Gross To Net

Ep. 4 - Work Hard And Be Nice To People with Jimmy DeCicco | Gross To Net

• George Milton • Season 1 • Episode 4

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I talked to Jimmy DeCicco who co-founded Super Coffee with his brothers in a dorm room. Jimmy has raised over $100mm to grow his company to the third largest bottled coffee in America and we talk about growing pains and how they had to change what they optimized for. Jimmy and I also talk about life and fitness and what it's like to hire your replacement at the company you started.

Jimmy is now an investor at Anthos Capital and you can learn more about him, Anthos, and Super Coffee by following him on LinkedIn: https://www.linkedin.com/in/jimmy-decicco/

Jimmy helps me on my quest to learn the meaning of life.

George Milton:

Good morning everybody. Welcome to Gross Sun net, the podcast where we learn about life by learning about business and vice versa. Also, I'm on a personal quest to understand the meaning of life, and I bet we're gonna figure it out, and today's guest is gonna help us learn the meaning of life. I'm really happy. I've been really looking forward to this. To introduce today's guest, Jimmy DeCicco. Jimmy co-founded Super Coffee with his brothers in a dorm room and built it into the third largest bottled coffee brand in America, which is amazing. He's raised money, brought in investors. brought in celebrity endorsements. Grew the company to God, 50,000 plus doors nationwide, probably more than that. now he's an investor at Anthos Capital. He's back in the next generation of consumer brands, so he's been on both sides of the table. Jimmy, welcome. How you doing, man?

Jimmy:

Storage man. I've been looking forward to this for since the day we set it up and put it on the calendar. Discovering the meaning of life today feels like a lot of pressure, but we'll go there. We'll go we'll get us closer.

George Milton:

Speaking of the meaning of life. I was actually, I did I did a medium amount of research about you because I, we've known each other for a little while, but I wanted to come in and know some extra things. Is this true that you were both a d one foot college football player and a philosophy writing and rhetoric major? Is this right?

Jimmy:

That's right. That's right. Little brains and Braun, although the more Braun than brains back then. But yeah, that's what happens when you play football at a liberal arts school.

George Milton:

Yeah, that's, dude, that's cool. So your philosophy your philosophy degree is gonna come in handy when we talk about the meaning of life. But man, I think we met you and I first met maybe 2018. Does that sound right? It was right before you moved to Austin.

Jimmy:

Yeah. I came down and we were touring Austin to see if it was the right fit for our next spot to live, next office. And you were the only entrepreneur that was kind enough to meet me at Cosmic Coffee on south Congress.

George Milton:

I remember meeting. I can't believe I was the only one that met you. That can't be right.

Jimmy:

Yeah, that was I think our mutual investor, Philip Serafin, put us in touch, so that was a

George Milton:

Yeah.

Jimmy:

warm intro.

George Milton:

Yeah. It was great meeting you then. And then you guys moved the business to Austin. Yeah. You moved, it was in New York previously, is that right? Yeah.

Jimmy:

We were in New York for four years. We were building with Big Geyser, who was our distributor up there. And as the saying goes, if you can make it in New York, you can make it anywhere. And then once COVID hit, we were ready to expand that footprint from the northeast to to a more business friendly state, which was Texas at the time. And Austin's great, with Whole Foods based here. It's a great little CPG hub as

George Milton:

yeah, I love it here. Like one of the, we probably wouldn't have gotten our company off the ground if it was in a number of other cities. Just like the network here and the fact that. I didn't know what the fuck I was doing, but I could get some, I could like somebody, like these industry vets would go to lunch or go to coffee and they would do it without asking for 2% of the company for advisory role. And they'd just be like, Hey man, here's what you're doing wrong, and if you fix these things, you got something. So I thought that was great there. There's definitely a lot of that here.

Jimmy:

Yeah, Austin back then, and even more so today after I've been here five years. It's always felt more collaborative and creative and like people want to help you and they don't expect anything in return. Where New York is competitive and everybody's trying to size you up, who are, where do you work, what do you do? And Austin's not about that. Austin's oh, you should meet George from Yellowbird. He's build, he's solving some of the same problems. You guys can team up. And I love that atmosphere, that culture. And we share a mutual love for the fitness community here too. And I find the same thing. Both in CPG and in fitness. Everybody just wants to learn and push each other to be better.

George Milton:

Dude, the fit. So the fitness community here, we will talk about that a little bit because the fitness community here in Austin is like insane now. It wasn't quite this way, like CrossFit, when I moved here in 2012 and I think CrossFit was just on here and there's CrossFit Central and all these. gym's opening up and, but today it's I'm originally from Birmingham, Alabama, so sometimes I'll go back to Birmingham and I'll do a workout, like in an outdoor park or something, just like what I think of as a normal workout. And people will come up to me and be like, dude, what are you training for? Who hurt you? And I'm like, oh yeah, this is like normal in Austin. There's always people in Austin like swinging kettlebells and Maces. And I used to go over, I used to go over to the Austin High School when they used to have like a. Big like rig out there, like monkey bars and pull up bars, which they've cut, they've taken down and there were literally like, like American Ninja Warrior contestants out there twice a week just doing reps on the monkey bars and stuff. It was

Jimmy:

The fitness community is wild and it's like. What are you training for? You're just training to be a better version than you were yesterday. And it's a lot easier to do that with people who are also on that same mission. And I got friends that come visit from Colorado and New York and California, and they're like, I've never seen anything like this fitness scene. We run on the track here on Tuesday mornings and there's 150 people out there. Like I've never seen anything like it.

George Milton:

Yeah, and it's it's very humbling too because I'm like, as soon as I start feeling fit, I'll jump in like a five mile run and freaking Jimmy DeCicco will show up and run like 27 minutes, just on a lark. No big deal.

Jimmy:

Dude, let me tell you, there's levels to this shit, man. I just, as soon as I think I'm fit I hop in and meet somebody who's been training twice a day for two weeks or whatever, twice a day forever. And I get humbled pretty quickly.

George Milton:

Yeah. And you're doing you're doing high rocks now, right? Like you're doing a lot of high rocks.

Jimmy:

I've done two solo and two doubles. Doubles is a lot better and it's tough. Once you do doubles, you don't wanna go back to solo. But I was just talking to somebody about this, it's wonder what the shelf life of High Rocks is, because now that I've done it a couple times, it's that was cool.

George Milton:

it?

Jimmy:

Yeah. Did it? I like to train for high rocks'cause it gets you in really good shape and it's better than just getting ready for a marathon. But I don't need to, I don't need to race hard anymore.

George Milton:

Yeah. I just did, as I just did. I just did my first one. I'll probably do. A couple more, but man, I was I was doing some recovery from High Rocks and I realized that I haven't really done much pulling in five months. Not a lot of, not a lot of pulling. I went to do some pull-ups and I was like, oh, that's harder than it used to be. Anyway, none of this has to do with building a CPG brand. I do wanna kinda I think one of the unique things we were just talking before we started rolling you, you and I have, been in the trenches for this, right? So you guys started in 2015. We started a couple years earlier as a farmer's market brand, but came to really came in with a business plan and retail plan in 2015. So the same amount of years in the market. As you said, share. Share some investors. we both came up in let me just set the stage because there's some of the listeners here are CPG people, CPG food people, and probably a lot of them are not, and probably a lot of them are not folks who have taken. Funding and kind of gone along that path. I think you probably got a real unique perspective at this point, being both a founder and then a funded founder and then sitting on the investor side now with all of that experience and baggage and all those scars and all of that sort of stuff. The other thing we have in common is that we both we both hired CEOs. we used to be the CEOs of the companies that we founded. So I wanna get into all of that shit. So let's do it. First of all I don't want to hear, I know you, you've done a bunch of podcasts. You've told the super co coffee story over and over. I've told the Yellowbird story over and over. I could do it just verbatim for a podcast. I don't wanna do that. Like super coffee started in your dorm room. wanna know what it was like. you guys before you got funding'cause it's two different worlds before and after.

Jimmy:

Yeah. And the world changes quite a bit once you do get funding, and we can get into that. But before you get funding you're just trying to prove that you have something that works, and ideally you can find that product market fit just through effort. And building a product that's gonna suck in the beginning, I'm sure you hated your first iterations of Yellowbird. Our first iterations of super coffee were clumpy. The packaging was wrinkled. It didn't look good. We knew nothing about price pack, architecture, branding, any of that stuff. But we knew that if you're selling a beverage for$3, you gotta sell a lot of them to build a business. And that's what we started. You, you mentioned Farmer's Market brand. Our first account was a Whole Foods in Washington, DC where my brother went to school and we would just show up and pour samples as every day. That's all we could control is the only store that we're in, so we might as well make it great. And naturally when you do that, you break start breaking records, right? Like the volume we were pumping through that store was off the charts and we took that data to the next store down the street. So we pretty much started manufacturing this narrative that if you take super coffee, it's gonna be the best selling beverage in your set. And we were drinking our own Kool-Aid one. We were able to raise money from that. Like we, we got that from one store to two stores, to 20 stores, and then all of a sudden it, it was a pattern and not an anomaly anymore. But what we didn't realize is we were muscling a lot of that early velocity, meaning it wasn't that you put the product on the shelf and it just flies off. I've never seen that happen. You need to create an incentive and promote and get people to try it. So I think that blurs the lines, right? When you manufacture velocities, whether through demos or promotions or discounts or displays. It doesn't really tell you a healthy read on how the product actually does. And we did that for years, man. Like we, we took that same approach and spread from DC to Philly, to New York to Boston, and we became the bestselling bottled coffee in the Northeast and we're like, wow, we got something. Now let's go raise money and do this nationwide. Little did we know, Jimmy, Jake and Jordan, me and my two brothers. Couldn't pour samples in 4,500 Walmarts all at the same time. We needed to adjust the strategy.

George Milton:

Yeah, that's that's a lot of what we did too. It's good to characterize it as like you muscled it through because we were doing the same thing. and me and my partner Aaron, we were like, sleeping in our car to do go do demos, to hit all of, Colorado Whole Foods and just like we became the, a top selling brand like in the Southwest and natural. And it was, and that's what we raised money off of. Same as you, that we said, Hey, we've got this regional success. can go replicate this everywhere. And then you realize, yeah, it's different. It's different when you're a nationwide brand. can't be at every one of those. Now I gotta hire people or find an agency. And then the people that you know, there's nobody who's gonna sell super coffee like you and your brothers, right? No. Nobody is gonna, nobody's gonna sell like the story of Yellowbird like me and Aaron. but we can't be everywhere. And we shouldn't be everywhere. And you guys shouldn't either. You raised money. That's a great success story. And I will I do think that there's we saw a pretty big funding cycle happen over the course of a decade, right? There were some billion dollar after the market collapse of 2008, you had a handful of billion dollar brands that got acquired. I think buy might've been the first one, right? But you had these, you had people looking for, starting to look for unicorns. Like you had investors starting to look for unicorns. In CPG food and beverage in the 2010s, call it. And we had a good decade or so of like not really knowing how to value CPG brands, right? placing a value on top line revenue and really not thinking about profitability. And then also maybe overvaluing growth projections, I would say. Valuing growth projections as though it was tech or something like that. And I don't I'm not gonna pretend to be an expert about that, but I do think that we saw a cycle and there was a step change around 20 22, 20 23. But funding for CPG was a little easier to get before that. Founders have learned that, investors have learned that and maybe pivoted away from early stage CPG. but tell me a little bit how life for you changed after you guys got funded. What were some of the first things that happened?

Jimmy:

Yeah. Yeah. Let me react to what you just said first.'cause there's a lot of good stuff in there. And I think that for buy, buy brands, BAI got acquired in 2017 for 1.7 billion from Dr. Pepper doing 200 million in sales burning cash to do it. And for every buy, there's a thousand brands you've never heard of that raise money and go out of business, but. When a buy happens, investors get excited and see the potential for what consumer investing could, can do and the returns that it can draw. And just this last year, we've seen it with poppy selling for 2 billion, getting scooped up for 1,000,000,003, I think. So there are winners that make this an exciting. Category to continue to invest in, but for every buy transaction, I think it makes it a lot more difficult for the rest of us because investors realize they overpaid. They realize that growth was also being manufactured by Superbowl commercials and Costco roadshows and things like that. And the synergies that these entrepreneurs think are real. It's oh, when they buy me, my gross margin's gonna go from 40% to 60% because they're gonna produce me in their factories and sell me on their trucks. Strategics aren't as good as people think. Like they're not, they have the same problems that you and I have just at bigger scales. So I think there's a lot of false assumptions that go into what needs to happen to build a brand and get it to an exit. And you're right, I think a business that burns money doesn't deserve to be in business for very long. And after 2021. Investors started to realize that, and strategics now say, I need you to grow double digits, not triple digits faster than the category, and you need to be profitable or on a very clear path to profitability. And show me the levers you can pull to get there. So what changed for us is we always raise money on. Forward looking projections, and we would compare ourselves to the category leader Starbucks, which is distributed by Pepsi. It's always been a$2 billion plus retail revenue brand. And 80, it was probably like 95% A CV still is today, meaning it's available in 95% of the places you can buy groceries. And super coffee. At the time we started raising, we were 5% a CV, 10%, 20%. And we said, guys, look at how strong our velocities are. If we get this thing to the same A CV, as Starbucks, we're gonna have a multi-billion dollar opportunity here. So of course it makes sense for you to pay five x forward revenue, or eight x trailing revenue whatever the math was, and it was a compelling story. And obviously people bet on the upside, but the moment you miss those projections is the moment everything. Gets flipped upside down, meaning the valuation of the company might come down and the investors might take more ownership stake or things like liquidation preferences come into play where investors get their money back before the employees do. So it's a risky game and if you execute properly, everybody wins. But if you don't it's a gamble that where the investors are willing to lose their money. The founders and employees who've been working there for some times over a decade may not get anything in return other than a sort of sub-market salary that they've compromised in, in, in like a concession for the potential value of equity. You know what I mean? People don't pay themselves what they could be paid at a bigger company because they have these shares and they wanna keep cash in the business. So it's a gamble on both sides from the investors and the entrepreneurs.

George Milton:

Yeah, and I just wrote about this kind of thing, like from the founder standpoint. So I would love to unpack a little bit of that stuff because I think that it is, it's known, but maybe not super well known, this idea of Hey, if you're a founder. Or if you're a, early, early employee, right? You're getting compensated in some ways for a below market salary, right? If you went and did the same job at not a startup, you'd be making 20, 30% more, maybe 40% more to do the same job. You'd have maybe a 401k match, you'd have some healthcare, you'd have some other benefits that a startup is not necessarily gonna offer and maybe legally isn't required to. And then you're betting on the value of that equity that you have or those option grants that you have. maybe maybe talk to us a minute about liquidation preferences. Just'cause I want to I wanna make sure that everybody hears this clearly and, the people who are listening to this saying, I think I want to go raise money. Just side note, whenever I mentor, like early stage founders, one of the first questions is, how do I raise money? And I'm like, wrong. First question. Wrong first

Jimmy:

Yeah.

George Milton:

like how do you make something that people love and react to? It should be the first question and then raising money should come later, but a lot of people who have sub call it sub million dollar brands who are asking the question, how do I raise money? That's its own topic, but like when you do raise money, there are a lot of things that kind of come into play and liquidation preferences, investor rights, that sort of stuff. is one of the things I don't wanna say to watch out for. There are some folks who go out there with predatory liquidation preferences, but for the most part a lot of this stuff is normalized, but essentially it just means investors have the right to get their money back. Right. I.

Jimmy:

It's definitely downside protection and first the thing I'll say to those founders are who say how do I raise money? That first million dollars is up to you. Nobody's gonna help you raise that. And if you can't figure out how to raise a million for your idea or your pre-revenue. Product, then you probably shouldn't get into business in the first place. And that may sound harsh, but it's true. Nobody cares about your idea. Nobody cares about your product until you give them a reason to care. And that comes through effort and relentlessness. So I think that first million bucks, scrap it together from whoever's willing to bet on you. And then as it comes down to liquidation preferences, I'll just use a real example because there's nice round numbers. Super Coffees Series C, we raised a hundred million dollars in 2021. At a$500 million post money valuation, meaning 400 million pre-money, we put a hundred million dollars into the company, 500 million post money. And with that, we we basically sold 20% of the company. A hundred million divided by 500 is 20%. And the investors had a one times liquidation preference, meaning no matter what happens to the business, as long as it sells for a hundred million dollars or more. They get their a hundred million back. So it, it de-risks the investors in a downside scenario where the business doesn't live up to the valuation or worst case decreases in value. The investors almost have a guarantee that they're gonna get that money out without losing it. Now that changes if you go bankrupt, if there's less than a hundred million dollars, if you sell the company for less than a hundred million, they don't. Clearly get all their money back. In an upside scenario where you sell for 500 million, 600, 700 billion, then everybody just gets paid the price of their shares. So the investors own 20%. If you sell for a billion, they're making 200 million. And the founders and other investors and employees make everything else. So yeah, but to your point about predatory ones, sometimes you'll see a two x or a three x liquidation preference, say, that says. If I put in a hundred million. I'm guaranteed that I'd make 300 million back so long as the company sells for 300. And where that becomes an issue is in the downside scenario, an investor might be making three x and the founders and employees who have common stock make nothing. And I'm seeing a lot that happen a lot more now since 2021. Everybody raised at these inflated valuations. The companies are still good businesses, but they're, the valuations have just been right sized. So today, super coffee's a better business than it was five years ago, but we're probably valued at 50% of what we were back then. And that's just a challenging reality that a lot of these entrepreneurs face because they've taken on so much capital from investors.

George Milton:

Yeah, that there, there's a lot of meat. So a anybody who's go back and listen to that at at half speed. Again, a lot of

Jimmy:

Yeah, sorry.

George Milton:

but I think that the, like raising money at a, at a higher valuation, a lot of valuations have come down, right? We mentioned this already. Valuations have come down more kind of realistic I think that it's not that valuations have crashed, it's just like you said, I think we're valuing. These companies closer to reality. My co my company as well. We had the same kind of issue where it was like we went in with the valuation math at the time. And I'm not a, I'm not a philosophy major, but I'm a freaking theater major, right? So like I was coming from being a bar musician. running a hot sauce company. So when we were looking at valuations, we, we came in with a, hey what's reasonable, right? I was like, Hey, what's a reasonable valuation? And you kinda look around at the market and you're like, okay, people are, three to five x revenue or you're doing, calculating off, trailing 12 or forward looking what do you have locked And. Now everybody's let's look at ebitda. And seven years ago, every nobody even said ebitda. Like people would say it, people would say it in conversation just so you knew that they were smart. EBITDA was just like a thing that was like a, Hey, look at me. I know what EBITDA is. but now it's actually like how people are valuing businesses and it's better, it's a better way to value businesses, to be honest than just Hey, here's the growth and I the other kind of term that you used. Which I think has become, troublesome or I think people are at least tired of is like path to profitability. Like the path to profitability. Like you can manufacture, I could spend, an hour and excel and make, create a path to profitability, but like it's show, actually showing it. You get a lot more value for showing it than showing model that's okay, if I spend. If we spend 20% less on coffee, and then I can get, this deal at my co-packer and get my tolling charge down 10 cents, then it's can you really do that? Go prove that you can do that and we'll jack your value up a little bit more. So

Jimmy:

Yeah. And on that. To totally. And that, those levers, sure, you might be able to show it in a financial forecast or a model, but those levers take sometimes years to come to life. It's like I'll be profitable if I reduce my ad spend, discontinue some skews, fire some people upgrade my co-packing facility. Those three things, those aren't three month. Plans, right? Those are super coffee. We went through a very painful, slow two to three year transformation where we had to reshape the p and l to actually become a instead of a growth at all cost business as sort of profit generating business. And three years ago we were pointing like, look at all these levers we can pull to make a lot of money. And here we are, three years later, it's finally working. But a lot happens in those three years to, to get to this point. And to your point now, people valuing ebitda, which is basically a slang term for profit. Not exactly but that's what people are looking for. If we were valued, if a$50 million revenue company is valued at four x sales, which is maybe a little bit steep, but four x sales means you have a$200 million enterprise. But if that$50 million company has 2 million in ebitda. They might only get valued at 20 times ebitda, which seems like a good thing. But here you have a$50 million company valued at 40 million because it's 20 times profits, right? So it's a very different thing. Valuing like a sort of mature, stable cash flowing business versus a early stage growthy, high growth startup.

George Milton:

Yeah, and you can blend those things and people are blending those things as well. It's hey, gimme some credit for, I've got three X revenue committed over the next two years or something. And I've got some net profits that I can show today. So there's there, there's shades of gray there. There's 50 shades of gray there.

Jimmy:

Yes.

George Milton:

It's not like one thing or the other thing, but it was almost all like upside grow upside on growth a while ago. And it's not anymore. And hey man, congrats on getting over the hill on some of those projects that they are big projects, right? And we do, like we do at yellowbird, we do our own manufacturing, is its own big thing. It gives you some benefits and there's some, we can make changes faster than the co-packer can. As far as but you still, a lot of the time, a lot of the times you get, to get the deal that you need this year got a contract locked in on supplies or something. So you might be in, you might be in that price on packaging or that price on tolling or that price on whatever it is for a year or a couple of years. And then you gotta renegotiate that kind of. So yeah, like pulling those pulling those levers does take time. I'm interested like during that time, like there's a bunch of things that you have to do to go,'cause you guys were like, you guys went hard on growth. You raised a lot of money for it and, from, at least from where I'm sitting, you guys delivered a lot. And I know that some of it was, some of it was inorganic growth. What's your view on that? Like how much of that growth do you feel like was inorganic versus like sustainable? during those boom years.

Jimmy:

It's a good question and I think in or. Organic growth. Growth that is comes from saying over investing in sales efforts and marketing spend and advertising like Facebook ads and having a big sales force in the field. It works if you have a product that sticks and leads to high repeat purchase rates and high customer loyalty, but nothing kills a bad product faster than great advertising. And that's what we saw at Super Coffee because we manufactured growth in those early years. We weren't really hearing the haters who said, Hey, I taste the Stevia aftertaste, or this isn't for me. Or, Hey, 70 calories is for focus on women only and it's not gonna work for men in convenience stores. So when we raised that round, we hired up we got to 160 full-time employees. Most of them were field sales and marketing folks that were just hitting stores in every state building displays, pouring samples, executing in the field, getting product and samples in people's hands and. A lot of that was great to drive one-time trial and growth, but if you only have 20 or 30% of people coming back and purchasing again and again that's gonna lead to a lot of burn. It's, we called it a leaky bucket. And it's not that super coffee's a bad product, it's just that it wasn't optimized for the right channels. Our 70 calories, zero sugar protein coffee works great in grocery stores where females shop. It wasn't for the truck driver who's stopping at a gas station on his way to work in the morning, like that dude wants full flavor, full energy in your face. Java Monster, 16 ounce cans of energy coffee, right? So like we, we had to learn that lesson the hard way and realize. Different channels require different occasions and have different need states. So I think that proof of concept or that product market fit, you really need to be honest with yourself and hear all of the feedback. And it doesn't need to be a lot of people. It could be a thousand customers and if 500 like it and 500 hate it, go listen to the 500. Some founders only listen to the 500 who are telling them what they want to hear and we've been guilty of that sometimes.

George Milton:

Yeah, absolutely. I mean we have too. Hey man, we're gonna take a quick break. This is great stuff. I want to come back and talk about abdicating the throne, and I wanna learn about the meaning of life. So we will be right back. Stick with us. And we are back. We're talking with Jimmy DeCicco philosopher, entrepreneur, husband, athlete, investor. What am I leaving out?

Jimmy:

And multi hyphen for sure. I'm a utility kind of guy.

George Milton:

Yeah, that's a real tool, right?

Jimmy:

That's right.

George Milton:

Just kidding. I want to, I wanna talk about another thing that you and I have in common, which is abdicating the CEO throne. It's a weird conversation. I'm sure you've had it a bunch of times. I've got a bunch of ti I got a bunch of times to have that conversation ahead of me. We, you and I haven't really talked about this, so let's let our first conversation about it be recorded on air for my, what I assume is a million subscribers.

Jimmy:

Let's do it. We'll keep it real and raw here.

George Milton:

so first of all you your signature for super coffee. Is founder and older brother. How did you decide how did you guys decide that you were gonna be the CEO? Is it'cause you're the older brother?

Jimmy:

Yeah. I think in the first year or two we all overlapped in responsibilities, and back then the responsibilities were very different. It was, who's gonna make deliveries tomorrow morning? Who's gonna print invoices? Who's gonna be at the factory filling bottles with coffee? So we all stepped up and did what, whatever was required. But as you build a real business in the consumer industry, like there are real responsibilities that must happen on time, every time in order to make this thing go. And for us it was being capitalized with in investment fuel. It was having strong operations to ensure we had product to sell every week at a good price and a good margin for us, and tasted good. And then it was sales, making sure that customers were excited about it. Going to retail headquarters, bentonville, Arkansas for Walmart and Minneapolis for Target. And then marketing as well. But each of us owned one of those verticals. I stepped up and took on investor relations and marketing, just'cause I, as the oldest brother I had a knack or I was interested in connecting with mentors and advisors who often became investors in the business. And I oversaw marketing too, which was mostly digital. And then my brother Jordan was the inventor and. Innovator and tinkerer. He came up with the ingredients and the formula and the positioning. So he was always overseeing operations and innovation. Then our brother, Jake, the middle brother, is the life of the party. He can sell snow to an Eskimo and he, he became the guy behind the demo table and that evolved into the guy taking all these retailer meetings. We divided and conquered and stayed in our lanes and I think that's what made it possible to build this thing with my brothers.

George Milton:

Yeah. I love that. I think that one of the funny things about being a founder at an early stage business is that at some point you're the founder, and then at some point you're like. You were the founder on Monday and then on Tuesday you're the CEO. And I'll tell you from our from our standpoint,'cause we had, we did the same, it was the same sort of thing, right? We're like, we're both filling bottles. But as far as going out and making the connections, the mentor connections, the advisor connections that turned into investor connections, like that became my job. And so like at some point when you're talking to. When you're talking to retailers, and I think for us, like the business card switch, the email signature switch of founder or just not saying anything about it happened to retailers. for us it was like a we want people to know, we, retailers and investors, we want people to know that they're talking to a real company. And especially like early stage or like early stage funding, the first million or whatever you're like. You now you've got, maybe you're a C Corp, maybe you go from LLC to C corp or something like that. And it was like, Monday I was a founder and then Tuesday I had a business card that said CEO. And there's no I didn't get my MBA, I didn't go to Wharton's. I don't think you, I don't know if you have an MBA, but I don't think you do. You got the MBA and the school of hard knocks. Probably what we have is way more valuable than an MBA, but also way more expensive. But it's just like that thing of what was that like for you? Was it the same experience where you're just like, who's gonna be the CEO or we need a CEO if we're gonna raise money or if we're gonna go to retailers? Did you just get

Jimmy:

Yeah.

George Milton:

at some point?

Jimmy:

No, I think we need to divide and conquer. And I think being a CEO implies accountability and authority on key decisions. And for the most part, my brothers were aligned with a lot of, with a lot of things, I think raising money. People wanted to talk to the CEO and that was my role. That initially that happened naturally and organically. And what I was really good at was connecting with the right people. That we needed on the team at the time. And in the early days, that was investors, getting in front of high net worth individuals before we had product market fit, or before we had real velocities and traction. And then networking with the different funds at trade shows and finding my way to the right investors to keep this thing growing. It also applied to talent, being able to recruit talent to the team. And that I, I think that's the founder's job is to make sure you're being clear on setting the vision and my brothers and I did that together. You're getting the right people around the table to go bring that vision to life, and you're giving them the tools they need to go do their jobs. And at a certain point you get big enough those, there's skills that. Executives may be suited, better, suited for or skills that executives might have. And what I mean by that is like when you get to a certain scale there's operationalizing and optimizing the business to improve gross margin, improve price pack architecture, and improve your promotional strategy by reducing trade spend, right? And surveying customers to figure out which innovation to launch in which channels. And those skills aren't really intuitive. Like they're people who are trained classically at Pepsi and Coke and Unilever and Mars that learn these things from the best organizations in the world that you can bring in and then learn from. I think a lot of founders try and reinvent the wheel. Which that naivete is a blessing in the early days because you're approaching age old problems with a new mindset and you're blind to the obstacles and you just run through them. But you don't have to reinvent the wheel on everything right there. There are people who have done the fundamentals at a high level, and that's when we started surrounding ourselves with executives. But yeah, it's it that. That crossover is unclear when that happens. And I think most founders stay in the CEO role for too long. Very rarely is it you have a Steve Jobs or a Phil Knight at Under Armour or a Michael Dell, right? Somebody who started this company in their dorm room and are still running it 40 years later as a public organization. The skillset of a founder and the skillset of A CEO are often different. And I think a lot of founders think that they can do both and that sort of hubris leads to a lot of expensive challenges.

George Milton:

I completely agree with us, with all of what you said. I think that the one thing that I'll add to it is that you have to be, have to be categorically insane to start a food or beverage business. It's just the chances of success are fairly low. The chances of flaming out are fairly high. The chances of, even if you get investment and go sell your company for a hundred million dollars or$500 million, talking about the pref stack, talking about valuations, like talking about all those kind of levers, the chances that you'll get paid out on that as a founder also not. Extraordinary, right? So like you have to have a certain amount of insanity and hubris, like there is hubris in being a founder because got told no a lot early on. Oh, this isn't something people want, this isn't gonna work. Or That price is too expensive in this category. And we just kept pushed through it. And I think that you get, I don't know if you had a similar experience of you just have to fucking muscle through it. You already talked about muscling through the first few years, right? With no, you don't have, you don't have any funding. You're just doing it yourself. And so you as a founder, a lot of times, and this. Maybe not a hundred percent of founders I know, but like pretty close. 98%, 98.2%. It's just like you get that muscle, you get rewarded for muscling through it and figuring the shit out so many times that you do get a little cocky or you think that's the right way. And I think that's for us too. Like we just recently brought a CEO on, I think it's been a couple of years for you, right? Is that 22, 23? When did you guys

Jimmy:

2022. Yeah.

George Milton:

22. So three, maybe two and a half, three years.

Jimmy:

Yep. Yep.

George Milton:

But yeah same thing for us where it's like a, hey, the skillset becomes really different when you're like, Hey, you need to focus an optimization here, as opposed to I, I just read a really I read an article this week on the you were talking about Anderson Horowitz earlier, like on their, one of their blogs, and it was titled be the Navy, not Pirates. And it was talking about this thing of founders are pirates, right? Like you go out and your job is to, you gotta, marry band of. Scally wags, and your job is to go out and break stuff, but you'll never be as powerful as the Navy. If you are, if you put together the administration and the rigor and the ranks, and if you put together all that stuff as pirates, you're now just a different Navy. Be the Navy. It was about, this thing that we're talking about is like at some point you need like a naval commander and not a. captain. And so I think of myself as a I and I think that I've made a lot of the transition to being a naval officer, right? But you look at like a company, especially a company that's funded, you don't want to tell your investors, Hey, wait two or three years while I learn how to be a naval officer. You have a responsibility to not them wait that amount of time for you.

Jimmy:

Yeah, there's so much there. My brother Jake used to joke, but he was serious. There's a book called Team of Teams, I think it was Stanley McChrystal a badass like special forces commander. And he would say the problem with the military was there was all this big bureaucratic machine and. People in the field couldn't react on time because they needed answers from the Pentagon in DC and it was just this slow moving behemoth of an organization. And you're in the Middle East at the time, fighting these terrorist cells that aren't organized. They're scrappy. They blend in with civilians, like they are the ones that are so effective because they're, you don't know who you're fighting or what you're fighting. And Jake would say this internally. We were positive energy terrorists, right? Like we were the ones coming in and doing it our way and attacking the big guys. And it was effective, it was super effective. But at a certain point, you need to evolve into an organization that it has top-down authority and clear roles and responsibilities and clear guidelines and budgets. And I think forecasting is one of the hardest things to do as a startup. But those are the muscles that you need to build. And again, when you need to make that transition from scrappy startup. Participating in gorilla grassroots tactics to a more well-oiled machine, there is no date, right? There is no moment where you're like, it's time to do this. And then when you do make that change, and our, in our case, me and you we both brought in a CEO. It's how do you work well with this person who you hire to, to one, entrust them with your business, but two, stay involved. So you have your founder's fingerprints on that brand, DNA, because the skillset of A CEO is very different. Than a founder. They're not gonna be the rah motivators, they're not gonna bring this brand bring this brand to life. They're gonna, they're gonna run the business and shape the p and l. But it, you need to find somebody who's compatible with that and who has the humility to let you do what you're best at while they focus on what they're best at. And that's hard. I don't think we got that right.

George Milton:

Yeah. Tell me about that. You don't think you got it right?

Jimmy:

It. We brought in our CEOA year after we raised that a hundred million dollars round. We were still burning cash. The world was changing, interest rates were increasing in 2022. And our investors who just gave us that money said, guys, this money needs to last, right? We need to make this money last. And you brothers did a good job getting it here, but let's turn this over to a trusted advisor and a trusted executive who can manage this thing while you guys go do what's best and what you're best at, rather. And he came in, he did a great job cutting costs and right sizing the business and teaching us how to think like a more mature company. But it also gutted the sort of culture that we worked so hard to build. And that was a culture of positive energy and being aggressive when it comes to retail execution and field execution and winning in stores. We all felt like we had our mojo taken away almost as if we were put in the penalty box. And two years after he, he joined as CEO, he ended up leaving and we put my brother Jordan, in the CEO role who's the founder of the company. And now there's a newfound energy. The business is profitable, the business is growing again, and I'll give credit where credit's due. I don't think we would be profitable, I don't think my brothers and I would've made the hard decisions on our own to rightsize the company the way that, that the CEO did. And as a result. It was almost a necessary step to get us to where we are now today. The business is smaller than we were when we raised our series C, but we're growing faster than the category and we're profitable, which are the two things that investors and strategics asked us to do.

George Milton:

Yeah. Wow, man. There's a lot there, man. You guys have you guys have taken some licks,

Jimmy:

heavy shit.

George Milton:

It's heavy shit. It is. I think one of, I do think one of the core skills for being able to do this is having some having a little resilience, maybe a lot of resilience to kinda get through this and say, Hey, we're gonna keep ticking. That didn't work. Let's try this other thing. You mentioned just to go back a little bit, you talked about the, there's not a perfect time to say, hey. want a business manager to come in here and do some of the things that are, to, but ideally you have a perfect Venn diagram where agree on these culture things that are like imperatively important to the business. And then you can overlap, you can be on your f on founder land with like founder things. I don't know. Just generally saying founder things and then the operator, the CEO can be on, cEO land operator land, and you all agree on agree on the core business, the core kind of mission and vision and all that sort of stuff. Pretty bullish on the person we chose and where we're going right now. We're all very excited about it. And we had a same, we had a similar where we said Hey, we gotta, we've gotta make this thing work. We've gotta make it work for the investors, for the business. And you do have all of those additional responsibilities. So I look, man, kudos, for navigating through it. I know you guys aren't done, your work's not done over there, but not by a long shot. But it's hard to do, man. It is, it's hard to take those licks and you do take it personally. I think, like it, the, like my business is my baby. It's, it's personal, but it is also you gotta say Hey, I'm playing with a team here. I've got shareholders, I've got, a bunch of employees. We got a lot of customers, retailers, like you're part of a team. Anyway, man, for sticking through all of that.

Jimmy:

Thank you.

George Milton:

road. Yeah. I.

Jimmy:

you. Yeah. Look, it's like you said, it's not over yet, but I don't think companies fail. I think founders quit and huge shout out to my brothers and the team for sticking through it and right sizing this thing and getting back to a real business that makes money and can grow faster than the incumbents are growing. And I haven't had a, a. Daily, true daily operating role since we put that CEO in place in 2022, I became the executive chairman and I was very heavily involved for the first 18 months. And then in 2024, I joined Anthos Capital as a venture partner. Anthos was our lead investor at Super Coffee, so I've known these guys since 2018. And that was a challenging transition too, because I never saw myself I never really thought about life after super coffee. But once I abdicated that, that CEO title I had to think about what's next. And I think joining our friends and allies at Anthos was a seamless next step. And you never know how valuable your founder friendships are until you get on the other side of the table as an investor.

George Milton:

I've, I, ever since I've known you, I've thought of you as a connector. I, and I see you doing that at Anthos. I see you doing that here in Austin. The last kind of community event that that we went to out at y'all's ranch was awesome. And I just see you've got a really cool community that kind of rallies around you, which is awesome. I know we had talked when you moved over to Anthos and that's just I like, get into that a little bit because I think that there's, now that you're looking at businesses, right? I'm not trying to have this podcast get you a bunch of pitches from random people, but like that you're out there looking at businesses. How do you, like, how do you think that you are just different and better advantaged having run, having run this thing yourself? Like even if, God forbid, but like even if super coffee just was over tomorrow, that experience that you have is nobody has that. There are just like a handful of people on the planet that have the experience of I started it in my dorm room and now it's worth half a billion dollars. Like nobody, nobody does that. Nobody does. Just statistically, the amount of people who do that is zero. So kind of, how do you find yourself looking at businesses than maybe your peers who came through maybe a more traditional, I, I don't know, finance path?

Jimmy:

I, I think I, I show up as a founder first in, in these meetings, not as an investor and that gives a lot of comfort to the founders that I'm meeting with. Meaning like I, I see a lot of founders have their guard up when they're meeting with investors because they see it as a zero sum game. Like in order for this investor to come in, I'm sure I get their money, but they extract a piece of business and they have control over my decisions, and it adds a cumbersome reporting and all of that. When in reality like you guys should be able to win together. You know that capital should help you achieve things that you couldn't achieve on your own. And with the right partner, you're getting resources and recruiting and relationships that can help you accelerate the business from where you're from or from where you're at to where you're going. And I think that some of the best businesses from an investor's perspective don't need to raise money. Which is why my job has come down to like building relationships and adding value to founders long before there's ever a deal on the table. And it honestly, it's a shitty thing because I see so many investors with pitch decks in their hand saying, Hey, fund me. I've got six months runway left and now what I know from Super Coffee and just. Doing this investing stuff for 18 months is usually there's a fundamental flaw, right? If you have to go out every six months with a pitch deck to raise money something's not working. And it's a tricky thing to for an investor to continue to fund this trial and error rather than having something that has true product market fit, a cult-like following in a niche audience that just needs fuel to grow faster and bigger than it can with other, with just the cash that is throwing off its balance sheet. So yeah, I think founders see my scars. I've raised nearly$200 million without any investment banks and it's, it sounds like a brag, but it's the truth. And I'm not proud of all of it.

George Milton:

A good, it's a

Jimmy:

I.

George Milton:

It's a lot of money.

Jimmy:

Dude, it's I always say now, don't judge a business by how much it's raised, but what it's turned those dollars into. So yeah and we were in this thing where we always had to raise money because we didn't have the margins to support the growth and we wanted to grow faster than everybody else. So we needed cash to do that. But yeah, I think founders appreciate that, and I keep it real and honest with them and share what I've learned. Try and help them avoid some of the mistakes that, that we made. So I see myself more as a friend and a partner to founders rather than an investor trying to take something from them.

George Milton:

That's awesome. When you talk about the, what I've always imagined is probably the hardest part of being on that side of the table and it's hard to just doing some minor advising that I do for like earlier stage. Founders to say Hey, when is it working? Like, when do I know that this is working? And I'm not just propping up something that's gonna fall apart if they're not raising money every six months. And I think that's a, it's a question that you have to ask at your own business as well. Because I think that the answer is like, Hey, even if I'm doing 50 million sales or whatever, 50 million annual sales, 20 minute million, a hundred million in annual sales, is that being propped up by investment? Is it being propped up by something that could just easily go away? Do I have a model that works? And that's a, that's a question that we have a. We get a lot when we're like talking, out in the market even. Even if we're not raising money, actively raising money, that there's a quite general question about does the model work? Does your business model work? Do you have product market fit? Can I say at$10 million, I've got product market fit, question mark, right? It depends on how much of that is subsidized. So as an in as an investor and as somebody who's a founder as well, and coming from that world, like how do you what are some of the things that you look at to, to answer the question, does this model work? Does this business work?

Jimmy:

Yeah. And it always comes down to customer love. And to your point, is 10 million enough? My first question is. How many stores is that 10 million coming from and what's the velocity in those stores? And you've seen me write about this on LinkedIn, but founder, a lot of founders are so tempted to say yes to geographic expansion beyond their home market that they'll, if they're building a brand in Austin, Texas. My advice is dominate Austin. Get into Central Market, get into HEB, get into Whole Foods, the Southwest region, expand to Kroger in Dallas, expand to Kroger in Houston. Get into QuickTrip and maybe Bucky's if you're a C-store brand. Do$10 million in the state of Texas and. That to me indicates consumer loyalty and customer love. And like a viral sort of regional hero, Bucky's, its itself is, has created that, and you and I have seen legendary brands come up through Austin, whether it's Tito's vodka or Cate Chips, or Lalo tequila now. And they've all built in a region. And meant a lot to a small amount of people before they've expanded and everybody agrees with that approach, yet very few people have the discipline to follow it. And I'll talk to these guys, they're like, Hey, I'm the number one brand in Central Market. I'm like, that's great. Where else are you sold? I'm doing a strategic test in Giant in the Northeast and a hundred stores of Ralph's and SoCal, and Hy-Vee in the Midwest, but they're all just strategic tests. And those aren't strategic, right? There's nobody there knows your brand. You're gonna have to spend a ton of money to support it. Your buyers at those stores are gonna be disappointed in the veloc, so you're gonna have to discount it. It just leads to bad behavior. So I think creating customer love in a very small niche community is the number one leading indicator we look for to see if this brand has potential to scale beyond that community.

George Milton:

I think you were talking about the way that you guys built super coffee, and one of the things that going through my mind as you were saying, as you were talking about that was one, one of the phrases that I use a lot, and I'm stealing this from somebody, but just stacking wins. So like your next expansion. And I will say that we have been guilty of doing the other thing as well, right? Where you go into a retailer that, or you get, you're like, Hey, I've got investor dollars and I've got the opportunity to open up whatever, 1200 Walmarts, and you say yes to it because that's you. That's what the dollars were for, was like, go as big as you can. I'm gonna just admit that I'm guilty of doing the wrong thing as well, but the right thing is almost always stacking wins. The next thing should be a win, right? If it's central market today and Bucky's tomorrow, or whatever you do, the next thing should be a win. And if you, it's just if you don't have any, if you don't have any right to believe that, going to. Giant, going to 50 stores of like giant Landover. Next gonna be a win. Then just don't do it.

Jimmy:

And I think a lot of people see success in a home market and say that it's gonna work outside of it. And it's just such a risky gamble, and it's oh, it's a test and learn. I'll tell you right now, don't do the test.'cause you're gonna learn that it's not ready for that market. And I, unless like you're a D two C first brand and you look at the e-comm data and you see that. Washington DC Pur purchases more of your product than everywhere else. Okay? Then maybe you have a built-in audience that can go support you at retail. But if you're just testing this because the buyer reached out and they want your product, have the courage and the confidence to say, no, you're gonna, you're not ready for it. And I think that's a tough thing to do, especially once you have investors who are expecting you to grow. And the other thing I'll say, this is becoming a tangent, but had we. Grown 15 through 2020, bootstrapped it. Me and my brothers didn't raise any money. We went from 500 K to a million to 2 million to 4 million, right? And first five years we get to 5 million in sales. You would've never heard of us. That was a small, local thing that, that investors didn't care about. And sure it's the right way to grow and I think that's the way to grow today in 2025. But back then, it's like you had to grow fast. You had to grab land, you had to take share, and you could only grow at that rate with the support from investors so that game has changed, has flipped upside down.

George Milton:

For beverage, like talking about grabbing land, like beverage is super hard. You guys you guys have had there's stuff in beverage that we just have never had to deal with, and I'm glad to not have, the prize bucket is pretty big in beverage, but man, it's tough to get there. So I don't have to tell you that. But while we still got a little bit of time left, I promise we were gonna get to, we've done all the easy questions now. So let me tee up something a little harder. Hey, Jimmy, are you happy, man? Are you feeling, are you happy? You got a good life.

Jimmy:

You've got a great life, man. I got a the best partner in the world and my wife Allison never thought I'd find her, but we did and that matters a lot. By now I thought we'd have sold super coffee for billions of dollars and I'd be financially free. That hasn't happened and I've finally accepted that's okay, and I didn't need that to happen to be okay with who I am and what I'm worth. So I'm happy, I'm healthy. I've got a great network of family and friends and looking for what's next on this journey.

George Milton:

One of the things, Hey man, I'm glad to hear that you look happy. You seem

Jimmy:

Thanks, brother.

George Milton:

I, one of, one of the things I'm trying to explore with this podcast, with these conversations are like, we've talked a lot about business and a lot about, we've had a lot of overlapping experiences, so I'm sure we could talk about it for days on end. Maybe we will, sometime we'll just go do some and just talk,

Jimmy:

I love that. Let's do it.

George Milton:

but, I think the thing I'm really interesting, interested in,'cause I think that like founders e especially folks who are like funded growth stage founders optimize a lot for growth. They optimize for that outcome. And I certainly have spent a lot of time optimizing for that. What do you find yourself maybe today? Like I, I think saying, okay, if I don't make a billion dollars. If that's okay. I'm all right. What do you find yourself for these days? Is your op, because gross to net right? It's very cute of what do you want to get out of it? What do you ultimately, what's your net, what do you want to net out of all of this?

Jimmy:

I wanna do work that I'm proud of with people who I like working with. Charlie Munger says, never work for somebody you don't admire or don't wanna be like. And I'm thankful that I have that in my team at Anthos and the team at Super Coffee and I'm very proud of the work that they're doing. But waking up being excited to tackle the day's challenges. When the alarm goes off at five 30 in the morning, I'm not excited to wake up and go run in the dark, right? Or go do a ROCs workout. But you get it done. I heard something the other day that I love. It's like I haven't fallen in love with running. But the pain of running leads to progress and progress is pleasure, right? Like that to me is I like getting better both at work, at home and fitness. So the pain is always worth it. And if you find yourself doing something easy. It's probably not going to be a big risk that you're taking or that fulfilling, I think a lot of people, it's easy to be complacent and fall into a comfortable life, but I think growth really happens on the edge. The edge of the strenuous life.

George Milton:

Yeah, that man. Like running in the dark is just such a visceral, it evokes such a visceral thing for me. How many miles are you running these days? Like what? What's your weekly mileage right now?

Jimmy:

I am up to 35, maybe 40. But. It takes a lot of time, and that time is a sacrifice away from something else. Anything else? Lifting weights, playing the guitar, which I don't do, but I'd like to do. Like it's a sacrifice, but that's what happens when you train for a goal.

George Milton:

Yeah, man. I love it. It's been a pleasure talking with you, Jimmy. I'm super stoked that we got to have this conversation. I would, if you're on LinkedIn, go follow Jimmy DeCicco on LinkedIn. He is.

Jimmy:

I.

George Milton:

lot of great stuff over there. Jimmy, is there anything else that you wanna plug aside from drink Super coffee? What do you wanna plug while we're here?

Jimmy:

Stu, this has been great. I love wrapping with you. We're overdue for a workout here in town, but I think on the life. The life's work questions that, that you were getting at the meaning of life. It's like work hard and be nice to people. It's a simple tagline. It's on all my social media and I think if you can do those two things, you're gonna be happy with the outcome. Whether there's monetary, windfall or just a good clean living. Work hard and be nice to people is the formula.

George Milton:

Love that, work hard and be nice to people. That's gonna maybe be the name of today's episode. We've been talking with Jimmy DeCicco. This is gross net. Until next time, guys, work hard and be nice to people. Bye-bye.