourself with intelligent smart people that can advise you and provide extra insights. But yeah, I think leaning on both intuition and data is how we got there and got people to, to get excited about this transition.
Yeah, and I know earlier, even you, by the way, I love like how much you also nerd out over data. It's like, my love language. So I feel like if I was, you know, an investor in your brand, I would feel like I was in very capable, very good hands with someone like you leading the way. Earlier, you did mention that the data piece when you guys were running kind of like multiple scenarios that okay, if we made this decision, this would happen if we did this, this would happen. Can you give an example of like one of the data analyses that you actually ran? So we can kind of like, imagine it in a more tangible way?
Yeah. So let me know if I get too nerdy talking about terms, or do you mean to define anything, go for it. So with a consumer product ad business, you have, you know, revenue, which is like the money that you get in and then you also have burn, which is the cost it takes to you know, run your company or, you know, generate that revenue and create a product line. So, for us to produce like 100k, in revenue for the protein bars, the previous product line, we would have to burn, I want to say like 40 50k in revenue to generate that revenue.
And so when we were running the model, we're like, Okay, well, then that's a net profit of 50k, which is not bad. But when you think about other variables of, okay, that's still our time to sell the product, that's, you know, resources from sales that we could put towards, you know, the desert cashew butter line, then we're kind of dwindling down into like, Okay, this is like not even generating a positive outcome. And so that was one model were like, okay, or we can discontinue this line, save that 50k put it towards preparing for a Costco rotation or making a key hire that can help us grow.
And then we just started to model out like, what were the different, like revenue opportunities with that. And especially, you know, in this climate, this is like, end of 2023 cashes very hard to come by in the in the fundraising world. And so we're like, let's prioritize keeping cash in the bank, because we don't know what, you know, investor checks are gonna come in, it's it's very difficult right now. And especially as we head into q4, getting capital is going to be even more difficult. So we were prioritizing cash at that point. And we're like, you know, it's not worth burning capital, just to get top line revenue and the end, you know, it's kind of netting out.
So that's yeah, one model that we were going through, and it really made it very clear that, you know, just because you didn't have like a shiny 100k on your balance sheet. The residual cost to get there is netting you out to be essentially, you know, a loss.
Yeah. And I'm guessing when you're saying and please correct me if I'm wrong, but when you're saying like, okay, so like, let's say you needed to burn 50,000 To make that 100,000. So, like you said, the net, the net income of 50k, but then you're saying but when you factor in team time, labor costs all that. So you're saying that 50k Burn was only really cogs like cost of goods sold. It wasn't even factoring in marketing expenses, add expenses, Team payroll, is that correct? Exactly. Excellent. Wow. Okay. Wow. So just true physical cost of goods sold. Okay. Yeah. That A fascinating thank you for walking us through that. I don't know if you're able to share this publicly. So if you can't totally fine, but with your new line with a cashew desert butters, what does the burn to revenue ratio look like? Now? Like, if you want to make 100,000? What do the new cogs look like?
Yeah, so it's kind of a complicated question to answer. But, you know, we're operating on very strong margins, we're at like, 50 60% margins, which is strong for a consumer product, good business. And that allows us to reinvest that back into marketing and to, you know, continuously growing the business. And it also depends on you know, what channels you're you're in, because if you're selling to retailers, they take their cut. So we were also strategic in our channels as well, too, you know, we've been primarily direct to consumer and Amazon because we get that cash flow conversion cycle faster.
For instance, retailers, they take, like, they have net terms, so they don't pay you until 30, 60, sometimes 90 days, whereas like, if you sell directly online, you get that cash back in your bank. And you don't have to worry about, you know, bigger cuts being taken out. So with the desert cashew butters, we were able to sell successfully in these online channels. Because the appetite was so high for them. And because when you think about, you know, our product lines, they're very visually aesthetic, they really do well on tick tock on Instagram, you know, you see, and you're like, I want to get that. And so it was really easy for us to convert customers with that product line as well, versus a protein bar, like a protein bar.
People are like, okay, it's another protein bar, you know, you see an ad for this, like blue vanilla frosting drizzled over banana people are like, what is that? So our our CAC was actually lower with the dessert, cashew butters. And we were profitable on first purchase running paid media ads. And so that's how we were able to scale that more efficiently to and it allowed us to build a very healthy online business with the with the cashew butter line.
Yeah, I guess I really didn't think about the visual aspect. But it totally makes sense how it lends to the virality of a product like yours, because we are very drawn, especially to that color, like where you're not expecting it. Right, like, now that you're saying that I'm like, Greg, your butter on the banana, like dangerous with bananas in my house. So anyways, tangent. Um, okay, that is very helpful. Thank you for walking us through some of the data points that you are running.
You already obviously talks about how your product line picked up attention from Costco, and it was actually launched just four months later. So four months was this from just so I have clarity on the timeline, was this from when the buyer at Costco showed interest in when the product landed on the shelves? Or was this for months at a different point in the timeline?
Great question. So Costco has this really cool opportunity called a roadshow. And a roadshow is essentially a pop up that you have inside of a Costco. And it's their way to test emerging brands, if they're still not sure whether they want to bring you in to be a line item in rotation. And for us, you know, they were really excited. But because we were on the younger side of a brand, they wanted to see a little bit more data, more proof points, and they're like, look, you can do this roadshow, you'll be a Costco vendor, you'll be sampling and selling your products. So you'll be gaining revenue.
And if you hit the right revenue marks that we're looking for, then we'll bring you in. And for us, you know, we would say yes to anything Costco presented to us. But also I was leveraging in my past sales background of Okay, let's get very clear on the deliverables that we have to provide and hit. And we were very upfront and communicative. We're doing this roadshow to get a purchase order. We're not just doing this for fun or for brand exposure. We want that purchase order in mind. So we were very deliberate in our communication of hey, what revenue targets exactly do we have to hit? And you know, what leniency Do you have? And, you know, going through back and forth on like, what margins they want, what like price point they want. And it's this back and forth tango, and we did a roadshow summer of 2023, from July to August, did exceptionally well.
And we got the PIO in October. They wanted us to come in even earlier. Originally, we were supposed to launch April 2024. They said can you do January? And we said hell yeah. And? And yeah, so it all happened very quickly. But it was also, you know, a testament to the hustle that my co founder Nicky and I did to execute a really strong roadshow so that it was a no brainer to bring us in for rotation.
Okay, so I obviously have no background in this side of business. So when you say roadshow, are you literally traveling to just different Costcos all around the country? Do they tell you which locations did you get to pick the locations? And my favorite thing as a kid growing up was like sample Saturdays at Costco, right? Like who doesn't love that's like what they're known for is iconic. So now I'm wondering like, are all of those kind of like sample booths that you get to experience are all of those roadshow brands? Or are some of them also, like, already part of the, I guess, the permanent rotation for their product lines?
Great question. So I'll try to go in order. But let me know if I forget anything. So a roadshow, if you do feel like a traveling circus, I will not lie. You're packing in your products, and then you're leaving. And this was like during the summer tours of Beyonce and Taylor Swift. So this is our summer tour, but way less exciting. So the locations were chosen by our buyers, we've decided upon the Los Angeles region as that's where we're local to. And we decided the numbers and the days.
So we did Friday, Saturday, Sunday peak hours for Costco members. And from there, we brought in the product, we sampled it, and we sold a special unique bundle for Costco members. And we then like packed up on Sunday, and then went to a different location a different weekend. So each weekend was its own location where we were there for three days. It could vary sometimes it's eight weeks you're doing this we had fortunately just for it, it was very exhausting, because we did every single one morning to close, or-
Was it just you and Nikki the whole time?
Yeah.
Just wow. Okay.
We hired CDS, which is Costco demo services is their internal like demo staff support to help us with sampling. But we were running and selling the whole show. It was insane. We were setting up our booth and taking it down. And you asked like, how do you tell the difference between a roadshow and a proper is it just like a standard sampling station. So a roadshow, they have like a full banner, they have like a giant table. It's like a proper production.
Okay.
you probably walked by like the smoothie ninja people where they have like the microphones and, and it's more of like a, an experiential, you know, performance. For lack of a better word. It's definitely a lot more high energy. So you have people passing out samples, it's more branded, it's it's more of a production. And it's, they have like a full like section in the aisles. They're not just kind of like off to the corner, like a standard sample section. So maybe you'll see it next time. It's usually on weekends, but it's like, very clear, it's different.
I'll have to be like, how's your roadshow going? Like, I have insider knowledge. That's so awesome. Oh, my goodness. I love that. That was your summer tour. I went to the heiress tour. So I'm like, Yes, I'm jealous. All the themes. Yes. So obviously, the roadshow was a huge success. And you are now in Costco nationwide, all locations or still regional to L?
Still regional to LA, hopefully nationwide soon. Cause dream big. And it's it's Costco is very methodical about your rollout. And they, especially with emerging brands, they really want to test get data, then give you a little bit more, and then a little bit more in. And so we just got approved for a second rotation at double the size, which is really exciting. But yeah, it's, you know, piece by piece. We're chatting with other regions.
But one thing that I want to make sure I call out, especially for any other entrepreneurs who are thinking of Costco, you want to make sure that Costco is not more than 30% of your business, that you're very intentional about not being more than 30% of your business. So you know, you want to make sure you have other distribution you have a healthy business without so if one day Costco doesn't renew a rotation for you, you're still fine as a business. Because yeah, it's it can make or break our brand. And you want to build a healthy business that can sustain not having Costco for one year on your on your balance sheet.
Great advice. Thank you for bringing that point up. I think that's honestly true for any type of business. Anyone listening even if you don't work with retailers, you don't have a product based business? No one client should really ever be more than Yeah, exactly what Michelle said like 30% of your total business, because then I mean, you're really at their at their mercy. So that was a great reminder, thank you for sharing that.
To wrap up this case study, I wanted to now that you kind of have some time behind you in the second product line, you know, has launched in Costco and whatnot. I mean, you're on track to do a million, like you said, with this product line this year, and the previous one that you cut had a potential of 100,000.
What do you feel made this second product line 10 times more successful and revenue? Like what do you really feel you did different other than the things that you already mentioned? Like, you know, visually more appealing products? Like maybe there's just more natural demand for this type of thing. But is there anything you feel you directly influenced that made that big of a difference?
That's such a great question. I would say a couple of things went into why the second product line is more successful one. We listened. We listened to the consumer. When we launched our protein bars. We had no idea if people were gonna like it. It was there. during the pandemic, we couldn't sample we couldn't get feedback, we couldn't iterate as quickly. And that really held us back in our innovation pipeline. And, yes, we had an online direct connection to our customers.
But the protein bars, they were great, but they did pick up and really hit. Because there was an appetite for plant based and our collagen protein bars, we're not, there was this huge growth around low sugar products, and our previous product line had some added sugar from from the honey. But you know, there's this huge momentum towards like low sugar, low glycemic, that we're now really starting to see spike and get to be at the forefront of.
And lastly, it's just really this eye for innovation, you know, that first couple years with the protein bars, we really cut our teeth, learning from literally Ground Zero, how to bring a product to market, how to scale how to do operations, and production and marketing. And so when it came to product two, we were able to apply all those learnings and accelerate our innovation pipeline faster. Bring in all the data and the feedback, and just open up our capacity for creativity that we couldn't have before. And in the first few years, we were in survival mode, both as a small business and a small business, running a company through a pandemic.
So just the options for creativity just weren't unlocked in our brains, we couldn't even think past, you know, the next step in front of us. And, you know, once we had our bearings, once we were in a more stable place as a business, then we can bring in that outside the box level thinking that allowed us to bring in this new product to market really piggybacking off of that first product line. And yeah, I think it's just this curiosity to really push boundaries that we bought into this second product line where our, you know, r&d team thought it wouldn't be possible and we just kept pushing, we just kept pushing, we're like, no, let's try it. Let's try it.
And, and I think that persistence, and that confidence to keep being persistent, came as we were more established operators in our business, if we were like, in our first six months, we'd be like, Okay, I guess it's not possible, but you gain and I'm sure you probably feel this too. You know, you gain this confidence when you're in it for a couple years. And I'd love to hear your thoughts on this. If you're just like, No, I'm just gonna keep pushing. Like, I know, it's possible. I know I'm capable. And and I think that confidence allowed us to bring a even better, stronger product into market.
That is so good. That is so good. I, I really hope that our listeners take that home. And to your point, like I think where our competence or my competence specifically has grown, is used to be I feel like if someone would say no, like, that's not the right fit for us or whatever, like have a pitch something someone said, No, I would kind of just take it as like a finality like, okay, no, but now I feel like I like to ask that curiosity that you keep mentioning, I really believe in the power of curiosity. And it's not so much that I'm trying to change anybody's mind about their decision.
But I just want to explore what is the no centered on is it something that's actually changeable? Is there another angle we could approach from? Would there be any sort of circumstance that could make it a yes. And I feel especially like, as we've shifted into media and really had to just go, you know, pitch so many brands and work with so many different partners? You kind of have to get used to like hearing that initial No, but then asking, Okay, what would make it a yes, you know, or have you thought about doing this? Would you be open to exploring an alternative option.
So that's where I feel like the competence has really changed on my end. So I love that you are also experiencing that willingness to like push back on R&D be like no, our customers told us what they want, like, you're gonna go to bat and like champion them and their interests and so I find that super admirable and speaking of being very admirable Of course, I can't in this interview without saying a huge congratulations for your mention and not even mentioned making the list of Inc magazine's 2020 for female founders 250.
For our listeners who don't know about this list, well, first of all, you gotta go like go through this list. It's so inspiring. It's Ink Magazine compiles a list of 250 female founders that you know, have done great things and Michelle, you made this list this year. So I mean, it is no no small feat. I just want to you know, say for our listeners, like there's some star studded names like celebrity brands, other highly recognizable brands like Alison Ellsworth of Poppy I feel like Poppy has been everywhere as a soda this year, Hailey Bieber's on this list Shay Mitchell Katy Perry's on this list and then Michelle's on this list. So tell us about you know, this this honor. Were you expecting this was this a nomination process by others or were you able to apply? What does that process look like?
Well, first of all, thank you so much for hyping me up. I just so so like I'm beaming right now. Thank you. The the process you have to self nominate, and I really like that because you should advocate For yourself, that's the best piece of advice I got early in my career is that no one will advocate for you better than yourself. And I am a firm believer of raising your hand and saying, Look what I did, because that is something that is not taught to women at all. It's the opposite. And so anything that pushes you to do that, and recognizes that I am so for, and yeah, I had to raise my hand and apply.
And yeah, I just really just shared exactly kind of what I shared is like look like, during a very difficult fundraising environment, operating environment for small businesses, my co founder and I have been able to scale our business, you know, doubling or growth with very limited capital resources. And we secured distribution and one of the largest retailers, we were able to, you know, demonstrate growth and multiple channels.
And we consistently innovated for our consumer who really is, is, you know, who we do this for, and that somehow resonated, it's still very crazy to see my name and a list with like, yeah, like Hailey Bieber, and Selena Gomez, and all these like Rockstar, you know, women, but yeah, I think it's just, yeah, a testament to, you know, the hard work and the discipline that we had for the past few years. And, you know, just speaking with investors, you know, a lot of them have said, yeah, we've invested in a lot of different companies, and you're the only one that's still thriving, and, and a lot of them were male owned companies.
So that's something that I really like to showcase is that, and we all know, this, like women are getting less than, you know, 2%, it's even less for women of color have capital funding, yet, our output is even higher. And so anything that can highlight and really champion that is, is so great. And I'm so grateful to Inc, for championing that, especially when you look at a lot of media that tends to tear down a lot of women founders, that they fall from grace, or if they make a mistake, or they have a public failure.
There's a lot of media that tries to like, you know, create a story around that and, you know, sensationalized that I'm just so grateful that there are publications that are still uplifting women and showing, hey, look what's possible. And here's, you know, successful women that have done great things and really difficult times. So, yeah, it's, it's so cool. And I just also love what it means to.
Yeah, absolutely. And I think that's just like the best message to end on be your own best advocate. I agree with you. I think it's so cool. When these processes allow you to self nominate, because I mean, if you're not going to, you know, clap for yourself and be like, look like, look what we've done, sometimes, you know, a lot of the hard work we do is behind the scenes, and people aren't always privy to that and would even know to, you know, think of nominating, so and so for whatever, but you know what you've put in and so I'm so proud of you truly like congratulations.
Michelle, where can besides going out and buying a copy of the magazine and really all about you? Where can our listeners further connect with you and a lobby?
Yeah, so coming out. We're very active on social media on Instagram and Tiktok. Our handle is Hey, hey Elavi. I, and my personal handle if you want to connect on Instagram as Michelle Razavi that's just my first and last name. And yeah, just come Come say hi, we are very active there. And if you want to support and try their products, you can shop our delicious products at e la vie.co. And yeah, it's it's such a pleasure to be here. Thank you.
Thank you, Michelle. Everyone makes sure you check the show notes. We'll put all of the links mentioned below so it's easy for you to click and thank you all for tuning in. We'll catch you in the next episode.
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