Ira: 0:04

Hello and welcome. I am Ira Gordon and, along with Stacee Santi, the host of the Accidental Entrepreneurs Podcast. We each previously founded successful companies Along the way. We became business owners and eventually sold those businesses despite us having no real background in business or ever even planning to become entrepreneurs. In other words, we did this all despite originally having no idea what we were doing or getting ourselves into. In each episode of this podcast, we will share stories and tips from our journey and we'll answer a randomly chosen question about our experience. Let's jump right into the show. How have you been, Stacee?

Stacee: 0:42

Oh, I'm doing good and you were. I've been waiting to talk to you because I know you were recently at the Angel Capital Association meeting, or something like this.

Ira: 0:53

Yes, yes, they had their annual meeting and, as one of the co-founders of a veterinary angel group, we attended to try to learn more about how to best run groups or best practices for groups, as well as see what else is out there. Um, and it was a good meeting. Definitely, was surprised to actually see one veterinary company that was there pitching to angels. That wasn't, and yet that a veterinary oncology company, no less.

Ira: 1:22

So that was nice

Stacee: 1:24

Which

Ira: 1:25

It was Elias Animal Health, which has a product that is, I think, about to receive full approval for treatment of osteosarcoma in dogs. Very exciting stuff and uh, I mean it was great. You know it is funny that I kind of got into this idea of angel investing because I just really wanted to help entrepreneurs with, you know, building companies and sort of being involved in in the early stages of these businesses in this space that I know.

Ira: 1:59

But it's always interesting to hear these people that have been angel investors for a long time talk about the actual importance of angel investing for the economy and for the world and this notion that the vast majority of innovation comes from new and startup businesses. And new and startup businesses have no chance of succeeding without having an influx of money to help them to build whatever they need to build, and most of that money comes from angel investors. And there's a perspective that I'm not sure I totally agree with, but I love hearing about and makes me feel good about myself, that essentially angel investors are a critical and driving force behind so many aspects of a growing economy and even things like the public markets and stocks that are out there for everybody. Those things are ultimately the outcome of the money that angel investors put in there before anybody else was willing or able to do so.

Stacee: 3:04

That's super cool. And what was the venue like? Was it really ritzy?

Ira: 3:10

No, no, it was. It was very nice, but but nothing, nothing too crazy. It was in the beautiful city of Columbus, ohio.

Stacee: 3:19

Oh well, there you go.

Ira: 3:22

Nothing wrong with Columbus. I spent a full year there as an intern at the Ohio State University, and so it's nice to go back and it was a very nice meeting so funny.

Stacee: 3:33

All you people say the Ohio State University. I have friends that went to vet school there.

Ira: 3:43

Yeah, it gets, it gets ingrained in you and for a while and I think I'm still at this for a while stage, like you say it, because you think it sounds funny and it does sound funny and then you said it because it sounds funny. For so long that it just becomes the way you say it oh my gosh.

Stacee: 4:00

Okay, so Ira, we're on the tail end of the season. We have three more episodes left. How are you feeling?

Ira: 4:07

I feel like it's been a very interesting season. We've gotten to cover a lot of ground, talk to some interesting people no one more interesting than you, of course, Stacee and it's been really fun for me. How about you? How are you feeling about it? And it's been, it's been really fun for me. How about you? How are you ?

Stacee: 4:25

Well, I'm feeling a little bittersweet. Like I do enjoy talking to you so much I I just find your, how do I say this, your sense of humor and your stories just always kill me, so I love hearing what you have to say on this and that. But I think we've had a really great season and getting to know your stories and hear some of mine things I haven't thought about for a long time. It's been really fun.

Ira: 5:01

Well, what is our question for today?

Stacee: 5:02

The question for today is how did you decide on pricing for your product?

Ira: 5:21

I guess I'll go first. So initial pricing was like we were sort of in a vacuum. We developed this online course to help people prepare for their board exams and there wasn't really anything similar. There were books that you could buy that were intended to be for the same type of benefits, and we looked at the pricing of those things and we thought we shouldn't be an order of magnitude more or less expensive than those. But we thought that was a little bit of a guide and as we looked at that, the books were anywhere from $100 to $200 for a set of books, depending on how deep you wanted to go into some of those things.

Ira: 6:08

And ultimately we decided on a subscription price of $149 for vet prep somewhat I don't want to say arbitrarily, but as an educated guess would be maybe a charitable way to put it. And then we just kind of had to take the wait and see approach to see is this going to be a price that you know veterinary students who we know have no money and are in debt and taking loans are going to say, yeah, we just don't have a budget for something in that price range. Or are they going to look at that and say, well, you know, I certainly can afford to not pass this exam and I need to study and want to try to get the best tools available to do it, and that seems like a small number in that context, right? So that's how we guessed and maybe we'll talk a little bit more about where we went from there. But I'd love to hear kind of how you decided to price things when you got started first.

Stacee: 7:05

Yeah, so I I had a weird way too. I was working initially with a company in San Francisco. I was sort of out for all intents and purposes, white labeling their product. So they would charge me $20 a month. So I just said, all right, 20. I knew from my vet clinic, like what a margin might? The healthy margin might be 20, 23%. So I ended up pricing it at $100 a month and then I said if you buy the year in advance, a whole year, then I'll give it to you for $75 a month. Because then I just was thinking I could take that money they prepaid me and use it to fund the business.

Stacee: 7:53

And most everybody did it that way and I guess that's where I came from is just trying to do a Forex times. Whatever, I was being charged on the hard costs. That is very simple math that I probably could have easily got burned on. But what ended up happening is that was, you know, I could keep my expenses down quite a bit, being just the only employee of the company and I didn't at all charge for my own time only employee of the company and I didn't at all charge for my own time. But then when I started growing it and pricing became more serious. I had to start looking at how much it costs to produce the product and then balancing that against how much could the market bear that against how much could the market bear balancing that against the volume? So it got to be kind of a complicated mathematic formula to try to figure out the right pricing.

Ira: 8:54

Yeah, I think we similarly made I don't know if it's a mistake, but just didn't really factor in the value and cost of all of the time that we put in.

Ira: 9:04

But we paid an outside person around $10,000 or so to build our initial app and site, and the ongoing maintenance costs of things like a server are pretty negligible in the scheme of things, and we had a product that had really minimal sort of incremental sort of cost right Like you know sort of cost of getting the first user. You've got to build this whole platform so that it's a really good product for that user. But the cost of supporting user number 10 and number 100 and number 1,000 is really pretty low overall until you get the one really squeaky wheel that takes up a lot of your time squeaky wheel that takes up a lot of your time. And so we had to make some guesses of what is a range of number of customers that we think we might have that would allow us to overcome our startup costs. But fortunately we guessed wrong. We thought maybe 100 or 200 people might use this and ultimately, of course, found that almost everybody wanted to use it.

Stacee: 10:06

What do you think about using your competitor's price to price your own product? Because that's what I got into. As we got more mature and people started entering the scene, you would have people come in trying to grab market share doing super low pricing, which gives you anxiety.

Ira: 10:28

Yeah, yeah, we did go on to develop a competitor, so this became something we worried a lot about, and I think you can overthink it. A ton is really what it comes down to, and you can give yourself a lot more anxiety than you should. There's really no right answer. I think. If you are going to price yourself above your competitors, then you know essentially what you're telling the world is that you think your product provides them with better value than your competitor's product and you're worth it, right. And if you price yourself below your competitors, um, in, the message you hope they receive is you can get something just as good and it's going to cost you less. But sometimes the message people hear is maybe this is not as good because it's a cheaper version, right. And if you price yourself exactly the same, I don't know exactly what that does, but when we developed a competitor, that sort of became the market dynamic is that they price their product.

Ira: 11:26

Where we priced our product and you know when we did decide, you know we think that we actually need to be charging more for this than we have been, for a variety of reasons. You know we always worried. Well, all of a sudden, you know, are we going to be priced higher than our competitor and that's going to change this dynamic. But our competitor actually decided no, I don't want to be the low priced alternative, and so typically, when our prices went up, our competitors' prices followed, and again. So I just think we overthought it a lot and worried about what are people going to think about us doing X, y or Z, when the reality was I don't think anybody was thinking about it nearly as much as we were.

Stacee: 12:04

Yeah, well, I saw this TikTok yesterday actually, and it was this guy reviewing the top five tequilas that are overrated, overpriced and not worth it, and it was some of the brands. Do you drink tequila? Yeah, uh, you know, every couple hours, no, occasionally it was the brands that he said to avoid, if I can. I can't remember all of them, but one was, of course, Jose Cuervo, and then Casamigos, which I've bought, Casamigos, supposed to be top brand, and then you've that's by George Clooney they got all those celebrities right yeah, they got all the celebrities.

Ira: 12:49

And then celebrities are drinking that tequila.

Stacee: 12:50

And then the other one I was surprised was Don Julio. And what he was saying, and he alleges, is that there's a lot of additives in these tequilas and they got acquired by bigger companies and left the family by bigger companies and left the family and now they're in it. You know, turning profits, making, cutting expenses, this sort of thing. But he was saying some of these tequilas are super expensive and you think that they're going to be really great and they're not. And my friend recently turned me on to the Costco tequila where you're pricing it does say something about where you view yourself as a level of quality. Therefore, you shouldn't maybe panic and try to beat the competitor on their pricing.

Ira: 13:59

Yeah, I mean there's a lot of psychology around these things, right, you hear about these studies of wine, right, since you brought up tequila. Right, like, I'm not a wine drinker, but I know that there's bottles of wine that cost thousands of dollars and bottles of wine that cost several dollars, and if you blind a wine drinker, they don't do very well. If you ask them which one's better, like they generally don't pick the ones that are the more expensive, right? But at the same time, the people that are, they love wine, right, they see the value there and that you just sometimes have to pick a price you think is right for your product and see what the market says about it.

Stacee: 14:45

I'm gonna share this TikTok because for all the tequila drinkers out there listening, he does give super good alternatives to these brands that maybe you're unhappy with or you want to do your own blinded taste test. That'd be fun for Friday night. Let's double blind taste test ten tequilas and see what happens.

Ira: 15:08

Maybe for our last episode we should do a tequila tasting party.

Stacee: 15:12

Oh, we're doing that. You nailed it Okay we're doing that.

Lui Fernandes: 15:18

Five absolute most overrated tequilas that you should be avoiding like the plague, no matter what that one friend of yours keeps telling you. First up, number one is Jose Cuervo. I get it, you're a cheapskate, you don't want to spend money on tequila. Well, there are plenty of other brands out there that are the same price as this that are actually doing things the right way. Jose Cuervo may be one of the oldest names in the tequila game, but today all its purposes is to make money. They are cutting corners left, right and center to make as much money as possible. I'll be perfectly honest with you if I open this bottle and smell it, I will throw up. And what's crazy about them is that they don't even hide the fact that they don't use 100% agave. That's nowhere on their bottle, and they are not confirmed additive free. To be honest with you, they're probably one of the worst offenders of using additives to try and make as much money as possible. Allegedly, I'm not accusing them of anything, I'm just just just just my thoughts. And so you might think oh, that's fine, but it's so cheap. Well, for the exact same price, you can get one of these two options. We have el tequileno misto, which, even though it's not 100 agave, it is confirmed additive free by tequila matchmaker. And you have arete, which is a confirmed additive free 100 blue ever agave tequila that is made by an incredible tequila making family, both of them about the same price.

Lui Fernandes: 16:35

Next up, we have casamigos. Casamigos is a brand that was originally founded by george clooney and he was one of the original celebrity tequilas after sammy hagar and cabo bo, but he is basically actually at fault for all of these other celebrities getting into the tequila game because he was able to sell this brand for $1 billion. And now I know you probably have a bunch of friends who swear that this brand is amazing and it's so smooth. I hate to break it to you, but they are allegedly using a lot of additives in this as well. They are cutting corners to make a bad product to sell you at a very high price, and I could maybe understand your argument if it was still cheap, but a bottle of Casa Amigos today is going for like 45 to $55, for about the same exact price as you would pay for a larger bottle of Casa Amigos Reposado.

Lui Fernandes: 17:19

You can get a bottle of Tequila Ocho Reposado, and Tequila Ocho is confirmed additive free. It is made at an incredible distillery and the master distiller is a man who has been in the industry for a very long time making some absolutely incredible brands of tequila. It's very light in color, which this looks super artificial when compared to this Something to think about, something to think about so nice, clean, smooth and I don't mean smooth in the way that other people use the term. It's actually genuinely incredible. It tastes like agave, which that does not, and it's got a really great natural caramel and citrus flavor to it. Really can't beat it, and especially for the same price as this garbage.

Lui Fernandes: 18:06

You can get a whole bottle of this. The next most overrated brand is Tequila Herradura, and I know you're probably already getting down there on the keyboards talking about, but my granddaddy and my daddy used to drink Herradura and it was really good. And while this has linkages to one of the oldest distilleries in Mexico, today it's owned by Brown Forman and they most of these other big companies started pumping it full of additives to make as much of it, to make as much money as possible. I'm unfortunately going to have to try this one because I haven't tasted it in quite a while, at least not on camera.

Lui Fernandes: 18:37

I'm really not looking forward to it. But all right, I'm gonna have to use my Volans tasting glass. I'm sorry, I apologize. I don't like the smell of that. No, what is that aftertaste man? I don't, absolutely not. No, no, no, no, no. Oh, my god, and I forgot to mention this bottle cost me $40. $40. That's not a cheap amount. That is a lot of money. For a little bit less than $40, you can get cascajuin as an alternative. They do make some other expressions, but this entry level is about $35. At least, that's what I paid for it it. And now let's put something in this glass that is truly worthy of it.

Lui Fernandes: 19:30

Tequila Cascahuena is one of the most well-regarded distilleries in Mexico and they make some absolutely incredible stuff. And this, for their almost like entry-level or like more budget-friendly option, is so tasty. Oh, I didn't even taste it, I'm sorry. Well, as you can tell, the bottle is almost empty Very bright, vegetal, good amount of citrus and just really tasty to sip on and nice to wash that out of my mouth with.

Lui Fernandes: 20:02

Yeah, the next brand I want to talk to you about is Don Julio. It is currently owned by Diageo, which is a giant mega spirits conglomerate, and you guessed it pumped full of additives, allegedly, allegedly. I'm not tasting this one, I've tasted it enough on camera. I'm just going to move on to the suggestion. If you like the story of Don Julio and you think about how long and how important this brand was for the tequila industry, I agree with you. But it is no longer the case. It is not even owned by the same family anymore. It's owned by Diageo, a mega giant spirits corporation that is really just pumping this full of additives, allegedly again to make as much money as possible and make as many products as possible so that you will buy them. But for the same price as you can get Don Julio Blanco, you can buy Lalo, which is a brand that was actually created by the original Don Julio's. Lalo, which is a brand that was actually created by the original Don Julio's grandson. It is confirmed additive free, it is very tasty and it is roughly the same price as Don Julio. So if you love the story of Don Julio, don't drink it anymore. Drink what his actual descendant is making right now Very, very good.

Lui Fernandes: 21:02

And the last brand that I want to talk to you about is, of course, clase Azul. I can hear the outrage from this side of the camera. But Louis Glace Azul is so good, it's so smooth, and I've made a whole other video about what you should be drinking instead. But I do have a new addition to that and I'm gonna be perfectly honest with you. I think you can even dig up these quotes from the dude who literally founded the company, where he literally said that his tequila was bad so he went to Marketing. Founded the company where he literally said that his tequila was bad, so he went to marketing school not to learn how to make a better tequila. So do with that information what you will, and my recommendation of what you should be drinking instead of this garbage is pretty much still the same, and that is learn to drink real tequila, tequila that was made well, tequila that was made really well.

Lui Fernandes: 21:41

And recommendations I have are obviously, if you can find it, some Fortaleza, very difficult to find, re, also very difficult to find, or one of those is a little bit easier to find, and one of my favorites is Cascanes.

Lui Fernandes: 21:53

All of these are cheaper than that monstrosity and they are really well made and incredible and confirmed additive free. Cierto Tequila it is made at the same distillery that makes Cimarron and Don Fulano. These are two incredible brands. This is confirmed out of the free, and they are really trying to play in that market of luxury tequilas. The only thing I can say about it is that it's made in a very reputable distillery with really good juice inside. The bottle looks really nice and it's still way better than Classe Azul, and thank God they didn't put a dumbbell on the top of it. And so there you have it. Stop drinking junk tequila. You're spending your money on stuff. There's so many better alternatives for the same price and I hope this video gave you a couple of different options. But if you want more tequila recommendations, I have a whole other video that you can check out right over here.

Stacee: 22:37

Next, All right. Well, let's hop over and talk about our favorite tip trick tool. What do you have for our listeners today?

Ira: 23:10

I want to talk about probably the most special of all of the mentors that I've had in my life and probably most people have had in their lives, and I haven't had a chance to sort of bring them up yet.

Ira: 23:15

But I want to talk about my mom and dad and how they have sort of shaped my entrepreneurial journey. You know, my mom is amazing. Like she is probably one of the smartest people I know and she has this incredibly like objective and analytical mind and you know, whenever she's confronted with a piece of information like, she is unbiased by like all of the other pieces of information that she knows and that she's seen and she's sort of able to kind of really independently focus on why did why? Why is this? You know what's going on here and I have learned so much from that. I think when people tell me that they think I have insight, it's almost always because of like using kind of my mom's lens, of of looking at things and um, and so she's amazing.

Ira: 24:08

And then my dad is just the the most entrepreneurial person that I know. That's not an entrepreneur, right? Like he just, you know, he wants to solve the world's problems and it's not true to say he's not an entrepreneur. He actually started a nonprofit project called the California Vision Project to help provide eye care to the working poor of California. Like he's done all of these things and he's just truly a seize the opportunity when other people see problems and is just the hardest working person that I think I've probably ever known as well. And so they both just had tremendous sort of entrepreneurial influences on me in their own ways, even though you know they didn't do the types of things that I have done with respect to sort of entrepreneurship. But but they did better things right, like they did really cool things in their own right.

Stacee: 25:06

You sound like you have amazing parents.

Ira: 25:10

Oh well, I better share then my tip, which is oh man, I didn't mean to put pressure on you. Yeah, you better.

Stacee: 25:17

Okay, so my mom is someone that I really admire because she got a job when she was 19 and she went to college for one year and then she ended up dropping out and going to work for the railroad and she got a job as a secretary a stenographer, if you will. That can write in shorthand. It's amazing skill actually. I don't know why. Maybe it's still done. I think we have AI now, but the original AI was stenographers. Right, she'd listen to her boss in meetings and take shorthand notes.

Ira: 25:52

They still have those people in courtrooms that do that stuff right.

Stacee: 25:55

Oh yeah, they do and turn that into a printed document.

Stacee: 26:00

So she ended up climbing the ranks at the Santa Fe Railroad and became the assistant to the superintendent there and had so many people she managed that were 99% men, that were 99% men and my mom was really a trailblazer in having to.

Stacee: 26:23

I'm still surprised to hear some of the stories she tells me. Like I didn't know, she took basically a crop duster plane to go from meeting to meeting across the different areas of the railroad to make her business meetings, so they didn't have to drive, she would charter the planes and I didn't know. She did all this stuff. But she also has been very inspirational to me when I'm a woman trying to break through, sometimes in a man's world, especially when you get up into the top ranks of businesses, which has led me to write my book that I'm working on Stop Acting Like a Girl and how to Overcome Traditional Girl Rules Holding you Back, and my mom had a lot to do with that, I think, just to be around someone that had the confidence to have a job like this back in the 70s, 80s it's a big deal.

Stacee: 27:15

And so my dad. I have to credit him for my love for technology because as long as I've known my dad, which has been a very long time, he's always tinkering with things and he's always trying to push the limits to see what technology can do for him. And he doesn't even know necessarily that he's doing it. But he's 78 now and he has all these internet of things going on in his house, like if I pull up to their house and they're calling me and they're not home, they're like what do you need? Because they have cameras on me that are giving them notifications.

Stacee: 27:52

He has his refrigerator, his Traeger, all of his stuff that he does from his iPhone. And now his latest obsession is he just went to the electric car conference in Phoenix and test drove all these electric cars and now he's obsessed with the BMW i7. I don't know. He's telling me all the things it can do and he researches stuff so deeply and then he makes a decision on which technology is going to adopt and I think because of that I've never really subscribed to the theory that technology is just for young people, because my dad, he uses more technology than I do and it's been inspiring to watch, honestly, all right. Well, now that you know a little bit more about our parents, let's spin the wheel and see what our next question will be have you ever fired a customer?

Stacee: 28:59

Oh yeah, what are you doing? Your own people are your own veterinary customers, arseholes.

Ira: 29:09

You know customers always right Stacee.

Stacee: 29:14

Are they?

Ira: 29:16

No, they are not. That is definitely a dated expression that probably needs to be retired.

Stacee: 29:21

That's some of the worst advice you could ever give someone. All right, well, I see you next time, Ira.

Ira: 29:28

Thanks, Stacee, see you soon.