How The F* I Started Nutcase Pt IV: Behind-the-Scenes Business Bullshit

We finally had our initial recipe and packaging. But creating a product is only half the battle. Running a business is a whole other beast. There’s so much behind-the-scenes operations that’s neither fun nor sexy, but if you ignore or mess it up — you won’t last.

For many founders, this is the painful part. Especially those who are more creator vs operator types… with ADD (like me). Luckily, I went to University for International Business. Unfortunately, I didn’t learn shit (except how to speak Spanish). Ultimately, I educated myself in the real world: thanks to amazing mentors, books, podcasts, YouTube videos… and by failing.

I’ve fucked up. I’ve been fucked over. It sucked. I’ve had to suck it up. Sometimes, you just have to learn the hard way. It builds thicker skin. I used to stress over every little thing: Why didn’t he didn’t reply yet? Do I sound crazy? Are they laughing at me? What if I fail!? After years of hands-on experience, I noticed that worrying about this shit is not only completely pointless, but counter productive. It now takes a lot more to faze me.

Building Nutcase is fun, challenging and fulfilling. But there’s also a lot of boring business stuff — a category we call ‘professional services’: legal, accounting, insurance, and banking. As dull as it may be, it’s kinda critical, so I’ll explain a little.

Let’s start with the least sexy of all: legal. I always saw lawyers as a sort of necessary evil. Not that all lawyers are evil, the compensation model is just messed up. So when I asked my buddy Griffin if he knew a good lawyer, his answer caught me totally off guard:“My guy is a stud!” Hands down the most enthusiastic reference I’ve even gotten for a lawyer.

That’s how I met David. Not only does he know his shit, he breaks things down for me without making me feel dumb, and patiently explains it again when I forget or just don’t get it. He gets shit done fast, gives solid advice, and I know he’s got my back.

Why do we need lawyers anyway? First off: I had to set up a US corporation. This is generally straightforward… for Americans. But for a Canadian? Brutal. Ultimately, I had to ask our US investor to use his SSN. Then there’s all the other fun docs: set up our board, issue shares, investor docs, etc. So much paperwork! I won’t pretend to understand it all 100%, but I learn what I can, and otherwise rely on David.

So actually, I take it back about legal. Accounting is definitely the least sexy. It’s tedious and confusing AF, but I do my best to follow along with Ward & Timmy there to help. For instance, did you know every single state has different rules for when you need to start paying taxes and you have to register for each state separately once you cross their specific threshold? As Avril would say: “Why’d you have to go and make things so complicated?”

Next up, insurance brokers. We all know the US is notorious for suing anyone for anything, so liability insurance is clutch. So make sure you have a good agent to cover your ass (Danielle you rock!) — without going for broke on premiums.

Finally, bankers. As if incorporating wasn’t complicated enough, setting up a US bank account as a Canadian was also rough. Big banks, with their rigid structures, simply can’t handle it. Luckily, one of our investors owns an innovative bank in Vegas that loves startups (not SVB, phew). I don’t know how, but they hooked us up. They’ve been super helpful and supportive since Day 1. Lexicon — you guys rock!

Once all that was set, along with our ops team (David & Josh from Boyle Brands), our formulator (Ryan), our co-packer (Black Eye) and our sleeve printer (BelMark) — we were finally ready for our first ever trial production run. Josh helped source all the ingredients and get them to Black Eye. Production was set for Friday. We were told it all went smoothly — phew! I can relax and enjoy my weekend.

Somehow, by Monday, the story changed. Turns out our chocolate batch sat in the tank for too long, causing it to turn slightly acidic. Our formulator Ryan was on-site and tasted it. He said it was mild, but that we may need a new trial run.

We rushed to get samples, and the first thing we noticed was that though the milk was fine, the labels sucked. The logo was too small and the sleeve seams stuck out. We planned to use these for sampling and didn’t want to waste time, so while we scheduled another trial production run, we decidedd to get started with these (asking people to ignore the ugly labels for now).

But where we shipping these exactly? I wanted Nutcase to be based in Vegas (cause we are building a house there and it is, in my opinion, the best city). That’s where Black Mountain comes into play. They have a warehouse near the airport and handle all 3PL. I met their team (Andrea, Andi & James) and immediately just liked them. Sometimes, that’s enough.

Ok, so who’s gonna ship them? We looked at the options. I tried to sign up for a FedEx account, but they wouldn’t accept my Canadian ID and were really not helpful. Screw that. We compared USPS and UPS, and UPS made it easy and gave us the best rates. UPS it is.

Next, we debated between Shopify or Amazon. I’m biased towards Shopify, but I recognize the convenience of Prime, so I decided to do a little test run on Amazon with some extra samples. It was hell. They were over a month late picking up the shipment, our rep was not helpful at all (ie. basically just sent links to FAQ pages), and all in all, a terrible experience. We may revisit it in the future, but for now, it just wasn’t worth it.

Shopify it is! Being a Canadian company I figured this at least should be easy. Wrong! Again, we needed an SSN and a US address (we work remote). It was such a hassle I may have told Tobi (Shopify CEO) they were worse than the banks and that they should look into that… haha. Ultimately, we managed to hack it though — so yes, Shopify I still love you guys!

We sent out samples and most people loved it, but we also got feedback that some people found it had a bit of a bitter after taste. It was good, but good wasn’t good enough. It needed to be fucking awesome.

I asked Ryan if he had any ideas how to smooth it out. His suggestion was to attempt to mask the tartness by increasing the sweetness. So we took the time to do one more round of formulation (not cheap). We ended up adjusting the agave by only about 5–10% and just that small tweak made all the difference.

We also upgraded our packaging by making the logo bigger and bolder, adding black lids, and fixing the seem issue. We also worked on how to better differentiate the flavors. I was set on maintaining the sleek black can — to stand out and be what the brand is known for. That’s when I had the idea to simply change the color of the logo and rim text for each flavor. It looked so sick against the matte black that we went with it.

We had our initial team locked and loaded. Our recipe was dialed in. Our Shopify site was looking good (great work Brooke!). It was time to pull the trigger on our first full production run. We decided to launch just our chocolate milk, only on Shopify first. Focus. Black Eye’s minimum order quantity (MOQ) per run was around 33,000 cans. That’s a lot of chocolate milk. It was simultaneously super exciting and nerve wracking. Fuck it. LFG.

I’ll share our launch story (including how Ninja came onboard) next!