023 | Bootstrapping & Investors | How the founder's role evolves with scale | Part 2/2 with Paul Hletko of FEW Spirits and Goza Tequila (Chicago, IL, USA)

Hi and welcome to the Mafair
Drinks Podcast.

I'm Chris Mafair, founder of
Mafair Drinks, where we provide

the nonsense approach to
building drinks brands from the

bottom up.
I will be your host and in each

episode I will interview a
drinks builder from the drinks

and hospitality ecosystem.
In episode 22 and 23, I had the

pleasure.
Of interviewing Paul Letko.

He's the founder and.
Distiller of Few Spirits and CEO

of Goza Tequila.
He's the former president of the

American Craft Spirits
Association.

He has played a.
Key role in the revival of small

batch spirits in the US and
brings an incredible experience

to the podcast.
I hope you will enjoy our chat.

Remember that this is.
A twopart episode, so if you

liked.
It feel free to listen to both

part one and two of our chat.
We were discussing about

managing expectation of growth
that that is a dear topic of

mine and I mean you have him
being a founder and then like

moving on like what's the
difference between bootstrapping

like in the beginning and then
having investors and manage them

in terms of growth.
How does it work for for a

founder?
Because I remember we had a lot

of talks like back then in
Clubhouse on.

On the fact that you need to
manage expectation of what you

want to do as a brand owner, I
mean do you want to live with

the brand forever or do you want
to pass it on to the next

generation or do you want to
sell out And there's a lot of

confusion there when people
start.

What's your?
Yeah, I mean, I think it's, I

think it's really tough that you
can, you can have a whole bunch

of different goals.
As an entrepreneur, your goal

could be to sell to a major.
Your goal could be to pass it

down to your kids.
Your goal can be that you're

going to be artistically
creative and have a business

that is personally satisfying.
You could have it be a hobby

business.
You can say I just do this for

fun.
I don't need the money, we just

have fun with it.
I think those are all very valid

ways of doing it.
But when you're operating your

business, your goal can and
should have an effect on the

decisions you make.
So you know if you're trying to

sell to a major.
Well, you're going to need to be

selling an awful lot of cases.
So you need to understand that

your volume and your velocity
are your primary drivers, and

your business strategy should
reflect that.

If you're trying to be an
artistic creator that you're

going to hand that it's just
going to be a hobby, then you

just do whatever you want to do
and you can create what you want

and it doesn't matter.
Or if you're trying to hand down

to your children, well, you
better be focusing a lot more on

your margins, quite frankly.
Make sure that you're operating

at a profitable business that
can sustain itself.

If you're trying to flip and
maybe you don't have to sustain

quite as well, and you can put
all your chips in, you know you

can shove your poker game all in
and say I'm going all in for

sale and I'm going to go as big
as I can, as fast as I can and

flip it.
But these are all different

choices, right?
You can go slow, you can go

fast.
There are different challenges

in certain categories like say
for example whiskey where.

You know, growing in whiskey is
extremely difficult because if

you want to grow, say 10% a
year, but your product is aging

for say, seven years, you need
to be producing two or three

times what you're selling today
so that you can have that 10%

growth, but you don't have any.
You know, if that's true, you

probably don't have anywhere
near enough money to.

To build the brand at that rate
on a cons basis or on a sales

basis that it's really difficult
to thread that needle that you

grow fast enough to make sure
that you have the revenue but

slow enough that you don't
outstrip your supply.

You know, there's a lot of
there's.

Different gin comes in to help.
Yeah, gin and vodka or lots of

other things.
Like in the beer, right?

Yeah, beer.
For the most part, beers, A's,

you know, a 90 to 180 day cash
flow cycle, spirits, you could

be looking at 10 years.
Absolutely.

And these are very different
operational challenges for a

brand that if you're looking to
grow, you know you're going to

run into challenges.
And then say, for example,

you're in whiskey if you need
more money, but you can't get

any more leverage with no more
debt, you know?

Where you gonna get more money
other than equity?

Well, yeah, equity very quickly
can get really expensive too,

because very quickly you as an
entrepreneur just bought

yourself a job because you don't
have more equity left because he

gave it all the way to buy more
barrels.

That's a very interesting topic
because I was reading something

I think earlier on LinkedIn,
they were talking about some

people that sold and how they
felt about selling and or how

they felt about keeping.
Themselves involved in the in

the role and you know that
there's no right or wrong there.

It's just like you need to be
able to make a decision and

what's your experience on on the
fact that for example, like I, I

speak to a lot of people that
create their brand but then

don't actually want to sell
themselves.

They go into hiring right away
brand ambassador or a

salesperson or however we want
to call it and they.

They haven't really learned from
the market before they actually

assigned the job to someone,
right?

I think it's tough.
Like if you're the brand owner

and the brand creator, and
you're not out in the field

personally understanding the
market's reaction, I think it's

really tough.
Because if you don't know what

the objections are, how can you
expect somebody that doesn't

care to overcome them, like you
as the founder slash

entrepreneur?
You will always be the best

salesman for your product.
Always.

And the goal as your as the
entrepreneur then is to make it

so that somebody who is less
than 50% as good as you is good

enough.
Because people always want to

talk to the guy.
They want to talk to the girl.

They want to talk to the person
that made it.

They want to talk to the person
that owns it.

That's what they want.
And you know, you talk about why

do customers buy?
Well, retailers and bar owners

like talking to the guy.
So it's really powerful to be

the guy walking in and say, I
made this because you've got

more credibility than the brand
ambassador ever will.

No matter how good the brand
ambassador is, there's a lot of

great brand ambassadors.
They're never going to be as

good as the guy that distills
it.

And so that the first, the first
step obviously, I mean we agree

that it's it's being bold as
long as possible to really

understand and and get feedback
from the market and understand

like what the objections are,
why they love it, why didn't

like it, is it approachable, is
it not and so on.

But then the moment that you
actually need to step out and

and say okay, like now I need to
pass the ball on on to this new

guy or girl.
What's your recommendation,

based on your experience on how
you transform that?

Enable those people to actually
do your job.

Well, I think of the one way you
don't, I mean really what you do

is you allow them to do a lot of
the, they do a lot of the work,

but fundamentally they then
bring you in to close the deal.

And it's a little bit of that
transition that you know as you

grow, if you as the founder are
doing your job right.

So your brand ambassadors and
salespeople can do their job

better.
Like if I'm out there doing

things like, say, for example,
recording podcasts and doing

press interviews and talking to
people on Clubhouse and I'm on

Instagram and I am spreading my
message that way.

It allows the sales team and the
brand ambassadors, everybody

else to kind of come in because
in some ways I am the one out

there continuing to sell.
The people know who I am.

And then oh you're you're from
few.

I've heard Paul talk.
I've heard I saw Paul do the

podcast.
I saw him do this.

I I was at a taste again.
Whiskey fast and he was there.

So you don't really hand it off.
You bring other people in to

amplify your message and do it
in a way that is just far more

efficient than me walking into
the store.

I make them more efficient.
They make me more efficient.

And I just.
I don't think you ever hand it

off.
And that's that's one of the

things, I mean one of my
favorite podcast, it's called

Revenue Vitals.
It's Chris Walker, it's my

inspiration, but it's a totally
different field is like B to B,

marketing sauce marketing kind
of thing.

And and for example, he always
talks about this that that part.

No, I mean, he's the CEO of a
huge company and he says you

feel like Organic.
Rich is free.

Because you're not paying Google
ads or Facebook ads or whatever,

but it's my time here now
without being able to do

something else.
So actually it's my salary goes

into that production cost,
right.

And which brings me to the point
that you're raising is like how

how do you create demand for the
brand?

This is one of the topics that
I'm that I'm talking about

because and what actually I
learned from him in his podcast

is like you said.
You want to create demand before

your team is able to capture
that demand, right.

So you want to enable that and
back in the day says was

different because you know you
were creating the demand and

capturing the demand at the same
time.

I mean when you started few, you
were the guy going out talking

about it and closing the deal.
But I still am that guy, right?

I'm just doing in a different
way like I am.

I continue to be out there.
Am I the guy who's walking into

every single retailer and doing
a quick tasting with them?

No.
But I am in fact out there each

and every day selling few.
I'm just doing it in a way

that's much more scalable, that
I can reach more people.

And there's a, you know, a
thought leader talks about doing

things that don't scale at
first.

You can't scale me walking into
a bar that doesn't scale.

It's just one of me.
But if I don't, if I don't know

what happens when I walk into a
bar and if I don't understand

the challenges and the
opportunities that the

salespeople have, I'm not going
to be very effective helping

them out.
You know, what are the

objections you're getting?
So we just had a few spirits

training with 60 or 70 reps from
our distributor.

That's awesome.
And.

Yeah, we talked about the brand
and we talked about this.

We talked about that.
But fundamentally, my, my

overall value proposition to
them was tell me the objections

you're getting, because I
guarantee you I've gotten them.

Are you getting the objection
that it's too expensive?

Are you getting the objection
that it's too cheap?

Are you getting the objection
that you don't like it?

Are you getting the objection
that it's not good?

Are you getting the objection
that you tried it before and

people didn't like it?
Are you like?

If you're not selling, you're
getting an objection.

So what's the objection?
And I don't care what your

objection is.
I've had it, and I can help you

get over it.
That's a great way of putting

it.
You basically have to start

doing unscalable things, but
then as soon as possible I would

say, you know, it's the time to
enable other people to continue

to do that while you do that at
scale.

And then it becomes more of a
podcast interview.

Talking to the media, talking,
doing your training to 100 sales

reps, like doing stuff that you
can really benefit from and

enable other people to take on
from you.

Yeah, as a founder when you
start the company, at least when

you start the company, like I
did with virtually no money.

You have to do everything
yourself.

And so when I started few, I was
production, sales, marketing,

advertising, finance,
janitorial, ARAP, like it was a

one man company when I first
started it.

And here's the thing about
people, and I'm no different, is

that I'm not good at all of
those things.

I'm not good at AR, I'm not good
at a P I'm not good at sales,

I'm not good at marketing, I'm
not good at finance.

Nobody is good at all of these
things together.

And so your job at your number
one job as an entrepreneur is to

fire yourself from every single
role in the company that you are

not the single best person on
the planet for.

And so that is my job and always
has been, is to fire myself.

And when I interview people to
bring them into the company, I

want to tell them your job is to
fire yourself.

Because you're going to be so
good at what you're doing, we're

going to replace you with three
people and you're going to

manage them.
That's your number one job.

It's not if I hire a sales Rep
your job is not to sell.

Your job is to be so good at
selling it that we have to hire

three people to replace you and
you run them.

That's your job.
And so transferring these things

that you are not the world's
best at.

To other people, that's your
fundamental job as an

entrepreneur.
And at least with few, I think

I've kind of done that.
My only real job at Few is to be

the guy that started few right
now.

And there's not one single other
person on the planet that can do

that job.
That's that's the reality.

But that's my fundamental job is
to be the guy that started when

I started.
No one else can.

I'm the world's best at it.
When you started, like one of

the things that we were talking
about earlier is the fact that

brands are built bottom up, but
actually you know, the flow is

actually top down, right?
You know, like you, you start

from an importer, you know,
distributor wholesalers and you

name it and.
To the bar.

The brand is built bottom up.
The business is built top down.

I remember we we we spoke about
it like back in the days and how

was it for you?
I mean I I know a lot of brands

for example in the USI mean
because of the three tier

system, you cannot market your
own product to yourself, but you

need a distributor to do that.
But you can do it with a with a

box mover.
No, you can have somebody that

you know that does it for you
and it's an enabler of that, you

know, that makes it 3 tier
compliant, right?

When you start to do that, what
would be your suggestion?

Imagine like I launched my own
brand in the US Now we discussed

about the the three steps like
to to get you know to get calls

from distributors back in the
days not now it won't it won't

happen because at this stage you
know with the oversaturation of

craft brands in the US no
distributor would ever call me.

What would be your suggestion
for me to to?

To start selling, I've got, I've
got pallets in the warehouse.

The product is ready, I just
miss selling it.

I think I get it.
Understanding your brand and who

it's going to appeal to, Is your
brand going to appeal to the

shot occasion, or is your brand
going to appeal to the whiskey

snobs?
Is your brand going to be

appealing at Italian restaurants
or is it going to be appealing

at Japanese restaurants?
Is your brand going to be

appealing at college bars or at
cocktail bars?

And yes, there are brands that
can that could be appealing at

all of them, but that's really
expensive.

And if, you know, if you're
trying to launch a brand, being

all things to all people, you
better have a big marketing and

sales budget.
Whereas if you want to be a

brand that lives and say, for
example, you are the Mastiha for

Italian restaurants, cool.
Now I know I can go to a

distributor and say, hey, look,
I've got a I've got the Mastiha

for Italian restaurants in the
US and distributors can go Okay.

Got it.
I sell to 50 Italian

restaurants.
I can go drop this Mastiha into

50 Italian restaurants and you
are going to go market it and

have those Italian restaurants
drive volume.

Now, how much Mastiha can you
sell at 50 Italian restaurants?

Well, you probably can't sell
100,000 cases in 50 restaurants,

but can you sell 500 cases a
year in 50 restaurants?

Yeah, you probably can.
It's aggressive.

But you can and that could be
your, that could be your goal.

You're going to start off
selling 50 cases into those 50

restaurants, but inside the
three years maybe you're selling

5. 100 and and.
That's your goal, That's your

focus and that you, you
understand what your customer

is, who they are, where they
live, why they buy what the

occasion is now.
You've provided value to your

customer that goes beyond
solving an intoxication problem,

absolutely.
And by focusing that that

occasion, you've made your brand
sticky in the mind of consumer

because they know when to drink
it.

So when you know no matter how
small that occasion is, it's Rep

replicable at scale.
And then there is will.

There will be a lot of people
having it in a model after

dinner and in Italian
restaurants around the world,

you know, it's even even.
Only that.

I know, I know to drink Fernette
Branca after I have an Italian

meal.
Now if I'm Fernette Branca, I

can extend that.
Oh, I also drink Fernette after

I eat steak.
So I could have Fernette Branca.

It's steak restaurants exactly.
Now I can go and I can do, oh,

and I drink Fernette and coke
When I'm in an Argentinian

restaurant.
Now I can have that.

But now I've got all these
drinking occasions that I that

are created because I know as a
brand owner.

When my drinking occasion is Why
do people drink few spirits?

Why do people drink few over
Elijah Craig?

There's a reason why people
drink few over Elijah Craig, and

if I don't know what that is,
I'm probably in trouble.

How do you bring on that
distributor that wants to sell?

You know that you want him to
sell the to the 50 restaurant.

Like when is the right moment,
is it?

Is it right to use like a three
tier compliance system in the

meantime until you actually get
to a certain leverage that you

can bring in to those clients?
Depends on the brand, like if

you can show success, but like
every distributor on the planet,

if you could bring a distributor
a package that they can

instantly understand, instantly
understand how to execute.

Instantly understand that they
can hit your goals, that you're

not going to be yelling at them
every week, that you're not

selling more.
You know how you're not selling

more of this $1000 bottle gin.
And like, I sold 5 bottles of

it.
That's a lot of five.

That's a lot of $1000 bottle
gin.

Yeah, but I thought you were
going to sell 25,000 cases.

Oh, I can't sell 25,000 cases of
that.

You know if you could bring a
distributor a package?

That can win.
They're going to pick you up,

right?
Distributors distribute.

So if you can come to them with
your sales and marketing plan

and your finance and your people
and your boots on the street and

show them how you are.
If the brand can show the

distributor how the brand solves
a problem the distributor has,

they're going to pick you up
every day of the week.

You just you as the brand just
have to be better prepared.

Because you have to understand
all these things.

You have to have the sales plan.
You have to have a marketing

plan.
You have to have the incentives.

You have to have the reason why
a distributor cares and they

only care if you're solving a
problem for them, whether it's a

I'm not making enough money
problem, that's a really

important problem to solve for
distributors.

Making the money, it's just can
be a strategic problem.

I don't currently have a a
Morrow from Sicily in my book.

Maybe I need it tomorrow from
Sicily, maybe I don't.

But I can now understand, OK,
this this brand solves a problem

for me that other brands don't
solve.

Got it?
Now I need that brand and I can

go win with it.
But Oh yeah, I've got a vodka

from corn.
I've got 30 vodkas from corn.

What problem does that solve for
me?

Well, it's really good.
All the other ones are really

good too.
Oh, but it's 25 bucks, Okay.

Well, I've got 15 corn vodkas
that are 25 bucks already.

Why do I carry yours?
Oh, well, I'm coming in with,

you know, we're doing at TV
spend.

We're doing ad campaigns.
We've got five people in market.

We've got, you know, we've got
all these reasons.

Oh, Okay, yeah.
I will make more money selling

your product than I do
otherwise.

Oh, I've got a, you know, I'm a
a per TiVo from Carlo Vivari.

Oh, I understand where I can
sell an apparent Ivo from Carlo

Vivari.
Now I understand how I can do

this.
That's the thing with bringing

something to the table because I
get a lot of calls and, you

know, messages on, oh, hey, can
you recommend us, you know, a

distributor for Czech Republic?
And it's just like, yeah man, I

could, but you know, basically
I'm just name dropping.

And it it doesn't make any sense
to you because you will call

them and you know they will
never answer to you and you will

actually kind of like burn by
name now.

And and that is another of these
things that I think I feel brand

owners often do not understand
is that there is an important

thing that takes the brand
horizontally, you know at

national level and then there
are wholesalers that do it at at

city level or at.
State level, city level,

neighborhood level.
If it's a big city and you know

their network is their net worth
and they cannot burn their name

on a brand, that it's going to
be there like six months and

then it's going to run out of
money and it's going to

disappear because all of a
sudden their clientele is going

to ask OKI want to order that
brand.

And it's like, no, sorry it left
the market.

I mean, they went bust.
There is a matter of managing

expectations that it's really,
really needed in understanding

Okay, what are the players in
the ecosystem and how do we

navigate importers,
distributors, bartenders, bar

owners, brand owners and so on.
Like with Goza, I've talked to a

few friends in Europe trying to
find distributors in Europe and

it's never, do you know who's a
good distributor, It's always do

you know a distributor that
needs to have a tequila in their

book around €30 retail.
That's a different question than

can you recommend a distributor.
To me it's a question of this is

the product, this is where it's
going to fit.

Do you happen to know somebody?
Exactly.

And that's a start.
Like obviously that's not the

end all be all, but that's a
different question.

Hey, I recommend a distributor
for an RTD.

No recommended distributor for a
RTD that is a vodka soda that

has fruit flavors and packaged
in a, you know, 16 ounce can.

Oh well, maybe that was work
here.

And at the same time, it's so
simple to understand.

I mean it is the same thing when
somebody asked me like, oh, I've

got a friends that is coming to
Prague.

Do you have any tips like dude,
I mean like, I don't know, like

go to the castle, you know what?
What do you mean He wants some

restaurants And it's like, yeah,
but.

Is he coming with his wife?
Is he coming with five guys?

Is it coming like, is it like a
stag night?

Is it like a romantic dinner?
Is it going to propose his wife?

You know, tell me something.
You know what?

What do they want?
Like a Czech traditional pub, I

need some goulash, my friend.
I'm going to town, I want some

goulash and I want to have some
really good beer and I don't

want fancy, I just want a nice
little neighborhood joint.

But I want to eat some really
good goulash or has really good

beer.
No.

When and who's five places for
you?

Yeah, and I'm still, I'm, I'm
still waiting for you over here.

Like I I can't wait to have you
and visit some breweries as

well.
Yep, I still miss really miss my

grandma's Gula.
I can imagine.

I can imagine.
No, fantastic.

So I don't want to steal more of
your time.

Paul, like did, has been a
really great experience.

Lots of.
Interesting points and great

tips I'm going to reuse if you
allow me.

And I want to leave you some
space to advertise your product,

the older ones and the newer
ones.

So where can people find you and
find more about your products?

Sure.
So we have few spirits.

You can find usfewspirits.com at
few spirits across all your

social medias.
We're sold in 50 states in about

40 countries all over the world.
Wherever you happen to be

listening, you can probably find
few spirits across Europe,

Master Malt or the whiskey
exchange across the US, major

retailers everywhere.
And then on top of that, I also

own a tequila brand called Goza
Tequila that's available online

in the US that
shop.goes@tequila.com.

You can also find this in
Illinois, Maryland, Delaware,

DC, South Carolina and launching
soon in about four or five other

states.
Nice.

Also that that goes to tequila
across all your socials.

Fantastic, Paul.
So thanks.

Thanks so much for your time and
thanks Chris, and speak soon.

Yeah, be well, my friend.
Take care.

Remember that this is.
A2 part episode.

So if you liked.
It feel free to.

Listen to both.
Part one and two.

Of our chat.
That's all for today.

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