[00:00:00]Andrew: hey, there, freedom fighters. My name is Andrew Warner and, uh, I interview entrepreneurs about how they built their businesses for an audience entrepreneurs.
[00:00:09] Joining me is a Mixergy listener who has been, we’ve been emailing now for a long time. And when I discovered that she makes whiskey, I told my assistant, she had got to buy it. Did I end up buying a bottle of whiskey or vodka? Do you remember it? It was whiskey, right. And the reason I say that is because you surprise me and you gave me a little bottle of four of your different
[00:00:30]spirits, I guess is the way you say it. I never cracked it open and here’s why it became one of my prized possessions in the office. I would keep it in the office. The fricking bottle looks beautiful. And so anytime somebody would come in, their eyes would be naturally be drawn to the bottles. And then I’d get to talk about you. And I get to say how you’ve got this thing. Now you’re a Mixergy listener and it creates a conversation that goes beyond how they like ILA whiskeys versus American bourbons, which is the same old thing.
[00:00:57] Now we’re talking about you now, we looking at the bottle [00:01:00] anyway, it became this really big thing. I wonder how many people about your bottles and decided I’m never going to open it. I’m just going to keep it on my shelf. Klonoff is the cofounder of surf city still works. It’s a craft distillery based in Huntington beach.
[00:01:17] It is aiming to be Southern. California is number one spirits brand. And after talking to her for a long time, I’m so excited to have her on here. And partially what led to this was that they’re doing well despite Corona and partially it’s because they’ve branched out beyond spirits. Can I say hard alcohol or just alcohol?
[00:01:37] You can say alcohol, you know what word I don’t like is liquor. For some reason, I was just talking to Josh about that. . I don’t like spirits because it sounds like, um, I’m in the business and I haven’t earned the right to say it.
[00:01:46] You get the alcohol? How about that? , I love your business. This is one of my fantasy businesses. If I could lean back and dream of being in any business, I know that a lot of people I interview will hope that one day they’ll own a winery. They’ll get to [00:02:00] make beautiful wine. I don’t care about that.
[00:02:01] I don’t like to drink wine. I want to be around it, but to make my own whiskey to make my own out alcohol, it’s just amazing. What is it? Is it as fun as I imagined it to be? So some people get into it because they want, they just, they would say the exact same thing you just said. Uh, and then they have a rude awakening because it is extremely expensive and very typical.
[00:02:25] So, uh, like what’s so difficult about it. It’s, uh, it’s highly technical, there’s a high bar to entry and, um, and it’s. Really expensive. So before you could even get started, um, you need your federal permit and before you can apply for your permit, which by the way, the reason why you want that to be number one is because it takes 12 to 18 months to get approved.
[00:02:49] So you want to do that first, right? Um, but in order to apply, you need to have an address. So you need to sign a lease. And you’re committed. So you sign a lease and you [00:03:00] also need to buy all your equipment because they require all the serial numbers for all of your tanks and your still and everything you’re going to use for production.
[00:03:09] So you’re saying you’ve got to buy all the equipment. You gotta have the place, but you can’t make any alcohol. Correct they will not issue your license until you’re about 90% complete. So you are spending money for, , 12 months to 18 months before you could even start testing, um, your recipes.
[00:03:28] before we get into the story, have you got into this? How you built it up and what happened now, post Corona, and how you dealt with it? Give me a fun thing. What’s fun about being in this space. Oh, the fun thing is that it really, it really is a fun industry to be in the people you interact with are always having a good time.
[00:03:46] or making your own product. And I think the most exciting thing was when we were, uh, at Carthay circle in Disneyland, uh, or actually California adventure.
[00:03:53] We. Managed to get on their cocktail menu. And after doing a tasting with the staff, [00:04:00] we sat and had their Mai Tai that we did, uh, featured in on their menu. And we saw other people who ordered the same thing and we walked up to them and we had an introduce ourselves and say, did you know, you’re drinking our rum?
[00:04:12] It was really, really cool to see people drinking our stuff. there are two things that I imagine I would love. Number one, the tasting room. You’ve got a beautiful tasting room. You’ve told me it’s smaller than it seems online, but it’s, it looks like it’s fun to just have some friends over, to have strangers over and taste and jump and talk.
[00:04:27] That would be fun. And number two. I’ve had authors come into my office and bring me their book. Great. Now you’ve given me homework. That’s kind of awkward if I don’t read it, but imagine if I go over to somebody’s house and I bring my whiskey, even if they’re not whiskey drinkers and they just get to put it out.
[00:04:42] It’s like, I know Andrew, this is what this is. That’s the fun. Right? It’s fun and you know what, and we are always like, whenever we get invited somewhere, they know we’re going to bring, you know, a bottle of something and it always makes people smile. So, yeah. Yeah. The lady who has a lemon tree who brings the lemon over it, lemons over is, is a, is a hit at the [00:05:00] party.
[00:05:00] But this is way, way bigger. Before this you two were in drones. Ha what type of drones? It was, they were highly customized drones. Um, so if somebody wanted to, uh, gather it and the point of flying a drone is to gather data. So it depends on what payload they wanted to attach onto the drone. We would customize the drone to be able to fit that payload.
[00:05:27]Um, so it would be infrared data. So, Oh, this is a good question. So you just put a camera, you would put a. Uh, a LIDAR, um, sensor on it. And you would, um, like for example, if you want it to go see a solar farm and it takes a lot of manpower to go walk through the entire pharmacy, which ones are broken. So you can get a drone to fly over, get the data, and then go exactly to that panel. That’s broken and replace it.
[00:05:52] I would hire your company, allied drones to do this. We would actually make the drone at that point. So we were the ones manufacturer. [00:06:00] Yeah. Felt like the drone themselves and fly flew with themselves. Yeah. You told me how you got into the business. Josh was doing what? Before. He was a, um, he was a special effects coordinator in Hollywood for 15 years.
[00:06:13] And that pretty much means he, he did all the physical explosions, um, flipping over cars, anything, all the special effects you see on movies that they used to do for real. That’s what he did. And how do you end up in drones? He was onset in the CRS and it was dry season and they wanted to. Or they couldn’t hire a helicopter to come and get an aerial shot.
[00:06:37]Um, so they asked Josh if he had a solution to get an aerial shot and he figured out how to build a drone quickly enough, put a camera underneath and get that aerial shot for them. You see that type of person who is just going to figure out how to make stuff. So, yes, and he’s not only going to, he figures it out the solution.
[00:06:57] Almost immediately. Like if you give him a problem, [00:07:00] he sees a solution almost instantaneously. And because of me has finally realized that that’s a gift. Like he used to think everybody had that. And no, he’s just, he’s very talented in that way.
[00:07:10] And this is who he is. He’s the guy who said, yeah, we should get into spirits. Or you both got the said, we’re going to get in spirits. He’s the guy who had to figure out how to get the right equipment, how to make it, how to put it. What about you going back to your childhood? What type of person were you.
[00:07:24]never a super confident person. You had something inside you that because of you, your timidity couldn’t be expressed. I did. No, I, you know, I don’t. I don’t know. I did think I’m just as naturally shy person, I don’t think I was a naturally shy person. I just think, I didn’t know the mechanics of having conversations and what do you even do in a, in a conversation. But I did feel like there was something inside me and the reason I felt that is I’d read biographies of people.
[00:07:57] Who’d made a big. And [00:08:00] when you go to the first chapter, it’s always the introduction sets them up for how amazing they are. And then the first chapter is a little bit about their childhood. And you realize these were failures often. These were people who couldn’t hack school or got in trouble a lot where their parents.
[00:08:15] And I realized, yeah, they had something in them, the world just, or they didn’t know how to tap into it. It’s not the world’s responsibility to tap into it. They didn’t. And I felt that was me for you. That wasn’t, you. No, to be honest, I needed to be pushed academically , so I used to be embarrassed to this part and I only, I went as far as getting an associates degree in college.
[00:08:38] And I used to be embarrassed to add people to my LinkedIn account because I wouldn’t want them to see that I didn’t have that four year degree, but I realize now that through experience. The degree doesn’t matter. . Josh created allied drones kind of, because he needed to solve a problem. It then became a thing. At what point did you say [00:09:00] I’ve got something of value to offer here and to be a part of this company?
[00:09:04]I’m really good at supporting somebody that has a vision and executing. So, prior to surf city or allied drones, I was working for a beer and wine importing company and managed all of their licensing and reporting for the 40 States that we were shipping our products into. Um, If for those that don’t know, each state is responsible for their own liquor laws.
[00:09:27]Because after prohibition, the federal government. Gave back the control of, of liquor, of developing their own liquor laws at each state. Um, Mississippi, for example, maintaining prohibition through 66. I don’t know if you knew that they were able to keep prohibition going or create their own regulations around, um, alcohol sales.
[00:09:50]know it’s your job to keep track of that, to keep track of how we needed to be registered, how to permit, um, our, our company and our brands in each state and [00:10:00] also how to report. So I am really good at the backend in the supportive role. Um, to figure out how to make things more efficient it’s not very exciting, but that’s needed.
[00:10:09] I realized in a business you need that person that keeps you, keeps everything organized and, and running. You know, I had dinner with my friend, Shane Mac, and another entrepreneur is incredibly well known. And I talked to him afterwards and I said, change, this guy is just super well known and I’m going to interview him.
[00:10:31] He goes, look up his glass door reviews because he’s terrible as a manager. And sure enough, I looked it up and yeah, terrible, terrible people didn’t want to work for him. And he said, Andrew, a lot of these guys who are really well known, I just terrible managers. They don’t run companies. Well, And I realized that many of the companies who I’ve interviewed, who are run well or run by people have your personality.
[00:10:54] We just don’t know about them. They’re good at supporting other people, getting the other people on the team to do what they [00:11:00] need to do to shine, but they don’t need to have all the cameras pointed at them all the time. And we don’t want the cameras.
[00:11:08] Yeah. You know, it was a little bit like that is the founder of MailChimp. I’ve talked to him for, for years. Come do the interview. Let’s do it. He’s really big about taking, or he was at the time that I started about taking his designer and putting his designer in interviews and he said, Andrew, I don’t want to do it.
[00:11:27] I’m too shy. It’s not my thing. Cool wants to talk to a designer on Mixergy. It makes no freaking sense. I think I finally interviewed his designer on stage at an event. I go can now can I interview no, Andrew I’m too shy. I get it. Yeah. I was borderline that person, to be honest, I was borderline like, no, nevermind.
[00:11:50] Because when I reached out to you, I was expecting Josh to be in my place. I thought you were going to view Josh. Cause he’s the founder. He’s the guy that built the business, not me, [00:12:00] but here we are. You’re a co founder and I do want to hear, I want, I don’t just want the person who wants to be on camera. I want to get a sense of really what’s going on in business and not give everyone the impression that the only way to do it is.
[00:12:13] To be 22 years old, to be a dude in Silicon Valley and also be the guy who can run for the limelight and talk about whatever everyone’s talks about. Well, let me take a moment to talk about my first sponsor and then we’ll continue with this. Um, My first sponsor is a company called top. Tell if you’re out there listening to me and you’re looking to hire developers, top tile.com/mixergy.
[00:12:35] If you do, you’re going to get 80 hours of developer credit. When you know what I realized, I never even did the intro for them. When we started out this interview. I didn’t do it because I was so into the bottles. I didn’t notice that, but we don’t even offer that to the sponsors because I just have to do it in the beginning of the interview, because I feel like we should disclose who the sponsors are and I should give them mention anyway, it’s top talent.
[00:12:59] If [00:13:00] you’re hiring developers, go to toptal.com/mixergy it’s top tal.com/m I N E R G Y. All right. At what point did you start to, did ally drones become a real company?
[00:13:11]Elena: Walmart called us. They wanted to do a test for a drone delivery. So Josh went out to Arkansas, I believe. Um, that’s Arkansas and did a test run with them, which is super exciting. Um, Google called us and they wanted to do a test in there at their location in central California, which by the way, if you try to look on it, if we tried to look for that location on Google maps, Yeah, they’ve covered it up.
[00:13:35] It’s like the secret location, really? That they’ve covered up on their own map. Yeah.
[00:13:40] Andrew: Their own secret, their place. They don’t want anyone to know about, right. Yeah. Wow. Okay.
[00:13:45] Elena: Test facility that they sent us to.
[00:13:47] Andrew: Yeah. And so what was the work that you did for them?
[00:13:50]Elena: , I don’t remember exactly what we did, but they wanted us to test out a certain payload in there.
[00:13:56] They just, and they just told us to do it at their location because they had all the parts, [00:14:00] all the, all the accessories needed and the batteries needed to do the testing. So we went out there and, um, we were actually by herself, so it was a small scale test, but
[00:14:08]Andrew: And do you guys just make the drones yourselves here in the U S
[00:14:12] So we had to, we had to source the carbon fiber. From a different vendors, but we would source it. Josh was a, he’s a builder. So he likes, he likes building things and he likes all the machines involved with that. So we had a CNC machine, he would design the parts through CAD and he would actually cut them out and he would build them and, you know, the whole thing.
[00:14:33] So it was all about sourcing the carbon fiber, knowing what thickness you needed, uh, getting the, the rods created. We got those, um, Hard coat painted, um, for the, for the LAPD, we did the camel coding. Um, so just highly customizable drones and really companies don’t scale. Well, when everything you’re doing is, is, um, customized
[00:14:55] Andrew: and that’s what you were doing.
[00:14:56] Everything was handmade. It sounds like. [00:15:00] Okay. How big a company did it? Did you get it too?
[00:15:03] Elena: Around 150. It wasn’t a year. It wasn’t, it wasn’t the biggest
[00:15:08] Andrew: company, 50 in revenue,
[00:15:11] Elena: 150 in revenue a year.
[00:15:12] Andrew: Yeah. And
[00:15:13] Elena: then we, and we’ve sold it. We actually got approached by a company that, that took the drones and serviced large corporations.
[00:15:23] With their drones together, the data that the large corporations needed, but didn’t have an internal team of drones and pilots themselves. And what this drone services company needed was, uh, an engineering arm that would help them maintain their fleet and be able to source the different, uh, parts needed to be able to have, uh, a fleet that works for anything they needed to do.
[00:15:45] Andrew: But did you even have a team then, or was it all just Josh here, co founder? So they basically were paying for the two of you. How big of an acquisition was it?
[00:15:56] Elena: after all said and done, it was probably [00:16:00]
[00:16:00]around half a million with the Apple hire with not all at once.
[00:16:06] Andrew: All right. And you had this idea that led to surf city. What was, what was it, where did it come from? How do you end up doing this?
[00:16:15]Elena: The idea of surf city is Josh really enjoys, or we both really enjoy going to breweries the environment that it provides. And, um, it, you know, by the time. We sold it breweries were kind of like, and, but as we travel, we would see that there were craft distilleries popping up here and there.
[00:16:34] And on the East coast, it was already booming. They were everywhere. We live in Huntington beach and there were, there were no distilleries in Huntington beach and it’s just.
[00:16:45] Seem like a perfect market opportunity for us. And we were interested in it and we just went for it.
[00:16:51]Andrew: with the craft brewery, I go in, I sit at the bar or at one of the tables and I get to order a beer that was made on [00:17:00] premises. Right. And if I look around, I’ll actually see those big, I don’t know what they’re called the stainless steel vats that they make the beer.
[00:17:08] Right. That’s the experience that people are going for. Can you do the same thing with spirits? Can you actually make whiskey? Next to, I don’t know, next to the next to the local bar are the buys whiskey and have people pull up a stool and have a drink and then order some food. Can you do that same experience?
[00:17:28] Elena: No it’s spirits are much different because you’re just dealing high proof alcohol. But when you’re making Bobcat comes off at 190 plus proof, so it’s highly flammable and dangerous. So you are required. Mo if you see any distillery around, they will most likely be in a manufacturing space. Because it is highly flammable and dangerous and they want you to be away from the retail and from, um, people.
[00:17:54]Andrew: And so then you don’t get a lot of walking traffic. It’s not like someone’s walking down the street saying, which bar do we go [00:18:00] to tonight, honey? And then they say, Oh wait, look, there’s a distillery here. Right.
[00:18:04] Elena: Sometimes depending on where you are in which city you’re in, sometimes that is possible based on the placement of the manufacturing space against all the retailers, but where we are, it’s pretty tricky.
[00:18:15] It is an ugly strip mall that we’re in, in the middle of manufacturing lane. And, um, no, you don’t just walk by and say, Oh, a distillery and jump in. You actually have to plan to go there and to, to want to be there.
[00:18:28]Andrew: . So you decide you’re going to do this. You start to look into how to do it.
[00:18:31] You realize that it’s going to take a year before you can actually get started because of regulations. Why do you still go into it? What is it that’s drawing you? That makes you say let’s put up with a year of no money while we spend a bunch of money.
[00:18:43]Elena: That is a good question. It was just something we were really excited to do.
[00:18:47], we had an idea and a dream of creating a brand, a Huntington beach specific brand surf city still works. We named it that on purpose. It doesn’t ring the same. [00:19:00] If it’s Santa Ana still works. Right. It just. Yeah, it, you know what I mean? We’re in surf city USA, we wanted to make a surf centric brand.
[00:19:07]Um, and that’s why the labels came about. Uh, we wanted something that was,
[00:19:15] and that kind of what our goal was. Obviously we wanted to make good spirits as well, but we were, we were excited about the branding opportunity.
[00:19:24]Andrew: Uh, you know what it is about the, there few things about the bottles. One is it’s, it looks like a stout barrel shape, right? It’s not the flat, um, bullet rye look it’s round barrel chested, and then the label has got this small label on the front with a surfer.
[00:19:43] And if you look through the, through the glass, which of course you’re going to, you see side part of the back label, and that is, is like background, like scenery and the combination of all three of those just makes the bottle look really hot.
[00:19:57]Elena: And our artwork is a local artwork [00:20:00] from local artists in Huntington beach.
[00:20:02] And we did that on purpose as
[00:20:03] Andrew: well. Came up with that by doing what it was you two, who said, this is, this is important to us. We’re going to figure out the design ourselves. How’d you do that?
[00:20:13]Elena: Uh, we were, we spent a lot of time, uh, as creepers in total line, going up and down the aisles and looking at every single bottle and what we were drawn to were the double sided.
[00:20:23] Printed bottles, where you can see the image through the bottle. And just with the liquid inside, it does a really cool effect where it highlights the, the work behind. And, um, we decided that a good eye, a cool idea was to put local artwork on the label. And then what we also do on the back label is we feature.
[00:20:43] Like a little blurb about the artist so that it shows, it kind of gives a little shout out to who the artist is and the fact that they’re in Huntington beach.
[00:20:52] Andrew: I see how you did it. How much did it cost to get up and running before you can serve up your first glass?
[00:20:58]Elena: was roughly a [00:21:00] hundred, I would say $150,000. It’s not that bad. A lot of people, well, I mean, that was again to start. Right.
[00:21:12] Andrew: What else is there? So it’s, there’s rent $150,000 in equipment. Right?
[00:21:17] Elena: Um,
[00:21:17] Andrew: Oh, You’re basically taking me through my little fantasy here. So let’s go into the details of it.
[00:21:23] Elena: Well, I mean, you have to, you have to operate the tasting room, right. You have to create the tasting room.
[00:21:27] Andrew: So you design a nice tasting room, which looks beautiful.
[00:21:30]Elena: , Oh, you have to have your rack of barrels. Right. Those are expensive.
[00:21:34] Andrew: because that’s what you’re storing the whiskey.
[00:21:36] And until it’s ready, you
[00:21:37] Elena: have to age your, yeah. You have to age your whiskey. So that’s your, essentially they call it your savings account. Um, so you put your, your whiskey in the barrels, the barrels aren’t cheap, the, um, then you have to actually produce the product to put it inside and you can’t sell the product for.
[00:21:52] A long time. , the regulations just say that it has to be aged, meaning it could kiss the barrel and then you could sell it and call it [00:22:00] bourbon. But nobody’s going to do that because it has to be a new. Oak barrel every time that you put, um, moonshine inside and you wouldn’t waste it by just putting it in for a second.
[00:22:10]Um, and it wouldn’t taste very good, but, uh, so it’s our first whiskey that came out with six months old. And a lot of people were surprised because it actually tasted decent. Um, and, um, and it was because we, we, we barrel aged our first bourbon in small five gallon barrels. So, um, it actually aged a little quicker.
[00:22:29] It got darker quicker and it it’s made a difference in six months.
[00:22:33] Andrew: So you know what? I got an instant pot because my wife saw an ad for it and everyone’s talking about it. So we got it. You make lentils the first time in it. It’s not that hard, but it doesn’t exactly come out. Right. And you realize, all right, the recipe and should have a little bit more water and then it’s going to come out better.
[00:22:49] Great. Next time you get it. Not hard two times. You’re good, but still it’s twice. I imagine if you’re making whiskey, you have to wait six months before you know [00:23:00] that you’ve made a mistake and you should have add a little more one ingredient on the other. You didn’t do that. You didn’t have that mistake.
[00:23:05]Elena: So unfortunately, no. And then also, if it is a mistake, time will always make it better through the filtering process of the carbon inside of the barrel. You just let it, if it, if it tastes like. Not like you want it. Um, you, you just leave it in there for a longer period of time.
[00:23:25] So we were
[00:23:26] Andrew: gasoline would taste like when it’s not right.
[00:23:27]Elena: Well, the reason why it doesn’t taste like gasoline is because you take your cuts while you’re distilling. what that means is when you’re distilling the papers, come, come up. The first vapors that come through are the lighter vapors. That is the that’s the acetone, the stuff that’s going to give you, um, a headache. If you leave it in there. And then the that’s the, that’s what they call the heads. You take out the hearts, which is the, the good stuff, the tasty stuff that you’re going to put in the barrel and on the end are the tails.
[00:23:54] And those are the oils. Um, the heavier oily vapors that are going to give you that stomach ache. So you [00:24:00] leave all that out and that’s why it’s not going to taste like gasoline. Um, but no, it’s, if it doesn’t taste quite right, you just leave it in the barrel longer in it and it really mellows it out.
[00:24:07] Andrew: And so then how did you get it?
[00:24:08] Right? I kind of imagine Josh going and looking it up on YouTube and then figuring it out.
[00:24:15] Elena: Yeah. Our standard recipes. Yeah,
[00:24:17]Andrew: you didn’t hire anyone. You’re not the type of people who say there’s gotta be someone who’s good. I’m always going to find the best person and he’ll take it.
[00:24:23] Elena: We didn’t have the budget for that. So, no, we just kind of tried and true recipe. .
[00:24:29] Andrew: Here’s another thing. Why do you have to make so many different types of spirits? Why can’t you say we’re going to be the vodka company or we’re going to be the rum company or we’re going to be the whiskey company. Why do you have to do so many different types of things when you’re just getting started?
[00:24:43] Elena: Because then you’re pigeonholing yourself into one type. So not everyone likes vodka, not everyone likes whiskey, not everyone likes gin and not everyone likes rum, but if you have a wide variety of spirits, you’re going to, you’re going to touch a lot more customers. Um, even though we have all four of those spirits.
[00:24:59] Our [00:25:00] number one question we get in the tasting room is if we have tequila,
[00:25:05]Andrew: uh, so in whatever it is that you don’t have, it feels like that’s what people want
[00:25:08] got it.
[00:25:08] And already we’re looking at a narrow audience of people who are into spirits and are willing to come out and get it. And now you’ve told them, well, it’s a small portion of a small audience. Okay. Let me talk about my second sponsor. And then I want to come in. You finally figured it out and then covert right?
[00:25:25] Rock the world. People can’t even come to your two tasting room, right? Right.
[00:25:29] Elena: It’s
[00:25:30] Andrew: a big part of the plan. Alright, let’s come back first. I’m going to do a quick of a followup podcast. You should be listening to after this podcast is over. If you’re trying to get traffic to your business, you should be checking out traffic secrets.
[00:25:41] It’s created by Russell Brunson. First of all, he’s a great storyteller. Number two, he’s the guy who knows how to get traffic to his own website. He created software that turns traffic into customers. So he’s watched his customers and do well and everything he’s learned from his own business and from why watching other people who use the software growth, their traffic, he is pouring [00:26:00] into this podcast.
[00:26:01] That’s a great listen for after this. Interview’s over, it’s called traffic secrets and he calls the secrets because you know that that people will want to know it more. If he says that it’s a secret. There you go, traffic secrets covert. Do you remember when you realized this was a real thing?
[00:26:17] Elena: I do. It was, um, March 15th when California pretty much shut down
[00:26:22]Yeah. That’s when a restaurant’s tasting rooms, everything shut down and funny enough, not funny enough. Um, but ironically enough, that previous Friday, so two days later, Um, we got a call from a guy we just hired as our director of sales. He was putting in his notice that day and he called and he was a little nervous and he’s like, Hey, are we still moving forward?
[00:26:44] Should I still put in my notice? And we told him, yep, no problem. We’re still like, we’re gung ho we’re building out this new distillery. Oh, we haven’t mentioned we’re expanding. Right? So we’re in a 1300 square foot. Location right now, but we’re building out a 25,000 square foot distillery. And, um, we’re [00:27:00] in the midst of that.
[00:27:00] That’s why we’re hiring, hiring the director of sales, because we need somebody to be able to sell everything that we are about to produce. And, um, Didn’t think that COVID would affect us to be honest. And then Sunday happened, shut down everything. Um, by Tuesday I was laying off my tasting room staff and we closed down the tasting room and , we stopped paying ourselves.
[00:27:23] We, we stopped paying everything. We just cut off everything, extra that didn’t wasn’t needed at the moment we just stopped. Stop construction, everything. We just need them to breathe and think,
[00:27:34] Andrew: but you wanted to hire him because,
[00:27:35] Elena: why we still brought him on.
[00:27:38] Andrew: Yeah. Why you still bring on a salesperson when things were so dire?
[00:27:42] Elena: Well, because we, we told him to quit his job and we like, even though
[00:27:47] Andrew: Kobe was out of work, it’s telling you that he could, he could undo that, that it was something that he already had gave notice.
[00:27:54] Elena: He already gave me notice. So he didn’t want, he didn’t want to give like a two weeks [00:28:00] notice. He was just giving a notice and letting him know, like I’m making this transition. Um, so because we told him that, yeah, go ahead and do it. And then later, everything changed. We told him we still want to bring you on.
[00:28:11] And we knew we needed some, well, actually we didn’t know, but we said, well, let’s bring you on. We don’t know how bad it’s going to be. We don’t know how long it’s going to last. We can commit to you for 30 days. And, um, at your salary and in 30 days, if things are worse, we’ve got bigger problems, that things are better.
[00:28:28] So we brought him on he’s a, he was a super team player. It was amazing. He didn’t care what he was selling. He said, I also hand sanitizers. So obviously. That’s what we’re getting into, but he ended up helping a lot with our hand sanitizer explosion.
[00:28:43]Andrew: , before you got to hand sanitizers, and that’s one of the big ways that you are able to continue to grow, he was selling to who, who is still buying after COVID.
[00:28:51]Elena: between the time we told them we’ll bring them on. And him actually starting, we had decided to make hand sanitizer and start promoting it. So it [00:29:00] was like a week, the week that it took us to ramp up for hand sanitizer.
[00:29:05] He started. And that was what he started doing immediately.
[00:29:11] local hospitals. First responders, even local residents were reaching out and asking if we were making hand sanitizer, we kind of dismissed it at first so we didn’t jump on it when, when some people were previously and then we got like 15 emails in a day and that’s when it all changed and we just decided to start sourcing and, um, and went for it.
[00:29:33] So he was the one that fielded all of the questions that came in through the website. And I think one week he fielded like 600 emails. For us
[00:29:43] Andrew: from individuals who wanted to buy hand sanitizer
[00:29:45] Elena: individuals, companies, everyone.
[00:29:48] Andrew: Yeah. And what happened was, I remember that moment I wondered about, I never cared about hand sanitizers.
[00:29:54] People who walked around with them just felt a little too delicate for me. And then I realized [00:30:00] we need it. If we’re going to protect ourselves from COVID and I couldn’t find it anywhere. And I was willing to pay exorbitant prices just to have it 60 bucks for a small bottle who cares? Yeah, I wouldn’t, I would have done it.
[00:30:11] I couldn’t get it from Amazon. And then I was stuck. And what happened at that point was there were some, uh, uh, who are shifting to making hand sanitizer, you read about, and you said we could do it to your. The people who lived in your area read about that happened and said, let’s just call up surf city and see if we can get it from them.
[00:30:32] The combination of the two helped you realize there’s an opportunity here. You still needed to, I guess, making hand sanitizer much easier than making whiskey. Right? Much easier, much quicker too. So you do that, but finding the containers was a pain still is how did you find the containers?
[00:30:49]Elena: , yes, the bottles we’re getting, uh, were sold out everywhere. We found bottles through just. Digging and searching and calling. And as soon as we found [00:31:00] a bottle available, we just paid for it on the spot. So it wasn’t the prettiest bottle, but we got it.
[00:31:05] our first container that we were selling was five gallon buckets. And those were selling like crazy.
[00:31:11] Andrew: Can’t believe it from first responders, they’re also local residents.
[00:31:15] Elena: Everyone,
[00:31:16] Andrew: everyone. So like a family would buy a $200 bucket of sanitizer.
[00:31:21] Elena: They would share. Yeah, they would have their own containers and they would fill it in their own containers and share.
[00:31:25] There was a, there was a guy that called that bought a bucket and said he was going to share with his entire street. It was,
[00:31:30] Andrew: they get that. And then they need containers to share it with. But frankly, a lot of people had soap containers and you could just put in a soap dispenser. And now you’ve got hand sanitizer dispenser.
[00:31:39] Elena: We were originally going to offer. To have all locals just come to our tasting room and fill up their own containers. Cause we knew everybody had containers, but we kind of thought that was a bad idea because of COVID
[00:31:52] Andrew: oh, so you got real buckets and you got it into buckets. And then talk to me about, um, how sales were for sanitizer versus [00:32:00] spirits.
[00:32:00] Elena: Um, those exploded it. Uh, the, the interest was, was insane. Like you said, you know, you searched, you couldn’t find anywhere. So people were looking all over. Once it got out that we were selling hand sanitizer, we were selling, we were producing, I think a thousand gallons a day when we started.
[00:32:19] And, um, within a month of selling hand sanitizer, we outsold all of 2019. Combined.
[00:32:28]Andrew: Wow. Wow. I get that. And I, I get it. I’m looking here at my office. They can’t open up at this Regis unless they’ve got sanitizer and they used to have this big thing of Purell they’ve run out of it. So now they’re, now they can’t make money unless they get this.
[00:32:44]So now the future is hand sanitizers temporarily, or you think hand sanitize is going to be a longterm thing.
[00:32:51] Elena: It is temporary the exemption. The reason why we can make it is because the FDA has issued an exemption for distilleries to make hand sanitizer, to [00:33:00] provide for the need. Um, but that expires at the end of the year.
[00:33:03] And, um, that’ll just be it’s we, we’re not going to extend beyond that. Some, some distilleries want to, and we’re just, uh, we’re, we’re not going to,
[00:33:12] Andrew: because this isn’t just not the vision that you have for your business.
[00:33:16] Elena: Right. We’re focused on, we’re focused on our spirits. And although we’ve been making hand sanitizer, we’ve been doing everything else at the same time.
[00:33:24] We’re still making our core line of spirits. We’re still building out the distillery. Um, we’re still working to open the new tasting room by the end of the year. We’re still on track, maybe a little behind, but we’re still focused on our main business.
[00:33:38] Andrew: What about this? I remember I’m the founder of KeVita, the kombucha brand.
[00:33:43] He did. He sold his business to Pepsi, came on and did an interview because I needed a fast guest after, after COVID, um, pit and. When we did the interview, I said, thank you. I know these are really difficult times. He said, truthfully, now he’s got hard [00:34:00] kombucha called flying embers. He said, some businesses just happen to be blessed right now and where people are buying, uh, groceries for their homes.
[00:34:10] And they’re buying more, more adult beverages. Are you seeing that too?
[00:34:16]Elena: Absolutely. So we had to close the tasting room, but what happened? Uh, at the same time that we started making hand sanitizer, the alcohol beverage control, uh, office, which regulates alcohol sales in California, they lifted their regulations for distilleries to be able to.
[00:34:33] A ship and, or sell and ship, uh, from our local patient online. it’s only in California but anybody in California can go online and buy a bottle and we can ship to them. We also can do curbside pickup and we can deliver in person as well.
[00:34:47] So, uh, that has exploded,
[00:34:51]Andrew: . I’m noticing they’re either completely avoiding alcohol or they’re drinking a lot more. Yeah. Yeah.
[00:34:57] Elena: It’s true. Yeah.
[00:34:59] Andrew: , I’ve got to say the [00:35:00] bottles of beautiful or how much pain I had to go through. I’d say, actually, I think I want to just buy directly from you.
[00:35:05] And you said Andrew, the law is not allowing us that we can’t, I can’t do that.
[00:35:08] Elena: We couldn’t.
[00:35:09] Andrew: So then I said, Andrea, my assistant, please find me a way to get this bottle. And she did. She found a local place where we could get it. And I think they delivered, I forget how I ended up getting it, but she had to find somebody
[00:35:20] Elena: local.
[00:35:22] Andrew: Yeah. Oh, the, uh, the service that will deliver alcohol. Yeah. It might’ve been, I don’t even remember, but it’s not, it wasn’t my headache. It was her headache. It was just my desire. Yeah. And then she made it work, which is great bottles look great. I will continue to leave them unopened. I’m gonna be honest with you.
[00:35:36] I guess at some point I should just get a bottle and open it, but I just, I just love that people’s eyes gravitate to it. Truthfully, most people you serve them. One whiskey. He give them a bourbon or a, an iLet scotch. They can tell a difference. They really can’t. Most people are just not that in tune with it, with the flavors I could.
[00:35:57]But when you have a few bottles and they [00:36:00] have something to look at, they will naturally feel a little bit more comfortable with the, with the drinking experience and with the conversation, because now they have something to talk about and they’ll feel a little bit more brought into the experience.
[00:36:14] There’s there’s this one whiskey, what is it? It’s a Beaky. The Japanese whiskey.
[00:36:20]They also have nice bottle. Everyone comes over and they look at the Hibiki whiskey because it looks round in 1950 ish. Right. So I care about giving people a good experience when they come over to drink. I know that I know that matters.
[00:36:34] A lot more to me than it does to other people, but it’s my thing. And I’m glad that you’re a part of it. Thanks so much for being on here and congratulations on finding a way to survive and frankly, even grow during these difficult
[00:36:46] Elena: times. Yeah, thanks for having me and congratulations. You’re almost at 2000 episodes.
[00:36:52] Andrew: Do you think it will be 2000? I’m not doing a big event for this. I remember for the 1000 interview reaching out to drew Houseton saying group, would you [00:37:00] please come back? I know you’re not like doing podcasts anymore. Can you do this one and going out and reaching out to a bunch of people? I don’t, I didn’t see increased numbers from it.
[00:37:09] I didn’t see, I did see increased attention, which is nice, but it wasn’t worth it. I’m just going to let the numbers not matter. And the
[00:37:15] Elena: content is whatever it is,
[00:37:17] Andrew: right. Exactly. We should see who ends up. Yeah. Being a thousand to 2000 interview, maybe it will be you. Alright. If everyone wants to go check out the website, it’s surf city still works.com.
[00:37:28] I urge you to just look at the bottles. That’s really, what’s impressive. , thank you so much for doing this. Thank you to the two sponsors who put up with me, not talking about the much in this interview, but they’ll get enough customers.
[00:37:37] It’s top tile for hiring developers. Go to top talent.com/mixergy. And as a followup to this interview, go check out the, um, the traffic secrets podcast. Thanks, bye everyone.