From Shark Tank to Success: Adam Callinan's Journey

Hello, it's, uh, Wednesday and it's happy hour and that drink up with Adam Smith and Adam Kalanin. Kalanin? Kalanin? Pronounce it correct, Adam, here.

I'm butchering it. That's good enough.

Yeah, well, welcome, Adam. Thanks for joining us for happy hour. We're gonna be live, raw, and real here on Drink Up on this Wednesday, April 2nd. I really appreciate you taking the time to meet with us, Adam. We were talking for the last 15 minutes and both Adams, Adam Smith and— I'm gonna call Adam C and Adam S. We're just gonna make this really easy on me, but they were talking about calculus. So, we're going to talk about calculus today and math. I'm just joking. Adam, why don't you tell us a little bit about your journey? Obviously, you look very familiar. I think you were on Shark Tank just recently. So, we have a little bit of a celebrity on with us today. But maybe talk about what it is you do in your journey and, you know, your current company. And we'll just start there.

Well, I can tell you that I'm not a celebrity, nor do I ever want to be one. Because the day after our Shark Tank episode aired, it was in December, we were at the Christmas tree lot and a kid, like a 15-year-old kid at the Christmas tree lot recognized me. And it's about the most uncomfortable I've ever been in my life. So that is not a rabbit hole I have any intention of ever going down. Uh, but we did go on Shark Tank when we were way too big to be on Shark Tank and it was outrageously weird and fun and, uh, it was a great experience.

So we'll get into Shark Tank later on because I really want to I don't know what you can share or not share, you know.

Yeah, no, we can share it all.

That's good.

We're a number of years detached and I don't even own that company anymore. So yeah, let's go.

Oh, that's good. I want to get the real scoop on Shark Tank. I'm sure people are really interested. I know you're— we put on the title Bottle Keeper. That was your last company. And then you're in your current company, it's called Pentane?

Yeah, Pentane.

So maybe talk about Bottle Keeper and then go into Pentane because it's really interesting because I think a lot of the people in our industry could probably utilize your services, by the way. Yeah.

You know, Bottle Keeper started as a side project gone mad, which is how— I mean, it happens. Companies get started like that. Cousin Matt was sitting on the beach in Southern California drinking a beer out of a red Solo cup. He's a little bit of a maniac in the best way possible, where he wants to drink a Corona at a specific temperature out of a bottle. And he— his beer's warm in 3 minutes, as happens in red Solo cups. They serve their purpose, but it's not to keep it cold.

Yeah.

And he's looking around and he sees people drinking out of Uh, water bottles, just like normal stainless steel water bottles, and has this idea of cutting one in half and insulating it, literally like cutting up wetsuit neoprene material and stuffing it inside and putting his beer bottle inside to literally— it's your classic scratch your own itch problem solution. So he does that. He hacksaws. I actually have our original prototype on the wall back here where you can— I don't know if you can see it back there.

Yeah.

Oh, can you bring it?

Can you grab it?

Go ahead and grab it.

You grab it. Go ahead.

Yeah, you can see in our— it's like vice grip marks on the top, the hacksaw in half, stuffed with koozie. Like you just cut up, you know, your college koozie kind of thing. Cut it in half, superglued them or whatever kind of glue inside, and a beer bottle fit. And literally that's what the entire company was launched off of.

Wow.

They got much prettier than that over the years. But where's—

now I know you, you sold that business, right? Where can you still get Bottle Keepers and stuff?

Yeah, we got acquired in 2021, technically by a private equity group called Wood Point Partners, who were great. You don't often hear a lot of great stories about private equity, but they were a really good partner. They did everything they said they were going to do. It was a really positive experience. They had just 6 months before us acquired Arctic Outdoors, RTIC, and replaced the executive team and were taking the company in a different direction than their historical. They put a CEO in there. His name is Bill Pond. He was phenomenal. He's just an epic guy. And I learned in a very short period of time a lot from him. So we got acquired by Windpoint and Arctic. We got put inside of Windpoint. I'm sorry, inside of Arctic Outdoors. So Arctic, I spent the rest— we got the deal closed in March of 2021. I spent the rest of the year as part of our deal to, as a CEO, to oversee the sort of integration of our company into theirs because they had custom everything. Like we were on Shopify and we had outsourced 3PL and we had, you know, manufacturing all these things in different places. They had everything inside. They were a much, much, much bigger, much bigger company.

Is this the product you took to Shark Tank?

Yeah.

So can you, I know we'll get into your, I just want to take a few minutes on this Shark Tank thing. Cause you and I talked, I think it was like last week or the week before last. So you go into Shark Tank with this, like who were the sharks? Uh, I guess walk us through kind of like how you got on Shark Tank, what happened during Shark Tank and what happened after?

Yeah. Quickly close the loop to answer your question. You can still buy Bottle Keeper product through Arctic. So the company lived on for a while and then they moved everything into Arctic. So you can buy can keepers and bottle keepers and all the stuff we made at ArcticOutdoors.com. I think that's Shark Tank. We had someone reach out to us from their casting department in probably 2015, which was early. I mean, we started formally started in 2013. We shipped our first product in 2014. For frame of reference, in 2014, we did something like 100 and $30,000 in sales, all of which was in the last 3 months of the year when we had this big inflection event, which we can talk about if you want. 2015, we did about $1.8 million in sales. So we're still like smallish. They reach out, we started, we went through the whole process. I was very diligent with BottleKeeper about building the company in a way that required zero employees. And that was because my last company before that was in medical And there were tons of employees and delivery vehicles and warehouses. And I wasn't an owner of the medical company. We spun off a health tech company that I sold out of in 2013, my position in 2013. So Bottle Keeper, we had no employees. What that allowed for is that I could travel anywhere in the world that we had internet. So my wife and I were gone. We were gone for 6 months of the year. At the time we were in Iceland and they weren't okay. I didn't know this in advance or obviously we would've done this differently.

So you're running this business, you can be anywhere in the world.

Yeah, we were in Africa. We spent, Months and months in Europe. We were in Asia. We were all over the place. We didn't have kids yet. So like we had a lot of flexibility. They, they wouldn't let me come back just for filming. And I didn't know that was going to be a thing. So they pushed us to the next season. Well, by the next season, we were an $8 million a year company. And then they pushed us.

You grew 8 times from, so 8 times your growth was, so you went from $1 million to $8 million.

Yeah. We went from $140,000, $130,000 or whatever in 14, 15, we did like $1.8 million. 16, we did $8 million and we still had no employees and like, no, there was no investors. I mean, we each put in $10,000 at the beginning. It wasn't an expensive company to start, but it was profitable.

Okay.

It was, I mean, it was, there's a lot looking back. Luck happens in hindsight. You rarely know that it happens when it's happening and you look back and you're like, ooh, that was lucky. For us, the timing was lucky because the summer of 2014 is when Facebook launched their video ad platform. And this product, when you see an image of this product, all you see is water bottle. But the second you see it do this and like a beer bottle go inside it, people's brains exploded because you'd never seen a thing do that before. And so that was, that was that big inflection point was their video ad platform launch. I shot a video on the beach in front of my house with just like hands come in, unscrew it, bottle goes in.

It totally went viral. Then that video went viral.

It went nuts and we could not spend money on ads fast enough. We literally, we didn't, I mean, it was in the second year, by the end of the second full year, I mean, it was over, we were almost $2 million in sales and we still weren't paying ourselves. So we were literally reinvesting 100% of everything in more inventory and more ads. We didn't have a team, so we weren't paying a team. Like we just reinvested everything, but that's how we made that big leap.

Were you just getting all your fulfillment in China in terms of your product and stuff?

The product was being made in China.

Yeah. Yeah. Interesting. Wow. So, so now you, you, you get on the second season, you move into season 2 of Shark Tank.

And they push us again because there are too many beer companies on or something that year. And we, we don't end up going on until 2018. And we film the week before Father's Day, which was again lucky because Father's Day is our second biggest holiday, only second to Christmas. So we were able to go on and open the episode, which we changed like 3 days in advance. I mean, and to be fair, You get to do whatever you want to do. You have a producer that helps you and sort of sets the guardrails. Like, we wanted to get the Sharks up out of their seats and create a beach scene and like make them take their shoes off and like come into our environment. And they couldn't— not that they didn't like that, but they was gonna like screw up the camera angles and the light. So it was like, there's some things we couldn't do, but otherwise you get to do whatever you want to do.

Yeah.

So we changed our pitch and I was able to open it with something, you know, we came out at— we were asking for $1 million for 5%, which in Shark Tank world is like crazy. And so you get the natural, you know, you better hope you have sales. And we were able to to open it with, well, we've done over $1 million in the last week. And over, you know, and like, yeah, they just go nuts and, you know, and over $10 million in the last 12 months. And yeah, and it sort of was like 55 minutes of mayhem that they cut into 7 minutes, however they wanna cut. And in our case, fortunately, they cut it to make us look, like I said earlier, way better than deserved.

Well, that's interesting. So who was the— who were the Sharks? Was it Mark Cuban?

Yeah, it was Mark Cuban, Lori, Kevin, Mr. Wonderful, Barbara, who hated us. I don't know what we like looked like. I'm making this up. Don't, you know, this isn't a slanderous statement. I feel like we, we talked about this after the fact and sort of stuck with that. I think we looked like her ex-husband's kids or something because she freaking hated us. The, from the very beginning, she was disgusted with us. And then Alex Rodriguez, which is a whole nother, whole nother thing. We had a guest judge and we, that was when we found out 2 weeks in advance. So we changed our whole pitch to, we figured If we could get him throwing a baseball on national TV on the show, they 100% would air our episode no matter how it turned out. And they'd probably use it in the promo reels. So we rebuilt our episode to have him throwing a ball at like a lineup of bottle keepers, like a carnival game kind of thing. And it worked perfectly. I think they used it in all the promo reels.

I don't know. I'm going to watch it tonight, but I know I saw the show because we do occasionally watch Shark Tank. That's just brilliant. So you go through the show, they, they, they chose you or they didn't choose you?

As far as doing a deal on the show?

Yeah.

Did you do a deal or did you walk?

We did. Mark went out immediately, he proclaiming, you're either the worst business people in the world or you don't need to be here. And then over the course of, again, 53 more minutes of absolute mayhem and offers from everybody except for Barbara, who hated us, we got Lori in for, I don't remember. I mean, I don't remember what the deal was at that point, but we ended up getting both Mark and Lori for $1 million for 5%. So we got what we asked for, for both of them. We asterisk didn't, that deal did not happen in real life, which is most of the time, but there's a lot of reasons for that. Again, we can kind of talk through what happened in our experience, but—

Interesting. So you did a deal, so everybody left, but the deal didn't really happen because you said you leave the show and a lot of work happens after you leave the show, right?

Yeah. I mean, you have to just appreciate that it's a TV show. And to be fair, like everything you see is real. There are no retakes. There's no like, Stop. Let's redo that piece. Like maybe you get to think about it. They shoot fifty five. However many minutes your episode is, is a full-length shoot of just insanity of them.

It's like this like drink up live podcast.

That's exactly what it is. Yeah. It's it's four really smart people and Alex Rodriguez hammering you with questions, and they're basically asking the same questions over and over and over, just trying to get you to do something stupid.

Yeah.

And they're it's not that they're bad questions, but it's like you can only be asked the same question seven different times before you're like. I mean, your brain, it just like hurts.

Yeah.

So yes, but if you also think about it from the context of an investment, I mean, we're asking for $1 million. They don't know us. We don't know them outside of what you see on TV. So from the point that you leave that, you know, you do the hugs and high fives and everything, the point you leave that, they still have a couple of weeks of taping. Like, you know, they tape the whole season in some shortened period of time, a month or something. And then you go into due diligence in both directions. Now they want to see all your financial stuff and they want to talk about the company and they In the case of Lori, I talked and met with her directly, which was awesome. She was amazing to deal with. In the case of Mark, he had, you know, someone on his team who was slightly less fun. And, you know, you spend months, you can almost like as long as you want, like you spend months and months and months and months in due diligence. And then you find out 3 weeks before your episode's going to air if it's going to air. Like you have no idea if your episode's going to air at all. Number one.

Wow.

In our case, we thought it would because again, we had Alex Rodriguez throwing a ball. We did an epic deal with 2 Sharks, like there's no way they're not going to air that episode. But that season starts in, I don't know, November and it goes through March. So it could air anytime in there and you don't know what it is until like a month out.

Wow.

So there's a lot of logistical challenges that come with that.

So this is a good segue into kind of lessons learned here in terms of, obviously you're an entrepreneur and it seems like you're a serial entrepreneur because it seems like you do one business, you sell that, Or you said you had 7 businesses that failed, which I appreciate that, or more, right? So, you do a lot of different things. So, a lot of people think, well, I'm just going to be successful. I'm going to be an entrepreneur and things are going to happen. So, you definitely stay into— I always ask the founder this is what's the difference between success and failure? Do you know?

I mean, I don't create success around what I do professionally. My success is built around what I do with my family and what I do professionally either supports that or it does not. So, I guess maybe that's my failure. But I get to control that. You get to control that. We all get to control that.

Yeah.

But, you know, the reason that we make—

yeah, I love that. So, but the difference between success and failure is that you didn't give up. You kept on going. You just told me you had 7 failures, but you also built a medical device company. You built this like cool brand, Bottle Keepers, where you actually made this like the mockup is just brilliant. You, your, your, is it your brother-in-law or brother was on the beach and Doesn't like to drink his beer warm. And then you did a video and it went viral. And then now, like, so where are you? So you, now you have your next company. Contain your current company that you're doing?

Yeah. On that last piece, this is important from an entrepreneurial standpoint. It went viral a year after we started it. Like, which means it failed for 11 and a half months until it succeeded.

That's right.

Which is a really important piece. Like, companies fail when people quit. That just flat out. Now, there's a lot of reasons that people quit. Some of them are out of control and heavily financial and personal, and I understand that. But companies, but legitimately companies fail when people quit. So, building durability is really, really, really important. And having resilience to deal with that stuff is mission critical.

How did you build the resilience? Like, so, like, you fell for, like, you gotta, like, your wife, and she had to be like, you guys were probably like losing your mind. Like, we're not making any money. What are we gonna do? How did you get through that?

We weren't. Well, I mean, one, I had had some success prior to the Bottle Keeper thing. My wife had a job. She did very well. We didn't live an insane, extravagant life. I mean, we lived in an amazing place on the beach, but we paid almost, for what the place was, was like nothing. We didn't have kids. And I am, if it's not apparent, extremely comfortable with risk. And she is comfortable with risk, but not quite as comfortable with risk. And that's good. You don't want that to be the case. That was how my cousin was. Like, I'm extremely aggressive. He was extremely conservative with respect to like operating the business and cash flow and capital and all that stuff. That's good. You don't want to be on the exact same page. You want to be able, you know, to have differing opinions because generally the meet in the middle is the right place to be. Wow.

So what kept you going though? So it's 11 months of failure and you, and then all of a sudden you had that one video and you're off to the races. What was the, what was the, what were the things that kept you going?

I was messing around doing other things. I thought I'd, be a good idea to start a VC fund, which is an awful idea because I'm terrible at raising money. I've never really—

See, I was right early on. I'm like, yeah, so you did something with VC. I remember hearing this.

Yeah. I mean, that lasted about 9 months. That was one of the failure ones. But it, you know, but I walked away from that because Bottlekeeper suddenly was a thing. We went from generating $2,000 a month doing like fumbling around to it went to $30,000 to $60,000 to $100,000. And then we sold out a product. And then we just— that just recycled for 4 years. 4 years.

Wow.

And meanwhile, you're traveling all over the world while you're doing it.

Yeah, we were out of the country for 4 to 6 months of the year.

But you're, you're stay— you're now— you're stable at your home now because of the family and all that. So, you know, you don't get to travel anymore.

Yeah, I mean, we, we do still travel. Um, I mean, we live in Montana now and we have young kids now. I am starting a, you know, I do have a tech company now which we've, you know, self-funded. 98% of, and which is different than self-funding a consumer product company.

And it's not—

is that slightly more painful?

Is Pentane the, the, the tech company? All right, so let's talk about, let's talk about, uh, first of all, I want to, I want to digress. Sorry, you were talking about 1923. I won't get into the episode, but holy cow, I did watch the— I'm into episode 5. That just like, it blew my mind, by the way. Anyway, so I'm a big, uh, A 1923 fan. So we were talking about that Montana base, Adam. Have you seen 1923?

Nice.

Anyway, so back to, back to the tech company. So one of the reasons we want to talk to you about is this tech company. It's really interesting because if it's true, I can give you all my data from a financial standpoint and you can kind of tell me exactly where I'm at or where I need to go, right? With this information I can give you with a data feed that you're, you're, you guys were talking about, like you can Basically aggregate all that data, spit it back out and say, this is what you need to do.

Inside your accounting system. So let's assume that's the most prolific, which is QuickBooks. QuickBooks Online.

Okay.

If you have, as long as the information in that is mostly accurate, I say accurate and then people are like, well, it's not completely accurate. It's like, okay, well, are you paying yourself your car, your personal rent out of your QuickBooks account or your business account? No. Are you, is it literally just business expenses? You're not personally doing weird things? No. It's like, oh, and then I'm sure it's fine. bookkeeper, I'm sure it's great. The data inside that system, if you're not using QuickBooks, the data inside your P&L forms the basis for how you need to operate the business, how you need to advertise the business. When you advertise the business, how that advertising needs to perform, all of that lives inside the information in your profit and loss statement. So Pentane, via an API, so like a data connection to your QuickBooks account, will pull—

Yeah.

the data that it needs to create this foundational understanding of what the business, if your business is an engine, how big the engine is, how many cylinders does it have, what's the state of the spark plugs? Like it literally takes a synopsis of your business to get an understanding of how much fuel that engine needs to operate. And the fuel is your profit. And the profit is driven by your ad spend or driven by the revenue that you generate and how you generate it.

Wow. So it actually could tell me, like I could take all my data, throw it over to you with this API, And they could tell me what my trade spend should be to actually grow my business?

Yeah. I mean, it will. Yes. Short answer. Yes. Plus a bunch of other things. You will go, you will, you will click the connect button. Like you're not physically doing anything. You literally click connect QuickBooks and it says, QuickBooks says, are you okay to connect this? And you click yes. And then it starts doing stuff. And what it will, then you, you go in and say my, you have to, you have to identify a goal. This is a thing that, you know, you hear people talking about this in like the frou-frou world of, of goal setting and all these things. And, and I think that's great. And that's awesome. That's not what I'm talking about. In your business, in, in order to achieve an outcome, you have to define what the outcome is. So the system makes you define an outcome. You have to say, I want to get to breakeven. I want to generate a 10% net profit margin or a 13% or whatever that is for you. If you put that number in, we can use math and all the data that lives in that P&L to tell you exactly how to accomplish that.

That's amazing. So who would be your client?

The math inside of Pentane is applicable to every company on the planet. Big and small. The clientele and business type that we focus on is consumer. And that's really because that's where my most recent experience is. It's where we can be, be and build systems to be the most helpful. 2 weeks ago, we onboarded a $2 million a year landscaping company. And I have aspirations of expanding into services to be able to help, to be able to provide this level of help in through the blue collar economy, because they all have the same challenges and, and nobody is paying attention to that.

Well, so there's hope for, for me, because I'm in the blue-collar economy. So with my, uh, my business, but all seriousness, Adam, I see you thinking over there. So Adam's the thinker of the team, and I know he's going to come back with some ideas and questions around this, uh, this, uh, this is a SaaS, this software as a service, right? This is like a SaaS solution.

So which, A, 2 things I have to touch on first. You mentioned it when we were talking and Sam brought it up when we went live. Nothing warms my soul more when I meet a founder who's got Some successful exits to hear them also say how many times they did not have a successful exit. In your case, is seven, right? Nothing frustrates me more than people that won't give me that number. Like I know it exists, right? I know you failed more times than you succeeded, and I want to know what it is. Thank you for that, for being open and honest about that.

Oh, for sure.

A, B, you know, we've all done it. We've all had worked on the house. I think the last note on, you know, like the last time we had worked on our air conditioner, it was a gentleman who. He was probably in his 40s, maybe early 50s. He had a kid with him who was maybe 22. And I said, how's business going? He goes, oh, I'm backed up and stacked up, super busy. And I was like, oh, how big's the company? And he goes, you're looking at it. I was like, oh, oh, what? How long have you been doing this for? And he was like, about 3 months. And then he looked at me like, I haven't been working on air conditioners for 3 months. I've been working on them for 30 years, but I've been owning my own business for 3 months. So I was like, no, I got you. I said, What prompted that? And he's like, well, company I was working for, the owners made a mistake of telling everybody on the team how much they made. And I went, screw it. I quit the next day and started my own thing and it's been paying off. Right? So like, A, I applaud folks in that workforce and B, I think you're spot on in terms of, in addition to CPG, that being another realm where like it's just not looked at, but it could be a huge help. Right? So kudos. The question I have is when you talk about like QuickBooks or maybe integrating other platforms like that, your CRMs, your ERPs, shit like that. For the groups I work with, and I'm asking this question on behalf of them, none of that exists yet. They're so new, it doesn't exist, period. It might not exist because they haven't been tracking anything. So not that they're spending money insanely poorly, but they're just not tracking it effectively. Or maybe they're so green that they're looking to start the company, but there's no actual action that has happened yet. So for them, is it something where from a Pentane or from your perspective, it's like, hey, Talk to as many people as you can, get as much good feedback as you can, go forward into that dark night, see what happens, and then come talk to us? Or like, what's your feedback for someone like that?

So I think let's separate those into 2 different buckets. The company that is this true pre-revenue startup, they absolutely can create a projected P&L in a spreadsheet.

Yep, yep, sure.

And pull And import that into Penntane and have a functional system based on those projections.

Okay.

It can literally be 6 lines in the spreadsheet. Like, if you make $1,000, what do you think your cost of goods are? What do you think your total fixed expenses are? What do you think your variable expenses, the things related to sales are? That's it. Like, that could be the whole spreadsheet.

Okay.

So you can do that. And I think people have a tendency to try to rely on perfection. And I think it's really important that you don't let perfection get in the way of progress. Anything is better than nothing. Like pretending it's not there, literally do anything else. Anything is better than that.

Yeah.

So in the case of the other bucket of they're going and they're doing and they're just not tracking the stuff, I mean, at minimum, just set up, it's like $20 a month, like a QuickBooks Online account, connect your bank account. You can pay a QuickBooks bookkeeper next to nothing. Like again, like $25 a month or something to just organize the things. And that now you have a functional system.

So, so follow-up to that. So, and again, because it's a lot of the brands that I work with, um, and I'm not— I could, I don't right now, putting— I'm not putting together P&Ls for them. But like, for example, I, I very commonly will create them in Excel. Again, we talked about if-thens and conditional formatting, fairly, fairly simple but slick, right? Uh, production planning tools. So like a little Excel, um, ERP, right? So for folks like that, or anybody, I guess, that are at— for folks that are that small, my question, I guess, is how does Pentane collect revenue and what should they be expecting in terms of the cost to work with you all and take advantage of this software?

To make sure I understand that, how does Pentane collect revenue as in how— what is Pentane's revenue model or how does it collect and track their revenue?

The first one. Okay.

We've gone through a number of iterations of pricing. When I started the company 2 years ago, based on what happened in the companies prior to that, I was like, people are going to pay $1 billion for this because it totally changed these companies. And it's, how could they not pay? I would have paid at Bottle Keeper thousands of dollars a month to have this. Clearly, honestly, that's, that's all.

Well, yeah, but you were in Africa though, hanging out with your wife.

So you did. We were managing it on these massive ugly spreadsheets and it was a fricking, we screwed them up and lost money all the time. On those things when you don't enter the data right, or you calculate something wrong. So following the subsequent 2 years of learning what to do and how to deal with the customer and what my end goal with this, we've gone the complete opposite. And now it's $99 a month for something that is dramatically more valuable than that, because I want to get as many brands, companies into the system as possible, as quickly as possible, because we learn so much and we're not taking the data and selling it. Like, that's not a revenue model. That's, I'm not interested in that. There is an opportunity for us to generate revenue in other ways via partnerships and things like that. I just don't want the barrier to entry for a company getting help to be this traditional, you know, expensive monthly SaaS subscription that you forget about and then you realize 6 months later you've been paying for it the whole time and not using it, which, I mean, it happened to us countless times.

Yeah, we were talking about that a couple of weeks ago.

That stuff just makes me crazy.

I have no idea all this stuff. I bought all this like AI software and stuff and I'm like, I never use them. Like, okay, I need to get rid of that.

Yeah.

But, uh, it's just, uh, it's amazing. Um, for $99 though, you could really, you still have to have your bookkeeper. Like for me, so my partner and I, we have Bev Assets. We have a professional accounting firm called RGO. And then they also use an app called Gusto. I don't even know what it's, I think Gusto. I literally, it's like, I'm like, it's like I'm an employee of my own company. I get paid on the 1st. I get a W-2 and I'm like, hey, this is really slick. And We, uh, you know, I, I swipe my credit card to do something and, and this accounting firm keeps us out of trouble other than I'm going to have a heck of a K-1 hitting my, my bank account this, this April in the next couple weeks. But could we use your services?

Yeah. Again, theoretically, any company on the planet can use that.

Okay.

As long as you have a P&L and there's an import function, we only have it for For accounting stuff right now, the primary API we have is QuickBooks Online. We will continue to expand that as we need to. I mean, I already know what the next 2 are going to need to be based on our existing company base. But, but if you don't have that, an export of, you know, we're today's April 2nd, when the March books are closed, you have your accounting team export the March P&L in an Excel format, or just have them give them a login. You create an account in Pentane and they just go update it. They upload it there and it's in the system.

Wow.

Wow. I mean, it takes them 45 seconds.

Yeah, I'd love to—

One time per month.

Yeah, I'd love to explore what that, that looks like because we certainly have— so we deal in beverage businesses. So we help— I'm a little bit different than Adam. We help brands find distribution and customers. And Adam's, uh, one of our partners. Like, we'll connect, uh, people with Adam because he's— the best way to describe, he's an operational expert, Adam. I don't want to— but I mean, he knows like from formulation to like, okay, co-packers to, you know, labeling to You know, getting the product, you know, through the, you know, the hole before it, uh, it goes. I mean, he knows it, and plus he knows distribution as well, so I don't want to do him a disservice. We, uh, we, uh, we, we partner with Adam on that piece. But all these brands, I'm just thinking off the top of mind, they're like— I have brands that— one brand, I won't, I won't name them because it's probably proprietary. It's not proprietary, but they sold 100,000, um, bottle or cans to Sprouts and, uh, and they're going into 500 Sprouts, right? And they're growing leaps and bounds and they have good investors and stuff like that. But those are some people I think probably could use this service because as they're trying to figure out, you know, where they're, they got investors behind them, Google and all that. And, but the point is that they can use your service because they can kind of figure out where they want to be. And then I talked to another gentleman today. It's another RTD and, uh, he's like a, Been a CEO, president, founded companies. But he's like, what are your services? Because I want to go into my model and figure out what it's going to cost me. And I'm thinking your model could do a little bit of that work too, right? In other words, kind of figure out where you want to be. Like, okay, if my goal is to grow 10%, Sam is going to cost me $100 a month. That's somewhere on a spreadsheet. Your, your data is going to go through and capture their cost of goods, cost of services, the whole bit, and say, okay, This is what you need to sell it for. This is how much volume you need to do, or your service needs to be. You're, you're gonna— your software's gonna give answers.

Yeah, I mean, yeah, it will absolutely take in the expenses, both existing and projected. You have the ability to, to add future projected expenses and see how the math changes. Where this works best is in a business that is, is at least selling a product online.

Okay.

They can also be selling wholesale. And, and the system is set up to manage both of those channels separately, but give guidance around the customer acquisition on the direct-to-consumer side to accomplish your net margin goal while also taking into consideration the B2B revenue and the margins associated to it. Because you can't just look at one without the— I mean, you have to look at the whole company, right? That's a really important piece.

Well, in our business, Adam, I believe what he's just describing, because we go through wholesalers and we do DTC, right?

Well, that's why I'm, I'm Yeah, I mean, I'm on the website. I'm going to book a demo, right? And the reason I ask the questions I do, and I've got a couple more, but you just answered one of them before I had a chance to, was the homepage of the website for D2C e-commerce brands. And that was my question is a lot of the folks I'm working with right now, for example, are trying to get, trying to figure out what starting looks like for both D2C and your more traditional distribution model, because at this point they're like, Dude, I don't care who buys it as long as someone buys it, right? I'll figure out which one's my, my better bet later and we'll spend accordingly. So there's those folks. And then there's also the people that are, to Sam's point, like, I hate the word expert. I appreciate it, but I, you know, I do ops, right? But I call it the give a mouse a cookie paradox because they'll come to me and they'll be like, hey, how can I make my cost of goods more efficient? I'm like, all right, let me see it. And I run them through my suggestions, right? And then they'll go, hey, that was really useful. What should my sales forecast be? How much money should I spend on advertising? How much? I'm like, guys.

Ops.

I don't— yeah, yeah, yeah.

Could you use Adam C's software, Pentane, right? And as a consultant, say, give me your data, I'll dump it in there, and then basically you could actually almost— I'm not gonna say white label it, but you could actually use his software to actually communicate back to your suppliers those takeaways.

I think that's like—

I think I'm gonna book a demo, Sam.

If you, uh, if you reset— if you refresh your page You might see a modification in that for D2C e-commerce brands.

Hey, can you, you can share your screen, Adam C. You want to share your screen real quick?

No, I just, I just updated the website for you. So it's more accurate.

The, uh, which I love that. It makes me feel so special.

The follow-up I have here, man, we're live, raw, and real. We're updating websites as we go.

So the follow-up I have to that is for, that was it. It was like I lost my train of thought. Are you familiar, Adam, with a group called Startup CPG?

Yes, I heard about that. I heard about them recently from somebody that was having a conversation with them. I don't remember if it was a client or a prospect or what.

I bring them up because I would strongly recommend, um, and I know I try not to bug him, but, um, so the guy that founded Startup CPG is also— he was the former CEO of like Machu Picchu Energy, left that company. I believe now he works full-time with Startup CPG, but there's them. They're the Shouldn't I shouldn't say they're the biggest. They're my favorite in terms of those like Slack or community-based groups. I strongly recommend reaching out to them.

Also groups like PS, the the um, yeah, yeah, yeah, we we use them folks. Yeah, I got EDI was like the worst thing ever.

Yeah, I think yep yep painless.

We were we yep yep.

But point I'm getting at is if you haven't already talked to those folks specifically Startup CBG like I think they would love to hear from you because I think everyone. period that is involved in that community would love to hear about this.

No, that's a great idea.

Yeah, we're part of the Hemp Alliance too. That'd be something that I could bring to the Hemp Alliance as well. All those, uh, hemp brands, they're like hitting like— it's like gold mine right now. It's a treasure trove of opportunity for you, Adam, but you can help all those brands. I mean, these— I mean, it's amazing. They, they don't probably have a mechanism to really manage it, and what you've created, I guess, and, you know, we're getting close to wrapping up. We can go a little longer for sure, but maybe what is it that the, the, the software or the service really offers a brand? And what are the, what are they gonna get out of it?

I don't wanna share a screen, but I kind of wanna share a screen.

You can, you can share what you want.

Yeah. I mean, what you're gonna get is clarity. You're gonna get, you're gonna get a, a system that understands your business and the mechanics in your business in ways that are really, really difficult to just wrap your brain around. It's, it literally will tell you when you set that net margin goal, it will tell you exactly what to do. It can't hold your hand. It can't make you fire the people. It can't make you hire the people. It can't, you know, it's not going to restructure your ad content and commentary today. It's not going to do, you know, but it will tell you how it will tell you what to do. So you have the guidance to go do it. Like setting ad budgets is one of the hardest things to do. And it's where most people's, most companies get in real trouble because they have a tendency to under-budget for advertising because it's just purely risk.

Yeah.

And I understand it. It's risk. If you don't know what it needs to do to meet whatever goal you've set, it is just risk. You're throwing spaghetti against the wall. So just getting clarity around that and understanding how, as you change your ad budgets, the performance that needs to happen changes. They, as your ad spend goes up, your return on ad spend needed to get to your goal comes down every single time. Knowing where those things intersect is really, really important. And what happens if you are going to do a 10% discount or increase your prices 13%?

So, is there a series of questions when you input the data? There's goals. You obviously got to tell them what your goals are, but there are questions that the system asks you too as you import the data?

I'm just sharing it.

Okay. There you go.

So, this, the Pentane system, there are a number of things. There's your sort of executive dashboard with a boatload of stuff in it. There's the mission control where you say, I want to do a 13% net margin. And it says, great, cut your expenses by this, increase your prices by this.

Wow.

Conversion rate right now is 0.82. It needs to increase to 0.9. So that's a 10% increase. Increase, in the case of this business, increase your ad budget to $144,000 a month at a 4.09 return on ad spend. And that's fine. Those are either-ors. So in your guidance system, you can come in here and say, we want to get a 5% net margin in a 30-day period of time. We're going to increase, or let's move our ad budget. We want to set our ad budget at $50,000. We now know that it needs to It needs to crush a 6.35% return on ad spend in order to get to a 5% net margin in a month. We need to generate $321,000 direct-to-consumer dollars. If we increase our budget, budget to $60,000, that comes down to 5.3%. If we increase our prices 10%, that comes down a little bit more. And by the way, our conversion rate on our website can come down from 0.82% to 0.69%, and anything above that is net positive. But we're gonna hire a new person. You can pull all these levers simultaneously to find what fits and then watch in real time as those things play out.

So this is almost, you can game the system.

It is a little bit like gaming the system using math, with the caveat that as long as you have to set your endpoint, where you want to be, is it a critical part of the equation? So as long as you do that, I mean, and you can't use the system without doing it, so it is a default part of the system. But there are tracking mechanisms in here that, that answer questions like, is what we're doing right now, is it good or is it bad? We want to see this trend line increase. This is called contribution margin. You don't need to know what it is. I am happy to talk about it. You don't need to understand how to calculate it. You just need to know that if whatever you're doing is working, this line, this trend line is increasing.

I see.

If it's not working, it's decreasing.

I would think if I'm— so I always talk about this 4 things. You test it, you build it, you scale it, and you sell it, right? I mean, you can appreciate that being that you're an entrepreneur, right?

Yeah.

I would think that if I'm— and everybody tells me I'm going to 10x this, I'm going to sell it. I have one brand, they're going to sell it next year in '26. I would think your software would actually be a heck of a story to take to investors. If I'm looking for people to put in or getting someone to sell it, I believe this would be an invaluable tool for them to have. Because if I'm an investor, if I looked at something like that, you're going to be able to build like a history of what's going on, right?

Or just pre— yeah, absolutely. I mean, that, that's a whole other category that we haven't started to, to work on in our partnership is the investor groups that— yeah, I mean, there, there are so many avenues and, and things to take this. I mean, we got a— one of the things that companies get in trouble with that I'm very sensitive to is that shiny object syndrome where you end up just sort of running around trying to be everything for everybody. And so we're, we're really focused on a couple of areas inside of brand right now. I deeply appreciate the breadth that the product could expand to.

Yeah. And is it machine learned? I mean, is it machine learning AI in this stuff or is it all mathematics?

It's all mathematics right now. I am very, I think we talked about this in our, when we met earlier, I'm very reticent to just plug an AI into this and call it an AI. One, it's really bad at math. AI is not good at math right now. So it can't be part of our development cycle, which is, it can't be part of most of our development cycle. Because of the level of math that exists in the system. But I also know that because of the revenue and advertising and even expense information that will exist in a single account, there will be opportunities to leverage AI to go in and pull interesting learnings from those things. And we will build that when it makes sense for us to do it. But yeah, I'm, I'm not a just plug in an AI and call it an AI thing.

How do people, how do people, how do people find you? How do they find you?

You can find Pentane at pentane.com. Pentane.com. All right. It comes from my nerddom. If you remember from college, Adam, if you took any chemistry, pentane is an alkane like octane, propane, methane. Nope. Okay.

No, I, like I said, no chemistry in— well, I take it back. I did take one chemistry class when I studied abroad. Chemistry, physics, that was not my bag. I took a chemistry class. I think you lost that. Yeah, it's kind of Oh shit, you guys hear me?

No, you're back. No, you're good.

Okay, you're back.

I mean, I studied abroad for a year in, in the UK and I took a chemistry class and this woman had a real deep, like, southern, uh, southern British accent and it was the first time in my life I ever heard it. So between that and my natural, you know, predisposition toward not understanding chemistry, I passed with a D and never thought about it again.

Yeah, perfect. Yep.

But no, it's awesome. For me, I'll leave with, I'll end with this and I'll let you guys wrap up. But yeah, pentane.com. I can say it works because I just booked a demo for the 15th. So we're going to talk again.

Oh, amazing. That's awesome.

Yeah. Well, I think I have to book it now. I'm feeling competitive, so I'm going to book a demo as well.

I like these kinds of competitions.

I believe we have a lot of clients. We obviously have partnership companies. Adam, I think I told you about that. Adam C. Happy to include you in that because we certainly like to bring solutions to our partners. And, uh, something as invaluable that people can use. Um, thank you so much. First of all, I, I learned a couple of things. One is, thanks, as Adam said, thanks for sharing your failures because so many people think I'm just gonna be an entrepreneur and make millions of dollars, and they don't know that you have more failures than successes. We all see the videos of Michael Jordan and company and, and Roger Federer. You know, they all fail more than they succeed. So I really do appreciate that, and I do appreciate that you fell for 11 months out of the 12 months before your brand actually hit. And people really need to, you know, really need to hear that you got to stay in. And I always say it is the difference between success and failure is really not giving up. And that's why I love to talk to people like you. And we really do appreciate having you on, but I want to give you the, the floor to have some closing comments that you would like to leave to everybody here.

Yeah, to be clear, we failed 11 out of 12 months for a decade. I mean that very seriously. Like You don't— I like that you guys enjoy talking about failure. I think it is so much more important to talk about the hard stuff than the easy stuff. So I spend a lot more time doing it. We don't need to go down that rabbit hole. But yeah, I mean, look, in the big scheme, if you have an idea and you're thinking about going and do something, don't let analysis get in the way of action. Just start doing something. You will learn from it. You will evolve from it. And if anything, if it doesn't work, you learned a new task, you learned a new trick, you learned a new skill, and that will become applicable at something later that you can't even imagine. So just like literally just do something, do anything. Wow.

Just like hit go, right?

Just go.

Just go. Do something. I, I've been doing that for 24 months, so I really appreciate that because I, I've jumped off the— it's Ashwan, I'll quote him. He goes, I asked him, I said, what's it like to be an entrepreneur? He said, if you're willing to play in the mud, it's, uh, just fine, but you gotta be willing to play in the mud. And then he'll use another statement. Is he ready to dive off the deep end with me?

Yeah.

And, uh, it's like with no safety net, you're just like, okay. And there's, there's, there's crocodiles and alligators down below, But, uh, I've been doing it.

So we hear that as, as being ready to eat glass. That's, that's the one I, uh, I've heard around.

Yeah. Eat glass. Yeah. I had some glass today, but it was, that was really good glass. That was kind of soft and the whole bit. So, but it's good. Well, thank you so much for, uh, joining us. I really appreciate it. I'll make sure that I'll include, uh, your contact information when we actually publish the, the podcast. And thanks for those that stopped by today to Uh, watch this live.

Thank you for having me. Appreciate it.