Disrupting the Florist Industry - Michael Jacobson - French Florist - Episode #66

Like, okay, operations is humming. How do we get orders in the door further right. So we invested into that and yeah, next thing you know, we're doing 9 million in sales out of one 3,000 square foot flower shop.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys.

Today's guest has taken on a challenge that is very different from the tech CEOs we usually have on the podcast. Michael Jacobson is the CEO French Florist, a business in one of the oldest and most traditional industries, flowers. What makes Michael's story so compelling is that he's approaching it with the same ambition, professionalism and scale minded thinking you'd expect from a high growth tech founder. He's not just running a flower shop, he's modernized an entire category, rethinking everything from technology to operations to customer experience, and showing how much opportunity there is in industries most people overlook. Michael bought a struggling flower shop in 2019 and in just six years has turned into one of the largest florists in the US with over a dozen franchises and rapidly growing national footprint. He's proving what's possible when you take a big vision to an old industry. Please welcome Michael Jacobson.

Awesome. You got me fired up with that intro. Thanks, David. I appreciate you having me very excited.

First question right out of the gates, what is the one thing that you've done at French Florist, big or small, that's had the biggest impact? And you do again if you're CEO of another company in the future?

Yeah, I think it's an important question. I think that if you ask me six years ago when I took over, the answer would be different. Looking back, you know, hindsight being 20 20, this is something that I've only started to infuse into the organization about a year and a half ago. And it's been absolutely transformative for us and has accelerated our growth in order of magnitude, not incrementally. And what that is is understanding that we're human. Right. I got into business because I like black and white. You don't have to, you know, theoretically can strip the emotion out of it and make business driven decisions. You're dealing with numbers. It's not the reality though. You have humans running the organization. Right. Even with the emergence of AI right now, and we're led by emotion. And so to answer your question, infusing emotion into our organization, I Think has actually been extraordinarily important. What I mean by that is, if I were to ask you, why does your company exist? Why does your role exist? Why are you in your role? A lot of those whys are. You can answer them from a logical perspective, but the nature of the beast is like, at least in my opinion, we're, you know, we're driven by emotion and we like to back up those decisions with logic. But getting everybody in our organization, including our clients and our client experience, to buy into the brand, buy into our mission and our why and why their role is incredibly integral into the big picture of what we're doing. That's been transformative for us and more of like a principle and a way of operating as opposed to a specific tactic, but infusing that across every specific tactic that we do.

And how tactically, how do you actually do that? Like, is that in something you write down and send out an email every week? Is that something that you do on onboarding? Like, how do you actually do that?

Yeah, it's all of the above. It takes a very intentional effort too. And people describe that as like culture and mission and vision and values. And it is those things and then how you infuse them. Most companies values are something that you write up on the wall, but they never become a reality. So you have to truly believe in it. Don't just do it for the exercise. When we went through that, it was a brutal exercise where everybody involved poured their heart into that. And it was a reflection, honestly, of who we are as an organization and that, okay, now we have that on a document and we can infuse that into onboarding. But I'll take the question and I'll give you a tactical example. Almost as it relates to our customers, it implies externally as much as it does internally. But if I sit here and I say, we have the best quality flowers, we have the best supply chain, we have the greatest client experience, that's all, like, logical. And I'm not saying we don't have those things. We do have this. We do have those things. But if I sit here and pitch our company in that way, A, it's super boring, B, it's not even our place to say those things. The marketplace gets to decide that. And our reputation for those things are earned, not said. And then C, again, in my opinion.

If companies that tout that kind of way are of speaking typically aren't like the highest quality.

Again, it's an earned position. I don't say I'm passionate. I just Am. Ironically, I just said it. But right. Like that's, that's kind of the way. And so like, okay, all of that stuff being high quality, having the best product, investing in client experience, all of those things become table stakes. Okay. And all of those things are logic. How do we infuse emotion into that? And if we can't say any of those things, those things are earned. Like, what do we say? Well, we lead with emotion. What are flowers? Flowers. Even if we take culture for where it's at currently, which we want, I'm going to challenge that a little bit later for us on why I think people don't appreciate flowers enough. But, but even if we, we take flowers for what they are right now, in the American mindset, at least we view flowers as a luxury. And we're. And we buy flowers for occasions. We might buy them for happy birthday, congratulations, even if it's for something sad like a funeral and you're sending your condolences. What you're telling that person, though, the message that's being sent is that you're thinking about them, that you care about them, and ultimately, if you dig really deep, that you love them. And so love and flowers are in our mind, synonymous.

I don't know about you, I can't think of a more powerful emotion that exists than love. And that's the industry that we get to work in. That's pretty freaking remarkable to me. And we feel very lucky to work in that industry. And so any of the messaging that gets conveyed out into the marketplace is that you are loved, I love a flower, and it's going to love you right back that flowers are a reminder that life can be beautiful and everybody deserves to have that feeling. Flowers shouldn't be viewed as a luxury. And so you can kind of see that way of seeing speaking is a little bit more emotionally charged and it's a little bit more, a little more human, and it goes a little bit further. So that's an example of how we use that for external, the emotion, emotionally led communications, externally. We use that equivalently, internally as well.

And do you are. Do the values tie back to that love kind of statement?

Oh, I'll slip you the Benjamin for asking that question later. No, I appreciate you asking. It's.

It's.

Our values are love. L, O, V, E. They spell out love.

Oh, really? We actually didn't talk about this.

No, no, we didn't. But it's L is. So when we do look internally and you look at our values, L is love. What you do o is own your impact. V is value connection. That's the business that we're in. And then E is exceed expectations. And we primarily talk about exceeding expectations from the client perspective. When somebody comes in and orders with us, how can we surprise and delight them? How can we, you know, look at the work that we're producing? Make sure it's a 10 out of 10. But hold on, before you produce that 10 out of 10 work, pause, look at it one more time and ask, what's the one thing additional that I can interview into this that can make it into an 11 out of 10 unforgettable experience or something at least that gives that customer some pause and says, hey, this is. Feels like a meaningful moment. So lov. Those are our values.

I love it. I love it. And so when you, you know, you've now built this company over six years, you've had to bring on a number of people along the way. We're going to talk more about that. But when you, when you think about trying to find people who are going to come on board and live these values, how do you, how do you find those people? How do you, how do you filter out in the interview process for people who are going to live these values?

Yeah, I mean, asking tough questions. Our interviews are pretty unconventional. I mean, don't get me wrong. Like we, we have to interview for. If it's an operations role or a sales role, marketing, like whatever it might be, we ask all of the, I'll call them normal questions, make sure that that person has the capacity to get the job done. They have the shops, like from a. But like, again, that becomes table stakes.

And then from there, once we recognize, like, hey, we like this person, they technically can get the job done.

What's driving this person? What's their nature? What's their why? What are their goals? I don't really care what their goals are.

Unless it's financial motivation is something that I think is. I have opinions about that, but I want there to be something more. I think financial is great. It's totally a good thing. I don't view that in a negative way, but I just think that it's a means to go and do more or other interesting things. So, like the interesting conversation around, okay, why do you want more? If that is somebody's answer is like, I'm very financially motivated. Okay, fine, say you have all the money in the world, like, what are you going to go and do with it? Right. I think it's a great journey and challenge to try to optimize for that depending. But you want to spend more time with the kids? Do you want to go and travel and have more fun? Do you want to start a charity? Like, again, I'm not here to judge on your answer, but I want to know what your driving force is and make sure there's enough overlap in the role that like or like our vision and mission and values and culture, that there's enough overlap in our. The way that we hold those principles in the way that they want to live their life. So there's a lot of like, what's their nature and how they operate beyond the chops. We have an insatiable appetite for incredibly talented folks. We will hire for roles all of the time, but if we come across somebody who really just continuously impresses us, we will find a role for them in our company. And don't get me wrong, we are a small, scrappy company that has come from negative.

But.

And so I recognize financial constraints. But that being said, I have a very strong viewpoint that money is not necessarily as finite of an object as most people think. If there is somebody worth bringing it on the team, we will find a way to do that.

And is when you say unconventional interview, what, what makes it so unconventional?

It's a little off script. A lot of it is, you know.

Gosh, I'm trying to think of an example. Like, it depends who I'm interviewing. If I'm interviewing a creative person.

I.

Mean all like an operations interview versus a sales interview versus a creative art director. Like, all very different. But just to use art as an example, I might say we want to design a new ribbon.

What's your approach?

I don't mean to. I think they're like, there's these interviews that you read about like Google and it's more of like the way that they answer it or like, like a server comes over and they pay the server in advance to deliver the wrong meal to see how the candidate. It's like not meant to be that like manipulative. But. But what I will do is I'll, I'll say I'll tell them I, I don't, I don't agree or not that I don't agree. I don't. I think there's a better approach. They'll take, you know, a few minutes to describe their approach to designing the new ribbon. They'll try to understand the use case, the texture, how it's going to be used. Right. So they'll describe in some way, shape or form there. And I'll, I'll Respond. No matter what they say, even if I really like it, I'm like, wow, that's a great idea. I'll hide that a little and I'll say, I think there's a better approach.

Can you think a little bit more? And like, how would you refine that approach? Or how can, like, can you make it. Is there anything else that might be missing? And I just want to see how they react in their thought process. Are they able to be coached? Are they willing to push the boundaries of their own way of thinking? Like, if they are taken aback, I, I just, I want them. We're a remarkably collaborative team. And whether I'm right or wrong, I think that listening to feedback and being open to other people contributing, even if, like, they're way smarter than I am when it comes to design, but being open to folks that, you know, even if I have a zone of genius and somebody comes to me and wants to, well, this is the way that I do it. Like, I'm don't know if I'd describe myself as humble, but I'm humble enough to at least listen and say, like, they're going to. They view the world slightly differently. And like, even though technically I know more about the subject, they might have something interesting that shapes the way that I look at it moving forward. So it's a little bit of that.

And I'm curious, like, profile wise.

Are you looking for people who come from the industry? Are you looking for people who specifically who don't come from the industry? I mean, you are really taking this different approach to building a company in a legacy kind of industry. So is it. Is. How do you think about the profile of the people that you go out looking for?

Yeah, totally. It's both, for sure. I mean, I think they're. It's. If I'm impressed by what other folks in the industry have done, I'll recruit from within the industry. For example, there are some very talented folks that have. That have a very deep expertise in floral supply chain. I'm definitely going to recruit from within the industry for our director of supply chain. Right.

That's not something to learn on the job, basically. I mean, that probably not.

Right. That said, you know, if somebody is. We don't have like an apprentice type thing, but in more of that type of role to the director of supply chain. We might bring somebody in from outside. Sure.

Most of our roles, though. It's an interesting question. Most of our roles, I'm not impressed with what our industry is doing. I think that there's Room to do it again, not incrementally improving the output of what's available in the consumer marketplace, but providing an experience to order a magnitude better than what any other floral provider is providing. So.

Most of the consumer facing work. So for example, an art director, I don't see another floral company that cares as much about art and therefore that reflects in what they're producing. We're going to go ahead and recruit from outside the industry for that type of position.

So I want to go to the origin story here of the business I mentioned a little bit in the introduction. And we'll go to your origin story in the back part of the interview. But for, specifically for this business. Can you just talk through how you came about this business? Yeah, you know, and how, how did you get into this and maybe just talk us through that a little bit.

Yeah, I mean, it goes back to the why. Right. Like, you know, I graduated college but didn't want to take the risk. And I kind of had, I'm sure like a lot of folks that listen to this podcast and have been on, they have that fire in their belly. A little more entrepreneurial spirit. I think that.

I've had that. But you hear this is the logic kicking in, right? Like 95% of startups fail. Whatever the numbers are, it's a large amount. I didn't want to take that risk right out of college, so I joined corporate consulting. That was a great job. I had a great time. A bunch of, I don't know if I should be politically correct, but it was a bunch of old white guys in suits, you know, working indoors. And it's like, oh my God, this is, like I said, exhilarating work. Really loved it.

After a year of working there, I really was like, look, I don't. If this is the wall that my ladder is up against, that just doesn't fire me up. And I can either sit here and complain about it or do something.

So, yeah, I got pretty, like my ears were perked up on different opportunities. Long story short, my uncle ended up calling me, saying, might I. I've run this flower shop for 38 years. It's called French Florist. Obviously, I knew I'd never been in the business before. Maybe once or twice in the span of my 20 years. But he said, I'm tired, I'm working 60 hour weeks. I'm not making any money. I want to sell the business. I studied finance in undergrad. So he's like, any recommendations on how to sell? I'm like, oh, I'm working my corporate consulting job. I want to move back down to la which is where his shop was.

Why don't I just look at the business and I've been interested in the sell side before like I'll help you sell your business, your family. And so I got a little bit involved in that way initially to help him sell the business.

Again, kind of accelerating the story. I worked with him for a couple of months to the, you know, the books were a mess. There were really clear opportunities to me, you know, some low hanging fruit to make things efficient and do it needed to happen to you know, sell the business for the most that we could. So started working with him to implement those things again. Just family happy to help but.

Went around to a bunch of other flower shops and looked at not just like the comparables of what they're selling for but what are they doing well. What are they not doing well? Turns out the entire floral industry, maybe it's a slight overgeneralization but virtually all florists are struggling with the same exact problems. Lack of technology, unnecessary intermediaries, a supply chain that's pretty messed up and unnecessarily complex.

The brand and emotional piece is missing. It's a wildly fragmented industry that.

I don't want our brand compared to Starbucks. We're different brands but the Starbucks effect hasn't even happened in the floral industry. Like Starbucks came in and consolidated. We, the floral industry hasn't even had that yet. Again we don't want to be associated with.

That. I think Starbucks has done great things. Thank God there's been additional innovation. I'll just say that on top of.

So.

Yeah it got me really excited about. There was an insane, insane amount of white space in the industry and florists were like struggling. All of them were not making any money.

Or very, very few were. And the ones that were like working for it in a way that was not efficient. So where there's pain, where is where there's opportunity. And I quit my corporate consulting job. My uncle looked at me a little bit funny when I asked but I told him, I asked him if I could work out a deal and pay him over time for the business. So it took me a couple of years to buy it but, but here we are and that was, that was six years ago. We haven't looked back.

And so you, you know, I know you've, you've really taken approach to look at each area of the business like you mentioned and, and kind of go through and improve on what everyone else is doing. Step function different. Where did you attack first? Like when you first. Because, because you said so much white space. Probably in the industry and in the business. Like, where did you attack first?

Yeah, look, I learned really quickly and I was actually forced into this learning. It was really good for us and we've made mistakes in the past couple years where we forgot what we learned.

You can drown in opportunity.

You can fail because there's not opportunity. I think you can also fail because there's too much opportunity. You start to spread yourself too thin and then nothing gets done.

Well.

So the way what I mean when I say we were forced into this learning was like we didn't have any financial resources and so like we needed, where we started was, okay, we need to get this business to at least break even or hopefully like generating a little bit of profit. I mean, I was coming out of, out of college almost, you know, only a year out of college. So I was still living a pretty scrappy life. I was happy to reinvest literally every penny back into the business beyond the small amount I needed to pay for my rent and food. So I was like, let's get this to, you know, even making 40, 50k of net operating income. Then.

Like, we'll invest as like every penny that we can back into it. But we, we were so, even though there was a ton of different ways that we could invest, we only had enough money to like invest into the one thing that's going to drive the most impact for the lowest dollar. Right, right. So where we started again, like more tactically, I looked at the financials we were spending.

The first decision I made was the telephones. It was a lot of listening to the existing staff was their ideas that they have. They know a lot more about the business than I do. So that was the first step. Just have an insatiable appetite to learn from them, earn their trust. Along the way. They told me they had a hard time hearing the customers on one side of the telephone. I'm like, okay, well that's clearly an issue. That is a low hanging fruit. We can fix that. It probably, hopefully will drive more revenue. But again, it's building trust with, look, I'm not here to disrupt anything. I want to, I want to be on the same team.

And so I looked at the phone bill and we were paying 12, $13,000 a year for our phones. Yeah, I will tell you short, short side path here. Florists are amazing people. They're super creative, they're super passionate, they're super kind, they're Very warm hearts. They're so warm that they're going to think that the old school phone salesman is telling the truth and really good friends and wants the best for the business, not necessarily for themselves. So you know, we, we had it. We were using a phone system that some salesperson sold that was a really crappy phone system and build us a lot for it and that's how we ended up there. So that was like, yeah, we changed our phone systems and we were, changed it to you know, a phone system that was billing 150 bucks a month, over a thousand a month and we had better quality phones. Like that. Not the sexiest answer, but like that was the first thing I saw. We were spending a similar amount, $13,000 around on printer ink. I'm like, why don't we just develop a little.

Ipad application and digitize some of this. It might cost us like 10 or $12,000 to make the app, but it's like that's a hundred percent cash on cash return year after year one on that added efficiency. Plus like the card messages were being printed out and papers were getting wet and like orders were getting lost. So like I think you're going to reduce your error rate and ultimately you know, it's going to be a higher return than that. So it was, it was a lot of those decisions the first four or five months really not the sexiest stuff but like we needed to get the bones a little stronger.

I think when you say that, I want one thing. When you say like that example of the phone system, it's so, it is.

It is so interesting how there's things like that that are such low hanging fruit. Yeah, like such, it's like literally staring you in the face. And I find when I go into a company and I start talking not to the founder or the CEO, but actually to the next level down or really more specifically to the, to the people on the front line. If you just ask them that easy. It is that easy. Like tell me what the biggest problem is and people will tell you. And usually there's some pretty stupid things that are being. And it's not because anyone was stupid, it's because it was probably that's what phone systems cost 30 years ago and no one ever switched it. And it's like, and that, that for me when you say something I, I think that is so like important for people to hear because when you're, when you're now the CEO, like you said, you maybe went away from it or I don't know exactly when you, when you were commenting on that, but like, you know, you see someone who's been a CEO for 10 years of their company, it's a big company, do it and they actually have forgotten how simple it is to find these improvements that are sitting right there and the team knows it.

I couldn't have said it better myself. That's. Yeah, that, that.

And so, so you started kind of there and then, but then you start to get into some pretty complex. I mean, from, from what you've explained to me, you've, you've really, I mean, the entire business, not just your business, but looking at the floral business, like you've really revolutionized all of it. Like, how did you, for example, technology and building the app. Is that something you had experience with before? Or you just said, I'm going to figure it out and I'm going to go out and look for someone to build the app. Like, how, how do you attack these things you have no experience in?

Yeah, you know, they call me naive. I still feel like I am. But I think most of us have an understanding that largely technology is at a space where. And even six years ago, technology is at a space where, if you can think of it, it can be built. It's just a cost benefit analysis at that point of like, is it worthwhile?

No. I've never developed an application before, but like, that wasn't going to stop me. Kind of like it hasn't been done before. So. Yeah, I mean, like, you know, I learned a lot. I made a lot, made a lot of mistakes, but I don't have a negative connotation with the word mistake or failure. Like we've learned.

Yeah. Anyway, so.

The.

Yeah. And still to this day it's like, I don't know, I just, I've been described as somebody who likes to kick up dust. I don't like to accept even if something is working. One of my least favorite sayings is if it ain't broke, don't fix it.

We will look to, for ways to stress test things. My friends make fun of me and I'm always beta testing stuff and breaking it. But.

If there's a better way to do it, I want to find it. And in our industry, like I said, we can drown in that opportunity. There's so much that can be improved. So it's really actually been the toughest part is which part do we tackle.

First and how do you, how do you continue to determine? Like how do you prioritize that? Because I, I think that's another one that Is just so. I. I've seen some companies and I've been in this experience myself where you just. The list of opportunities is literally so long. Yeah. That it can be almost paralyzing to look at the list and then what you do. At least I'll speak for myself. You say, well, I'll go do 10 of these things. And you do stretch yourself too thin. Like you said before. Like, how do you have a framework? Is it a gut feel? Is it some OKR kind of framework and prioritization? Like, how do you do that on an ongoing basis?

Being really clear on the vision really helps because you can kind of reverse engineer what needs to happen. I mean, I could have told you a long time ago that, like, I'm not the smartest guy in the room when it comes to marketing. I'm not the smartest guy in the room when it comes to ops, nor sales, nor tech. I've had to do every single one of those jobs. But like, which one of those roles are we going to hire for first? It's really like, what's my biggest pain right now? And then finding a way to buy back your time is one way of looking at it. Solving for that pain worse. Maybe somebody else can do that job better than you. And like that. I mean, that's the framework that we use. It's not necessarily about buying back my time, but it's like, if somebody can do it better than me, they should be doing it. That's how we hire as well. If I can, like, I'm a. I like to be a player on the field. I really do. If I can do it really well, like, fight me for it. I'm going to do it until you can prove that you can do it better. But again, with a heavy bias towards. I think a lot of. I'm more of a generalist and most people are smarter than me in their field for sure.

So.

That'S one way of looking at it. We've definitely used frameworks before. So I will say that we built a matrix where we had 15 or 16 different ideas on. We want to expand our marketing mix. We have an X axis and a Y axis. I mean, this is a very basic version, but like high impact and low impact, high cost and low cost. We'll plot all those out. Whatever is in the quadrant of high impact and low cost. You better believe, like, those are the ones. And then we'll do another matrix if there's like five ideas in that quadrant. Okay. Do a similar type exercise to further prioritize Those. I don't think it's necessarily rocket science using any objective framework. You know, it has been helpful for us.

What, what do you think is the thing that you've done in the last six years that's been the real unlock, like if you, if you could because you've, you've grown pretty quickly. But was there like a moment in time where the curve kind of turned and really accelerated?

Yeah, there was. Specifically October 21, 2021. Gosh. Oh my gosh. I'm going to have to go back and look. I got the date right, but I don't have the year. Our revenue doubled overnight. It was when we invested in all of the operational like infrastructure from a technology standpoint where we just, we weren't happy with our website, we weren't happy with the operating technology that we were using. And the problem in our industry was like all of our tech is really old and so it's not, there's no APIs or anything like that. So if we wanted to change our front end website, it wouldn't work with our backend. Same with our dispatch system, same with the order printing, like literally fax machine printer thing. So if we changed one little aspect about it, like everything would break. And so we literally needed to develop an entire operating system of technology if we didn't want to.

If it was out there, we would have licensed it or purchased it. We looked at building on Salesforce, on Shopify, like all of that and it was either super expensive or wasn't going to provide us the functionality that we were really looking for at the end of the day. So yeah, we were like, okay, this feels really important. You know, we did our matrices and it's going to cost us a couple hundred thousand. And so like we needed to work for a couple of years on really improving efficiency and trying to drive revenue incrementally where we could. But literally every single penny for the first while was invested into building a better operating technology platform that included the internal operating platform and also all the external like the website. But with the website it's like, how do you invest heavily into an incredibly sophisticated web architecture? Because Google, you know, at the time and now it's large language models need to understand what you're trying to do and so tickling their belly because they have a lot of influence in how people find you, right? Conversion rate optimization, increasing our average order value, understanding the unit economics of how the margins work in our industry where the higher the aov, the higher the margin as well. So you get a double Tailwind effect of people, you know, spending more so, you know, optimizing for that, not competing on price but more so, you know, servicing quality. So all of the front end stuff as well from a technology standpoint, what can be automated and just like fun little projects like you can go and leave a video card message now. We developed that in 2020 or 2021. And she's like a weird fun thing that you know, it's the flowers are the vehicle and the flowers are everything but like it's the message that they're sending and then you can send the card message with it. But a video card message allows like an additional layer of complexity in terms of like your inflection in your voice and like how your speaking to that person that you're giving flowers to. It's like a more human touch as a video card message.

But you're saying you launched this.

And.

Revenue, it doubled overnight.

Overnight.

Yeah, it doubled overnight because we were sending signals to Google that this is how we changed the website and we're trying to get them to know through redirects and whatnot and get them to crawl our website. Um, but it was a phenomenally better web architecture that ever existed our and you know, in our industry before. But also conversion rate was optimized. Average order value is optimized. So yeah, all of these things led to. And then it actually our revenue tripled. It doubled overnight. And that growth continued over the course of the next few weeks. So that was a huge moment where we were like. And, and then the financial resources got unlocked for us. And then the single most important thing after that was like, okay, we need to invest in.

People. We need better operations. Like, we need a, like it's one, you can have.

The best quality flowers, you can have the best tech, you can have orders coming in. But like if you're not servicing those orders super well like the table stakes and stuff, right? So like okay, we need operations to be really good. After that it was marketing. It's like, okay, operations is humming. How do we get orders in the door further? Right. So we invested into that and yeah, next thing you know we're doing 9 million in sales out of one 3000 square foot flower shop. Average shop does somewhere between 300 and 500k in revenue after many years of operating. So we're like, wow, this is like maybe we should open a second shop. So I'll, I'll pause there. But that's.

Yeah. Wow. Wow. And, and, and in this from what you've told me, you know, part of it also was the supply chain.

Yes.

Can you talk about that? Because that was very, that, that is to me just the steps that it takes and the number of middlemen and it, it, it almost sounds not real, you know, when you, when you think about it, can you talk through that and, and, and how you learned that then, how you dealt with that, you know.

Yeah. So you know, we open up a flower shop and you go down to your local wholesaler, you buy flowers, right. It's kind of seems as simple as that.

The problem, like I don't know if you're, what your experience is buying flowers, but I feel like sometimes you buy flowers, it's a little hit or miss. They can last three days, they could last 13 days. Don't know what you're gonna get. You know, I can teach you the ticks, tips and tricks if you're buying at a grocery store. What? First of all, don't buy at a grocery store. Cuz the ethylene, they put it by the produce aisle and the ethylene releases from vegetables and produce and ethylene kills flowers. So farmer's market's fine. Anywhere else fine, just grocery stores. I'll give you the tips and if you do buy from grocery stores, I'll give you the tips and tricks to look for what's highest quality.

But no, it's a remarkable supply chain. It goes from the farm and even just to paint a perspective, it takes seven to eight years to grow an orchid before it's on the farm level, before it goes through the rest. K so you get roses, you have orchids, you got all these flowers that are being grown. Takes a phenomenal amount of effort to grow the flowers. Then it goes to a consolidator, then it goes to a processor, then it goes to a distribution. The country of origin we're importing from Colombia, Holland, Canada, Mexico, Ecuador, all over the world. A lot of local farms in the states do. Then it goes to the country that it's getting delivered to. Then it goes to the wholesaler, then it goes to the retailer, it goes to the consumer. So that's, that's a lot of steps in there. And every step is, you know, a few days. Right. And so crazy idea. What if we got rid of all of that and just like imported directly from the farm? Like not a rocket science idea necessarily, but like, like, I guess easier said than done. The only way we were able to do that was through extraordinary buying power. So, you know, there's a reason retailers have to buy through the wholesalers you have to purchase, I guess, millions of dollars worth of flowers in order for the farms to entertain taking you on as a client. So it wasn't until then that we could really properly invest into supply chain. It was an opportunity that was identified very early that if we can cut out intermediaries.

I'm not here to talk about competition at all. We're here to make our company the best. But I do want to say 1-800-Flowers in Teleflora, they're on the other side of the supply chain. They take what they're. How they work. They take a. They'll take your order and they syndicate it to a local florist. They take a 30 to 40% cut from that order. Yeah. And so that's, that's an extreme version of an intermediary. So obviously don't work with, you know that all that model is out the door. Going out the door.

Same with the downside of the supply chain. Like that made no sense to me. But this was like, okay, like, obviously this is so. But anyways, we were already. We had dropped all our relationships with. We called them wire Services, the 1-800-FLOWERS and all of those companies. So we were hungry. We saw what disintermediating could do if we work directly with our clients. And like, so we were like, oh, let's look at the other side of the supply chain.

But yeah, it's. The more that we, our revenue increased, it gave us an extraordinary amount of opportunity to go to farms and say, hey, we want to import directly from you. So now we work for the very most part direct from farm. Not only are we getting higher quality product.

Because the vase Life, you know, is. And we get to deliver something that drastically reduce that down that time to customer. We're also getting better pricing. Right. Could we get more direct? And so like better client experience.

Better margins that largely we can pass to our client base too. So again, we don't compete on price but like we can stay very competitive and have very healthy margins. And it's such a virtuous cycle of like, okay, we can make our tech even better. We can do even better branding and marketing. We could hire better people.

And so this is where. So this is where for this industry, the one 800 flowers, all that they, what they were really good at that I'm assuming these things, what they were really good at that all the other florists sucked at is they didn't know how to do marketing. They didn't know how to do online marketing. They didn't know how to optimize for Google. They didn't know how to do all of those things so they put up a front page that did that was a marketing machine and then charge those florists 30, 40% and in theory leaving, well not in theory leaving very little margin for the florist. And on top of all of that the florist has to go get the flowers through a multi step kind of process. So they had no margin on that side, no margin on this side. Which to your point about your uncle's flower shop before you bought it, it's like you could work unlimited hours but on everything you're selling, I, I feel in some it's. It. Yeah, it feels. Not exactly, but it's like those early days of all like the coupon, like what was it called that company in Chicago, Groupon. You know that like basically it's like oh, we're going to help you and we're going to get and. But by the time the restaurant was done with it, there's like there's no margin left for them and these restaurants are like going out of business. By working with Groupon it feels like a similar almost dynamic where the, just the physics of the business, if I'm understanding it, were almost impossible to succeed in.

Yeah. And I think that it's easy to get. I think a lot of where we haven't had innovation in the floral industry because.

You know, there's not any one person to blame for it. I think they're a contributor. They've had the dominant market status for a long time and they're, they have a pretty good chokehold on the industry and they're not interested in letting go of that. And by innovating they could disrupt themselves. They've chosen not to.

So.

And that's the opportunity, right? That's the opportunity, yeah.

But also, you know, we.

It'S easy to get frustrated and a lot of florists do get frustrated with them. The one common thread that all florists have is like we can have a lot of camaraderie over not liking the wire services.

There's a lot of camaraderie around that I will say but we don't. It's not. Our primary drive is to like be like. Our primary drive is to provide a better client experience. Ultimately we're not in control of our success. We know that very well. To what I was saying earlier, the market is in control. We get to put something out there and we can say anything we want. But ultimately like they're the driver of how well we do. So that's our North Star.

And if you look at the 1-800-Flowers model, it doesn't put the client first. In our model, we are very intentional about putting the client first. I think that's the difference more than.

Anything else in terms of, you take this one store, you're doing 20x what most people are doing out of a single store, and you decide, hey, we want to expand this.

So you go and start opening more, buying more. Like, how do you go and take it from. From where you are, where you were to where you are today?

Yeah. So.

I only recently discovered what entrepreneurship through acquisition, or eta, is. I know, it's like it's a whole big thing that I was behind on, apparently. I didn't know you could, like, go and buy a business. So. So we, we expanded, but we opened these things up from scratch. Now we are looking at acquisition and I'm sure we'll get into it, but we decided to franchise and a lot of the folks that are coming in are acquiring an existing flower shop and converting it to putting our engine in the French florist engine. So, yeah, we can talk about that. Wait.

Oh, I didn't understand. So, yeah. Oh, you're so. Because I know you'd mentioned you're doing the franchises. So you're saying a lot of the franchisees are people who are coming in and buying a florist and then saying, well, I'm just going to take this operating system that exists. That's. That's interesting.

Most of them are on this train of thought. We, we actually launched the program and said, there are good florists out there. I might even say there's some great florists out there. They just need help. And on the infrastructure, on the boring stuff, right, the marketing, the accounting, the financials, the. All that crap. Not crap, but, you know, the boring.

Stuff, the necessary evils.

Yeah, totally. And they, and if we give them all of that, they can focus on what we feel like is the fun stuff, the client experience, making sure that they're operating like a great business.

We have had a really hard time convincing existing florists to join our program because they have been operating their business for a really long time. It's. They're very emotionally tied in. They don't want to feel like they are selling a part of their identity. They don't feel like this or that. It's not like it's a lot of feelings. And we understand that. When we launched a franchise program, we were like, wow. We can convert florists and change our industry by like grouping a bunch of amazing florists together, joining forces because it's like, it's a really cool thing in my opinion. That, and this is a kind of goes to why we decided to franchise. Like we opened a bunch of corporate stores. We pitched Maveron Capital in BSM Seattle. It's Howard Schultz, Starbucks.

Back to venture capital firm. They said we would love to entertain the idea of investing, but only if you do corporate expansion. They also gave us some really gnarly terms that we didn't like. But basically we're like, nah, we're good. So we wanted to do franchise expansion. We like that there's the local owner feel to our industry. I think that's a special thing and it might seem like a small difference, but I don't think it is for our industry. I also think that if you could, you know, you can hire 300 managers to run 300 corporate locations across America. But like, I don't know if you have an owner there. Again, seemingly small difference but you know, the manager might be making 80 or 90k. The owner of that store is probably making a heck of a lot more than that. And like who's going to care more and if we can, if our job as the franchisor now becomes selecting the right partners. That again like it's almost like we can hire somebody technically like to say it how it is, you can fire that person if it doesn't work out. You can't really fire a franchise owner. So we date for a little while and then that's like it's a 10 year franchise agreement that often most of the time gets renewed for like way longer than that. That's like longer than most marriages last. Right. We need to make sure we're doing our job, picking the right franchise owners as well as, you know, them vetting.

Us so that, so that's where you're investing now from a scale perspective. It's all going to behind this franchise model.

Yeah, exactly. And the reason for that is, you know, I've already touched on a couple, you know, a final for why franchise? There is a we, we have learned time and time again that one plus one is greater than two. When we bring the right person to their organization, they bring insights and knowledge and expertise and additional thought leadership that helps propel our brand to further heights. Joining forces has been amazing for our organization. We have franchise owners that are operating today and really happy to say that the thought leadership that they're bringing to the table as well. Now we own and operate our corporate locations. So we do have corporate locations that we own and operate. We are florists. That's where we come from. We will always operate those locations. Might even open up a couple more. All of the territory is exclusive though, so there's no competition into the system.

And. But like bringing these other franchise owners into the system, like now we're one of the owners and we have a bunch of other really great owners and we all get to collectively put our ideas on the table and run in a more meritocratic way where like the best ideas bubble to the top and those are the ones that we get to execute. So there's a lot of cool stuff. Like, I have a negative connotation with the word franchise. I think there are very, very few great franchise systems out there. There are a couple. So similar to how we've approached the floral industry, I would say we're trying to push a little bit on the franchise side to create a model that's more than incrementally better than a lot of the existing models.

So in this six year period, what is the biggest challenge you've faced? Building the company.

Ooh, too many to count. You want the ones that just came up today.

Now the biggest ones, I mean that, you know, like the fact that they're never ending, you need to get really comfortable with that took a second where it's an emotional ride. For sure. There are ups and downs.

But I think like through all of that, the thing that's really helped was.

I hold a really high standard. I know what our industry could and should be for the clients that purchase from anybody in our industry.

I know what that should look like. And nobody's delivering that. We're working on delivering that and leveling that up every single day. And I have a really high standard and I've been told I won't be happy no matter how much work is produced. It's not that I won't be happy, I am happy. But I know how much more work needs to go into what we're doing in order to get the business to where we need it to go. And it is about the journey. But like, I'm looking forward to providing that to the marketplace. And the challenge has been there's constant pressure from folks, internally, externally, wherever it comes from, to lower that standard. We're like, that's not possible. Or you need more money or more time. And it's like, no, no, I'm asking you to do.

Synonymous of the impossible. This Is the reality of what I'm asking for. Can you make that your reality or not? And so. But it's. It's tempting. And I have made the mistake of lowering my standards and do it in a really nice way. I have learned that nice gets you a lot further than not nice. But, yeah, just don't lower the standard for me.

When you talk about those ups and downs. I mean, I think that's probably. Every time I ask people this question, I'd say 90% start with too many to count, and which. Which one do you want? And in terms of challenges and. And the ups and downs are. And they're very fast. I mean, I think in some days, it's like one meeting to the next meeting to the next meeting could be, you know, full swings of we're going out of business to we're going to close the biggest deal ever to we're going out of business. So how do you personally handle that? Because that's exhaust. I mean, I've been in it. It's exhausting. How do you personally handle that?

Great question. Just to really open up the dialogue, I guess. I. It's better than any alternative life that I could choose. Like, I. I, through and through, fundamentally love what I do.

I think that, like, you know, graduating college and getting a job that I didn't feed, I actually kind of spiraled into like a. I got depressed after that. I was like, what am I doing with my life? Like, is this what. You know, I have so much structure. I think a lot of people go through that, Right? So I went through that and really looked at. I. I was lucky. I have an aunt that runs an orphanage, of all things, in down in Mexico. Yeah. And so she's. She's, like, very spiritual. And she was like. So I called her. I'm like, you know, what do you, like, you're living a crazy, different life than most people. Why? And like, how you figured, have you. Are you happy? And she's like, well, come down and we'll talk about it. It's like, okay, her. Her whole thing. And I don't disagree with it. I think there's no right or wrong. But her whole thing is live a life of service. And I think that's a beautiful thing. I commend the work that she's doing. I spend a lot of time down there with them and realize that it is very fulfilling to live a life of service. But.

Specifically, and this pained me a little bit, working down with the kids was very energetically draining. I was really physically Tired at the end of each day. And I was like, I don't know how long I can sustain this deeply, I guess, fulfilling. But I like working with kids. I just like, drained me. I wasn't wired for it. I have so much respect for people that work in that kind of field.

So I'm like, you know I love business, right? I do. I just love business. And so, like, how can I combine business? And, you know, there's this new term called. What is it? It was told to me a few weeks ago. It's like.

It'S like ethical capitalism. I was like, you can't combine service and capitalism. I'm sorry. Like, they don't work together. And apparently there's like, maybe there is a way to do it. So anyways, we're came into the floral industry with like an industry being around love. Our mission is to create a more loving world. Even if we make the world like 1% more loving, we feel like that's a very worthy mission. Um, and so it's, you know, through the ups and the downs, I have that, like, why, why am I doing this? Like, even during the downs, it's like, still maintain an incredible motivation to continue going. Um, so it's, it's really like very deep roots as opposed to like. Yeah, there are definitely a lot of challenges and they're super draining. But like, the, the roots provide way more than enough sustenance to get through those moments.

Yeah, it's interesting. You know, I, I, I've had a couple of conversations with CEOs who have been, you know, sold their company for billions and billions of dollars, have more money than they know what to ever do with kind of to full circle to the beginning of our conversation. And when I asked them the question, why? Why do you keep doing what? Like, the answer is just because this is what they are built to do. You know, it's like they, they don't really know how else to, to do it. And, and, and it's, it's. I talked to one the other day who said, I retired for three weeks. And he's like, that was. He said, my wife, my. What? He said, I told my wife I'm starting my next company. And she said, I'm surprised it took so long. You know, and, and I think there is some element of that which is like, you know, but it's hard to keep. I, I think it is hard to keep perspective when you're going in, when you are in it and you are in those ups and downs and you just come out of that meeting where someone told you they're quitting or some big franchise doesn't sign, whatever. Like, those are things that are, that are hard in the moment, but when you don't have them, you kind of miss them, you know, and. And it's just part of problem solving and part of, you know, creating something.

Yeah. 1,000%. Like, yeah. I used to say I'm not a creative. I do view this business as like a fun creative outlet too. It's like, yeah, I think it is important to find that intersection of what you're good at, what you love doing.

And, and did you, did you always know that you would be like, you mentioned you were in, you were in consulting. You were like, but did you know that you wanted to be an entrepreneur? Like, there's something back in your childhood, is there something from your family? Like, where does it come from?

Yeah. I'll bring up my grandmother. She just passed and she was a beautiful. Lived a very, very long life. Is a very beautiful memorial we just had as well. I remember going up to her and I said, grandma, I think I'm obsessed with money. I must have been like 8 or 9 or 10 years old. She goes, oh, I don't think that's good, Mike. I wasn't expecting that. I thought she was going to be proud of me. I was like, what.

Happened was I was in middle school and so I must have been maybe I was 12. And our middle school had just banned soda from the vending machines. Convinced my parents to drive me to the supermarket before school, pick up like 24, 36 cans of soda, put it into my locker, and guess who the new supply was. There was a pain. There's an opportunity. I sold soda at lunchtime. I ran into another pain point where I would go back to, you know, fourth period or whatever it was after lunch and would be really hungry because I was selling soda. Holiday, like all lunch long. So I was like, oh, man. Like, I now here's a new problem I need to solve. Brought my friend in. I'm like, hey, I'll do the first half of lunch. You do the second half lunch. We'll split the profits. Guess what? Had my first business partner. So it's really cool. And that. And then ultimately I like, you know, made 20, 30 bucks every day. And for like a 12 year old, that's nuts. All right, Right. And so that's. I went to my grandma and I said that. And so, you know, I think that's what the spark was. But then you hit reality and it's like you hear the statistics of startup failures. I was a part of a few startups during college as well. One of them was still going, but about three or three of them failed. And, you know, I saw it firsthand. So.

Yeah, I, I, that's where that fire in my belly started. But I got dampened out by, by life.

And did you that entrepreneurship and that, Was that from your family, from someone that you had seen doing this? You know, because a lot of people say to me, like, until you see someone being an entrepreneur, it's hard to even kind of think that way. Or was it just natural to you?

I couldn't tell you.

My dad's a doctor.

And my mom took care of us growing up, but she, she worked. She worked. She did landscaping and general contracting work. I think they both just worked really hard. I couldn't tell you that. It's a good question.

Do you have, have you had, since you bought this and building this business, have you had a mentor or some, someone help, you know, someone that, an advisor mentor, like someone who's helping you along the way?

Yes, definitely. I think I take a lot of inspiration from other folks that have done great work in the world, alive or not alive right now. There's been some remarkable things that people have done. And again, call me naive, but, like, anybody can kind of do anything. Um, like, I understand the rules, but, you know, like, I don't know, somebody put those rules in place too. Right? Like, people created the rules. People contributed to everything that is going on in the world today. Why can't I? So I, I read, I read a lot, I read a lot of other people's works that I appreciate what they've contributed to the world.

So I didn't have like a physical, in person mentor for a long time. I will say as soon as I could afford a coach, paid for a coach. I think, like, there's a recognition the greatest athletes in the world, LeBron James. And I, like, don't mean to get political about who the best athlete in the world is, but.

The best athletes in the world all have coaches. Why wouldn't I? So mentorship coaching, huge advocate of all of that.

Where do you think where, where is French florist three years from today?

You know, I'll tell you what the aspiration is.

The aspiration is always for the consumer marketplace. It's not really about us. It's about what we can provide. And.

I think that if you were to buy your mom or your partner or whoever it might be, if you buy them Flowers.

You might buy them flowers for Mother's Day, for Valentine's Day, for an occasion.

It almost feels like an obligation to buy someone flowers for that holiday. I think you should buy flowers for that holiday. Don't get me wrong.

But it's like a Hallmark holiday, right? It's an obligation. I would go so far as to say if you bought your partner flowers on a random Tuesday for no reason at all, just because. Because she deserves them.

I think that that might have more impact than buying her flowers on Valentine's Day. And of all the things that we said earlier about how flowers are a reminder that life can be beautiful, everybody deserves to have that feeling. I think, look, like, we're an American brand. Our name is French florist. How does that make any sense? It's a nod. It's a nod to the European way, specifically the French, where flowers are not really viewed as a luxury. They're more a way of life. We want to bring that into American culture. I want you to look at flowers and say, I want flowers on a random Tuesday. I want to give flowers on a random Tuesday. And understand, I think, like, look what we were talking about earlier, the extraordinary amount of steps for somebody to purchase flowers. There is a recognition of how important flowers are in life. We wouldn't go through that extraordinary amount of effort. And people pay what they pay for flowers too, for them to just die, you know, seven or 12 or 15 days later. All of that. Seven years of effort of growing and all of that, just for them to die 15 years later. Right. And pay the amount that people pay. If we didn't understand that, but I think we've forgotten and we view it as our job to resurface that. That, like, hey, we want to reposition and do that through inspiration, do that through motivation, do that through education and attract people back to flowers. It's one of the oldest things that are. Before any commerce even existed. It was a gesture that one person would give to another. It's a very deep, ancestor level thing. So where are we three years from now? I hope we can move the needle in terms of repositioning how important flowers are. It's not even about our company. I don't even care if you go to grandma's house down the street or pick flowers off the side of the road. Like, it's about the flowers. It's not about us. We feel that we care very deeply about flowers. And hopefully that reflects back in the. In the work that we do. And we can earn the trust of clients to purchase from us because we're going to treat that act in a sacred way.

I'm going to. I'm going to go buy my wife some flowers after this.

I've done my job then.

For no reason. Yes.

Last question. And knowing everything you know today, the experience you've had, what is the one piece of advice you would go back and give yourself before you started your first job?

I have a cheap answer which is like I probably wouldn't because that sometimes that struggle has allowed me to learn what I learned now.

You know, I don't know if I would give myself any shortcut advice. I think maybe what I would say is how I similar to how I say flowers are not a luxury, I might even go one step broader and say art. Art is not a luxury. I used to think in very black and white, it used to be very like finance driven operations. I think we're humans and.

I think that art is something that feeds the soul. I probably would have said it's okay to go and enjoy the arts a little bit more. It creates a lot of space and freedom and in my mind and allows me to act more creatively in the organization as well.

I like that. That's a unique one. No one said that yet. So.

Awesome. Mike, thank you for doing this. Really, I enjoyed this. I've learned a lot in our preparation calls in this. I've learned a lot about a business I didn't know anything about and the opportunity seems endless. So congrats on the success so far, but I look forward to watching what you continue to build. But thank you for doing this with me.

Yeah, you know where to find us if you need flowers. We've got your back.

Awesome. Well, I hope everyone enjoyed if you did. Please share this with your networks and we'll see you for the next episode of Not Another CEO Podcast. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast. Com. We'll see you next week.