Vino Jeyapalan from Kabo

Sam (00:02): Vino, welcome to be on the inbox. Thank you so much for taking the time to join us.

Vino (00:07): Thanks for having me. Excited to chat.

Sam (00:09): Can you tell us about your background and how you got started in the pet snacks and treats market?

Vino (00:16): Yeah, so definitely didn't grow up wanting to be a veterinarian or nor am I any animal health expert in terms of official background. My journey into this whole world of direct to consumer and pets really started with the background that my brother and I had where prior to Facebook going public, I was this 20 year old studying medical sciences and university dropped out because I had this opportunity to join Facebook at a very early time, being 20 years old and really spent the next five years at a very pivotal point where Facebook was really building this great ads engine as we know today, love and hate, and getting to see the first time where on the internet we could truly identify people. Prior to Facebook, we weren't really telling our age, our background, where we lived and sharing all this data. And now here I was as a 20 year old working on the ads platform from newsfeed to Instagram ads to DPAs, anything that we see today and really get infatuated with the fact that you can reach this broad audience, you can provide something that's really targeted to them.

(01:25): And of course we worked with brands and built products for the SaaS side all the way to B two C, but it was really that direct to consumer side that caught me right when you saw a guy like me who can grow a beard pretty fast and realizing there's a company that has this warehouse out in Buffalo and shipping razors directly to people's doorstep and watching brands like that Dollar Shave Club take advantage of this ads platform in terms of targeting the right people, presenting the right message at the right time and being able to disrupt the way is by providing a bit more convenience or a new solution. And more and more, I just kept getting hooked on the fact that consumer products is this great opportunity for me to kind of spread my wings and drive a bit of that entrepreneurial spirit. And as I mentioned, both my brother and I, who's my identical twin, we're working at Facebook together, we're really working on the D two C retail on a global scale at Facebook.

(02:26): And after a while, once Facebook does build itself, I don't think they need really myself there to sell that product as we know today. And we saw that opportunity for us to start to build our own brand and take the lessons of what worked, but most importantly, what we found that didn't work and apply it. And that's where both our personal interests of an infatuation for pets and this need to disrupt this daily ritual of what we put in their food bowl every day came into place where when we launched Cabo, the goal really was just to make mealtime for our pets a little bit easier and healthier by providing this convenience that we saw on the human food side and this direct trend that we saw towards fresh eating and the humanization that we have towards our dogs.

Sam (03:13): There's a lot to unpack that I think. I want to start with how did your job at Facebook help inform your approach to marketing and growth at Cabo?

Vino (03:22): Yeah, I'll say when I joined Facebook's audit practices weren't the best. So as an employee, if you're a curious 20 year old and you want to learn, I learned a lot about the auction. I learned exactly how things are ranking, how the ads are changing, how user sentiment was balanced. Because really in these auction environments, what you're really looking at is you have this giant population of people. You have an ad being forced into an organic feed and you're really trying to figure out what works. And you can hear all these podcasts, what people talk about, creative and comments and having certain number of likes or shares. And here I was with the entire formula on the other end and really trying to figure out how these other brands that weren't making it work could make it work. And watching and applying it in a way where I'm taking zero risk.

(04:10): So when you watching a brand like Casper being able to try and reach a broader audience or using new tools that we build lookalike audiences, it was great because I got to be in the nitty gritty of it, help them execute it and work on these kind of campaigns. But I had zero risk, right? I'm not the entrepreneur here and I even got to spend eight months in China, spent some time in Singapore and really took these concepts that we build at such a micro scale as like an alpha beta. And for those who don't know, whether it's Facebook or TikTok, the number one thing I always suggest is get into an alpha or beta program because these are new products that are being built that haven't been touched by anyone and has this great reach potential. And I think for me that's really what it was.

(04:53): It was this opportunity to run with these products and most of my focus was around this cross border advertising globalization, and it was these small nuances that I would pick up on where countries like Malaysia has, or Southeast Asia, you see this growth in middle income households. And what's interesting is the first thing they're getting is a mobile phone. And the second thing they're doing is maybe buying a couple drop shipping products here and there because of this free income. And then in the Middle East it was a little bit different. They don't have access to a lot of the beauty products, let's say we might have, and they have a higher average order value and they're willing to take customs and duties. And you started seeing these trends and I think that was the interesting takeaway on the Facebook side was not only how this ad auction works or how these ad products are being built or where the focus is, but really the application of it because we actually work with these brands who were the first movers on it and seeing how they take advantage of it, why it works, and most importantly seeing why it doesn't work.

Sam (05:55): So you have this realization and you decide to go into this market. Tell me about launching your first product and what your go-to marketing strategy looked like.

Vino (06:06): Yeah, I think starting cavo and getting into the world of dog food delivery was definitely not easy. I think of course it's so much easier being the guy on Facebook behind the scenes zero risk and helping these brands, but once in a while and not really being part of the day-to-day. But really when we started Cabo, it was, I'm not like heads all in kind of entrepreneur. It was a very risk approach where for a year we still had our full-time jobs. We were talking to scientists formulating the first recipe we wanted and working our evenings and weekends. And when we did finally incorporate the business in January, 2019, our approach was fairly simple. We're just going to develop one recipe and see if we can get 30 people to purchase this product and keep coming back. And a big focus around what we wanted to solve was around a daily reoccurring ritual because building a business that has a high retention allows us to not focus so much on paid acquisition as we've seen that can be the downfall.

(07:07): Ironically, from running hundreds of millions of dollars of other people's money, we really wanted to be a part of someone's daily loop. So when we started, we did all the most unscalable things. We actually didn't even touch pit acquisition for the longest time. We just went on Instagram, searched hashtag Toronto, hashtag dogs focusing on one Canadian city and just started DMing literally hundreds of people. The conversion rate was not great. Obviously when a random guy messages you on Instagram trying to sell dog food, I don't suggest you go with it, but we were able to convince 30 people to do it and it really gave us the feedback around what works in terms of the messaging, what resonates because we had this premise that this fresh diet can help dogs live a longer and happier life and here's the research. And then we also knew that it makes pooping for the dog easier and it's less poop for the owner to pick up.

(07:57): And we wanted to figure out from us doing these unscalable marketing approaches, what message actually resonates? And the truth was is poop resonates more than scientific research. And that was great because it allowed us to say, okay, there is something that can help the customer to be a little bit more educated on why they're switching. And then on the other end, a lot of the early days of building up that pet food business was trying to figure out can we make the contribution margin work with the delivery, the production and everything. So we see an opportunity to scale it.

Sam (08:28): There's a lot of great takeaways there. There's something so scrappy about manually reaching out to people and asking them to buy your product. I imagine that's a very vulnerable thing to do.

Vino (08:38): Oh yeah, definitely. I think you got to really set aside the ego and go for it because even to this day we still have that approach where whether it's a new customer that comes on board or a cancel customer, we still have this approach of manually reaching out. I still do deliveries once a month and actually meet the customer and drop off the food and get to know. I think that that part in consumer product, I think that's really, really important. You need to have this connection to the customer. And we see it even now more so than ever where if you're running ads, it's less about how fancy it looks, but more around the founder story and the why. So I think that's always going to be a core part of our culture in terms of how we learn and grow. Because to this day, we now not only do freshly cooked dog food, we have dry, we're constantly trying to figure out different product forms that suit the owner's needs as well as the dogs.

(09:33): And then that's what also drives a lot of our innovation for our retention. Customers going to love getting the same box over and over again, and sure it solves their problem, but we all have subscription fatigue, so we want to be innovative, we want to drive a sense of community and from talking to our customers, that's how we developed our mod bar, which is like a protein bar for dogs, think about it as a cliff bar, but a dog version of it. And it came from us just talking to customers during the pandemic. And of course anyone who had a dog was the only one allowed outside in Canada at that time, and they'd be going on hikes and they'd be worried that the kibble that they're using actually dehydrates their dog, which is true. So we're like, okay, why can't we make something like a cliff bar for dogs?

(10:15): And I think our scientist is, Andrea has been absolutely phenomenal at taking all my crazy ideas from pizza for dogs to protein bar for dogs, but a lot of those kind of initial premises come from the customer. We then do a bit of email testing in terms of getting their feedback and then get a pre-orders going and then develop an M V P. And then if we find that there's this cohort that's interested in having this product, then it allows us to invest more and more and build it into the core of our brand. And that all just starts from putting yourself out there and talking to people.

Sam (10:50): I love hearing stories like that because I feel like it goes against the grain that's often taught in traditional entrepreneur books about if you want to scale, you have to delegate and so on. And I understand that is important, but I feel like that's something that comes up with a lot of e-commerce founders. I speak to. My question for you is how do you strike that balance between delegating and growing in your role as a founder, but also still having that face time with customers?

Vino (11:17): Yeah, that's definitely a good question. I could definitely improve on the delegating piece, and I think in hindsight you always look at it and you're like, oh, I should have definitely delegated this or moved from it. But a lot of it just comes down to reflection. I think it's okay to make that mistake. I think a lot of the times when entrepreneurs come into the space, we're all like operators. We all have a specialty and my background and paid acquisition, of course, I want to sit down and run all the ads. Luckily I have an identical twin who's also great at that. But the big piece for us is to think about process. I think when we look at what's really worked for us in the past is it's okay for us to jump in and do something like deliveries, running the ads, like running these partnership campaigns that we might do with other brands.

(12:03): But the most important thing is there's going to be always a ton of things on your plate, and it's all about time management, what makes the largest impact. And I think when I look back at things that have given us the highest contribution towards the business, whether it's growth, whether it's margin development, whether it's retention, whether it's team satisfaction, a lot of that has come from us identifying a problem, getting our hands dirty and executing. I think that's really important as a founder. But then as well most importantly, figuring out, okay, now how do I scale this and delegate it? And I think it is hard to just completely pass it off. And what I found just works for me is I'll just whip up a Google Doc, try and put together an S O P A standard operating procedure around that. And even if I find it hard to write into words, I'll just record myself and then put it into a Google Doc. And even if I don't pass it off to anyone, taking that first step of documenting what you're doing is a big, big kind of lever towards allowing you to pass it on to someone. And I think just getting into that habit allowed me to be a little bit more ease in terms of delegating things and passing it off and having a bit more comfort.

Sam (13:14): We're big fans of SOPs here at Drip. One of my favorite books is Built to Sell. Have you read that book?

Vino (13:20): Yes. I love that book.

Sam (13:21): Yeah, me too. That's a great book. I want to switch gears a little bit and ask you about, actually let me run up to this question in a different way. In the first episode, I interviewed Aaron Powell from Bench Bikes and he talked about his experience of going on Shark Tank. Now I know you've been on Dragons Den and I wanted to ask you how it impacted your journey with Cabo.

Vino (13:42): Yeah, so Dragons Den is a great platform depending on when this podcast is released. They're still doing auditions, actually. They're probably doing the taping for the upcoming season. One thing I love about it's, it's a community. I think it's a place where entrepreneurship comes to be. It comes to life on tv, whether it's Shark Tank or Dragons Den. What they do is highlight these stories. And for us, when we were building our business, we knew that in order to be the number one Canadian fresh dog food player, we really have to get our message out there and we really needed people to back us around it. And looking at the consumer product side, yes, of course we went to institutional venture capital and actually ended up turning down pretty much all the institutional venture capital offer. We really looked at Dragons Den as this platform where one, we can actually meet investors that understand this space, have worked in this space because everyone who's watching our tanker Dragons den knows that consumer product businesses are definitely highlighted a lot more on these channels.

(14:44): And then two, it is a great platform to reach tons of people who are probably first movers or adopters when it comes to new products. So when we were applying and auditioning for it, it was actually in January, 2020, we got into the audition and listed, but then because of Covid, it got canceled. And at that time we were just actually expanding out of Toronto into Vancouver as well. I was stuck there for quite a bit of time. And then when I got back in July, August of 2020 back to Toronto, the film industry was just getting back into things and dragons and said, Hey, listen, we're just going to try and do it this month. Let me know if you guys are free in two weeks. And we said, of course. And we went off to the races and the focus was right away of like, okay, how do we get our product during by the time this airs in October across all of Canada, so when people are watching this, they can purchase it. And two, how do we actually expand off of freshly cooked food to provide a dry diet as well so we can use this audience and really leverage it to grow our business.

Sam (15:50): It's such a journey to go from DMing people on Instagram to being on national television, presenting your multimillion dollar business to the Dragons.

Vino (16:02): Oh, yeah, yeah, that's definitely a big jump. But I think when you're in it, it's just day to day and you don't really get the nerves once you're there. And I think a little secret between us and the listeners is my brother and I had a couple shots of tequila before getting on the final shoot. It's a 45 minute to and hour shoot for each actual audition that kind of makes it through and does the pitch, and then it gets whittled down to maybe a five to six minute segment if you're more on the featured side. So if you always notice in these shows, there's a little bit smaller ones, and then usually the one at the end of the episode has a bit more of a highlight. And our goal leading up to it was just like, how do we prep as much as possible?

(16:46): We literally watched every episode of Dragon Thin. Again, we talked to people who've been on the show, we rehearse constantly. And then a little bit of tequila helped us get into the flow of things. And after that, it does provide a huge amount of impact. I'll always tell people that following us being on that show, it was like a three x month over month in terms of sales growth and we are ready to take on the capacity, and most importantly, we have the distribution in place. And I think that's where I saw a lot of other people in similar situations not be able to take advantage when you don't have the ability to reach everyone across the country. And I think distribution is key to growth as well. So these kinds of opportunities when they do come in line, do a lot of prep, of course, understand there's a lot of upside around it even if you don't get the investment. And then three, I think it's just like you got to enjoy the moment and that's when the tequila came in.

Sam (17:43): I love that you mentioned distribution because you and I were talking in our pre-interview and I want to ask you about PAC Freshs, how it came about and its role in carbos overall strategy.

Vino (17:56): Yeah, yeah, definitely. So PAC Freshs is our cold and frozen three PL service that we provide to other direct to consumer business, to the brands to distribute across Canada. And really the way that came about was as we were building Cabo this fresh frozen dog food brand, the reason they didn't exist before is because distributing a frozen product or a fresh product is very difficult. But as we've seen literally over the last five 10 years with brands like HelloFresh and ready to eat meals like Lifted Foods, it made it easier for humans to get it. So we wanted to build the infrastructure for us. And what that meant was really developing these fulfillment centers around these core hubs in Canada, like British Columbia, Alberta and Ontario, where we have anywhere from a 5,000 to 10,000 square foot freezer gets to up to minus 45 degrees Celsius, which is pretty cold.

(18:51): But as we were growing, what was always difficult for us as we did this on the Cabo side of the journey was the investment of it. And I think as an entrepreneur, regardless of how much money you raised, yours going to be like, I don't know, $200,000 and building a freezer and doing all these things, should I just use a three pl? Should I just do it myself? Will we get enough volume in this region in British Columbia? Should we just wait until we get enough volume? And I think that always delayed us because what we realized was once we developed these fulfillment centers, our reach became phenomenal. And I think that when you think about growth, really the key thing is how do you reach more people? So you need that infrastructure. And when Pac Freshs really came about, it was last year when we saw the financing market dried up, we saw a lot of it, especially on the D two C side pull back.

(19:39): And we had a lot of people in the human food space as well as the pet food space that were in the fresh, frozen, and even on the dry side that were saying, Hey, listen, we need to find a freezer or we want to expand to bc, do you mind if we just put a pallet of our food in your facility? And over time we saw this concept where these guys are going out trying to raise money to build the exact same thing we've built in BC or Alberta, and we have the space we can increase the utilization of it and help us cover this opex of a warehouse cost while actually taking in this ops tech that we've built around Cabo fresh food subscription business to support something like a fresh human ready to eat meal company or a ramen business or an ice cream business.

(20:24): And the more and more we kept talking to our friends, we said, let's give this a try. And last year we rolled out PAC Freshs of the subsidiary brand under the Cabell Labs entity. And what we are able to do is leverage this operational arm that we've built as well as our ops tech arm to integrate something like a Popsicle or ice cream brand that wants to expand, let's say BC or Alberta and truly provide them a third party logistics experience and fulfillment experience that they don't get. Because if anyone's worked with any type of warehousing company, the biggest issue is they don't understand what we go through. I think the thing that we found that works really well operating this supply chain business if running a dog food business wasn't busy enough, is that I think we really empathize with them. So for instance, we can do order cancellation right up to the delivery point because we know customers change their mind even though we email them a million times to change their orders in advance, but they'll do a last minute, or we'll be able to provide better last mile logistics options where we're able to ship a 15 pound frozen box for $4 instead of going through a federal courier for $12.

(21:36): And we use our group buying power to say, alright, we all need insulation because we're all frozen products. Why don't we buy it together and get a cheaper rate? So I think running this frozen gold chain through PL business has really allowed us to almost build this Avengers group of food brands that can come together, reduce their cogs and provide a better experience for the customers. And as we go forward now we're expanding into more micro fulfillment centers to reach audiences like in Montreal, Atlantic Canada and really focusing on distribution across Canada for other brands.

Sam (22:12): I love that. I love how you solved your problem and similarly problems for other companies as well. Another problem that a lot of e-commerce brands face is growing their website. And something I really wanted to ask you about which came up in our pre-interview is acquiring other websites as part of your marketing strategy. You acquired dog breeds list.com, and I wanted to ask you, what was the thinking behind that and how are you using it to grow your website today?

Vino (22:41): Yeah, that's a great question. I think the way we always look at it's whenever you're thinking on the growth and the paid side, where does that dollar go and does it continue? Right? And for us, I think what we saw was interesting in the pet world is pet owners are constantly searching from the moment that they're not even a pet owner, right? They're always looking for a dog that maybe doesn't bark right? You're googling and researching that. And our main concept in the thinking about online growth for your site is really around how do you just touch that customer prior to that moment of purchase? Of course that the intent to purchase is always going to be the highest looking for a new mattress, you're going to want to purchase a mattress, but it's very hard to identify someone who needs a mattress before they have a mattress.

(23:24): But it is a lot easier on the pet side because we're always making these indications of what do I look for in a dog searching for shelters or adoptions and dog breeds. list.com was just one of our affiliate partners. And I think what we love about the affiliate side is we get to talk and engage with them through maybe more of a traditional paid partnership, right? They're doing a list on the best fresh stock for delivery options in Canada. We're listed on there. We share a bit of that revenue or give him a C P A, and that allowed us to build relationships with a lot of these affiliates. And this was just one of those affiliates where he built this business very early on in WordPress and had a great Google rank and said, Hey, listen, I'm actually thinking of selling this site. Do you mind if you give me some sales data so I can use it for my sale?

(24:12): And I said, okay, well, this is a great opportunity for us to potentially take on that role. And I think the reason that it's important is because you kind of want to compare it about putting $10,000 into Facebook versus buying a site for 10,000 that Facebook sure gives you that return, but it doesn't continue ongoing. Whereas Dog Breeze list was great in terms of ss e o rank when someone wants to learn about German Shepherds or Bulldogs. And for us, we really channel it as an education platform for us, and we use email to continue to nurture that audience until they're at a point for purchase. Excuse me. I'm also losing a bit of my voice here, but as I was saying, I think what's really important is when we're capturing that audience, we're not going into a direct sale. It's like, how do you continue this educational journey through email? And then eventually when they're at that point of conversion, we have enough touch points there where we can present our Cabell products, so it's a bit more natural.

Sam (25:08): When you bought the website, did you buy that email list as well? Did they have an email list or was that not a priority for him?

Vino (25:15): Yeah, they didn't really have an email list. That business was primarily onsite affiliate as much as possible, but we did optimize a lot more on the email list side. Also, the sale of an email list can be a bit difficult depending on the country and stuff, and in Canada with Castle and everything. So for us, we didn't see it as much of an opportunity because there wasn't as much of a focus in the beginning, but it was a big piece because we don't want it to be something where you're just acquiring the site and you're just plastering it with nonstop sales for Cabo. So email was kind of a big focus around how do we navigate them from here's a blog where people just read content, how do we use email to navigate them to get back into that blog again and find another piece of content that they like, and they should be able to naturally find these touch points within the blog that bring them to Cabo, and then for Cabo, then tab that opportunity to make that sales separately.

Sam (26:12): I popped Cabo into a refs before this recording, and I saw your ranking for some really interesting long tail keywords, like how long can dogs hold their pee and how to cook chicken liver for dogs. And I love how you're using content, and I'm curious how content fits into the overall marketing strategy. Aside from everything you mentioned, are you using it also to grow your email list, or is it more of a nurturing mechanism for subscribers going through your email flows? I have so many questions, but I'll turn it over you.

Vino (26:43): Yeah, it's twofold. So it's definitely used to nurture our audience. So our audience always wants to be educated. So when we think about email, it's a lot of education for the customer. And what's the best way to figure what people want to know is through these, as you said, long tail keywords, understanding what people are searching on Google. So we do find it's an opportunity for us to educate them. I think what's always very difficult is we have to play around with segmentation because it's hard to predict what people might want to engage on an email versus not. And then the second full part of this is really on the SS e o piece, right? As I've mentioned on our organic side, we're driving up to 30% to 35% of our sales and new customer sign up through organic search. And that's a big piece.

(27:30): And for us, our scientist plays both a role as a scientist and as a growth marketer, where she really does the research to find out what are these things that people are searching on on the long tail side so that we can build out domain authority around and then start to evolve it. Because where it starts is really from us writing a blog post around what do you do when my dog eats grass? What does that mean for me? And then taking that and saying, okay, can we now go to a veterinary site or someone else and have them link back to it? And then the next layer is like, okay, now how do we add this to our email education flow for our customers so that they get a better idea of, or maybe specifically segment it to specific dog breeds that we know that will be a little bit more troublesome and eat grass and test it in that channel. And that way we really have this opportunity to bring people in that might not be looking for dog food, but are looking for an answer. And I think building that thought leadership is important as a brand. I think whether you're in the world of plumbing, whether you're in the world of dog food, all you want is your customer to really trust you. And that trust comes from answering their questions and solving their problems, and not necessarily on what you sell, but it could be things that are related to what you're selling.

Sam (28:45): Vina, we're soon coming to the end of the interview, add so many more questions, but I have two more for you. The first is, what does the future hold for Cabo? What are you working on in 2023?

Vino (28:55): Yeah, I think for Cabo it's as I mentioned, kind of twofold. We have our fresh dog food business where we're continuing to grow and we're still the market leader when it comes to fresh dog food in Canada. We want to continue to increase that dominance by introducing more core product forms beyond dry and freshly cooked to things like raw diets and new product forms. I think that innovation is key for us. We always want to be a solution for what goes into that dog food bowl. As we continue to also develop, one thing that we're kind of excited about is we're bringing a lot of our production in-house as we want to be a bit more agile with these kind of product development ideas, as I've mentioned from our protein bars onwards. So we're really excited to work on some new projects on that end that will delight our customers that we know that drives retention, that we know that drives that new customer growth.

(29:46): And then on the other side of it, with PAC Fresh, we're really excited to take a lot of the learnings we have that we've done with Cabo and help these other direct to consumer brands, whether they're coming in from the us, whether they're Canadian born, whether they're coming from outside. And I think what's really interesting there is by us developing this infrastructure and working as a group, there is a lot of this learning and it's great to see everyone kind of grow together. And that for me, always excites me when I get to see someone who's gone through something similar that I've gone through, and they can kind of avoid a little bit of that trauma that I went through in terms of building something and saving a bit of money. So I think both of those ends are really kind of the focus for us as we move forward.

Sam (30:28): I really enjoyed this conversation. I feel like I've learned so much more about this market, and I have a whole new perspective on the importance of distribution as well. My final question for, you know, is where can our listeners go to learn more about Cabo?

Vino (30:43): Yeah, they can definitely check us out on Instagram at Cabo Foods. You can also check out on our website@cabo.co and they can also find me on LinkedIn or Instagram if they ever want to reach out and ask questions on Vino Jr.

Sam (30:58): Perfect. Well, we'll put all those links in the show notes. And vino, I want to thank you again for taking the time to join us today and all the best in the future with Cabo.

Vino (31:06): Appreciate it. Thanks for having me.