Michael Wystrach is the co-founder and CEO of Freshly which delivers gourmet ready-made meals, prepared and delivered to your door. The company so far has raised $110 million from investors such as Highland Capital Partners, Slow Ventures, Insight Partners, Alumni Ventures Group, Total Access Fund, White Star Capital, Monkish Equity, The Yard Ventures, Chestnut Street Ventures, and Blue Ivy Ventures to name a few.
In this episode you will learn:
- The importance and value of having a cofounder
- Why diving all-in on your startup is the way to go
- Who to hire first
- How to maintain yourself as the founder and machine that makes it happen
- How to play the long game and enjoy the journey
- A new definition of success
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
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About Michael Wystrach:
Michael Wystrach is the CEO and co-founder of Freshly, a healthy meal delivery service offering nutrient-packed dishes with restaurant-quality taste. Wystrach brings over ten years of experience in the food industry, as well as backgrounds in finance, real estate, and multiple startups.
As CEO, Michael Wystrach leads the charge at Freshly to deliver great-tasting meals directly to its customer’s doorsteps, while significantly reducing the environmental impact of the food industry.
Freshly was built on Michael Wystrach’s personal mission to find convenient and healthy meal options for his fast-paced life. Michael Wystrach discovered that through technology, he could disrupt the $1.3 trillion food industry by delivering food directly to customers.
This allows Freshly to provide nutritious meals while reducing the food waste caused by the outdated grocery supply chain. All meals are cooked to order and are delivered fresh, never frozen. Our 100% all-natural meals are designed with no artificial ingredients, no refined sugars, and no gluten.
Prior to founding Freshly, Michael Wystrach honed his natural entrepreneurial skills by working in every stage of business, from launching startups to equity sales with Wall Street trading companies.
Michael Wystrach’s hands-on experience in the business world, paired with a strong work ethic inspired by growing up on his family ranch, has provided him with the skill set to lead the operations, finances, and growth of Freshly.
Connect with Michael Wystrach:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to be learning a lot about healthy meals — healthy meals delivered to you. We’re going to learn about someone that is going to tell us about the early days, about building, about fundraising, scaling, and all the above. So without further ado, I’d like to welcome our guest today. Mike Wystrach, welcome to the show.
Michael Wystrach: Hey, Alejandro. Thanks for having me on the show. I’m excited to share the story.
Alejandro: Originally born and raised in Arizona. Tell us about life growing up there.
Michael Wystrach: Born and raised on a ranch in Southern Arizona about 15 miles north of the Mexican border. I grew up in a ranching family and a restaurant family. My parents bought our first restaurant when I was a month old. I started working in the restaurant when I was eight. I begged my parents to let me work. Hindsight was a huge mistake because once they realized they had cheap labor, they took full advantage of it. But yeah, I grew up working all the way — it was my spending cash in college, and I worked all the way till I left Arizona after college.
Alejandro: Very cool. What kind of restaurant was that that they had?
Michael Wystrach: It was a steak restaurant. We have a cattle ranch, and I’d like to say we were doing farm to table before farm to table was cool.
Alejandro: Very cool. You were able to see that. Was it at the time that you told yourself, “I want to be an entrepreneur as well in the future”? Or anything like that?
Michael Wystrach: You know, it’s interesting. I grew up in a very entrepreneurial family. My dad was a Marine Corps aviator. He left the Marines, because during his career, he started doing real estate investments and stuff, and he actually built his whole entrepreneurial base, left the service two years before his 20-year retirement because he had become such a good entrepreneur. So I grew up in a family where the entrepreneur was the job. As I watched my parents, that was kind of the job. I went through college, I went through high school dreaming and having this fascination that I wanted to be an investment banker. I wasn’t fully sure what an investment banker was, but I was always fascinated by business. That was my passion. Going out of college was I wanted to be an investment banker.
Alejandro: Very interesting, and that’s actually why you decided to go and study finance.
Michael Wystrach: Yeah. I studied finance at the University of Arizona, which is a great school, but it’s not the number one target for an investment bank. After school and a combination — I graduated from school in 2002, which was just after the bubble burst, and investment banks were still downsizing, not hiring. I worked for two years doing mortgage investment securities and hustled every single day to find a job in investment banking. I got one interview with a guy in an investment bank. It was a friendly interview. He just did it to be nice. I emailed him every single day for a year — maybe not every single day, but at least at minimum, once a week. He finally, after a year, said, “There’s a job opening in New York. I’ve got you an interview. Don’t email me ever again.” I said, “Thank you.” I flew out, landed the job, and got into investment banking that way. That was an example of persistence paying off.
Alejandro: That’s amazing, and New York City. For you coming here to New York, you were probably super impressed.
Michael Wystrach: Yeah. My interview was the first time I had ever been to New York. I got the job. They said, “You’ve got to start in two weeks.” It was an experience. Those of you who have lived in New York know that to anyone, your first month in New York is terrifying, but as a country kid, it was a unique experience and one that I cherish. I look back, and I was lucky I made it all the way through.
Alejandro: Of course. One of the things that I see as one of the patterns is that some of the most successful founders have this interesting background of either consulting or investment banking. But here, for example, in your case, what did you really learn? Why was an investment banking background so useful for you, for example, to tackle your entrepreneurial journey later on?
Michael Wystrach: I think what both investment banking and consulting do is, they get you into the weeds from a financial point of view on a lot of different kinds of businesses. So you’re able to learn about what are the levers? What are the dials? What are the things that happened? Then, I think when you get close proximity to the management team and hear conversations and hear pitches, it makes you have a better practical understanding of what it is that makes businesses move. Generally, no matter what the business is — you hear people say selling widgets. It comes down as core principles, but you get that day-in and day-out experience. I think the other thing that investment banks do and consulting firms do is it really is like boot camp for business. The hours are horrible. It’s stressful. It’s long. It crunches a lot of information into a tight timeframe. What you can learn in two years on either one of those is pretty amazing. I think that’s why you see so many successful people come out of those different fields, especially early in their careers. It teaches a discipline and a work ethic. All those things matter if you go in to start a company.
Alejandro: Especially, for example, on the companies that you saw that were performing very well, were there certain traits or perhaps like a pattern that you would see repeating over and over again?
Michael Wystrach: Yeah. The general thing I always saw in businesses that they did great, was passionate founder organizations, and people that believed in their convictions. Warren Buffett has a great saying that, “The market in a short-term is a voting machine and long-term is a weighing machine. What you see are these passionate founders who knew what their direction was and didn’t let the market waiver their beliefs. One of the greatest examples, when I was there, was Netflix and Reed Hastings. Netflix was very successful, pushing off a lot of cash with their red envelope that showed up and that DVD rental business. Reed Hastings was adamant that the future was digital. The market reacted horribly. The stock traded down. People were calling for him to get fired, all these different things. He rode that out, and he rode that out for two years at minimum. Now, everyone in hindsight can look back and say, “That was so obvious.” At the time, it wasn’t obvious. That’s what I saw in great businesses. Whether it was Google who we’re on the book of and those things are founders that were really passionate about that mission and that belief of what they were doing. That allowed them to ride out the hard times where the market maybe wasn’t aligned with them.
Alejandro: Got it. You did this for a bit, and then you went into real estate. What got you to make the move?
Michael Wystrach: I did two years of investment banking. One of the things I realized was how much I hated working for corporations. So I said, “It was the slowest slog.” I loved the people I was working with, but I felt I wasn’t a corporate person — my family’s back in Arizona. My dad was looking for me to come back and help. At that point, they had a conglomerate of small businesses: gas stations, hotels, restaurants, and real estate development. So I went back there and worked with them aligning things. After two years working directly with my dad, I realized the only thing harder than working in Corporate America was working for a family business. But we had a good divide, and I started doing more real estate development. I started sitting down and doing some of my own small businesses, and I did my own restaurant that I partnered with my parents, but it was my lead on that restaurant and did some things there. That was me getting my own entrepreneurial chops going. That was a lot of fun.
Alejandro: Doing your own restaurant, I think that this was the immediate thing that happened right before launching, which is now your company. Can you walk us through, perhaps like what were you seeing while you were in the restaurant? How did this idea or frustration incubate? Can you walk us through that?
Michael Wystrach: We’d done some successful real estate deals. This was 2006, 2007. My dad and I did successful deals and made a good amount of money. So I said, “Yeah. I’m going to do a restaurant.” This was 2007. We opened the restaurant in 2008. Basically, I opened the doors into one of the worst economies, at least in my generation, since I was born. Quickly, I had come off of all these successes. It was like anything I do, I thought I had the Midas touch. The restaurant was foundering. It was having a hard time. I was working doing real estate during the day. I was working in the restaurant. I was at the point bartending, doing anything to get that going. I was finding that after being in New York, eating out, and eating at the restaurant, I wasn’t in the shape I wanted to be in. I had a good family friend who said, “You need to start eating better.” He’s an ER doctor by training, but about 15 years ago, he got passionate in what he calls anti-aging, which is using food as medicine. He said, “You need to start eating better.” I said, “Okay. I’ve got this restaurant. You tell me what I should be eating, and I’ll have the chefs make food for me to go.” I was at the restaurant every day. So, fast-forward 60 days and in the best shape of my life. I was feeling great, and now counting calories, carbs. Literally having my own — I was in an ability to have my own personal chef and nutritionist. People started asking me to do it for them. I had a restaurant not doing great. So I said, “Okay. I could turn this into a side business, a side hustle, and start doing this for other people and making some money. It was a combination of having one business that was, for lack of better words, failing and needing to get creative and innovative, and having a solution that worked for me. There were people coming to it, so I started doing that, and that grew.
Alejandro: Let’s talk about you thinking about, “This is something that maybe has legs. I’m going to start thinking about assembling a team, or maybe incorporating, or taking this more seriously. Let’s talk about that a bit, Mike.
Michael Wystrach: Yes. It started growing, and it started growing so fast. It was pretty quick, and in probably three or four months, it was out scaling the restaurant. We had no more capacity there, so we had to move it into a separate facility. We decided that we were going to do a separate facility in Phoenix, Arizona, a bigger facility dedicated just for this project. About six months into that, I came to the realization that I had to choose. The restaurant was floundering, and I made the decision that I was going all-in on this. I shut the restaurant down and leaned into this. For lack of better words, I burned all my bridges behind me and said, “Okay, this is it.” I brought in a co-founder earlier than that who was that ER doctor that I was talking about. His son, who’s an amazing guy, Carter Comstock, who’s super passionate about health and wellness. He came in, and we built this together and moved into this facility in Phoenix. We were working 20-hour days, literally getting up at 4:00 in the morning and then usually leaving there — one of us would leave at 11:00 or 12:00 if we were the one that locked it up. We built a small team and kept building, building, building from there. We moved into that facility, I think, in 2013 or 2014, and we worked to get that thing up and running.
Alejandro: You were mentioning that at this point and time, you had the restaurant, and you also had this project that seemed like it was picking up. When you made that decision, because it’s a really big decision, there was perhaps one key metric or one key validator that told you, “I really should go with this project and shut the restaurant down. What was that?
Michael Wystrach: It was just a natural growth. The business was growing 30 to 40% a month with very little to no marketing spend. Customers were extremely happy. The reorder rates were insane — the amount of revenue we were doing per person. So I was looking at it from a unique economic standpoint compared to the restaurant. And it was clear that this had tremendous legs on it. Even if the restaurant turned around and was highly successful, the maximum cap I was going ever get out of that restaurant was going to be pale in comparison to what we could do out of this business. People often, in a startup, think about how raising capital, the finance resources: time, energy, and focus. So in any startup, I always tell founders, “Focus, focus, focus.” Because it’s all about how much energy, passion, and effort can you put into one thing? So it was diluted. If you’re running two things, it’s diluted. That was where I said, “This has got to be all-in because if I put 100% of my effort on this, I think it could be much bigger.
Alejandro: And obviously, super-nice growth as you were discussing. This was going in the right direction, and the second most immediate important decision was who you were going to share this journey with; because the co-founder that you choose can make it or break it. You were used to seeing teams from the investment banking days and seeing those different patterns on perhaps what made them work or what didn’t make them work. For you, the decision was a really big one. What were you looking for, and what did you see in Carter that got you guys to click?
Michael Wystrach: You nailed it. I think if you’re a first-time entrepreneur, it is very hard to go at it alone because there are a lot of dark days in startups. I don’t care what startup it is; most everyone has — there are a lot of good days, but there are a lot of dark days. Having a founder, having someone with you who’s sharing that journey, both the ups and the downs — your sibling, your family, your significant other, they’ll be supportive and be all those things, but they won’t be able to understand to the degree a founder will understand the highs and lows. For Carter and I, I think the thing that clicked is we both believed in what this business could become. We both believed that we had an ability to change the world. We both believed that there was a fundamental shift we could make in food that we were excited about. Then we were both willing to put everything we had into it. I mean from credit cards to pulling all our 401Ks down. When we moved to Phoenix, we shared a cheap apartment. When we launched, we literally had no money, so we ate beans and eggs for the first two months until we started up that facility. Then we were able to eat our own food. But it was that level of commitment. That’s how I look at entrepreneurs is, you want to get someone who’s all in with you, and who’s fully committed to making this work. In the early days of almost every startup, outsiders looking are saying, “This is nuts. There are very few startups that in the early days people can look and say, “Wow! This is going to be a huge multi-billion-dollar, hundreds of millions, whatever that number is business?” Most startups don’t look that way, whether it’s Amazon or Uber. It just looks like, “Wow. This is a crazy idea.” It’s getting that person who’s crazy enough with you who is going to take that journey with you.
Alejandro: For sure. For sure. Mike, what ended up being the business model here for Freshly?
Michael Wystrach: It’s interesting because we tried a lot as we fell into different areas — we originally were doing more of a Door Dash model where we were delivering direct. That we saw as being very challenging from a unique economic standpoint. We did a bit of a Myntra model. You know, later Myntra went out of business. We were like, “Wow. We don’t know how they’re going to figure this out,” because we weren’t able to figure it out with running your own logistics. Then we started saying, “What if we shipped food directly with FedEx.” FedEx was our first partner. “That would broaden how far we could reach.” And, “What if we made it really easy for the customer.” One of the big challenges for our customers, they would forget to order. So we said, “Let’s set up a subscription, but an easy-cancel subscription, so you never felt like you were locked into something,” but we always made sure that you were getting food because our customers depended on us. Then similar to what I was benefiting from is, at the time when we started, the craze was around these meal kits and cooking food, and this was — our thing was, “Ah. We don’t like cooking. We want someone else to do the cooking. We want to just be able to heat up the food.” We wanted to be convenient, healthy, and, most importantly, we wanted it to be craveable. You want a dish that we’re excited to eat every day. That was the model: fully-prepared meals shipped to your house with a subscription because our customers were relying on us for the block-and-tackling. But zero commitment so you can always pause, skip a week, cancel if you wanted to. That was the model that we pivoted into in 2015, and those tweaks were the thing that all the sudden took the company off at an insane, accelerated growth rate.
Alejandro: Very cool. What were some of the biggest challenges? You were pointing to them from a logistics perspective, also the fact that we’re talking about food. What were some of the biggest challenges here?
Michael Wystrach: We were doing something in food that had never been done before. We were doing fresh, prepared meals, shipped directly to your house, and shipped overnight so that you got a week’s worth of fresh food in your house, that all you could do is heat up. That’s never been done in food at any level of scale. It’s been done locally, but never done to that scale. Traditionally, if you look at your CPGs, they use preservatives, they use frozen food because that’s how they manage the supply chain. As you said, we were reinventing the wheel here. We were reinventing the facilities and how we did manufacturing. We were reinventing logistics and working with partners and understanding that supply chain, what food and in areas we’re buying food from, packaging, customer acquisition, retention. It was figuring a lot of things out as you go. I always like to say that Freshly started with the Kitty Hawk plane that the Wright brothers flew, and while it was in the air, we built the 747, and we did it all while it was flying. It is not the smartest way.
Michael Wystrach: Ultimately, you want to build the 747 on the ground, but that’s how we built it. While this thing was in motion, we got smarter. More importantly, we continuously hired smarter and smarter people who knew more and more. Carter and I always say, “The best thing we did was make ourselves the dumbest ones in the organization. We feel we’re lucky we started the company because we never would have been hired into the company.”
Alejandro: That’s very interesting, and why don’t we go into that a bit deeper. We’re thinking about the team, so in this case, you had that experience of looking at teams from the investment banking days. Now you were with Carter. Then, what was the process of like taking a 30,000-foot view, and then also looking ahead and thinking about what you guys needed to execute on and the strategic roadmap? How did you guys think about that team that you guys needed to surround yourselves with, and what were some of those immediate hires that you decided to bring aboard?
Michael Wystrach: This is probably one of the things that’s overlooked the most in startups is the success of startups is, there’s so much wait and so much talk going into funding and fundraises. But the first people you’re selling are great employees. What you’re trying to do is, just like great investors, you’re trying to sell someone who’s a drain, who by all collective measures should not take that position with you. Most of the time, you’re trying to sell them on taking a haircut from what they’re currently making and to work longer hours. So in the early days, as we look, it was hiring what we call generalists — people who came in and were willing to do anything that needed to be done whenever it needed to be done. Our first one was — we had some great people — Garrett, who’s still with us. Our chef Chris, who’s still with us. An entire team of people who were willing to do whatever it took. That was rebuilding computers, driving trucks, whatever it was that the team — we built that team. Now, as you start growing and scaling, what you start seeing is gaps, and specifically gaps in knowledge because you’ve got these generalists, you have founders. You start seeing, “Where can we go hire the best in breed — the top talent who could jump us to the next level?” That was a manufacturing operation. Again, we sent out and did searches on LinkedIn. We found people that were doing similar companies. That first person we hired, Venessa Lindsay, was someone I pitched, originally, as a consultant. I pitched her for three months solid about joining Freshly. She was the first person who came in with a tremendous amount of knowledge on doing food at scale to that next level. And she helped us step-function the business to the next level as we thought about growth and elevation, and her ability to bring in and attract great talent took us to that next level.
Alejandro: You guys started this in Arizona, and eventually, you moved to New York. Why did you decide to move to New York?
Michael Wystrach: We took our first series of funding from Highland Capital Partners and Bob Davis, who’s been on the board of Harry’s, Handy, nuTonomy, a bunch of very successful companies. He said, “Look. If you’re in Phoenix, I’m still going to invest in you, but if you’re in Phoenix, there’s not a lot I can do for you. But if you’re in New York, I can open up the world for you. I have so many connections and so many different people I know. My network’s just smaller in Phoenix.” Carter and I both knew that if we wanted to build and scale this business to where we wanted to take it, that we needed to be in either San Francisco or New York. That made our decision easy. I lived in New York at this point, so I did investment banking in New York. Carter hadn’t visited New York since he was ten years old, so that was a bigger jump for him. But we kept our operations in Phoenix. We still have our operations — actually, we still have a secondary headquarters now that we’ve opened in Phoenix, but we just moved our headquarters out here to New York in 2015. Looking back, it’s probably one of the best moves we made as we looked to scale, marketing, and our tech team out here. The level of talent out here doing e-commerce and things like that was immense.
Alejandro: I’m sure that there are a lot of listeners now that are thinking, “Oh man! I’m outside of a hub like New York or the Valley,” or whatever that is. As they’re thinking about whether to make the move of not, how would you suggest them to approach this big decision?
Michael Wystrach: There’s no one answer, first of all. There are plenty of major big companies, very successful companies that have grown up in all sorts of different places. Additionally, there are your major hubs, and now there are these secondary hubs that depending on what you’re doing, are becoming outsizing, whether that’s Austin, Salt Lake, Seattle, to a degree Chicago. There’s the ability to look at those. The big thing for us, I think, is startups are hard. With startups, what your trying do is always stack the odds on your side, and proximity to talent and proximity to people who have done and are doing great things in your industry makes the job that much easier. Now, can you recruit great people to live in your town? Yes, you can. But it’s a challenge. Proximity is always king and depending on the industry that you’re a part of, that hub may be in a different location. For us, we attracted great talent in Phoenix, and it was great. We definitely challenged to get the talent that we wanted from a tech and marketing standpoint just because there weren’t as many industries doing that in Phoenix. When we came to New York, that was the blood. It’s not only the people that you can attract, but it’s the conversations, the proximity, and it’s sitting down with other founders. If you’re in New York or San Francisco, it’s so easy to build your network of people doing similar things. What you realize as a founder is, a lot of the things you’re doing are unique, but most of them are not unique. Most of them are people issues, process issues, scaling issues, fundraising issues. Those are all things that it helps to have a proximity to other founders, and building that network is really important.
Alejandro: Absolutely. In this case, Mike, for you guys, it took a bit of time to raise money. I think that some of those days were probably super-scary because it’s like walking on a thin line. You don’t have a lot of room to make mistakes. Tell us about one of those moments where you felt that perhaps there was not going to be a tomorrow for Freshly.
Michael Wystrach: There were so many in the early days. I think this is a very different kind of — it’s been beneficial, but we ran this business on a collective for two years, total fundraising. We raised just over $250,000. Two years, and Carter and I didn’t pay ourselves for two years. Not only personally were we running on flames — one of the most vivid moments was Carter and I sitting in a room, and we had three months of burn. We had 48 hours to make payroll. We had two investors that were hemming and hawing on putting money in. If they didn’t put the money in, we were going to have a challenge making payroll. A lot of those moments are luck. It’s like, I don’t know how much skill is involved in that. There’s an old Gary Player’s quote, “The harder I practice, the luckier I get.” Maybe there’s some of that, but that just one of the moments. There are so many of those moments where we could have gone left or right, or someone could have gone left or right. We had one of our original vendors, a machine that we needed to give us all-natural shelf-life preserve. It’s a machine that is a packaging machine which allows you to keep the food for longer, but not add any preservatives. It was a $50,000 machine. There was no way we could afford that machine. However, it was crucial for us to do that to get that shelf life for FedEx. This vendor agreed to finance it for us for 0% interest with 10% down, just because he met us, and he believed in us, and he went to bat for us. Had that guy not done that, it’s difficult to say whether we would have been here.
Michael Wystrach: A lot of those moments that we had people bet on us; we had people invest in us that got us through the hurdle.
Alejandro: It’s super interesting like you said, I think there are moments of this nature left and right, especially during the early days with doing a hypergrowth business. But it’s also a mental challenge and being able to quiet those voices: the why days and questioning yourself, and all of that stuff during those really challenging times. So, how do you do that?
Michael Wystrach: There are a few things. One, and this is what I always tell people is like you want to do something you believe in. You want to do something that you’re passionate about, that you’re excited to build, that you feel that it’s going to leave the world in a better place, and whatever that may be. That passion, that excitement will help you and your team drive through the tough times. First of all, that’s a mental outlook. If you’re a hiker, it’s getting to the top of the mountain, and that’s the goal, and that helps everyone through the tough times. So that mission and that purpose help a lot. I think the other thing I always tell founders is, do not underemphasize that you are a machine and that to properly maintenance that machine is very important. So, lots of sleep, eating right, getting exercise. You know, when you get on a plane, they always say, “Put your oxygen mask on before you put your kid’s on.” You’ve got to take care of yourself first. I think that gets underestimated as to how important it is. That gives you the stamina to handle the good and the bad days. Right?
Michael Wystrach: Then, I think that’s why the last thing is have someone on the journey with you because a lot of times, you just need to sit in a room with someone and say, “We’re on this together. We’re going to figure this out together.” What I always saw with my founder and me is that we would take times being the strength and being the person who says, “We’re going to get it. It’s not that bad. We’re going to get through it. We’re going to figure our way out.” I would say never did we have a moment where we were both down. Always, one fed off the other the opposite way and said, “We’re going to figure out how to get through this.” It’s optimism. Part of being a founder is being a little overly optimistic, a little insane because that gets you through the days.
Alejandro: Yeah. Absolutely. Then, now, extending a bit more on the fundraising side, how much capital have you guys raised to date?
Michael Wystrach: Now, we’ve raised 110 million, total. Our last round was led by Nestle, and that was a 70-million-dollar round that we completed a little over two years ago. Yes, it’s been a big difference in not raising any. $250,000 our first two years, and then now have raised 110 million in our last four-and-a-half to five years.
Alejandro: That’s definitely a lot of money. You’ve been able to onboard great people. You were talking about Bob Davis from Highland, Insight. You have White Star. You even have the guy that founded Seamless — really, really great people. My question here is, what have you learned about fundraising, Mike?
Michael Wystrach: I have learned that fundraising is hard. It doesn’t matter where you are in the world; fundraising is hard. It is a journey. It’s one that you have to enjoy the journey in the process because it’s hard. I’ve also realized, and I advise people all the time on this is that your investors are partners. They are going to be your partners for the long-haul. They are going to be in that room. They are going to help you solve things. You need to make sure that you go out and find great investors. I think so many times, people get stuck on the firm, but it’s really the partner, the board member who’s going to join that journey. And there are different investors at different times that you need. Your Series A is a very hands-on investor. That’s someone who’s helping you solve the block and tackle. Series B, C, it’s investors who understand the evolution of the business and are now extending their network and helping in that way and helping build the business and those structures. It’s great people. Our investors have been amazing and on the same journey. We’ve gone from 15 employees in 2015. We’re now over 1,500 employees. All great businesses are built by great people. It’s attracting the best people to help build this business. For us, it’s been great because we truly do have a mission and a belief that we can fundamentally change food by making it easy for people to eat amazing, healthy food by making it craveable and convenient. That’s been something that no matter who’s joined, whether it’s an employee or investor, everyone has believed in this mission. At times, it’s all unified around where we’re going and why we’re going. I think that helps a lot with your fundraising, and you’re bringing on. In this day and age, it is overly important, and you’re seeing some whiplash on that is that valuation. “What was your valuation?” Which is really less significant in the journey of building a company. You can see that, obviously, and we’re seeing that where we work. That can work against you at points, as well.
Alejandro: Yeah. I 100% agree. One of the things I thought was super interesting here is that you guys literally launched during the same time as some of the other companies that were also doing deliveries to the homes. We’ve seen some of them panning out not so well. Other ones that had some acquisitions, but definitely not the 10x that maybe the investors were looking for. But in this case, something that I thought was super interesting is that the way you guys have positioned the business is in a way which addresses significant problems that the consumers are having because the other competitors, for example, yes, they were sending you the food, but they were not doing it in a way where it was just ready to go and ready to eat. I find that now, convenience is something that people really go after. One thing I want to ask you here is, in a segment that is competitive — when you guys were launching this and executing this, it was super competitive with all these people raising rounds and doing all of this. It seems that now, you guys are coming out strong and leading the way, but it’s definitely a process, and how were you guys able, and how were you able to keep everyone focused and not get too distracted with what competitors were doing to be where you guys are today?
Michael Wystrach: That’s a great question. What we’ve always believed is — you know, the old story of the turtle and hare. It’s a long game. You’re not trying to win at the highest valuation. You’re not trying to win next year; you’re trying to say, “I want to build a great company.” I always say the biggest competition is ourselves. We’ve got to compete against ourselves to go a bit better every day, and we’ve got to remain very focused. And we’ve been very focused on that. Unique to us, and unique to Carter and I is that we started this company because we’re solving our own problems. We didn’t start this company because we’re in business school, and we said, “We’ve got to start out. We’ve got to come up with an idea.” Then we built this idea, and we had a lot of hype around it. Then we also grew up outside of the coast, so we grew up with no money for a long time, which made us be very disciplined on how we spent money. We were very fanatical on gross margins. We were very fanatical on not wasting money and on knowing how exactly we were getting returns on our investments. That wasn’t always the trendy thing to do. The trendy thing was to go hire some Uber-chef, or some amazing thing, and throw parties, and do these things. It’s frustrating because those are the things that the media picks up. Those are the things that they work really well until they don’t work, and then the media turns on you. We said, “Keep your heads down and just keep going because we know at the end of the day, we’re going to be continuously making the product better for our customers and fulfilling the needs of our customers. It was easy for us because we were our target customers. I hate cooking. My belief was when I started this, “I need an affordable solution.” I wanted my own personal chef and nutritionist. I just couldn’t afford them. So I needed something that I could eat healthy on for $8.99 a meal, but I couldn’t spend hours cooking it. This was the solution that solved my problem. It was someone else designing a meal for me that was healthy, and that cost me under $10. I didn’t have to tip or do any of those things, and I could heat it up whenever I wanted to, and it was ready to go. That has resonated with some of the challenges that people have with food is that people are busy. People don’t have a ton of discretionary money where if you’re ordering on Uber Eats or Door Dash, it’s expensive, and people also don’t tend to make the healthiest decisions on those channels, so it ends up being unhealthy and expensive. Then on the other side, the meal kit side is, it’s fun; it’s fun to do that. If you’re a person that enjoys cooking, it’s fun, but you can do that maybe one or two meals a week. It’s hard to find an hour or two hours to cook a meal at the end of a night. That’s where Freshly comes in is, we don’t solve all 21 meals for your week. We solve six; we solve nine, twelve, depending on the customer. That’s where we come in. We want to help you get through the week and make better decisions by making it easy, by making you crave, and be like, “Oh, I can’t wait to go home and eat that Freshly meal,” and not feel like, “Oh, I’m on a diet,” or something like that. That’s what we’ve stayed away from. We’ve been focused on doing what we do, and we try to stay away from the phono and let’s all — the hottest thing. That’s generally what I’d say is that belief in your mission, the belief in what you’re doing, and disconnecting. It’s a long game. I’m a runner, so if your splits aren’t great in the first mile of the marathon, that’s okay. You’ve got another 25 miles to go. It’s really focused on that, and focus on that it’s a long journey, and these small wins are great, but they aren’t necessarily indicative of the long game.
Alejandro: For sure. Mike, one of the questions that I typically ask the folks that come on the show is — you’ve had now about seven years of super-hard work, super-smart work, and then also a lot of lessons learned along the way. If you had an opportunity to have a chat with that younger self, with that Mike that had already made the decision of “I’m going to go and start Freshly,” what would be that one piece of business advice that you would give to yourself knowing what you know now, and why?
Michael Wystrach: It’s probably the same advice I’ve been giving. I’d go back and tell myself it’s a long game. It’s a long game. Make sure you stay patient and stay focused. Don’t let the little things stress you out too much. That’s something I still have to remind myself because I’m highly competitive, and all these different things, is making sure that I slow down. Then the other thing is, enjoy the journey. This is what I always like to say is that if you’re a hiker, the goal is to get to the top of the mountain. But that’s a moment. That’s a flash, and what you really want to do is enjoy that hike, enjoy the four hours it took to get to the top of the mountain. If you only enjoy the top of the mountain, then you’re not getting the most out of that journey. That’s the thing with startups is, it is something you’re going to dedicate a huge portion of your life or a substantial amount of time. So, enjoy it. Enjoy the people you’re around, enjoy the process that you’re doing, enjoy the outcomes that you’re delivering for your customers. Don’t anchor your success purely upon an outcome. Hopefully, that success is that even if I don’t make the top of that mountain, even if I don’t hit the highest peak, I hit the lower peak, even if I never hit a peak, it’s still a great journey, and I still got a ton out of it. If you do that, you redefine success. It helps you on that journey. I think there’s an overemphasis on success being just financial success. There’s no amount of money that you will make in life that will ultimately go back and correct an unhappy ten years. Time is your greatest resource, so make sure to enjoy it.
Alejandro: I love it. Mike, for the folks that are listening, what is the best way for them to reach out and say hi?
Michael Wystrach: The best way is to reach us on Instagram. That’s our channel that we’re all over. #getfreshly is our Instagram. We put a lot of energy and effort into that. Certainly, order the product. You’ll love it, and have a great time. We’ll make sure that we get a promo code for you to put on the website, so you guys have that. Then our support channel, our chats, all those are great channels to reach out to us. Try the product. I promise you’ll enjoy it, and let us know what you think about it.
Alejandro: Amazing. Well, Mike, thank you so much for being on the DealMakers show today.
Michael Wystrach: Hey, Alejandro, thank you so much for having me on. It’s been a pleasure chatting with you.
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