Nui Foods with Victor Macias and Kristoffer Quiaoit

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand with guidance from retail product design and development experts Tracy and Tom Hazard. Get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource, and out profit your way to retail success.

Hey, everyone. Welcome back to product launch. Hazards and I kind of have a twist on what we usually do. We normally are talking about how to do stuff and everything, but today I thought because we had Kevin Harrington on that, we would twist it up and start to get some lessons on what not to do and what to do from a couple of founders. So I've got Nui Cookies. Nui Cookies is the product. Nui Foods is the company. And Nui Cookies sound really yummy. And I've got Christopher Kiawit and Victor Macias, and they have started this company because they want to annihilate sugar addiction. And oh my gosh, I need to get you guys to work on my girls. We've just been through a birthday party with a whole lot of really awful sweet cake, so I'm imagining serious sugar addiction later in life, so we'd love to nip that in the bud early. So after baking cookies yourselves and having lots of people love them, you started posting your cookies on Reddit, which is a really unusual choice, so we're gonna get to that. And you got some of your first orders, and then you did two successful Kickstarter campaigns. We definitely have to talk about that, because crowdfunding is not always a preferred method for certain types of products. Food is kind of one of them. And you also have a Shark Tank story to tell us. So I would love for you guys to get started and tell us a little bit about the background of the stories. But first, what I really want to know is, do these cookies taste good?

Absolutely. They're amazing.

So how many iterations of them did you go through before you got to something that tasted good?

For the first one, it took us 20 something tries. We were in my mom's kitchen. We had no baking experience and had to figure out how to make a cookie from scratch. And so we were literally youtubing on making cookies from scratch and said, well, we can't have gluten or sugar, so let's figure out how we can replace it. And then we eventually create something that we both love.

Imagine two guys going into Chris's mom's kitchen asking if we can borrow aprons. And then it's the middle of summer, and we're gonna try to figure out cookies. We don't know how to bake. We know what good cookies taste like. And it was just a ton of experimentation until we found something that we liked and his mom liked. And then we wondered, would anybody else.

Like.

What made you guys try to kick this sugar addiction? Tell me that story.

So I heard about this diet called the ketogenic diet on a podcast, and I was like, hey, this sounds amazing. Let me try it. And once I went on that diet and it cut out the sugar, I felt like my energy levels were through the roof. I stopped napping. I used to nap twice a day, and my anxiety levels dropped way lower than it used to be. And then my hunger, I used to get hangry, and that went away. And I'm like, I told Victor, hey, you should try this for a few days and see how you feel.

And I was skeptical at first, because in high school, I used to be the kid that could eat a whole pizza and not gain any weight, like a large pizza by myself. I was a skinny kid. But then I went to college, and I discovered beer, and I gained a ton of weight.

That sounds like a pretty typical story. Yep.

And I had tried different diets, like, quote, unquote diets where I would lose some weight, then I would crash and burn, start again. Crash and burn, start again. So I'm like, it's the same thing. I decided to try it, and what was different is it was very easy. So it was food that I loved, food that I could really indulge in. And because of that, the weight melted off. I lost over 40 pounds on a low carb ketogenic diet.

Wow. Wow. Amazing. But you guys missed cookies, obviously. Yes.

Yeah.

What kind of cookies? Now I got to know. Now you're making me hungry. What kind of cookies did you miss?

Chocolate chip for sure.

Yeah.

Peanut butter was something I missed.

We actually. One of the ways that we reverse engineered what cookies to start with were, one, what do we love? But two is what were the most popular cookies at the time? So we looked at data and used that to determine what flavors we'd start with to lessen our risk.

Okay. So this wouldn't be product launch hazards, and my listeners would be, like, all up in arms if I didn't kind of call you guys out on this right now. So you actually almost fell victim to the very first trap of product design and development. So the very first trap is picking something that you like and sharing it with your friends and family. And they tell you that they love it because it's not a sign of something that likely be successful. But you guys didn't stop there. You did go on Reddit, which is an interesting choice. So let's talk about that. You went on Reddit to really test it out. And so that's our rule here on product launch hazards. Our rule is, is that doesn't matter how many people love you and love your cookies or love your thing, right? It only matters if they're ready to plunk down dollars for it.

Yes, 100% agree. And it was great. You like it, I like it, your mom likes it. But do we have a business? We don't have a business unless, like you said, people will actually buy it. So we go on Reddit because there are various focus groups on there, right? So there was a keto group on Reddit and I remember we threw up this very simple looking website with a picture of a chocolate chip cookie, a stock photo. We found PayPal button and some copy saying low carb keto friendly, delicious and paid $20 to advertise. And we said, all right, Kris, we had a rule like if we sell 15 of these, then we actually have a business, right? So I remember we launch it and then we sell one and then three and all of a sudden we're getting 10 orders, 20 orders, 30 orders. What the heck is going on? Well, Chris calls me after we had hit, I think it was like 20, and he's like, so do we have a business yet?

It got upvoted on Reddit, right? That's what happened for you. And so it got really shared within the group. It's interesting because you went into a place where it's not typical to test market as product, right? We test market on Etsy or we test market on Amazon, we test market in Instagram. But Reddit was an untapped territory, so you guys really tapped into something. But you had a group there that you were already jumping into that were already focused on the topics, so they were interested already. So this is something that we talk about all the time here on the show is we're really talking about finding your core audience, finding the tribe that you can gain access to the quickest to test market your product. And that's what you did. You went straight to the tribe that's already interested and passionate about keto. In this case, yeah, you got valid feedback and in this case, it validated the results and said, go for it. So what you do from there, because now you got to really build a business.

Yeah.

So we, at that time, we were buying all our ingredients from Whole Foods.

Oh, you went all out with lots of expensive.

And we were losing money on every single order. So, hey, hey, let's put the pause on this.

But wait, wait, wait. I do want to say that's brilliant actually though, if you are losing money on your initial tests, but you find out you have a business, you can always lower your costs. Yeah, but it's way more than if you invested in all of this and like going all out in it and making thousands of cookies a day at some facility and then discovered you didn't have an audience. You'd spend way more money that way. So that's still okay. It's an okay way to test market.

Yeah, absolutely. And we wanted to reduce the risk involved. So, like, okay, it wasn't that risky to put a $15 ad on Reddit. What's the next thing that we can do to level up without risking a lot? And so we're like, hey, let's do Kickstarter. Right? So we decided to run a Kickstarter and we're looking up all these different articles, how to hack Kickstarter, watching all these YouTube videos, because we've never done it before. And so one of the biggest things that we took away was the biggest mistake that people make are that they go on Kickstarter expecting that their project would get funded magically out of nowhere.

Yes.

They say, hey, I'm just gonna put on Kickstarter and people are gonna find me and they're gonna fund my project and everything's gonna be good. But what we Learned was that 99% of the work happens 45, 60 days before. And we did a little bit shorter than that. We did it in 30 days to launch it, and we started building community. So you talk about community and we started looking into what other communities we could start talking to. One of the biggest things that we found was Instagram. And so looking up who are the influencers that love keto that maybe have like 10,000 at that time? 10,000, 25,000. Those are like huge numbers. And we would just message them, hey, can we send you some cookies? And for you to try. They're like, what cookies?

You have good low hanging fruit in terms of like a product that's not too expensive, you didn't have to wait like most Kickstarters until the Kickstarter funded to be able to send out samples. So you actually really had a benefit to going forward with that. Plus, you already did know your profile, so you already knew the keto community, you knew who was in it. You knew what kind of people they were. But so smart. I would also suggest it if you had consulted me at the time, podcasters, because we have a huge number of keto podcasters out there and. Or biohackers, whatever you want to call them. There's a huge number of them. So, yeah, if you're in that world, those are definitely influencers and their communities, like you said, they're 10,000. We call them micro and nano influencers. But the micro and nano influencer levels have a higher influence over their community, and the conversion rate is higher than it is if you got into a big, big group.

Yeah, absolutely.

So in your early days, that's a really good plan. So you guys really. You guys have stepped on all the good things right away. Did you have a marketing background before?

Victor was really deep into digital marketing.

So you had a little sense of how things work, how advertisements get placed. So that's a benefit that you have that experience.

So I was running social at the time, had no idea how to run social media, and I just knew that influencers were the key. And I was like, how can I bribe them with cookies?

That's it. That's exactly what you're doing.

I mean, you're giving them something. So a lot of times, just the mere fact that you're giving them something and expect anything back, they'll talk about you.

Yeah. And especially if they love the product and it's like, okay, if they don't talk about us, that means they don't love the product and we don't want them talking about us anyway. But fortunately, people loved it, and that's how we got the word out.

Wonderful. And you probably got a few more clients in the process.

So that's wonderful. So now that led you to something, and I buried the lead on this when I said that you went on Shark Tank because you have a really cool Shark Tank story that's really, really exciting. So in a way, I'm not surprised this is a choice because I've been seeing him post a lot about ketogenic type things, so he's off his sugar addiction as well. So tell us your Shark Tank story and tell us who you decided to go with.

Yeah.

So family and friends have always been going to us and saying, hey, why don't you guys go on Shark Tank? I don't know. We probably got asked, like, a hundred times to go on it, and we always dismissed it, like, no, no. You know, there's so many applicants Blah, blah. And then there's like one day where it just clicked. It's like, well, what do we have to lose? Right? We only have to lose time, but the amount of that we gain by being on the show is just tremendous. We don't have to spend money. It's just a day or two, right? And so we decided to go to open casting call. And we get there, there's literally thousand people there already in line, and we're like, how are we going to stand out amongst all these people? And we see the Cassie agents, they're walking together, handing out wristbands, and like, okay, this is our chance to make an impression on them because we. We need to stand out. And so I go sprint to the car, grab all these cookies, as many as I can hand a hold in my hands, and I start handing it to them. I was like, hey, not trying to bribe you or anything, but I know it's going to be super long day and you're going to be hungry. Here's some cookies.

Oh, my gosh, you're serving. I love that.

They'Re cookies and they're not all sugary, so you're good.

And it was definitely a long day. I think it was 11 hours or 12 hours.

Yeah, like 12 hours.

12 hours that we're there, and we're trying to condense our story into a short fragment.

Tell people about how that works, because I've written about it a few times, but I don't go into great detail on it very often because the articles are short. But there's a lot of prep that come with it. Working on your pitch and getting that right that comes with that. So how does that work?

Yeah, definitely. And we can talk about in a little bit how we learned how to prep from Beyonce and Destiny's Child.

Okay, I totally want to hear that. So, yeah, totally sit on that.

But in order to make our first impression, right, you take 11 hours. You know they're going to be exhausted by the time that they see you. So how do we stand out? Right? Like, our whole question was, what do we do to stand out? So I remember we go up and we pitch the first round. When we're there at the casting call, we're like, here's why you should not invest in us. Neither of us have any bacon experience. Neither of us have any experience in the industry. Neither of us have any blank, blank, blank, blank. And they're, like, caught off guard, like, here's why you should. And we showed all our traction, and their eyes lit up and Then we look over and they have a bag of Newey cookies on the table.

I've been already eating your product. So sold, you're in.

I love that. That's a really great way to do it. So interesting, because what you've done is not only set yourself apart, but you already just handled objections right from the beginning. And so people say that they invest in people they like. The reality is, is that most inventors, most people who go on the show are all about their product. And so they think it's their product that they want to like, but it's really not. It's you guys. It's, can you guys do what you say you're going to do? And then you pull out proof. You have proof you did it. Right. You've already been doing it. You honestly don't need them. And why isn't that the best time to invest in someone when they don't really need your money? Because then they're going to be able to do amazing things with it. They're not desperate.

So true.

Yeah. So now you get in front of the sharks and tell them who the guest shark was.

Alex Rodriguez.

Awesome. Right? And so he and JLO have been doing nothing but posting about, like, totally breaking the sugar habit. So did that happen before or after?

I think they started posting afterwards. But it was very interesting before we got to the show. And I had a dream that someone was eating our cookies, and that person happened to be JLo.

She was sitting at a breakfast nook just eating her cookies. And I didn't think much of it at the time. And I brought it up to Victor. Hey, like, I had this weird dream like JLo was eating her cookies. Maybe that's a sign or something. He said, you know that Alex and JLo are dating, right? And, like, no way.

I think they're engaged now. Right? Or something. Yeah, that's what I heard. So, yeah.

And so that was really interesting. So that kind of set the tone before we even went on stage.

So that's so awesome. So he's the guest. Now, you got multiple offers, which is really great. So obviously you pitched really well. But also, this is what, you got an offer from Kevin o'. Leary. You got an offer from Barbara Corcoran. And the thing about them are, is they all have food in their portfolio already. So that's a really, like, a pitching match is so important to whoever you're going to pitch in front of if they already. You don't want total overlap. Obviously, if they had your specific kind of cookies that's going to be a conflict of interest. But if they've got cookies, they already understand, or they've got foods they already understand processing and issues. It's not something new they need to learn. That means that they're always on the lookout for new food groups, new products, new companies to bring into their portfolio. So you hit on something that they already had a specialty in. So that's a safe bet.

Right.

Like, that would have been the safe choice that most people would make to say, I'm going to go with them, because they already understand the food processing. They can scale us. They'll know about how to do that. But instead, you went with a rod because he made you an offer as well. Why?

Mr. Wonderful came to us with an offer. And obviously he usually does royalty deals. And for us, it was hard to have a royalty deal because our margins weren't super high at the time.

That food's really hard. Yeah.

And it just didn't make sense for our cash flow. And then Barbara, she's like, hey, I'll come in. And like, oh, awesome. We were super excited because we know she works with food companies, and then she comes out with a royalty deal. I'm like, oh, Barbara, why would you do that?

Oh, yeah. So those weren't really great deals for you then. And it wasn't a good match. But this is a sign. You really know your numbers, you know your pricing, you know what would work for you. You also know how you wanted to scale, and that's really important. So how did a rod fit that?

Yeah. So then a rod comes out, and his valuation was a lot lower than what we wanted. This tough. And the bright lights are shining on us, and there's all this pressure yelling.

At you say, hey, stay away from him.

I know you're like.

Not a good time to be making a good decision.

No calculators, notepad.

But one thing is we believe in, like, the law of attraction. And we're like. We start looking at each other. After he starts talking about JLo, he goes, I happen to know someone that loves cookies. Jennifer has a cookie every single night. And after he said that, Victor and I look at each other like, okay, I think that's a sign. And so we decided to go with Alex.

Well. And then they went on their whole ketogenic push, which. She looks incredible for her age.

Oh, yeah, yeah.

And I can say that. Cause I'm actually the same age. So, like, she looks way incredible. Too much babies. And I know not an excuse, but that's that babies in Sugar, I'm sure so gonna have to kick me in gear there. But you also have a kind of a personality match, I think, with Alex Rodriguez. I mean, he comes from immigrant parents. He. You wrote it in the bio you sent me. Poor, hungry and driven PhD, which I really relate to. I love that that's how you guys all are, because that helps him understand what you're struggling with. Because too often I find a lot of venture capital groups and all of them come in and they don't really understand that guys don't have the cash to just show up at a trade show because they tell you to, and they don't get that. And so to have someone who already gets that, that's really important because he's not going to put you in a position on which something you just can't do. And yet you can't refuse him either, because he's your money guy. Like, that's not a good place to be. So having them get it is really important.

Really agree. That was the selling point for us. It's somebody that understands that. The founder of Alibaba has a quote. I'm paraphrasing, but it says the. The greatest gift I had was having no money because it forces you to be creative and resourceful. And that's what it's done, right? I mean, it's like, okay, we bootstrapped this with like three grand each. It was like, like what we had saved. And to take that and use that to grow a company is one of the best gifts we can ever have because it's forced us to do a minimum viable product. It's forced us to do things with lower risk and higher upside. And to have somebody empathize with that.

Was really important to us right now. You couldn't have just hit into all this, like, great timing and luck and all of that, right? It's not all that. There was a lot of things that went wrong. So what went wrong.

One is we almost burned down the kitchen. We moved to a commercial one.

So that would have gotten your insurance rate through the roof. You would have got totally kicked out.

Yep.

That's not good.

We just moved in a shared commercial kitchen, and we thought the ovens operate just like our. My mom's.

No.

They're like, okay, it's the same thing, right? Same temperature time. And then all of a sudden, all the smoke comes puffing out and runs the oven. Turn it off. And then people come running in. They're like, are you okay? You're okay? And we're just like, Red. Because we're so embarrassed. We're like, oh, these people probably think we're noobs.

Which you kind of are, but, yeah.

So that was a learning experience.

Another one was in. We were talking about resourcefulness. Right. And we were at a point where we were growing so fast that we had money, let's say, from the Kickstarter, that we're like, okay, we're anticipating. We're going to be at this pace. Let's jump ahead. At one point, we had an office that was 4,000 square feet. We were four people. Okay. But we justified it by saying, well, we're going to fulfill X amount of orders, and if we fill X amount of orders here versus going somewhere else, we're going to save X amount, blah, blah, blah. We get in there, we're in a lease for $4,000, about two months in. Because we're moving so fast, we realize Amazon is crazy cheap. And now we send all of our products to Amazon and we're saving money on shipping, and now we have a place that's $4,000 a month. 4,000 square feet a month. Yeah. So we were able to get out of that agreement. But that was an example of we're excited that we're growing, but we didn't take into consideration how fast things change. And you need flexibility.

It is a kind of a rookie error to think that you should reinvent it and do it yourself. And it's going to be cheaper that way because it actually isn't at scale. When you have somebody who's efficient as Amazon, utilizing their process in their facility, you can't catch up to that any at any point, and it distracts you from being able to grow your product line, which I'm sure you're going to need to do right now. Right. Because you got to have some more ketogenic foods.

Yep.

We don't all want cookies. My daughters would like cake. I'm just gonna put that out there. And if it can have frosting, all the better. Whatever that is that you're getting asked for by your customers, you want to be working on that and not necessarily on these things that aren't gonna matter. Should you get, let's say, on the retail shelf somewhere? Right.

Yep.

Yeah.

So such important lessons that you were learning, how really, what is the biggest struggle? What is the biggest thing that keeps you up at night now? Because I'm sure it is. Because when you have a company that's growing fast. Yeah. You're stressed. There are things that are always making you worry. There are always things that you're thinking through. What are some of the biggest opportunities that are kind of nagging at you right now as to. I want to take advantage of that, but we got to slow ourselves down a little bit.

Yeah. One of them is retail. All our sales have been online, and it's been great, but there's a lot of opportunity to have retail presence. And the retail helps the online sales. But we know from talking to people that it costs money to be in retail, and the margins are a lot lower. So that's. Margins are lower. Yeah, absolutely. And so we're trying to figure out, okay, how do we navigate this in a way where we're not bleeding cash?

Yeah.

And while at the same time growing. One of the biggest things that we've learned is people focus so much on revenue, but we also have to focus on the profit, because the profit's gonna help us with scaling. And if you do it responsibly, you won't find yourself in a cash crunch. And so that's one thing that we've learned from our mistakes of overspending.

You need to build a sustainable business. So having a profit focus is so critically important to that because as you grow, the margins get less and less and less for you. So your profitability really needs to be there to be able to make that happen. So that is really important. Those are some really critical stages for you. And it is the stages of going into mass market retail or going into Whole Foods. Going into those places like that can be giant pitfalls. If you do it too soon and you're not ready, then you have a bunch of revenue, but you really don't have a sustainable company at the end of the day?

100%.

Yeah. So great. So what else do you want us to know is on the forefront for new E Foods? Because you said foods, not just cookies. Is there something you can tell me? It's okay if you can't, but I'd love a scoop if we can.

Our mission, our goal is to be the Nabisco of low carb, low sugar foods. So everything that pains you to not eat, but also pains you to eat because it's hurting our health, we want to create those indulgences to solve that problem. And so instead of grabbing an Oreo or something like that, grabbing our cookies, or instead of grabbing a Hostess ding dong, they're grabbing our stuff. So I can't really get into the details of the product.

There's expansion line coming. And so have you gotten yourself a professional cook, Somebody who Has chef experience. Who has food experience here? Not just you guys.

Yeah. We are no longer an army of people hand scooping cookies. We have.

There you go.

I can say we're more of a marketing company now. So a lot of that is handled by other people that are more capable than we are.

Luckily, we found these amazing food scientists that know low carb and low sugar. And I said, hey, can we make this? Like, yes, we could do it. I'm like, all right, let's do it now.

Let's make sure it tastes good. So have you gotten yourself a process for testing it out? Because testing out just amongst yourselves, still not a great idea.

Yeah, we test it out with ourselves. We send it out to some of the people that are close to us in terms of, like, our influencers, and we'll have them try it out and get their feedback. And then we're in an office with another company that's focused on writing about food, and so we'll give them samples.

Great. Oh, that's really awesome. So now you also understand about how to be more editorial, too, because that matters, right? So absolutely. Well, wonderful. Well, I am so glad you guys came on the show today. So it really just gave us some insight. I can't wait to see you guys on a shelf somewhere.

Yeah.

Yeah. So I'm sure it's in your future. You certainly have all the makings of great brand new big brand food company.

Thank you so much to hear that.

Thank you.

So, everyone, this has been product launch Hazards. I'm Tracy Hazard and we will be back with another story, another set of lessons next week. But for today, thank you so much for listening. And don't fall victim to all those hazards of product launching.

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