Brothers Nadim and Rami Yahia grew up mixing together condiments and hot sauces to create their own concoctions. They turned this habitual sauce mixing into CustomHeats, a hot sauce business that allows customers to create their own sauce and labels while bridging the food industry with tech and data.
In this episode of Shopify Masters, you’ll hear from Nadim Yahia of CustomHeats on marketing with a low budget, developing hardware, and how their $100 bottle of hot sauce went viral.
Rather than invest in the marketing aspect of it, how could we try to do marketing initiatives that don’t require much money.
Key Learnings shared by Nadim Yahia:
- Think outside of your product. The Yahia brothers realized that it’s not just the hot sauce that customers enjoy, it’s the whole process. So they decided to partner with a robotics company to develop their own sauce customization machine for restaurants.
- Test your concept on social media. Before launching their business and website, CustomHeats was launched on Instagram and the Yahias got the chance to validate their idea through social.
- An attention-grabbing item can bring sales for the whole business. CustomHeats launched $100 hot sauce, complete with truffles and gold flakes. Despite this expensive bottle not generating a lot of sales, it has brought in a lot of traffic for their site and sales for other items.
Show Notes
- Store: CustomHeats
- Social Profiles: Facebook, Instagram
- Recommendations: Contagious (book), Privy (Shopify app), Crisp (Shopify app)
Felix: Today I'm joined by the Nadim from Custom Heats. Custom Heats allows food enthusiasts to customize their own hot sauce in the start of 2017, and based out of Montreal. Welcome, Nadim.
Nadim: Thank you. Thanks for having me.
Felix: Excited to have you on. Where did this idea behind DIY hot sauce come from?
Nadim: The idea came from my brother and I, we come from a family of hot sauce aficionados. Growing up, we pretty much grew up on Tabasco, but then as our taste buds started to develop, we were looking for new tastes. At my house, we kind of would mix hot sauces together, so we were like it would be a really neat idea to have a business where you can actually customize your sauce, right? Also, a little joke that we keep saying is how we kind of grew up with the hot sauce is our parents, whenever we would actually swear or something, they would actually punish us by putting hot sauce in our mouths, so it came out a little bit of a punishment, this taste for hot sauce.
Felix: Awesome. I was going to say, I'm a big fan of hot sauce too. You mentioned that you decided to build a business around allowing other people to customize it rather than you and your team just going off and creating your own flavors. What made you decide to go with the choice of allowing the customers to customize rather than just coming out with like 10 different flavors, or however many number?
Nadim: Us, we were always kind of ... We would buy hot sauces, but we felt like a lot of the different hot sauces sell the same product, but just under a different brand name. We would always try to experiment with different flavors, and we feel like a lot of the competitors lack that. It was kind of a similar standard product, so we kind of had a concept early on, and we were kind of like it would be cool to kind of make a game out of it. Kind of like an RPG game, more or less, of how to develop your sauce. It was just kind of let the customers tell us what they want.
Felix: How many layers of customizations do you support?
Nadim: The concept kind of works this way. The customer or the user will select a type of base. They have the choice of four bases. There's a red pepper sauce, which consists of pretty much just cayenne, a cayenne base. We have a Chipotle sauce. We have a wing sauce, and we have a sriracha. Then, we also have, once the user selects the type of sauce, they then select the type of chile peppers. We offer the customers seven different chiles, from milder options like serrano or cayenne to extreme sauces like Carolina Reaper, ghost pepper.
Nadim: Once they've selected their level of heat, they can select the ingredients. The ingredients, the possibilities are really endless. They can pick from ... We're talking about the fall spirit right now. There's pumpkin spice. There's the pumpkin spice for the month of October seems to be very popular. We also have other options like root beer, and more traditional selections like garlic, onions. I guess the possibility of combinations is like in the millions.
Nadim: We also allow the user to upload their label. They can get creative, tell their story as if they kind of made their own sauce. We get some pretty creative ideas. Sometimes we get sauces for weddings, so we get a lot of orders for weddings. If any of the users, or your listeners have a wedding coming up, there's a cool gift.
Felix: Party favors, right?
Nadim: Party favors, exactly. We have companies that reached out to us for promotional gifts. We let the customers tell us what they want. What's great about this concept as well is we're gathering data from customers. We kind of have an advantage versus competitors is that we know exactly what customers are inclined to select. For now, I guess it kind of breaks down 50/50. We have a lot of B2B orders, and then we have a lot of B2C. We work with a lot of companies, and as I said earlier, weddings.
Felix: Because you do allow these customizations and personalization of the products, the kind of problems that you probably face are going to be different than a entrepreneur's thrown out there that is not a lot of customizations. If you were to introduce customization into your business, what kind of new complications do you think people would run into? What are some problems that are unique to a business like yours, that allows customizations?
Nadim: You pretty much said it. One of the challenges that we faced early on, the struggles, is that because we have such a product that differs from client to client, you don't really have a standard product. You can have millions of different combinations, so it really could change from a customer to customer. The challenge early on was to kind of find out who could help us produce under these constraints. We approach a lot of co-packers. Co-packers pretty much laughed at us and said, "You know, we want big runs of the same standard product." Then, we kind of found caterers. Caterers were willing to work with us. Caterers kind of helped us find ways to cut down on lead times, and to also cut down on costs.
Nadim: That was one of the struggles early on. We kind of had to honestly produce out of our kitchens early on. Our house smelled like hot sauce. We had chile peppers under our nails, so whenever we would scratch our eyes, we would get our eyes swelling. I guess that's one of the challenges. You know, we looked for solutions as well, due to that constraint. We invested in R&D Initiatives. We actually have a machine that is patented, where you could actually customize your sauce through the machine. Kind of like the Coco-Cola Freestyle, Pepsi Spire, which we're hoping to use in our production, and also to put in restaurants and businesses.
Felix: That's amazing. Definitely want to talk about this machine that's patented in a second. When you first started the business, did you have as many customizations as you allow today, or did you start off with something smaller?
Nadim: We actually started off with a very large options for customization. The bases were pretty much the same. The chile peppers kind of were the same, but it was more of the ingredients. We had a lot of them, and then we kind of went by elimination, in terms of what didn't really sell. We realized that we didn't need to have this many options, and it was mostly we kind of looked at the trend of what was popular, and then we would just kind of narrow it down to kind of limit the variance in SKUs.
Felix: I got it. Basically, you wanted to, over time, reduce the customization, reduce the ingredients that you allow people to put in there, and just stick with what was popular?
Nadim: Correct. We still have over 70 ingredients, so the options are endless, but early on, we had over 200 ingredients, and we found that a lot of them were redundant, so we kind of narrowed it down over time.
Felix: You figured out one of the biggest challenges was trying to basically scale this up, like how do you do this outside of your kitchen, and work with vendors. You first said you approached co-packers. Anyone out there that is not familiar with the food business, can you explain what a co-packer would typically do?
Nadim: Yeah, a co-packer is basically a manufacturing company that will produce on your behalf. A lot of big companies, you think that they're the ones that produce it, but they'll go through a subcontractor, and then they'll just put their label on it. A lot of the co-packers have high minimum order quantities, which was, again, a challenge for us because users can order as little as one bottle. Co-packers generally run under high minimum order quantities.
Felix: A co-packer, is that specific to the food and beverage industry, or is that like other industries too?
Nadim: I guess if you go to other industries, if I'm not mistaken, maybe it wouldn't be considered a co-packer, but I guess you could subcontract your production as much as you want. You can get an electronics company from China to manufacture a product for you. It's pretty much just the idea of outsourcing your production.
Felix: You mentioned though that you didn't end up working with them because they had such high minimum order quantities, and you wanted these kinds of very limited runs because there were so many customizations possible. You decided then to explore caterers. Was that your next initial kind of attempt or I guess solution, or did you kind of search around for other ways to solve this problem?
Nadim: Yeah, so it actually didn't come to us right away. It was actually after brainstorming to try to figure out a solution to our problem. We brainstormed and we were like, "Who would want to produce such little quantities, and that's varied from customer to customer?" We came down to caterers. We pretty much went onto Craigslist or Kijiji early on. We were looking for people that can produce for us, and then we came through our searches we pretty much found out that it looks like caterers would be our people that are interested in this.
Nadim: As our capacity grew, we started ... or our demand grew, we started to acquire more and more caterers. Now we work with companies with big operations, but that are still considered caterers.
Felix: Do caterers usually work in this line of business, like the one that you have set up with them? This is not like a normal business or service they provide, is it?
Nadim: No, no really We basically, nobody does this. That's why we had to find unconventional solutions to our problems. We didn't really have things to compare us to. I can't say that the companies that we work with have worked under these kinds of constraints, but we kind of worked with them. They helped us find solutions to our problems, and we've been able to improve our operations as a result.
Felix: Got it. Can you describe how this works logistically if you are working with a caterer to produce your food product?
Nadim: We had an idea of how we were going to implement our production. Early on we kind of made a mix of dried spices and different ingredients, and we kind of listened to the caterers to kind of see what their issues were. They were telling us early on that they were spending too much time per bottle, so we kind of listened to them to see how we can find a solution together. We found some operational improvements. Now, we've been able to, as I said earlier, now we're down to costs and deliver in a timely fashion.
Felix: I can imagine a co-packer or a vendor, or a factory that is operating at a large scale. One of their key value propositions is that they are able to keep the product super standardized. They're able to keep everything the same. I'm assuming that you probably had to set some additional quality assurance or something with co-packers, or sorry, with caterers because they're probably not as used to the stringent standards that you might require for a business like yours, where you're selling at scale. Did you have to change or implement any new processes in their day-to-day businesses to make sure that the standard of quality was where you wanted it?
Nadim: Absolutely. Early on, when we were going for caterers, we still wanted to be compliant with regulations. We looked for a lot of caterers. We made sure that they were FDA compliant, and we would audit them once a quarter to make sure that the operations are clean and sanitary. Also, here in Canada, we had to make sure that they're compliant with Health Canada regulations. We made sure that the conditions were good.
Nadim: We had to supply them with equipment that we wanted to use. We kind of identified ways to improve on time. For example, we have blenders that will heat the sauces at high temperatures. They were kind of using conventional blenders and pots and pans, so we kind of supplied them with equipment that would facilitate and improve, as I said, the lead time. Yeah, that's pretty much the only thing that we had to implement with our caterers.
Felix: Got it. Speaking of the machine, then, that was patented, you guys created this yourself, but where did the idea behind ... How did you guys even begin to create a machine to help with production?
Nadim: As I said earlier, we had the challenge of the different SKUs. One thing that I didn't mention is we have over 3,300 visitors per month, and we get a large amount of those converting to sales. We have to kind of like improve production, improve lead times as we grow, and try to kind of automate our production. Initially, that's kind of how we came up with the idea was to kind of automate our production by doing this machine.
Nadim: We kind of saw that customization was something that was trending. When you go to a fast-food chain, a restaurant, now what's really popular is they have Coca Cola Freestyle machines, Pepsi Spire machines, which basically allow the users to select their soft drink flavors. We were like it would be cool to kind of use this machine, and put it into restaurants so that people can customize their condiments and sauces as well.
Nadim: It came initially as a way to automate our production, and then gradually we were looking at producing it to kind of give a value to the customers in restaurants as well.
Felix: How did you build this machine? Did you guys do it yourself, or did you hire a company to help you with it?
Nadim: We're working with a company based out of Montreal called Robotics Design. They kind of worked on the BIXI, which in Canada is the biking stations. I think you guys might have those in New York as well.
Felix: City Bikes, yeah, they call it.
Nadim: Yeah, exactly. They developed that, and they kind of liked the idea, so we're working with them. We have a prototype that is being completed as we speak, and we'll have something ready by next month.
Felix: Very cool. That's totally almost like a different business that you had to start to build a product like this. What challenged did you face, early on, with creating a machine from scratch?
Nadim: A lot of it is that because we're developing something that doesn't really exist, a lot of the materials required to develop the prototype kind of have been expensive because you have to develop a mold to produce it. Without sounding too technical, it was kind of produce the machine without having to invest in molds early on so that we can have a prototype. When you're developing molds, we're talking about hundreds of thousands of dollars just to develop a small piece of the equipment. The challenge was to kind of build it without having to invest in those different things.
Nadim: We kind of developed a prototype that we're going to kind of tweak as we go along. The initial investment we didn't want to be too much so that we can have that flexibility later on to kind of tweak it as we go. Right now, we've actually discussed the machine with a lot of big companies. We've spoken to Mac’s, I believe. I don't know if you guys have them in the US, but it's a big chain here in Canada. In French, we have Couche-Tard, which that's basically the French equivalent of it, and we have chains here in Montreal, fast food chains, that are interested in bringing it in once we've completed it.
Felix: You mentioned that their prototyping the machine. You did not want to put in too big of an investment at first by getting these molds done. What were you doing, you said it was like 3D printing? What's the alternative to spending a lot of money on creating these molds for a product?
Nadim: We're looking at certain materials like instead of looking for ... We're looking at things like alternate certain materials more or less. Instead of going for plastic, we kind of started off with aluminum and things like that. It was just to kind of swap certain materials early on, and then once we have purchase orders for the machines, then we can kind of invested into developing more cost-effective materials.
Nadim: I guess aluminum may be cheaper initially, but once you have the mold completed for mass production, it's cheaper to go different routes.
Felix: I got it. What is the patenting process like for something like this?
Nadim: To be honest, it was mostly our engineer that kind of helped us out with it. We approached a company, and then they kind of patent the operations aboard the functionality of the machine.
Felix: Got it. Okay, so when you were marketing this product, you mentioned that you already have some restaurants that are interested in it. How did you market or present this idea to them. How do you plan on marketing this product to restaurants in the future?
Nadim: With now that a lot of restaurants are using foot traffic, we think that it's an added value to these restaurants. Now that Uber Eats is becoming really popular. People are ordering and they're going less into restaurants, which is a good and a bad thing depending on what type of business model you have, but for companies that want foot traffic, we pitch it as more of an added value for them, something that is going to interest customers to kind of come in rather than order because they have that added value, more or less.
Felix: Do you have a price point in mind for a machine like this?
Nadim: Initially, what we're thinking is not to ... We can potentially sell it, but we're looking more at a leasing kind of business model. You can lease the machine, and we would also supply the flavors, the types of sauces, all the ingredients that are required to run the machine. We would also take care of the maintenance. It wouldn't sell outright. We'd kind of like to lease it.
Felix: Got it. Okay, makes sense. You mentioned that when you were allowing people to come on and customize their product, you said that one of the key benefits that you have over the competitors is that you're able to now gather data on your customers. You know exactly what they want. Tell us more about this. How have you been able to use this data?
Nadim: Pretty much as you said, because of all the data we're gathering, we also have an option on our website, which is the pre-made sauces, or when we're doing our business to business, we usually sell a standard sauce, which we'll re-label. What we're doing is we gather the data, basically the selections, and we kind of develop sauces based on what people want. One of our popular things is a Caribbean Ghost Pepper Sauce, which is basically a ghost pepper sauce with coconut ingredients, a coconut milk.
Nadim: We've been able to develop standard products, which would allow us to also reduce our costs. We gather the data. Also, what we're doing is we can also have ... We're in negotiations with restaurant chains in Canada, or not restaurant chains, grocery chains to kind of hold our sauces in their groceries. These are all sauces that we've developed based off of the data that we gathered. Believe it or not, one of the popular ingredients that people tend to select is root beer. We develop sauces based off of those selections.
Nadim: What I said earlier, people can still customize like the businesses, they can still customize their sauces, but we also have the option of having those pre-made sauces based off of what sells.
Felix: Yeah, I can see that. When you approach these supermarkets, these grocery stores, and you bring these pre-made sauces, do you use that data, and say like, "Hey, this is stuff that people are already directly asking for." Does that help your pitch into these grocery stores?
Nadim: Absolutely. As I said, one of the benefits that we have, one of our competitive advantages versus our competitors is that our competitors kind of have a standard product, and haven't necessarily evolved into other types of sauces. They've kind of kept it very standard. Other companies do have different sauces, but they haven't really gone into offering customers what they want. When we go to the groceries, we tell them, "Look, hey this is the data that we gathered. This is what people want, and this is the sauce that we have to kind of meet that demand."
Felix: If anyone out there, and maybe doesn't sell customized products but they are selling a food or beverage based product. When you approach a grocery store, what do you find that they care most about?
Nadim: What they want is ... At the end of the day, they want a sale, right? When they want to bring in our sauces, they want to make sure that there's going to be a consistent sales. We've been able to show them that we're a different type of company that is kind of ... At the end of the day, we say that we're a food company, but we feel like that we're a technology company as well, in the sense that we have all that data.
Nadim: Then, when we present to them the number, the traction we're getting, the viral intention that we've had through online media, it kind of reassures them that this is maybe something that is kind of trending upwards. At the end of the day, we have all this information that we present to them, and it's something that puts us in our own kind of separate lane compared to other companies.
Felix: Now, when you want to pitch to a grocery store, what's the role or the title of the person that you need to get into a meeting with?
Nadim: There's category managers that we kind of work with. We have one that we work with at Sobey’s, but pretty much category managers that we've kind of approached over time.
Felix: What's been the best way for you to get in touch or network with a category manager?
Nadim: To be honest, I hadn't mentioned this earlier, but we actually went on Dragon's Den, which is equivalent of Shark Tank in Canada. We pitched. We got multiple offers. We actually were on TV back in February. We had contacts after Dragon's Den through the cohort that we went to when we accepted the offer of one of the Dragons. We actually developed relations with the category manager, but other than that, we kind of just reached out to people on LinkedIn. We looked on LinkedIn for category managers from different chains, and that's how we kind of approached them. We just slide into their DMs and that's how we did it.
Felix: Basically, publicity is the key to opening the doors for all these relationships. Being on Dragon's Den, I'm sure a lot of these category managers, the people that knew them, or other people that might be above them at these companies saw you and were interested in taking these meetings, and then you approached them, or maybe they reached out to you directly.
Felix: You mentioned, too, to us that you stared with a marketing budget of just $100, and you've been able to get on places like Rachael Ray's Everyday Magazine, Now This, Time Out, Urban Daddy, and then, of course, Dragon's Den, and then all the other benefits that came out from that publicity. You mentioned that you felt like you did this through very calculated steps that can be repeated. Walk us through that. What were the calculated steps to have $100 budget, basically nothing, and get onto all these publications?
Nadim: You know, we were kind of fortunate early on, in the sense that before we even had a website, we had an Instagram account explaining our concept. Early on we were reached out by Rachael Ray Magazine, and she wrote an article about us. It was right around the time of November, so right before Christmas. That kind of gave us a lot of traction. A lot of people wanted to order it as a gift for friends or relatives.
Nadim: Then, after that, it kind of was like a snowball effect somewhat. We had Time Out, Urban Daddy that wrote not far after that. Then, we were like, "Okay, we want to build on that." Rather than invest in the marketing aspect of it, how could we kind of try to do marketing initiatives that don't require much money?
Nadim: Then, after that, we went on Dragon's Den, which initially wasn't even something that we thought we would be getting offers. It was just to kind of have that visibility. We went on Dragon's Den. The concept alone was kind of viral. It was something that got people talking and things like that. We also approached people from NowThis Food. We told them, "Look, we were on Dragon's Den. Would you guys be interested in doing a video about us?" They look for content. They look for new ideas, so they were kind of interested in doing a video about us.
Nadim: Then, we're kind of looking at ways where we can have people talking so we developed 100-dollar sauce, which we put gold flakes, truffles, and that also gave us a little bit of that viral visibility. It's one of actually the most looked at items on our website. We were kind of, early on, just looking at free ways to get people talking. We did invest in Facebook, and Instagram, social media, and things like that, but early on, it was more to look at how we can put our names out there without putting too much investment.
Felix: Correct me if I'm wrong, but this 100-dollar sauce, I feel like there are these products that you can create for your store or your brand that are just strictly for getting attention, and then products that you actually intend to sell. Was that one of the goals with 100-dollar sauce? I'm sure that you weren't expecting too many people to buy this, but it was to pull potential customers of your other products in through the door?
Nadim: Yeah, absolutely. There was a very good book that I had read a while back called Contagious. That's pretty much what it talks about. He talks about how you can get your products viral. If anybody listening is looking at ways to get their product to sell, get it viral. That's a really good book. One of the examples in the book, they said they had a restaurant that sold a $100 Philly cheese steak out of Philadelphia, and that it got a lot of people to get into the store, not necessarily to buy it, but just out of curiosity to see what made it $100 cheese steak.
Nadim: We were kind of like that was pretty interesting that they got traffic just because of an item. I'm sure they didn't necessarily sell too many, but it was kind of something that got people talking, newspaper writing about them, so we're like wouldn't it be cool to kind of do 100-dollar sauce. I think we might be actually the most expensive hot sauce in the world, not excluding those very scarce once, those artisanal ones, but one of the most expensive hot sauces.
Nadim: It actually brought a lot of traffic. We didn't sell too many, as you said. We sold only a few but a lot of people were curious, but it got people definitely talking. Also, we were looking at ways to get people talking, and another way was to use your hot sauce as a business card. We'd go to trade shows, and instead of having a business card, we would just show up with a hot sauce bottle with our names on it, and it got people really ... It gave people a lot that it was really something cool. We told people, to businesses, do something like this. It'll get people talking. To the listeners, if you want to make an impression, the hot sauce business card is definitely one of them. Come see us.
Felix: Yeah. Where are these ideas, these viral products, or viral campaigns, where do they come from? Who do they come from? Is there a process that you try to work through to come up with new ideas?
Nadim: Yeah, well a lot of it comes from us, just brainstorming. We read a lot of books on marketing as well. We look at other industries and how we could implement it to the hot sauce industry. Then also, we do a lot of prototyping. We come through ideas, we do a lot of them. Then, the ones that work, we stick with them. Then, the ones that don't work, we kind of let them go. It's a lot of trial and error, and that's how we stick with what works.
Felix: I like that, that you look outside of your industry because if you look for the best ideas from other industries, they are proven to work on humans, right, on potential customers, but they've never probably been exposed to your actual customers. Now, you have a proven formula, a proven concept that is going to be introduced to potential people that have never seen it before, so it's basically the best of both worlds, a brand new audience that has already worked. When you come up with these ideas, have they all been successful? What have you guys tried that has failed?
Nadim: We did work with some companies. We had a marketing company out of Montreal that we kind of wanted to outsource our marketing. That didn't work too well because they were kind of doing the standard way of marketing us as a hot sauce company. We were kind of looking for something different. We were kind of looking at the ways to kind of do something kind of ... We're kind of unconventional at the same time. As I said earlier, we kind of looked at ourselves a little bit as a technology and a food company. To find a marketing company that has our vision for social media and things like that didn't always work out. That was one example of them.
Felix: What do you think is key now when you look back on the patterns of products or ideas that have gone viral for you? What do you think is the key to getting right, to at least stack the odds in your favor for a product, or an idea, a campaign to go viral?
Nadim: At the end of the day, it's kind of ... People don't want to necessarily ... They don't want you to necessarily sell something, right? At the end of the day, you kind of has to give some sort of content. You don't want it to look like an infomercial. We kind of looked at what made us unique, what kind of had people talking about us, and then we kind of tried to build things around that. Again, like I was saying earlier in that book, initially they were talking about how Vitamix had that challenge where they had a $400 blender, and they were like, "How do we sell people a $400 blender? How could we tell them that this is something that they would want?"
Nadim: They started to make a YouTube channel where they were kind of like will it blend? They were kind of like blending things to see if it would. At the end of the day, it's not necessary to try to sell something. People have the tendency of wanting to push through sales. It's actually looking at ways where you can give the content. We kind of always looked at that route in terms of how could we give something that will grab people's attention?
Felix: I want to go back to something you said earlier, which was that you guys had Instagram before a website even. What made you start there? Why did you decide to start with Instagram rather than a website first?
Nadim: Early on we had the concept, but we didn't ... We wanted to have that market validation early on. We didn't want to develop a website for something that people don't necessarily want. It was a new concept. It wasn't something that was necessarily tested. It could have been pretty stupid, you know what I mean? People would have been like, "Oh, what is this? I don't want to have to customize my sauce." We wanted to start an Instagram account to see if there would be some sort of attention behind it.
Nadim: We were kind of like, "Okay, let's just start an Instagram account, talking about customization of hot sauce." That's when we kind of got approached by Rachael Ray right after. That kind of gave us that market validation. It was just to kind of reduce the risk, to kind of test our product before we actually launched.
Felix: Tell us about the content early on then. This is a profile that you basically started from scratch, or did you have something going on before on here?
Nadim: Nope. It was one Instagram page that we started from scratch.
Felix: What kind of content were you putting out there to validate if there was a market for it. Were you posting like behind the scenes photos, videos, stories? What kind of content ... What was the content strategy early on to validate if there was a market?
Nadim: We pretty much had these little gifs that we would post pretty much, and like hard work that would say like, "Have you ever wanted to try a root beer hot sauce?" Then we would talk about how customize your sauce today. It's kind of like taking the most unique ingredients that people would be like, "I want to try this. This is kind of different," and kind of making pictures around that. We would tag a lot of influencers or use certain hashtags to get people to look at those images, and grab people's attentions.
Nadim: Early on, it was a lot of gifs, and also pictures of weird mixes that we kind of posted on our Instagram. We used a lot of videos on stories basically saying testing out Carolina Reapers and things like that because as you know, with “Hot Ones”, and things like that, people are looking for creative ways to kind of test themselves, so we posted a lot of little videos of consuming Carolina Reaper sauces, and things like that, and make polls to get people engaged. That's how we kind of built a little bit of a following, which led to us getting publications writing about us.
Felix: How slowly or quickly was the following building?
Nadim: It was actually pretty fast early on. We were kind of fortunate in that regard. As I said, it was kind of right around the time of Christmas, and we didn't want to necessarily die down, so right after that, Urban Daddy, right after that time out, then we were like, "Okay, we have to do something to kind of keep it going up." We're like okay, we went on Dragon's Den. We were fortunate enough to have something early on, and right around the time of Christmas, and then after that, we just built off of the visibility that we had from the previous media publications.
Felix: Do you remember how big your following was, or how long you were at it before a big publication like Rachael Ray approached you?
Nadim: It wasn't that much initially. It was maybe like 600 followers. Once we had Rachael Ray, it wasn't necessarily through our Instagram because a lot of, I guess, the followers of Rachael Ray still us print, so a lot of them were kind of like just through the magazines and things like that. It wasn't too much early on.
Felix: I mean 600 followers. How long were you at this because it seems like it was pretty early on in, I guess, the company or in your online presence before all these publications picked you up. I was wondering what was it, do you think, about your social media approach that allowed you to get picked up so quickly?
Nadim: We started the Instagram account in October. Rachael Ray wrote about us in November. It was mostly, I would tend to say, was because of the concept of the customization of the sauce, which was part of our strategy. You know what I mean? It was kind of we didn't have an infinite amount of dollars, a lot of money to kind of invest in marketing, especially something that is so new. She kind of allowed us to educate the public about us without us having to invest too much into explaining that.
Felix: Were you selling via Instagram at this time? I imagine you're posting all of these hot sauce, you know, concoctions that you're putting together, and you were actively talking about products that you wanted to sell. I'm sure people were reaching out, or commenting, or sending DMs, saying where can I buy this? What was your strategy to handle these kinds of requests?
Nadim: You know, early on, we did have on our Instagram that we were in the process of developing a website. We had a launch date, so we had people that were kind of waiting for that launch date. We did get approached by people while we were still only with an Instagram account. We did get a couple of orders, a business to business order as well, which we kind of had to do unconventionally, kind of aside. We had an Excel spreadsheet of what we had, and we would send it over to them, and that's how they placed orders. Early on, we kind of put a launch ... We were keeping people posted for a launch date while we were validating our product.
Felix: Now, when you were getting picked up by these publications, and your product was starting to go viral, you mentioned that you were able to leverage this viral product that got you media coverage by using Facebook retargeting to capitalize on all of this virality. Tell us more about this. How did you use Facebook retargeting when your product or your business, your branch started to go viral.
Nadim: Pretty much what we did for the marketing, we had installed Facebook Pixel, so at the end of the day, it's still saving somewhat the user's information, and then we would retarget based off of that. We would actually use promo codes that we would ... Through the retargeting we would offer the customers a promo code, and then we would kind of review how successful the retargeting was based off that promo code.
Felix: I got it. You were getting audiences base off of the traffic that was coming to your site that was basically free traffic because it was coming from media coverage?
Nadim: Yeah, we also used the Privy pop-up app, which is offered through Shopify, and offered another kind of promo code on that to get people to place their first order, and then they would get a newsletter after that once they registered their email. It was the pop-up, gave a promo code once you enter your email, and we can kind of retarget through newsletters like that.
Felix: Basically, your goal was to capture this free traffic that was coming from media coverage, whether that be through retargeting on Facebook, or by capturing their emails and then marketing that way. Is it still a strategy that you still use today?
Nadim: Yes, of course. We haven't really changed that aspect of our marketing. We still follow the same strategy.
Felix: You mentioned to me in the form, in a pre-interview form, which was that there is a difference between entrepreneur and someone that's self-employed. Can you say more about this?
Nadim: About how the entrepreneur is different?
Felix: Yeah, exactly.
Nadim: I guess when you're an entrepreneur, not to sound too cliché, you're not really doing that nine to five. You'll have to work long hours, and you kind of have to find solutions yourself. You can't necessarily delegate it to somebody else. You can, but it's kind of like you kind of have to find a solution, and you don't always have the answers, so you have to be willing to kind of work those long hours, and to test things out, and not to be scared to kind of try new ideas, especially with our concept, we didn't have any examples to go by, so we kind of had to kind of be fearless somewhat and to just try different things out.
Felix: You mentioned that this business really took off right around the holiday shopping season when you first started in 2017. What kind of preparations are you doing today to take advantage of that holiday shopping season again this year?
Nadim: We basically will make sure that customers are aware of the 10 business day lead time. We get a lot of customers that want to surprise me, which is one of the features on our website, where we kind of produce based off kind of something at random, based off previous customer orders, so we kind of build up inventory on certain items like that, trying to produce ahead of time. We hold a little bit more inventory of our pre-made sauces to kind of limit on lead times. Pretty much that's what we kind of do when we prepare for the holiday seasons.
Felix: When you are looking for brand new customers, how do you get these customers to try a product, a food-based product, without tasting it ahead of time, especially since these are unique combinations that they probably have never had before?
Nadim: Yeah, so pretty much that's another challenge that we have. We kind of offer the customer ... They reach out to us a lot. They'll ask us, "Is this a good combination?" Sometimes they'll write to us with little comments. We're not afraid to reach out in case there's something that we think is not necessarily compatible, but we do guarantee our customers that they'll have a great tasting sauce at the end of the day. We make sure that we offer a product that is consumable at the end of the day, even though we have certain ingredients that sound a little crazy. If we ever have a concern, we kind of have a communication with our clients.
Felix: You mentioned Privy was one of the apps that you use for the pop-ups. What other apps do you use to run the business?
Nadim: The apps that we use ... We do use Crisp, which is our messaging tool through our website.
Felix: That's a good chat, live chat.
Nadim: Correct, yeah. We have the Chatbox on our website. We'll message customers that go on our website. We'll be like, "Do you need any help with something?" We can see that if they have something in their check box that they're taking a little bit of time, we have these automated messages that we send out. We use that for the messaging tool. We have Privy, as I said, the pop-up. We have a conversion tool for US/Canadian dollars that we've installed on our Shopify. We have the newsletter app, which is Privy.
Felix: On Crisp, the app that you use for live chat, what kind of questions typically come in through there?
Nadim: A lot of them is people who ask if this is a good mix. They'll ask us to kind of ... When they would be getting their order if they placed their order today. They ask us if we can assist them with designing the label. Sometimes customers, they have an idea of an image, they have an image, but they don't necessarily have an actual label design, so we discuss certain things with our clients, and we kind of develop certain labels for them. A lot of them relate to the labeling and the development of the sauce to make sure that they're making mixes.
Nadim: Sometimes they'll let us, they'll trust us. They'll be like, "This is what I want in it. Could you guys make something that is pretty good with this ingredient?" We'll tell them what we think is kind of a good combination with their sauce. At the end of the day, we joke around. We kind of feel like we're pepper consultants. Then, we kind of consult our customers on ways they can develop a great tasting sauce.
Felix: You mentioned earlier, you said that there was how many visitors per month that was coming to your site?
Nadim: Over 3,300.
Felix: Got it. Have you made any changes recently to the site to improve things like conversion rates?
Nadim: Yeah. Initially, we were on Magento. We switched to Shopify. It wasn't too great. It was limited in terms of ads. Our website wasn't as great as we feel it is today. We switched from Magento to Shopify, which was a major change. Aside from that, we added the different levels of heat on the chile peppers, for example, on our website because they had people that were wondering what the heat levels are. Whenever we had questions that were asked to us in the Chat Box, we tried to see if there were ways we could implement it on the website so that they can avoid some messages. Some people don't necessarily have the patience to message, so we were willing to put the information right off the bat.
Nadim: What else we added, we have a measuring tool. Seeing all the ingredients on a scale from one to ten, we actually put a chart saying one would be considered a little, one to four, for example. Then, five would be like the medium, and then from five to ten, or six to ten would be a lot. We kind of put tools in place to kind of help our clients to know what a lot of the ingredients they're putting. We're also thinking of adding a feature on our website, which says it would be kind of a tool to say if the sauce will be sweet if it will be salty, things like that, based off of the quantity of ingredients they put in. This is something that we're looking to add to our website in the short-term.
Felix: These all came from basically just questions that people are messaging you through email or live chat?
Nadim: Correct, yes. We noticed that a lot of the same questions were being asked, so we were looking how we can save customers from having to message us, to make the experience ... to have a good customer service that we are giving to our clients so that they could have all the tools necessary to place their order. At the end of the day, it was ways to convert. We looked at our conversion. We're like how could we convert? These are the questions that keep coming up. Will this help the conversion, and that's how we kind of developed certain tools on our website.
Felix: Yeah, I think that's important that people are asking the same question over and over again, it's much better than to just respond to each comment, each question with the answer. It's better to put it on your site. You've gone a little bit beyond where I typically see where sometimes people have like a FAQ page or something. What you've done is you've built the answers to their questions into parts of your site where people would ask that question.
Felix: You sound like you don't want them to have to dig for that information. I'm on the product page now, and then the heat stuff, and the amounts that are right here on the product page, so it's very clear where I might have a question, the answer is right in front of my face when I would have that question. I think it's important that what you guys have done is that you've built the answers into the places where people might ask a question, to begin with.
Nadim: Exactly. At the end of the day, me personally, I don't like to go into FAQs and things like that. I want to be able to have all the information that is needed right off the bat. I want to be on a website. I don't want to spend too much time. If I want to order something, I want to be able to have all the information to place my order and that's it. This way, you kind of, as you said, you integrated your FAQ straight on your website so they have all the information needed.
Felix: Awesome. Customheats.com is the website. I'll leave you this last question. What do you think is going to be the biggest challenge you guys will face over the next year?
Nadim: The biggest challenge is just to continue scaling. You know I said that we have over 3,300 visitors on our website. It's climbing on a monthly basis. Really, our objective is to scale and to kind of reduce the lead times as we scale. I guess that's one of the challenges is to continue to develop a highly customizable product, and offer this to millions of people without them having to wait too long, and to keep offering a fresh product, an artisanal product, that somebody wants, to have that identity of offering a good sauce in a timely fashion based off of the taste of the user.
Felix: Awesome. Thank you so much for your time, Nadim.
Nadim: Thank you, Felix. Thanks for having me.