Our spotlight on first-generation alumni continues with a conversation with Cassidy Nolan, the co-founder and managing member of Mach 1 Hot Sauce.
Growing up, Cassidy struggled in school. But joining the Marine Corps after high school helped him find his drive and discipline that ultimately led him to Haas.
Cassidy and host Sean Li discuss his family roots in the kitchen, his military intelligence work for the Marines, how his education at Haas helped shape the idea for Mach 1 Hot Sauce, and why it’s the hot sauce that pairs well with anything.
*OneHaas Alumni Podcast is a production of Haas School of Business and is produced by University FM.*
How his time in the military helped with school
Post-Marine Corps, I never found trouble in school. I learned how to study, I learned how to be disciplined. There weren’t any distractions like what I used to have when I was younger. It was like, here’s the work, and 50% of the job is just showing up, right? 30% of the job after that is participating in class, and then 20% is actually doing the homework and the test and the quizzes because if you do, if you show up and you ask questions, you’re gonna learn and retain so much of it.
One of the things he loved most about Haas
If you made it to Haas, chances are you’re curious, you’re not afraid to ask questions. You’re not afraid to go out on a limb and say, ‘Well, I think it’s this.’ There weren’t a lot of politics that got in the way. Like a lot of the time, we’re just looking at brass tax…and I felt like the dumbest one in the room, and I loved it because it meant I had the most to gain, you know?
The push he gave himself towards Mach 1 Hot Sauce
Look, if you don’t jump off on this hot sauce thing, you’re never gonna do it. Because you’ve always been scared to do it. You know what I mean? Because you’re married, you have kids, and if not now, when? And that’s such a hard thing, I think, for a lot of entrepreneurs or people who wanna be entrepreneurs is that fear of failing. But I think I just got to a point in time where the fear of not trying was greater than the fear of failing.
What makes his hot sauce stand out
There’s a dichotomy that exists between either it has flavor, but there’s no heat, or it’s just complete dry heat, and there’s no flavor. And I really believe that we created a hot sauce that can pair with your food because it has a lot of flavor upfront. And then the heat rolls on in the back so you can still have your food and not have it be overpowered by the hot sauce.
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
[00:00] Sean: Thank you for tuning in to the OneHaas Alumni Podcast. This month, we’re celebrating first-generation alumni. And we have the privilege of having Cassidy Nolan with us today. He is the co-founder and managing member of Mach 1 Hot Sauce. He’s also a marine. And so, thank you for your service.
[00:31] Cassidy: Thank you for paying your taxes.
[00:33] Sean: I always have to say that, really, really appreciate all the vets that we have in the program, and anywhere, obviously, but definitely in the program. Yeah, Cassidy, let’s just start off hearing about your background, your origin story.
[00:47] Cassidy: Sure. Yeah, origin story. Grew up in this little farm town called Petaluma, and divorced parents. So, I split my time between Petaluma and Napa. My father was a chef and my mom was a stay-at-home mom. And we didn’t really have as many divorced families, didn’t really have a lot of money between us, didn’t really come from wealth and means. So, everything that we wanted or desire to have, you had to really work for on your own. You had to be really creative. So, from a really young age, I would wash cars and I mean just the quintessence of this childhood Americana of like, “I’m going to mow lawns to get money to buy candy,” or something like that, right? We’d always get creative, like baked sales. And I was very fortunate at the time. I grew up in this… it was a low-income housing complex, so there was a bunch of families, young families.
[01:46] Sean: Where’s your mom from again?
[01:48] Cassidy: She’s from Barranquilla, Colombia. So, she’s a nationalized citizen. And she came to America in the late ’60s, or late ’50s, I want to say. She landed in New York. So, on my mom’s side, they’re from Barranquilla, Colombia, but they grew up or they put their roots down in Queens, New York. And in the ’60s and ’70s, still is to this day, Grateful Dead fan and Rolling Stones. And she left school at 17 to follow them around. When we talk about hippies, that was my mom, like flea collar, everything. Hence, the reason why my name is Cassidy. It’s a Grateful Dead song, and a lot of people don’t know that.
[02:32] Sean: Oh, did not know that.
[02:34] Cassidy: So, education, it was more of just a check-in-the-box, but it was never a discussion. I didn’t even really know what college was until I was in the Marine Corps many years later. And when I was a young kid, I think the first job or profession I really wanted was to be an inventor. And I don’t even know what that was. I think the equivalent now would be like an engineer of some sort. But nobody at that time told me that that wasn’t even a thing. So, education to me was like I never really applied myself that hard or I never really thought much of it. I just always wanted to go outside and play and be with friends and challenge myself when I did Boy Scouts. And I did wrestling in high school and played football and then joined the Marines. And at the time, and there’s a lot of in-between there, my mom ended up losing custody of us, but I really wanted to get out or have this upward mobility that a lot of people had that I saw when I was in high school. And it just never seemed like something that was obtainable to me in my situation. So, the fastest way that I saw was to join the service. And I really wanted to work for the CIA or the NSA doing intelligence, because I always enjoyed. I was the guy in high school that would go to the library and just read all of of these books, like espionage and the Vietnam War.
[04:08] Sean: Yeah, all the spy books, right?
[04:10] Cassidy: All the spy books, yeah. I just found it so fascinating, this cat-and-mouse game, this cloak and dagger kind of thing. And when I took what’s called the ASVAB, when I took the test to get into the service, I scored really high. And my recruiter said, “You could do any job you wanted.” And I said, “I want to do intelligence.” And I did that, and I did that for five years. So, I had a top-secret clearance and did two deployments to Afghanistan in 2010 and ’12. And I ended up getting married after my first deployment to my wife. And we’ve been together for almost 13 years now. She was pregnant on my second deployment. And when I came home, I think, at that time, in a very arrogant way, I thought if I was going to work for the CIA, they would’ve tapped me by that point. They would’ve found me. That’s not necessarily how that always works out.
So, I was not selected. I was given the opportunity to reenlist. I didn’t want to, because I figured the worst. We’re going to still keep going. So, I really just wanted to be there for my daughter and get out of this environment for the time. And I think, realistically, it would’ve been great if they said, “Hey, you could take six months off and then come back to this.” It probably would’ve changed my opinion.
[05:19] Sean: How did you hear about the Marines? Did they come to recruits on campus in high school? How are you exposed to it?
[05:28] Cassidy: So, I think, for most people of my generation, 9/11 was a pretty influential moment. And that was, I think, for those that were cognizant at the time, it was that day you can remember exactly where you were at. And I graduated high school in 2008, so the September 11th attack happened when I was in sixth grade.
And from that time to the time that I graduated, patriotism was still in full swing. And there was marine recruiters, army recruiters. And then, I was dating this girl at the time, and her father was a Marine Vietnam vet. Total gentleman, really nice guy. And he asked me, “What are you going to do when you graduate high school?” And I said, “Well, I think I’m going to go to the college. And Napa Valley College is a community college. And I was working at this restaurant. I’ll just do that.” He never really pushed it on me, but it was more of like, “Well, if you were thinking about doing anything else, this would be it. And it was like either the Marines or nothing, really.” I think the first day of community college, my first class, it was an Algebra 2 class. And I remember we were talking about polynomials and I was like, “Oh, I’m done.” I closed the buck. And I went in, I talked to the recruiter that day. And then, six weeks later, I was in bootcamp.
[06:45] Sean: That’s cool. Okay. Just out of curiosity, were you still in close contact with your mom at that time? And did your parents have any say, or did they care?
[06:59] Cassidy: Unfortunately, because of my mom’s condition, like I said, she had lost custody of us, I didn’t talk to my mom for… from the time that she lost custody of us in 2004, I didn’t talk to her until 2011. So, it was about a six, seven-year stint I didn’t talk to her. Lived out with my dad, and my dad is a chef. So, I always grew up in a kitchen. And in fact, my parents met at Aspen, Colorado, where my mom was working a job at this restaurant just to pay for money to go to the next Grateful Dead show. And my dad was actually a chef there. And he was skiing and mountain-biking. And next thing you know, they ended up getting married.
But with my mom, though, she suffers from mental health issues, we’ll say. And it’s frustrating because I know that she did the best that she could with what she had. And she loved her children, but she just had a lot of internal struggles that, unfortunately, I think that she really lost in the end. And I was very bitter and I had a lot of resentment towards her. And I think it’s Stockholm syndrome, because when my father left, obviously, my parents got divorced when I was really young, I was about six years old when they got divorced, you have this. And I think a lot of people that come from similar backgrounds, they grow up having this lack of self-worth or feeling of “I’m not good enough” or whatever it is. So, then you have this Stockholm syndrome where then I really gravitate towards the other parent, because that’s the parent that stayed and fiercely loyal. Like, it didn’t matter what my mom did. Like, “That’s my mom. She’s watching us.”
And I have kids of my own now. And the stuff that my mom did or let happen, I would have a lot more gray hairs today if that were to happen with my kids. To me, it’s just unacceptable. And it’s not even, “Oh, there were different times. There might’ve been different times,” but negligence is negligence. You know what I mean? So, processing that. Took a long time. And even to this day, I wish I could tell you things are on the ups, but mental health is a serious thing. Drug addiction is a serious thing. And if you grew up in the ’60s and ’70s and you’re following around a Grateful Dead and the Rolling Stones, you weren’t a squeaky-clean person, working a nine-to-five, thinking about your 401(k).
So, that’s the type of person that she was. And my dad was very much an opposite of that. And he struggled with alcohol himself, and still to this day. So, those are the type of environments myself and my siblings came from. Unfortunately, there was a lot of trauma, like what we just call trauma today. And I think the biggest things that, for sure, put me on the right path were Boy Scouts. I had a lot of really good mentors. My wrestling coaches are just high school coaches, in general. And then, my time in the military, for sure. So, you get these older brothers, second dads, if you will, kind of thing. So, good role models.
[09:54] Sean: Yeah, that’s great. That’s awesome to hear. So, from leaving the Marines to now, what have you been doing?
[10:04] Cassidy: So, I got out in 2013. And I really wanted to have just something on my own. And the guy that I was telling you about earlier where I was dating his daughter, he had a port-a-potty business in Napa, which is we laugh at it, but it’s very lucrative because of OSHA, you need to have one toilet every eight workers. And grapes are picked by hand. So, in Napa County, there’s always port-a-potties. It’s never going away. It’s never going to happen.
So, he had this port-a-potty business. And I told him, I said, “Hey, look, I’ll come work for you. And I’m going to go to the junior college. It’s the same one that I dropped out of many years ago. And just get my associates in business because it’s going to pay. There’s a stipend that I get from the Department of Veteran Affairs. And I’ll run the business for you. I’ll buy the business off of you.”
And I’m doing this. And I tried and purchase the port-a-potty business for $120,000, but I have no collateral. I have no real capital to spend. The only thing that I had in my name was a $8,000 truck. So, the bank naturally denies the loan because the liquidity is only 20%, so they think it’s too risky. And at that point, I’m like, I don’t know what to do. I guess I should just keep going to school because if I get, maybe, my bachelor’s, I could still keep getting this stipend from the VA.
And somebody had said, “Hey, look,” because I was looking at Sonoma State. They’re called a veteran-certified. Basically, they’re the people at the college that certify your courses and send it to the VA. And she said, “You know, Cassidy, there’s this really good business school not too far away. It’s called the Haas School of Business. Have you thought about applying?” And I said, “Really? Never heard of it, so it was never part of my repertoire.” And she says, “Yeah. I think you do really well in school here.” Post Marine Corps, I never found trouble in school. I learned how to study. I learned how to be disciplined. There wasn’t any distractions like what I used to have when I was younger. It was like, “Here’s the work.” And 50% of the job is just showing up. 30% of the job after that is participating class. And then, 20% is actually doing the homework and the test and the quizzes. Because if you show up and you ask questions, you’re going to learn and retain so much of it. And then, the homework and everything else just kind of reinforces it, right?
So, I ended up doing really well at community college. And she told me I should apply to this business school. And the problem is that, in order to transfer to Haas, you had to have at least Calc 2, and I was still at Algebra 2. So, I had to take Algebra 2, pre-calc, trigonometry, Calc 1, and then Calc 2. You couldn’t take them in unison. You had to take it incrementally. So, then I started loading up all these other classes, just to fill the time.
When I finally did transfer, I transferred with five associates, like mathematics, natural science, business. I have a CSU transfer. I have all these. Yeah, it’s kind of comical, but that feeling when I got accepted into Haas was probably one of the greatest feelings that I had. What I really enjoyed about Haas is, if you made it to Haas, chances are you’re curious, you’re not afraid to ask questions, you’re not afraid to go out on a limb and say, “Well, I think it’s this.” There wasn’t a lot of politics that got in the way. A lot of the times, we’re just looking at a brass tacks. You would think very rational rather than irrational. So, I loved all the classes, the exception of finance, I loved. You know what I mean? Because it was you’re surrounded by just… and I felt like the dumbest one in the room, and I loved it, because it meant I have the most to gain.
And then, graduated Haas, where I went to Haas from 2017 to 2019. Took a job. I did recruiting, and I worked as an accountant for the Clorox Company. Did terrible. I did just enough. I’m good at finding patterns in math, to do the bare minimum, but knowledge was never really solidified, if that makes sense. It was just more of like, “What are the steps that I have to do to balance this out?”
COVID hit, 2020, we ended up buying a house back in Napa because everyone was working from home and I was working in Pleasanton. So, we figured, “Look, we’ll just buy a house in Napa. We’ll figure it out.” Bought the house June 15th, 2020. The house burnt down August 18th, 2020. So, we’re only in the house for two months and three days. And then, we lived in a hotel for a while. I quit the Clorox Company, naturally, just to be with my wife and kids. I took a job with LVMH (Lois Vuitton Moët Hennessy) Domaine Chandon, and their special projects because I was good with Excel. And at that time, I realized I wanted to go back to school and get my MBA because the only jobs I was being offered were accounting positions or finance positions, which aren’t bad if that’s for you. But it’s just for me, it was never something that I really enjoyed doing. It was something that I could do.
And when I was getting my MBA, I really settled on making hot sauce because, up until that point, like I said, my father was a chef — he’s a chef still. And my mom always grew up in a kitchen, too. She was basically a baker. And when I was at Cal, I was making beer with some fellow veterans in their apartments. And that passion for the fermentation process, the lactobacillus fermentation, I started applying that in other places. Like, “Okay, I can make beer. What else can I do? I can make sourdough. Okay, what else can I do? Can I make hot sauce?”
So, I started making hot sauce. And when I was getting my MBA, I just really doubled down on that because it was the cheapest thing to make. It fulfilled the passion that I have for making food, right? But it was incredibly cheap to do compared to when I made beer, because making beer is super fun, but it could be very expensive when you start buying out all your material. Because you need to have fermentation cakes and cleaning material and brushes and heat exchangers and bottles and just everything else.
And I thought, “Okay, I don’t want to spend $8,000 on beer-making equipment again. I could just spend 50 bucks on a big container and I could start fermenting hot sauce peppers for significantly cheaper.” So, I did that. And through time, n 2021, it got to a point where I was making so much that I was giving it out. And then, people were saying, “This is really good. I think you have something here.” And like, “I’ll actually buy a bottle from you.” And at that point, I thought, I was like, “Okay, I think I have a winning formula. Do you want to continue doing this?”
So, when I was getting my MBA, I really doubled down on a hot sauce business plan and got all the paperwork done. And I ended up getting headhunted for this director position at a nonprofit where I was matching veterans with service dogs, or they were rescue dogs that were training to be service dogs. And I did that for almost 10 months before it got to a point where like, “Hey, look, if you don’t jump off on this hot sauce thing, you’re never going to do it, because you’ve always been scared to do it, because you’re married, you have kids. And if not now, when?”
And that’s such a hard thing, I think, for a lot of entrepreneurs or people who want to be entrepreneurs, is that fear of failing. But I think I just got to a point in time where the fear of not trying was greater than the fear of failing.
[17:30] Sean: It’s actually interesting you say that, because crossing that threshold or jumping off that cliff, it doesn’t happen very often, actually. Because for a lot of people that I know that are interested in entrepreneurship, it’s one of those things where, yes, I totally see people making up all the excuses, having all the external reasons, externalities of why they can’t make that leap of faith right now.
And I will add something to that, because even after you make that leap of faith and say it doesn’t completely pan out the way you want to, not saying it won’t, I think you’re going to be a knockout success, but even if it doesn’t, it’s to continue pushing, keep trying.
[18:15] Cassidy: Yes. And I mean, it’s something like, what is it, 80% of businesses fail in the first three years and 90% of startups fail, right? So, I think a lot of that comes down to the person’s unrealistic expectations or, maybe, just ulterior motives, where you’re like, “No, I just was looking to get bought out, or I thought we’d be a unicorn.” And you’re like, “In what world?” Like, temper of your expectations.
[18:40] Sean: Right.
[18:40] Cassidy: It’s definitely hard, but I can’t really see myself trying to go. I could not, in any world, be like, “Hey, you’re going to be an accountant again for Clorox.” Like, “No, I’m not. I’m going to go work at McDonald’s. No problem. No shame. That’s a great company, in and out.”
I enjoy the freedom and the creativity. It’s like some of the best days are just driving out and making a sales call. We’re in 17 locations now. A lot of it’s in Napa and Sonoma County. We’ve only been doing this for a short time, but a lot of private grocers were now could be found on Walmart marketplace. So, we got accepted into that.
[19:17] Sean: Amazing.
[19:17] Cassidy: Yeah. We’re definitely trying to get a lot of traction and trying to build quick. And that’s just for trying to have sustainability and, eventually, profitability. But the biggest thing that I always focused on was make the right product. And I know that perfection is the enemy of progress, but we really tried to put a lot of emphasis on depth for the customer, for the flavor, the pairing, the label, the name, everything.
[19:46] Sean: Ooh, the pairing. I like that. I like that idea.
[19:49] Cassidy: The pairing, yeah, I don’t feel like that’s talked about enough —
[19:53] Sean: No.
[19:53] Cassidy: … in the industry is hot sauce can actually be almost like a condiment. It is a condiment. But a pairing condiment where it can actually elevate the food.
[20:04] Sean: Right. Let me ask you this, as a fellow entrepreneur. What are some of the biggest challenges, or what are some challenges you’re encountering right now that, maybe, Haasie, a Haas alumni listening might be able to help out with?
[20:18] Cassidy: I love that. I think the biggest things for me have been getting exposure, like traction, because I think about you’ve ever been to dive bars or some small indie concert in LA or something like that, there could be a great band, an amazing band, and they just never get picked up because a producer never found them.
It’s a similar thing here, where it’s like I know that we have a really good product and the only way for me to get people to take it is if they try it. But it’s hard to get people to try it if they don’t see it. So, getting exposure is difficult. And it’s like you have to rely a lot on social media, digital space.
I treat my customers as employees. And that’s a big thing, too. I think a lot of entrepreneurs lose sight of that, too, is that you need to treat everybody as an employee. And I treat my customers as employees because they could do a lot of heavy lifting for me for free. And that is, they could talk about it, they could tell people, “You eed to pick it up.” They can make recommendations to stores. That’s been a really helpful thing, too. If I do a demo at a grocery store, some people will say, “You should really have this one place in Truckee, California at Terry, your hot sauce. I’ll reach out to them for you,” something like that.
But as far as having somebody help, the biggest thing is get yourself a bottle, 100%, and try for yourself. I want to convert people into customers, for sure.
[21:41] Sean: It’s the Mach 1 Hot Sauce.
[21:43] Cassidy: Yes, sir.
[21:44] Sean: How’d you come up with the name?
[21:46] Cassidy: All right, lot of depth there. If you’re able to name something in successions, especially with hot sauce, where it incrementally gets hotter and you could say it’s 1, 2, 3, then you as a consumer can immediately say, “Okay, 3 is going to be hotter than the 2, and the 3 is definitely going to be hotter than the 1.” And then, the label can tell that tale, too. That would be a really fun thing. And then, if you were to have 1, 2, and 3, like the real estate, on a shelf, that would be a really good eye-catcher.
And I like that name, Mach. It sticks with you. It’s a unit of measurement. In marketing sense, that sound sticks with customers a lot longer than any other sound, I guess. And that’s the reason why the woman that created Spanx, she did it with an X because it was that foreign sound. So, I really liked that aspect of it. So, I just felt like Mach 1, 2, and 3 really just built. It had a lot of depth. It had a lot of layers that I could use.
[22:44] Sean: Maybe, the only thing fast, I don’t know if rockets or spaceships are faster than that, trying to exit orbit, but that would maybe be the hottest.
[22:55] Cassidy: Exactly. So, I am glad you bring that up. We only have the three sauces right now, but we do have other ones in the works. And it’s like you don’t want to just immediately go to the hottest because then you don’t have any room to grow, right?
[23:06] Sean: Right.
[23:06] Cassidy: So, we do want to do one that’s called the X-15 and that was a experimental aircraft. That was basically testing our aircraft… from a height and speed thing, how fast and sustainable it could go. And it went something like Mach 5 or Mach 6. And that’s the fastest aircraft that’s ever gone.
So, if you saw that movie, Maverick, with Tom Cruise, he approaches Mach 9 or Mach 10. I mean, that’s oof. I mean, the aircraft itself, it’s not going to happen. We’re not there, yet.
[23:41] Sean: That’s completely fictitious, right?
[23:43] Cassidy: Yeah,
[23:44] Sean: But I guess, back to the hot sauce, we’ll definitely include a link in the description for any listeners to find your hot sauce. But you had mentioned on Walmart marketplace, you can search for Mach 1 and find it there?
[23:56] Cassidy: Yes.
[23:57] Sean: Okay. That’s called M-A-C-H.
[24:00] Cassidy: Yeah, yeah, yeah. M-A-C-H 1.
[24:02] Sean: One thing that I commonly talk about with budding entrepreneurs is the idea that entrepreneurship is very diverse. It’s not this one singular idea of just starting a business, period. I can break it down into a dozen buckets, but for me, some of the big buckets are there’s lifestyle entrepreneurship versus high-growth tech entrepreneurship, completely different types of businesses.
[24:30] Cassidy: 100%.
[24:31] Sean: Then, you have, obviously, B2C and then B2B, completely different in many aspects, from go-to market to operations and whatnots. And I think a lot of people don’t have clarity or they were never told or mentored on what kind of entrepreneurship is the best fit for them. And so, they go into entrepreneurship thinking they should be doing this B2B high tech, when they just really want a hot sauce business.
[25:04] Cassidy: Yeah.
[25:05] Sean: And it’s something that, some people, I feel like, get lucky. I feel like I got lucky. I fell into the right kind of entrepreneurship for myself. And I think for you as well, and I think we fall into it, because it originates from a passion.
[25:19] Cassidy: Yes.
[25:20] Sean: Versus originating from just a pure desire to start a business for the sake of starting a business sort of thing. And you’re meeting a demand, right? Because people are interested in your hot sauce. And so, I think that’s, in my opinion, the best kind of entrepreneurship. Are you doing this alone?
[25:36] Cassidy: The other co-founder is my wife, believe it or not. And her and I are a dynamic duo crack team. Couldn’t have done it without her. It’s hard to express it, other than saying that we wouldn’t have the product that we have now without her input along the way of trying the hot sauce. Like, what’s it missing? ? It was her idea, like, “Hey, we should really do tomatoes instead of this.” Little things here and there. I will say that I do take care of a lot of the business aspects of it because it is something that I’m professionally trained in, but it’s something that I enjoy doing.
So, her and I are the ones that really created it together. And we went into it together. So, we’re both, it’s 50% owned by her, too. And I wouldn’t change any of that.
But I would like to just go back for a second and completely agree with what you were saying about entrepreneurism, because I think a lot of people do really miss that. It’s like there is different types. And I remember reading this one case study at Haas, where it’s like these two gentlemen created this mobile washing service, where all your dirty laundry goes in one bucket and then they pick up that bucket and they dry-clean it, and they bring it back to you. And it was finding a lot of traction.
But they ended up going out of business, because at the end of the day, they realized they didn’t really want to do that business. They started it, I think, more of a proof of concept. And then, when it started to become successful, but it had challenges, they just folded. But that really stuck with me, that concept of, is it really more of a lifestyle? Is it really more of just you want to be a unicorn? And for me, personally, I just don’t have a lot of sympathy for go, go, go, raise capital series funding, just to say that you did, but at the end of the day, you don’t even have a prompt. Everything is still theory.
And I just think the whole thing is a scam to me. This is me. This is a Cassidy Nolan opinion. It’s totally fictitious. You don’t even have a physical product or concept. And a lot of people are just chasing a title.
[27:38] Sean: Yeah.
[27:39] Cassidy: And I’m much more. And it’s hot sauce. So, I’m sure you’ve heard Porter’s competitive strategy, like low barriers to entry, relatively low barriers to exit, like this is going to be a slow, incremental growth. It’s a volume game. This isn’t something that you could really have tack on a high price to it.
And that’s okay with me. The biggest joy that I have, personally, is when people try it and they’ll be like, “That’s really good sauce. I really like it. Can I buy another one?”
Yeah. Does the name Tom Frainier ring any bells to you?
[28:12] Sean: No.
[28:13] Cassidy: I’m going to out him really quick, okay? This gentleman has had such an impact on my life in more ways than I can explain. He went to Haas as an undergrad, graduated, and then took his first job in finance at The Clorox Company in Oakland. And then, they paid for him to go to get his MBA. And he got his MBA at Haas, but he was under contract. And he worked there for 10 years. And he made it to director, which is, that’s a big deal. As you know, being a director is a big deal.
On the second day, he quit because he technically fulfilled his requirements. And he quit. And he’s like, “I was making $80,000 when $80,000 was $80,000.” Now, this is back in the ‘80s, ‘90s. And he was in free fall. He didn’t know what to do. And his brother and sister-in-law had this baking company called Semifreddi’s in Redding, California. And they were just working in a small little shop.
And he’s been doing that for 35 years. And he came into one of our classes as a guest speaker I took an entrepreneurial class with Peter Molloy, who is a co-founder of Sabra Hummus Dip. He came in. And obviously, it’s a bread company, so he let everyone gave everyone a loaf of bread.
His story was like he was so anti just this corporate America thing, and not in a bad militant way, but more of find your passion. And he didn’t grow up in a restaurant. He never baked before. But when he started just doing something that he’d never done before and he’s like, “Man, I really enjoy doing this.”
I reached out to him on LinkedIn, and I said, “Hey, Tom, I don’t know if you remember who I am. Why would you? But I was in this class with Peter Molloy. And you came in. I was wondering if I could talk to you.”
I’m currently working at Clorox myself. And he just was like, “Yeah, come on through.” And we toured the facility. And he had so much passion on the bread. And he’s the owner of this multimillion-dollar company. It’s that kind of person, that entrepreneur. And it’s like it cost him a lot. He told me, there was pretty high price to pay, personal relationships and this dogma that you got to live with. But he absolutely gave me so much motivation of like, find something that you like to do, even if it’s off the beaten path.
[30:29] Sean: Yeah. And I think, to tie back it to first-generation immigrants of sorts, it’s very fitting, in some ways, to come to America, of all places, and start a business. And I remember this wasn’t too long ago, probably about five or seven years ago, one of my good friends from France… and a lot of people I talked to who are not from the U.S., they really admire the entrepreneurial spirit in the United States. And I couldn’t understand why. I was like, “What’s so different here?”
[31:05] Cassidy: Yeah.
[31:05] Sean: And one of the things he said was just the amount of community and support that you can find here, people who are just really interested in helping each other start small businesses and things like that. And then, beyond that, another thing I never thought about is just the size of our market. We have, I think, I want to say, the fourth largest population in the world. Maybe, the third. I think the third largest population in the world, 300-plus million, right?
[31:37] Cassidy: Yeah, behind India and China.
[31:38] Sean: But we have such a huge market, readily assessable market.
[31:42] Cassidy: Yeah, how interesting.
[31:46] Sean: Yeah. And again, there’s the infrastructure to support that as well.
[31:50] Cassidy: Yes. I’d say, culturally, we are very much a free market society. And that’s the reason. If you think about ingenuity and with that you have us creating the internet, right?
[32:05] Sean: Yeah.
[32:05] Cassidy: Electricity.
[32:06] Sean: A lot of things.
[32:07] Cassidy: A lot of things. And I think it’s because of our culture. And absolutely, like you said, though, there’s so much infrastructure that really props it up. But you have loans and if you file right for your articles organization, there’s no debtor’s prison anymore, more or less. I’m sure we can make an argument. So, I think our culture really focuses a lot on entrepreneurial aspects.
[32:34] Sean: So, I recently finished Einstein’s biography by Walter Isaacson. And one of the quotes that just stuck with me is that he said the development of science and of the creative activities of the spirit requires a freedom that consists in the independence of thought from restrictions.
It was just so interesting that we, obviously, as a nation, we really care a lot about freedom, but the implications of that freedom is what fosters the creativity. And I just think it’s amazing. It is really amazing to be here and be able to start these businesses. And I say that because I live in Orange County.
[33:15] Cassidy: Love it.
[33:16] Sean: And this is considered the suburbs. And you’re in Sonoma, right? And these places, if you look around, you’ll find so many businesses. You’re like, “You do what?”
[33:26] Cassidy: Right, yeah.
[33:27] Sean: And surrounding me, there’re just thousands of warehouses. And I would drive by with these signs of names I’ve never even heard of. And I’m like, “You clearly make enough money to have this massive warehouse here.” And it’s just crazy. And it’s amazing.
[33:44] Cassidy: Yeah. I really like that. I can’t remember how much of our economy is propped up by small businesses. I know it’s more than 50%.
[33:53] Sean: Yeah. And I think what you’re doing and you’re thinking behind it, too, it’s something I resonate a lot with. I had come out of Haas and tried starting a tech startup. And it was challenging. It was tough raising the money and doing all that stuff. But it did bother the heck out of me that, whenever we tried to think about revenue generation or making money, we’re discouraged from it. We’re just like, “No.” Because those B2C, they’re just try to get as many users as possible, it’s not about revenue generation at this point.
I get it. There’s reasons for that. And it works for certain types of companies and startups. But did it resonate with me personally? It did not. To this day, my most successful businesses have been because I focus on solving a problem that people want to pay money for. To me, that is the ultimate validation. When somebody gives you a dollar for whatever it is that you create, there’s no greater validation than that.
[34:52] Cassidy: In your opinion, what do you think are some of the biggest pitfalls that a lot of graduates are not seeing right now when they’re graduating? Do you think that they’re filled with grandiose things of, “Okay, you just graduated. You got your MBA. Now, go start a fintech, healthtech startup, go crush it,” but they’re not really looking at what you’re talking about is this passion, though, like this viable product that at the end you know?
[35:19] Sean: Yeah. I think it goes back to some of the fundamentals I’ve learned over the past 15 years for me. To me, entrepreneurship is about problem-solving at its core. You have to be solving a problem. It’s not starting a business for the sake of starting a business. And what I tell people is it’s a mindset to be in a problem-solving mode, because a lot of people I meet, they complain about things. Everybody complains about things. But the difference for an entrepreneur is that, when you encounter a problem, you don’t just bitch and moan about it. You wonder.
[35:56] Cassidy: Yeah.
[35:57] Sean: “Is there an opportunity here?” Because every problem is an opportunity. And then, I learned over the years, there’s a couple questions that we should be asking ourselves. One is, how big is this op? How big is this problem? How painful is it? Another question I ask is, am I suited to potentially go solve this problem? Do I care?
[36:19] Cassidy: Right.
[36:20] Sean: If you’re telling me tomorrow, like, “Hey, let’s go start a bleach cleaning business,” I’d be like, “No, thanks. I don’t care.”
[36:27] Cassidy: Yeah, because you’re not going to have that passion to get you through the winter months.
[36:32] Sean: Exactly, exactly. And then, some other questions of, are there existing solutions? And a lot of times, there are. But that’s not the important thing, because the next question following that is, are they good solutions? Is there a potentially better product I could make? And to your point, it’s like hot sauce. You’re not reinventing the wheel here, but what else are people demanding that may be different — pairings and things, things that people are just…
[36:59] Cassidy: Flavor, that’s what they’re missing.
[37:01] Sean: Flavor.
[37:02] Cassidy: Flavor.
[37:03] Sean: Other than the straight-up spice, right?
[37:05] Cassidy: Exactly. So, here’s my plug, is, I think that a lot of people want to have a hot sauce, but there’s a dichotomy that exists between either it has flavor but there’s no heat or it’s just complete dry heat and there’s no flavor. And I really believe that we created a hot sauce that can pair with your food because it has a lot of flavor upfront. And then, the heat rolls on in the back, so you can still have your food and not have it be overpowered by the hot sauce.
And like you said, the greatest feeling, the biggest dopamine hit is when I’m doing a demo at a grocery store and this one gentleman in particular tries it, walks away, and two minutes comes back, and he says, “Hey, where can I find that.” Like, it took him that long for his brain to process it. And he was like, “That hot sauce is amazing. And I really want to buy it. And I want to buy it right now.” And I said, like, “Let me show you the aisle.” I said, “What are you making?” He’s like, “I’m going to make fajitas tonight, and I just know this is going to pair really well with it.” And I was like, “Perfect. Got them.” You know what I mean? That’s exactly what I wanted to hear. He’s already got a meal planned out. He could already envision this hot sauce going well with it.
And I love that feeling. I love it when they say that. And obviously, they’re buying it from the grocer. So, the grocer has their own markup. So, I’m happy when the grocery store buys it.
[38:28] Sean: Yeah.
[38:28] Cassidy: But what we do differently is we roast our peppers. And that is something that you can find out in the market, but the amount of vegetables that we roast, and this is me coming from a culinary background, creates a lot of caramelization that occurs. So, you get a smokey, sweet, hot sauce without any added sugar. We don’t go a cheap route, so there’s no powders or stabilizers or preservatives.
I think a lot of people can taste the difference. It does mean that it’s a more expensive hot sauce relative to our competitors, but it’s also not completely on the high side where it’s as expensive a trough of $16. You can find it for $9.
[39:10] Sean: Yeah.
[39:11] Cassidy: But I’m never going to win against Crystal or Tabasco or Tapatio where that’s…
[39:16] Sean: You never know. You never know.
[39:19] Cassidy: Well, they’re on the lowest. They could sell a bottle for $2.99. Now, you always want to have your big hairy, audacious goal. Maybe, in 20, 30 years, for sure. Absolutely, maybe going to be I’m able to create volume.
[39:34] Sean: I will say, it’s so crazy that, obviously, before knowing different hot sauces, for me, I was like, “Oh, yeah, Tabasco.” And then, after I learned about Cholula, like…
[39:45] Cassidy: Because it’s what your parents grew of. Hot sauce is a transitionary good. I’m going to nerd out again. Something I really enjoyed from my marketing class at Haas, the case study was about Safeway and Safeway’s organics product line and understanding things. And the term that I remembered was transitionary good. What is a transitionary good? Hot sauce. Hot sauce is a transitionary good, because when you’re 12, 11, 13, 15, the only hot sauce that you’re having is the hot sauce that your parents bought in. And that’s in the fridge, right?
[40:21] Sean: Yeah.
[40:21] Cassidy: Like, that’s it. Maybe, whatever hot sauce is at a restaurant. And even then, the restaurants are only going to buy hot sauces that are typically the cheapest because they have to refill it the most, right?
[40:29] Sean: Hmm.
[40:30] Cassidy: So, I learned that hot sauce is a transitionary good because you’re only, as a consumer, are going to really start looking at what hot sauce you want to have when you’re 17, 18 years old and you’re going to college or you join the service or whatever and you don’t have a lot of money but you want to have something that’s going to change the flavor profile of your food for relatively cheap, right?
[40:52] Sean: Yeah.
[40:53] Cassidy: And then, it becomes an embedded product and you have strong customer lifetime value or loyalty, because that person will associate that hot sauce with this certain particular time with friends or a dish or whatever.
[41:07] Sean: Yeah, I see what you mean.
[41:09] Cassidy: And then, they stick with it. Hot sauce, because it’s that kind of thing, like, you want to be able to sell to a younger audience because that’s what’s going to be the biggest thing down the road.
[41:22] Sean: I love it. Well, Cassidy, is there anything else that you want to mention that we didn’t get a chance to talk about today?
[41:29] Cassidy: Follow your passion. Everybody should watch the 2005 Stanford commencement address by Steve Jobs that I probably… if there’s 15 million views on it, I’d probably account for 500 of them. If you haven’t watched it, Sean, I implore you to watch it, just like his points are absolutely phenomenal. And you can never connect the dots looking forward. You can only connect the dots looking back. The classic quote, “Stay hungry, stay foolish, and do what you love.” And I think that, if you have those three understandings, guiding principles, you will be successful and you will find happiness. And don’t ever just settle for something that you think is less than yourself. That’s it.
[42:11] Sean: I love it. Well, thank you so much for coming on the podcast today, Cassidy. Really enjoyed having you here.
[42:15] Cassidy: I appreciate it, Sean.
[42:23] Sean: Thanks again for tuning in to this episode of the OneHaas Podcast. If you enjoyed our show today, please hit that Subscribe or Follow button on your favorite podcast player. We’d also really appreciate you giving us a five-star rating and review.
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OneHaas Podcast is a production of the Haas School of Business and produced by University FM. Until next time. Go, bears.