Irrational Persistence

Seven Secrets That Turned a Bankrupt Startup Into a $231,000,000 Business

Dave Zilko

• Publisher: Wiley
• Year: 2016
• Print ISBN: 9781119240082
• eBook ISBN: 9781119240105
• Edition: 1
• Topic: Business
• Subtopic: Customer Relations
• Index: Business

A modern-day Detroit success story that fuels the entrepreneurial fire

Irrational Persistence tells the story of Garden Fresh Gourmet, and how two entrepreneurs turned a million-dollar debt to a 100-million-dollar annual revenue. Woody Allen famously said that 80 percent of success is just showing up; but any entrepreneur can tell you that it's the other 20 percent that's key. The founders of Garden Fresh took that old saying to heart, building so many strategic advantages into their products and business that their 'sales' team didn't have to do any selling—they simply had to show up. In this book, you'll find out what kind of legwork goes into building a mega-success product, and the strategies, methods, and just plain stubbornness that helped two guys from Detroit build a market leader.

Garden Fresh Gourmet is now the number-one fresh salsa in the US, shipping over a million units every week to Costco, Walmart, Whole Foods, and other national chains—and it all began with two middle-aged guys with negative funds and plenty of ideas. This book shares their journey, insight, and passion to help you build a better business and take it to the top.

• Learn how two entrepreneurs went from major debt to major revenue
• Discover the key characteristics of a product that sells itself
• Consider why selling out might not be the ultimate goal
• Track a journey of 'irrational persistence' from rags to riches

Garden Fresh Gourmet is an inspiration beyond the journey—the way you run things at the top matters, too. Irrational Persistence shows you how to make the tough decisions, live with the sacrifices, and prioritize your values as you build your brand and just keep on going.

1
Summon the Courage to Enter the Dark Room

“If you’re going through hell, keep going.”

–Winston Churchill

So how do you launch a business, even with less than nothing, and somehow get to the point at which some of the largest companies in the world want to buy you?

What’s the first step?

The first step is into the dark room.

The dark room is what confronts everyone who is not living the life they’ve imagined for themselves. Who is professionally unfulfilled. Who finds that condition unacceptable.

And who is determined to do something about it.

And also those who determine that doing something about it involves developing a product or service, then launching it, either within an existing company or doing so independently on their own.

It’s one thing to have an idea. Actually making it a reality is another entirely. Actually bringing it to life requires facing a moment of truth.

What’s that moment like?

Imagine you’re standing in front of a door that leads into a room. A dark room, a room completely devoid of light.

Dark rooms are frightening, potentially filled with peril. There is tremendous ambiguity involved.

It’s natural, and certainly rational, to walk away from a situation like that. To not enter the dark room. To stay where you are, where you can at least see what’s around you. Where you’re comfortable.

But it takes courage, which is often irrational, to enter that room. And to have the door close behind you.

You’re now alone. In utter blackness. Not sure where to go. Not sure what to do.

No one is comfortable in a situation like that. It’s unpleasant at best, and often terrifying.

So what do you do then?

You search for sources of light to illuminate the dark room. Sources of light that will allow you to navigate your way around the room. That will allow you to be successful in the room so that you’re not operating in the dark.

Those sources of light are not always obvious. They can, in fact, take years to locate.

Both Jack and I did enter dark rooms, and we both spent years in them, years in which we often found ourselves in absurd situations doing things we never thought we’d do.

What was it like? What were our darkest moments? Why did we stay in them for as long as we did? Why did we persist?

How did we find the lights to illuminate our dark rooms, so that we could see the paths we needed to be successful? To live the lives we had imagined for ourselves?

LIFE IN THE DARK ROOM: DAVE

So my girlfriend just financed my new food company, American Connoisseur, by signing for a $2,500 credit card loan and I set up shop in a 300-square-foot former break room in a vacant office in a small industrial park in tiny Sylvan Lake, Michigan.

You don’t get much for that kind of money, even in the early 1990 s. Washable walls and ceiling, a couple sinks; fortunately, my landlord had just closed a TCBY yogurt shop he owned, so he let us borrow a stainless steel table. For equipment I ran to K-Mart and purchased two standard household blenders, some one-quart plastic pitchers, and four funnels.

I found a bottle supplier in downtown Detroit, along with a spice importer, and would make the 35-minute trek one way in my car for supplies. I could fit 35 cases of bottles in my trunk and would buy 20-pound bags of dehydrated garlic, onion, oregano, and basil, all of which would go in my back seat. I’d travel back to our plant with my windows open, even in the winter, to try to dilute the pungent odor from the garlic, but nevertheless the smell would permeate the fabric of the seat upholstery and would last for weeks. For just about everything else—salt, sugar, and canola oil—I’d go to Sam’s Club.

To make our marinades I’d measure the ingredients into the blenders, mix them, pour them into a plastic pitcher, put a funnel in the bottle, and fill them, then seal them and label them. All by hand.

The blenders invariably broke down every few weeks—I soon learned the hard way that canola oil seeping into the control panel is not a good thing—and I’d run back to K-Mart to buy $30 replacements.

We did have air conditioning but, ironically, we had no heat. I kept calling my landlord, who lived in the Bahamas for half the year for tax purposes, if that tells you anything, and he just kept telling me to keep flicking the switch on the thermostat and the heat would kick in. Apparently, the $300 per month in rent I was paying him under the table did not justify a significant capital expenditure budget.

We kept flicking that switch, but nothing ever happened. I wasn’t, though, going to let something like the lack of heat stop me. I was in business, and that was all that mattered.

I estimate we did the first 400,000 bottles this way, through five Michigan winters. We could see our breath when we first walked in. My parents gave me a couple of space heaters and after a while that, coupled with our body heat, brought the temperature up to a relatively humane level.

No worries in the summer, however, as again we had air conditioning.

For the most part we’d make our product at night, and in the day I’d balance my time between the various commission-only jobs I arranged, either selling commercial real estate or life insurance, while also trying to market my line of premium marinades.

I was actually getting some nice publicity, even being interviewed by the Food Network on their daily “TV Food News and Views” show.

After taping my segment with one of their hosts, The Dean & Deluca Cookbook author David Rosengarten, he was kind enough to escort me out of their Manhattan studios down to the street.

Rosengarten was also at the time the New York City restaurant critic for Gourmet magazine. I asked him whether he had any idea how much money he spent dining in Manhattan per year.

“Funny you should ask that,” he replied. “They have me use a dedicated American Express Gold Card for all my restaurant meals for the magazine. Just last week I was looking at my statement, and so far this year I’ve charged just under $95,000 to the card.”

This was in early November. Nice work if you can find it.

And sure enough I was getting picked up by local food retailers and then by a few national accounts as well. T.J. Maxx, for example, who had just started selling specialty food, and even QVC, who featured my marinades for years.

Although accounts were buying my products, getting it to them was another story.

Heat wasn’t the only thing I was lacking in my little makeshift 300-square-foot kitchen. I couldn’t afford a forklift either.

Every time I needed to ship an order, I’d wheel all our product out on a cart into the parking lot, load it onto a pallet on the truck by hand, stretch wrap it myself, and use the truck’s pallet jack to get it into the back of the trailer.

After a while it was difficult to even get trucks to come, as sometimes they’d be there for upwards of an hour.

One day a woman, Michelle Marshall, came out into the parking lot. About a decade before, she had started a specialty food company of her own, launching a British pub style mustard she called Mucky Duck, and by chance her kitchen was directly across from mine.

I’d like to think Michelle felt sorry for me, seeing me loading pallets in the snow. In reality she had a doctor’s appointment and could not get out of the parking lot, as the truck was blocking her way. She blessedly offered to let me use Mucky Duck’s forklift.

That soon became a standard practice for us, and I befriended her as well; I thought she was terrific personally and professionally and believed she had developed a great product, verified by the fact that Mucky Duck Mustard won the 1996 World Championships of Mustard.

A few years after that chance first meeting, after I had been encouraging Michelle to partner with me, she said she was retiring and moving to Phoenix and that if I wanted to buy Mucky Duck, now was my chance.

We closed on the company three weeks later, an all-cash deal that the bank financed 100 percent, with my dad guaranteeing the $108,000 loan.

I figured at least I was consistent: I founded my first company via financing courtesy of my girlfriend and I financed my first acquisition via my dad’s credit worthiness.

So now I owned a mustard company, which was very exciting. Even more exciting was that I finally had a somewhat professional commercial kitchen to work out of, and at that time I defined “professional” as having a place with heat and a working forklift.

The day after we closed on the Mucky Duck Mustard Company, we moved across the parking lot to our new professional commercial kitchen. After moving a vertical spice rack we had against the wall in our old American Connoisseur space, one of my employees looked at me, somewhat aghast, and called me over to that wall.

“Uh, Dave—you want to take a look at this?”

I walked over, somewhat concerned, and could not believe what I saw; it was a second thermostat. I flicked the switch, just as my landlord had implored me to do so many times, and sure enough the heat came on. Just as we were leaving the space for the very last time.

An even bigger surprise was waiting for me when I showed up for the first day of production as the new owner of the Mucky Duck Mustard Company.

Most American mustards are made with mustard flour and vinegar that is mixed with maybe turmeric and, when whipped together, comes out as mustard.

It was just my luck, though, that I did not buy an American mustard company but one that produced a British pub style mustard, which typically have more personality than their U.S. cousins; they’re made with eggs and sugar and employ a multi-day process to produce.

So I soon found myself getting up at 5:30 ever...

Table of contents

• Cover
• Title page
• Copyright
• Dedication
• Prologue
• Introduction
• 1 Summon the Courage to Enter the Dark Room
• 2 Find Your Place in This World
• 3 Search for the Holy Grail
• 4 Never Sell Anything
• 5 Build a Company Woody Allen Would Be Proud Of
• 6 Value Values
• 7 If a Fortune 500 Company Calls, Take the Call
• Epilogue
• Index
• EULA