Steve O’Dell: Spilling The Tea on Entrepreneurship | E17
#17: Spilling The Tea on Entrepreneurship with Steve O’Dell
In 2019, coffee has some major competition —> enter matcha, a green tea that offers caffeine without the crash. Not to be mistaken as just another trendy drink sipped by instagram models, the green tea is jam-packed with vitamins, anti-oxidants and good-for-you-stuff that can prevent cancer, improve focus, make your skin glow, promote relaxation and more! No wonder people love matcha so matcha. In our latest YAP episode, we chat with Steve O’Dell, the Founder & CEO of Tenzo Tea, an up-and-coming matcha tea startup. Tune in to hear him spill the tea on launching his company—— from getting seed funding to building a brand—— and uncover all the health and energy benefits that Matcha tea has to offer!
[00:00:00] Hala Taha: Hey guys, Young and Profiting podcast has just launched YAP Society on Slack. It's a cool community where listeners can network and give us valuable feedback on the show. To join YAP Society on Slack, go to bitly/yapsociety. That's bitly/yapsociety. And if you're already active, share the wealth and invite your friends.
[00:00:18] YAP society on Slack is sponsored by Compass HQ, a Slack app that gives insights to help your team work better together. Use Compass HQ to get detailed analytics, visualize communication patterns, and run surveys to collect input from your team, visit compass hq.com to learn more. Hey Young and Profiters, I've got some great news.
[00:00:38] Our guest, Steve O'Dell, has gifted you all with 20% off, all Tenzo Tea matcha products. Head to TenzoTea.co and enter the code YAP to get your discount.
[00:00:49] You are listening to YAP, Young and Profiting podcast, A place where you can listen, learn and profit. I'm your host, Hala Taha, and today we're yapping with Steve Odell, [00:01:00] the founder and CEO of Tenzo Tea, an awesome matcha tea startup.
[00:01:04] Stay tuned to find out his tips and best practices for launching a startup from getting seed funding to building a brand and uncover all the health and energy benefits that Matcha Tea has to offer.
[00:01:18] Hey Steve, welcome to Young and Profiting podcast.
[00:01:21] Steve O’Del: Hey, Hala, how's it going? Thank you so much for having me.
[00:01:23] Hala Taha: We're happy to have you on. So you are the co-founder of Tenzo Tea. This is a tea brand that is taking LA by storm, and you're revolutionizing the way that we think about energy and caffeine. But before Tenzo, you were focused on a global venture fund called Ad Valorum, and before that you started a few other companies.
[00:01:41] So did you always have such an entrepreneurial spirit? Help us understand what you were like as a youngster. Walk us through your journey, the different companies you started, and tell us about some of the leaps of faith you had to take in order to get here.
[00:01:53] Steve O’Del: Yeah, got it. I would love to, so I would always consider myself a very curious and [00:02:00] passionate guy, but when I was a lot younger, I used to play volleyball and so went to UCLA was playing on the men's volleyball team there.
[00:02:07] And while I was at school, I wasn't a great student, but I loved to learn. I got really into entrepreneurship. I took a great class with a really good professor and he was very encouraging and supportive. And then when I went home that summer when I started my first company with my cousins actually just doing odd jobs, and this all started with literally like my uncle handed my cousin an application to work at Burger King and we were like, oh my gosh, what's going on with our lives if you need to get it together?
[00:02:34] . And so we met the next morning at a Starbucks and agreed to not leave until we had a concrete plan of a business that we were gonna start. A few hours later, we had an idea to do odd jobs and we ended up creating a flyer. We paid the mailman $10, which is actually highly illegal. Would not recommend doing that for anyone listening
[00:02:51] But it really helped us out cause we got about 10,000 flyers in people's mailboxes the next day. And what happened was that spiraled into getting a lot of jobs. We hired all of our friends in [00:03:00] town that were home for a summer. We had a crew of 15 working for us within a few weeks. And by all means, a really successful venture.
[00:03:06] A really small one for just like some kids. And then I went back to school. It's now my senior year at UCLA and I was selling like portable chargers online. I started an on-demand printing company and kind of through those two things, learned a lot about entrepreneurship and what like really it takes to make a great product and to tackle a market.
[00:03:25] And then ultimately, like halfway through my senior year, I ended up pulling the plug on college. And like a big bet on myself and moved in on my buddy's couch to start a tea company.
[00:03:37] Hala Taha: Wow. So let's talk about you dropping out of college. That was a big step. And some of the world's biggest entrepreneurs, Bill Gates, Mark Zuckerberg, they dropped out of college and successfully started billion dollar companies.
[00:03:52] Actually, this is not an uncommon thing. So in 2016, more than 40% of all students who started at a four year college, [00:04:00] six years earlier had not yet earned a degree, and nearly 2 million students who begin college each year will drop out before earning a diploma. So clearly you're not alone in making a decision like that.
[00:04:10] So how did you decide that you would drop out of college? What was that thought process like?
[00:04:14] Steve O’Del: That's a really good question, and nowadays it is pretty common, but I really just believed in as an entrepreneur and that I was gonna make in this world. I thought it was a really compelling story and I wanted to put the pressure on what I was doing, and I had some support in terms of I knew like how to start a business and how to make money essentially so I could live.
[00:04:33] And then I really just wanted time so that I could work solely on Tenzo and just testing the waters, but it wasn't like this crazy decision. It was more like I didn't have any money. I was taking on a lot of debt. It's very expensive to go to UCLA outta state, and so I had already built up this kind of small network and skillset that I knew I could use to continue to grow.
[00:04:55] I felt like ultimately school was holding me back and getting a degree would only prove something that's [00:05:00] technically already there.
[00:05:01] Hala Taha: Got it. So do you think that having nothing to fall back on like a diploma makes you a better entrepreneur?
[00:05:08] Steve O’Del: I wouldn't say it makes you a better entrepreneur, but it can. I have several friends who did similar things and it didn't work out.
[00:05:17] It's all about how you react to that. It's very stressful. It's very intense. There's a lot of pressure both to pay the bills and to be like emotionally happy and you have to work really hard. And it's not easy, but if you have the right attitude, you're willing to learn, you're willing to put in the time, no matter what ends up happening in the end, you can obviously make it.
[00:05:36] Hala Taha: So you mentioned that when you first dropped outta college, you were staying on your best friend's couch for a while. Were your parents unsupportive? What did your family think about that decision?
[00:05:46] Steve O’Del: So I have a pretty conservative family. Two parents, four older brothers, and none of them are entrepreneurs. They all went to college and got to Greece four years, pretty standard. And I didn't initially tell my parents, I just [00:06:00] dropped out and I flew home, what would've been my spring break or so they thought I told them. And it was pretty tough on my relationship with my parents. Now they're very supportive, but initially they were really upset.
[00:06:13] And the relationship, I thought it could have been severed. Thank the Lord. It's not and now it's pretty well accepted in my family that I am an entrepreneur and that I'm gonna be okay. Better or worse.
[00:06:22] Hala Taha: Yep.
[00:06:23] Steve O’Del: But in the beginning it was really hard. So it's good that like the birth that gets pushed outta the nest and you need to survive.
[00:06:29] Hala Taha: Yeah. So for our listeners out there, what's your advice on taking effective risks and sticking to your gut despite any naysay?
[00:06:35] Steve O’Del: I'm a super firm believer in ignoring all the hitters . I honestly use them as motivation. Like when I dropped outta school, I posted this long essay on LinkedIn. This one guy named James Gill wrote this extremely negative response.
[00:06:49] I literally printed it out and taped on the wall above my bed, and I was like, man, if there's one thing I want in life, is prove. James Gill, wrong . And I really believe that you should follow your heart and stick to that. And [00:07:00] if you do that for long enough and you're willing to put in the sacrifices, then the universe and the world will reward you.
[00:07:06] Hala Taha: Yeah, I think that's true. Things tend to just work out if you work hard and you're passionate and you're moving in the same direction.
[00:07:13] Steve O’Del: Yeah.
[00:07:13] Hala Taha: Let's pass forward to Tenzo Tea. Tell us where it all began. How did you get an idea to start a tea business? Where did your love for matcha develop?
[00:07:22] Steve O’Del: Yeah, that's a great question. It really started with something very simple. I Googled what is the healthiest form of energy on the planet. And at the time I was an entrepreneur and I was an athlete my whole life. And so energy was so important. Pre-workouts before the gym, a morning coffee, maybe like a Red Bull at night. If you're like studying for an exam or whatever, you need to get work done.
[00:07:45] And so a lot of people do that. And when I google this, I found matcha. And when I drank it, I didn't feel like this need for more caffeine all the time. I felt like I had very consistent energy. My productivity increased, literally, like everything about [00:08:00] my life was better and I knew that I was treating my body the right way, meaning like I'm putting good stuff in it.
[00:08:05] And so if you look at a Red Bull, some of the ingredients, you have no idea what that is. If you look at a pre-workout, it's like impossible to read the label. And coffee is even questionable. And so it was like, do I really wanna live my life knowing that I'm gonna need all this energy? Do I really wanna live it where I'm harming my body?
[00:08:22] So seeing the meaningful impact it made for me, learning a lot of the things that I had learned in my previous startups. Matcha was the perfect business.
[00:08:31] Hala Taha: Very cool. And we're definitely gonna get into all the benefits of matcha, but first I wanna focus on the business side because a lot of my listeners are either young entrepreneurs or considering starting a side hustle.
[00:08:42] And so I think we can really pick your brain on some of the business side. So this is your third or fourth company and you've always founded it with someone else so that your third or fourth time with a co-founder, how do you choose your business partners? What in your opinion, is the top two or three qualities that you look for in [00:09:00] someone that you wanna found a business with?
[00:09:02] Steve O’Del: By far the most important quality is the strength of your relationship with the other person. It's not perseverance or any like the stereotypical ones. It's literally the relationship because startups are really hard and you are gonna get in disagreements. You're gonna feel like the company should go different ways.
[00:09:20] You're gonna put a lot of pressure on each other. And one of the best things that I can say a hundred percent confidence about my relationship with Rob right now in Tenzo Tea is that when we fight or get an argument or debate something like heatedly in a few hours, there's no unresolved tension. We're moving on.
[00:09:36] And so having this highly developed like emotional kind of skillset is really important. So you can understand the other person rather than attack them, and there's no ego involved. And it's I think that's really, truly found in the relationship, and I'm really grateful to have Robbie on my side, but I would really look for like strong emotional strength and toughness and grit, things like that, that you [00:10:00] know, that this relationship's gonna last because most startups die from co-founder breakups.
[00:10:04] Hala Taha: Yeah. And so you and your co-founder have actually been friends since you were 12, is that correct?
[00:10:10] Steve O’Del: Yep.
[00:10:10] Hala Taha: And so most people usually say don't mix business and personal, but you didn't listen to that.
[00:10:15] Steve O’Del: I'd really encourage everybody to look for the people that they know and trust, rather than the random web developer that's the only kid in their class of college.
[00:10:22] Hala Taha: So Tenzo Tea is a really catchy name. What's your story behind it?
[00:10:27] Steve O’Del: So with Ad Valorum, that means according to value. That's another business that Rob and I own. But for Tenzo Tea, we wanted something that was meaningful. It was simple to pronounce, easy to spell, wasn't really confusing. The T and Tea alliteration, Tenzo Tea is nice.
[00:10:41] And then it also means Heavenly Monk in Japanese, which is one of the paths to enlightenment in a Buddhist monastery. More specifically, a Tenzo as a noun, traditionally is the person in a Buddhist monastery that would prepare food and drink for the monks to meditate.
[00:10:57] Hala Taha: And you also have a very nice brand, so [00:11:00] beautiful colors, imagery, catchy names for your drinkers, like Tenzo Tribe. Tell us the process you took with developing your brand.
[00:11:08] Steve O’Del: That is a loaded question, Hala, to be totally honest, it's been a long journey of incremental progress. We didn't know anything about branding when we started. We had absolutely no design skills, no copywriting skills. We really didn't know what was gonna stick.
[00:11:24] And so a lot of it is testing and just improving over time. And it's also one thing in the beginning when you don't have any money. . And it's just important to recognize. And one thing I'm dealing with, even right now, I'm trying not to compare ourselves with these bigger companies that have million dollar budgets and stuff.
[00:11:40] You just need to make the most of what you can right now, and I'd highly recommend for young entrepreneurs out there are people just starting that they're extremely specific about what they want to do. And just to do those things truly great. And once you have that, you wanna do what I call stacking. It's like you wanna stack your [00:12:00] growth and so you have a really great website and kind of you stem that out and maybe great, really great packaging.
[00:12:05] And once you have those two things down and you can move into attend a tribe type thing. But it's really like this process of incremental progress and making iterations over time and just being willing to improve and listen to feedback.
[00:12:16] Hala Taha: And from my understanding, you guys started in 2016 and secured 250 K in seed funding. So first, can you just explain what seed funding is for those of my listeners who may not be familiar?
[00:12:29] Steve O’Del: Yes, of course. Seed funding is basically the first round or the very beginning amount of capital that's injected into a business to help it grow. It's typically done by friends and family or maybe small angel investors.
[00:12:42] And then after the seed round you have series A, which is typically larger, maybe institutional type money. So you've heard the word venture capitalist or like Morgan Stanley Bank, and then you go to series B, C D and they continue to go up as the company grows.
[00:12:56] Hala Taha: So tell us about the process you went through to raise that initial funding. What [00:13:00] was that like, and do you have any best practices or learnings that could help others be successful at it?
[00:13:05] Steve O’Del: Definitely. Ah, man. I wonder if you can sense the pain in my voice, but raising funding is very hard, and when you're from Rochester, New York, there's not that many people that, I could write a check that was bigger than like a thousand dollars.
[00:13:21] And so we had to go through this process of making relationships and meeting people and earning trust over a long period of time. And so to do that, I learned a lot along the way about Tenzo and myself and what I thought the business was, and I love fundraising. Now. It's very exciting and fun, but when you're just starting, I would really seriously think about what you need in terms of financial resources and then making a strategy to only go and get that set amount. And then using that well to get more funding. And it's kinda like you proved you can spend $10,000, here's $30,000. You prove you can spend $30,000. You get a hundred thousand dollars. . And it really just keeps going up like that. I would encourage [00:14:00] most people to not raise a seed round at all.
[00:14:02] I would try to get a, like a small bank loan or line of credit and just show sales growth from like zero to a thousand to 10,000 in a few months. And then you can go and talk to angel investors. And there's a lot of resources and people that are willing to help, but you really need to put yourselves out there.
[00:14:17] And if I could recommend one piece of advice on starting, it would just be to ask, literally ask everyone that you think might know someone that could invest if they want to invest. And if they say no, say, oh, you don't want to invest. Do you know anyone else that could be interested? And then it like spirals and snowballs into this thing. And if you have enough runway, you'll be fine.
[00:14:36] Hala Taha: With the seed funding. You got this money from everyone. How did you decide, like what you were gonna offer them in return?
[00:14:42] Steve O’Del: Yeah, another really good question. We did it on a convertible note, which is a common method in an early stage startup to get capital and a convertible note.
[00:14:51] It doesn't set a valuation, and so you have a loan and then the loan turns into equity. at a [00:15:00] certain time or event. Does that make sense?
[00:15:03] Hala Taha: Yeah, that does make sense. And then, so what do you suggest is the best way to use seed funding once you've secured it? I know every business is different, but is there some like standard things that you should use that initial investment for?
[00:15:14] Steve O’Del: Yes, definitely. The number one priority for you or for any business person is to increase revenue . And so how I think about it as like a pyramid and what's like hovering above the pyramid is like brand values and cultures. Like you never wanna compromise your integrity and who you are as a brand and the culture of your company.
[00:15:33] That's first and foremost. And after that you wanna sell. The reason why is that selling will A, allow you to either get profitable or B you need to raise more money. And so you really need to reinvest and or invest in the things that are making you money in that. If you're building an app or something like that, then it's all about users.
[00:15:53] I guess the meta-level concept is like identifying the core KPIs of the business and investing in those.
[00:15:58] Hala Taha: That's really good advice. That [00:16:00] makes total sense. So previously you alluded that angel investors might be a better idea when you're first starting out rather than using seed funding. So what's your argument for that?
[00:16:10] Steve O’Del: Yeah, angel investors are definitely the best in the beginning. And I would even say like even now for Tenzo, we're raising our Series A and I still don't wanna raise institutional money, like meaning BC money. And that is strictly because angels are typically easier to work with. They're not like ruthless capitalists.
[00:16:29] They truly believe in what you're doing and why, and they have skin in the game and they want us to you succeed. So they give you better terms with your financing and let you retain more equity and things like that. But I would highly recommend working with Angels for as long as you can. And eventually that's just not possible when you're raising like tens of millions of dollars.
[00:16:46] So you need to go to institutional money, but I would go, angel, as long as you can.
[00:16:50] Hala Taha: Cool, that's very interesting. Okay, so tell us about a big challenge that you had with Tenzo walk us through that and how did you overcome that challenge? [00:17:00]
[00:17:00] Steve O’Del: Great question. So probably the toughest thing that I've ever dealt with is, to give a slightly more background on the story, we ended up raising $650,000 total over the last year, and that was truncated across the whole year under really the same terms of the convertible note.
[00:17:16] But around early August, we were speaking with two potential investors, both extremely successful. Everyone on the podcast would probably know their names. I'm not legally allowed to say it but.
[00:17:28] Hala Taha: Oh, come on.
[00:17:29] Steve O’Del: They were going to give us, I know, I'm sorry. I would love to, honestly, I can't. I can't. . They were gonna give us 1.5 million of these two groups, and what happened was about two days before, we're gonna sign the term sheet and eight days before we run out of cash. Literally zero. Were bankrupt.
[00:17:48] Hala Taha: Wow.
[00:17:49] Steve O’Del: Eight days before were bankrupt. They pull out of the deal.
[00:17:52] Hala Taha: Oh boy.
[00:17:53] Steve O’Del: Yeah, so I, I remember so vividly getting this call and I walked out the office. I was like, oh, great. We're [00:18:00] gonna talk about a time that we can sign the term sheet and get the money. . That's what I'm walking into this call thinking.
[00:18:05] And I remember it's like a five minute conversation. They just say, Hey, you're too small. We love what you're doing, but we're not gonna invest anymore. We're sorry for wasting your time. And they're like, we don't wanna talk about it. The decision's final. Let's stay in touch. So I was sweating bullets, like I must have looked like a ghost
[00:18:23] And I walked back into the office and I got my co-founder, Robin, and I was like, holy crap, I might have just killed our company, but we didn't. And how we got out of the problem was that over the next 48, 72 hours, I went on this insane learning cycle about alternative finance. I didn't really know a lot about lines of credit or loans or like your debt to income ratio and things like that.
[00:18:49] And so Tenzo had really no debt at this point relative to our revenues. . So I went to Chase Bank and they immediately gave us a $40,000 loan. And then I went on this [00:19:00] company called Cabbage, cabbage.com as a credit line, and they immediately gave us 60 more thousand dollars. And so then I was like, oh, whew.
[00:19:07] Like we have some breathing room. And so we basically saved the company using alternative financing methods when the investors backed out, and it allowed us to continue to grow. I literally, personally guaranteed all this money for the record. So it's exceptionally risky. . And if it failed, I would be in serious trouble.
[00:19:26] Financially, but it didn't, and it allowed us to grow. And then we ended up closing around at the very end of the year with a quarter million dollar investment from the former CFO of Dr. Pepper Snapple. Which was the perfect strategic investor. And then about another a hundred thousand dollars kicked in based on his commitment. And then we closed the round shortly after.
[00:19:48] Hala Taha: Wow. That's amazing. It's a theme with you to take effective risks, you just go with your gut and make it happen.
[00:19:54] Steve O’Del: Yeah. I call it my heart, but I'm following my heart and my beliefs and I think just having [00:20:00] an indomitable will is a really powerful thing. And I tell this to investors, nothing is gonna stop me.
[00:20:06] I'll have to be dead or completely incapacitated For Tenzo to stop..
[00:20:11] Hala Taha: So in a similar vein, something that seems close to your heart, Tenzo Tea also has a social entrepreneurship angle to it. For every bag you sell, you give clean water to one person for one year. And so for our listeners who might be interested in doing this sort of thing, how does the mechanics of that work?
[00:20:29] Steve O’Del: It's honestly super simple. We work with an incredible nonprofit called The Thirst Project. They're only a few miles away in West Hollywood, and we reached out to them and said, Hey, we started this company to give back. And we're doing that right now through our product. And it's very nice that we can provide a positive impact on people's lives by giving them healthy, clean energy.
[00:20:51] But we wanna do more. We met with their founders and it was pretty simple. We literally write them a check every month after we get a total of the bags ordered [00:21:00] and they are building wells in third world countries, and so we work with them. It's honestly so easy.
[00:21:07] Hala Taha: Cool. So it's just like a collaboration and you just pick that social venture. How did you pick them?
[00:21:12] Steve O’Del: Great question. They were really close by. The founders were really cool. They're also pretty small and they specifically work with youth. And they work in some pretty cool regions around the country. And then besides that, like water we felt was a very foundational piece of even making matcha, like you can't make it without water. And so on that same note, like kind of the last big reason is that everyone, except for maybe people in Flint, Michigan, everyone in the US takes water forgranted. And it's extremely depressing, but it also I think, instills a sense of responsibility. In yourself knowing that there's 800 million people on planet Earth that don't have access to clean water.
[00:21:54] Hala Taha: Yeah.
[00:21:54] Steve O’Del: Makes you second guess what you're doing with your time. And it only costs 50 cents, by the way. [00:22:00] Like I will share that openly. 50 cents is one year of clean water.
[00:22:03] Hala Taha: Wow.
[00:22:04] Steve O’Del: For people in these communities.
[00:22:06] Hala Taha: Wow.
[00:22:06] Steve O’Del: Next time you, I dunno, waste 50 cents. Think about that and what that really means.
[00:22:10] So our team I have two quarters taped onto the window above my desk and like I see it every day and it's a very good centering piece.
[00:22:18] Hala Taha: Yeah, that is, that's so nice that you're doing that. So I know that there's, a philanthropic angle to this, but it's also really good marketing. So can you talk about how social entrepreneurship can help a business grow?
[00:22:32] Steve O’Del: Yeah, so for Tenzo specifically, we're really actually not trying to use it as like a foundational marketing aspect. That said, in terms of like social marketing, I guess is the word. It is really powerful and I think that goes back to Seth Godin's concept of worldviews and a certain subset of the population believes in clean water and sustainability and philanthropy, that's one of their worldviews. They adhere to that and they make decisions [00:23:00] based on that. And so by providing a social aspect to your company, you're te technically tailoring to those people's worldviews. So it offers up a new market and you can definitely acquire customers through that way.
[00:23:11] Hala Taha: Cool. All right, so let's spend a little time on matcha. This is the product of Tenzo Tea ,Matcha has been around for a while. It was part of traditional Japanese tea ceremonies for hundreds of years. And it's really popular with millennials. It's all over Instagram and Tea in general is popular amongst millennials.
[00:23:31] 87% of millennials report drinking tea and matcha is definitely the it tea of the moment, and that's mainly due to its energy boosting and health benefits. And I heard that Samurai Warriors used to consume matcha because it's energizing without any side effects. So why is it good for us and what are the best ways to consume it?
[00:23:51] Steve O’Del: When we originally started, like I mentioned earlier, it was about finding the healthiest form of energy. And like you mentioned, it's, it goes back [00:24:00] centuries to ancient Japanese society, and that's where the name Tezo comes from as well, but different from other teas is that instead of steeping it traditionally in a bag, you actually blend it directly with whatever you're drinking, so you get 10 times the health benefits, 10 times the amount of caffeine and really drinking the product is all about the caffeine and the health benefits. And so contrary to coffee or Red Bull or pre-workout, which you can't even literally read the labels on most of those things.
[00:24:32] Matcha is extremely pure and it doesn't give you any jitters or that shakiness or the crash or that feeling of man I really need more of that. Like that feeling when you drink a cup of coffee and like you get a little bit shaky and then an hour goes by and you're like, wow, like I'm starting to crash or I need another cup of coffee.
[00:24:48] That doesn't happen with matcha, you get a very clean like focus that happens over four to six hours. And so that's one of the reasons that monks and Samurais used to drink it [00:25:00] centuries ago is because Samurais would drink it before battle for that energy while also staying focused. And monks used to drink it so they could meditate for long periods of time.
[00:25:10] Hala Taha: Very cool. I actually am so excited. I've never tried Macho before.
[00:25:14] Steve O’Del: Oh my gosh. I'll send you some as soon as you get off this call.
[00:25:17] Hala Taha: Oh, yay. That'd be awesome.
[00:25:19] Steve O’Del: The second part of your question, which is regards the best way to drink it or consume it. Now, one of the best parts about matcha is that there's a lot of ways you can do this, and it really depends on how you get your energy.
[00:25:32] So it's different for everybody, but for me I like espressos, cold brews, red Bulls. I wasn't like in the Vanilla Latte Group or the Frappuccino Group , and so I like to drink matcha straight as what the Japanese called a koicha, or Americans would think of it as like the espresso shot version of a matcha. So it's just two ounces of water, one gram or more of matcha, and then you take it like as a shot.
[00:25:57] I'd maybe take those a lot, but I would [00:26:00] highly recommend trying that if you're going to workout or you're in the mornings headed to work or in the office or going to class. Just take a shot of matcha. It's awesome. Also, you can mix like a concentrate, which is also like that, the shot I just mentioned in pour over milk and form a latte.
[00:26:15] A lot of people who make smoothies will put it in their smoothie so they can get the benefits, the health benefits, and the energy there, and my mom actually uses it as a like frosting dye when she wants to make green frosting during the holidays. Instead of using a green food dye, she uses matcha. You can make tons of super cool foods with matcha, actually.
[00:26:38] Hala Taha: Very cool. And I think I read that it's high in antioxidants, right?
[00:26:42] Steve O’Del: Yeah. So it is, it's the highest amount of antioxidants per gram of any edible food or beverage in the world. So what that means is antioxidants fight free radical. , you can think of those as like the bad guys of your body, so they help fight free radicals and keep your body really [00:27:00] healthy.
[00:27:00] That affects literally every portion of your body, heart, brain, muscles, you name it.
[00:27:06] Hala Taha: Yeah. And I think that free radicals can lead to Alzheimer's, Parkinson's disease, heart attacks. So getting your antioxidants is very important. .
[00:27:16] Steve O’Del: Yes, I know, very important. So just drink matcha and you can handle that.
[00:27:19] Hala Taha: Yeah. So how about the skin benefits? What are the external benefits?
[00:27:24] Steve O’Del: Okay, so I personally don't apply face masks too much , but some of our customers do and they'll say it makes them glow or shine, things like that. And it's actually extremely easy to make. You just need a little bit of water, some honey and matcha. And you need to rub it on. It's super simple. We actually have a how to make it guide. On our website if you wanna check it out.
[00:27:47] Hala Taha: Cool. I love Face Masks. I am like a skin addict, so I'll definitely try that once you send me some tea.
[00:27:53] Steve O’Del: Yeah.
[00:27:55] Hala Taha: So speaking of your tea, your leaves are sourced from [00:28:00] Kagoshima, Japan. How did you decide to get your leaves from there? And what are your best practices for sourcing product effectively?
[00:28:07] Steve O’Del: This is like the brand question where what we were doing when we first started isn't what we're doing now, and it's really a process of like incremental progress over time.
[00:28:20] What I mean by that is when you're first starting and you like, you have no resources, no money, no network. You can't hop on a plane and go to Japan for three weeks and try to find product. So clearly all we did was we went on Google and we typed in where to buy matcha . And then we got it from some guy in Arizona who owned a private labeling company and we bought like 10 units.
[00:28:44] It wasn't the same matcha we're using now. It honestly, it wasn't even that great, very average. And then after six months of going through him, I was trying hard to figure out where is he getting it from. He wouldn't tell me. And then I eventually did find out that person, when we went [00:29:00] directly to them.
[00:29:01] So this is now a Japanese company, and I think this was maybe 10 months into business. We now had some resources and so we flew to Japan to visit them. And the tea farms, and this is probably my favorite story in the whole history of Tenzo Tea, but while we were in Japan on the very last day, we were in the Kyoto train station and we had time to kill.
[00:29:25] And so I googled, where is the closest tea farm? .And what happened was we took a train, so we're there, and it wasn't a tea farm, it was just a tea shop. And there isn't like an 80 year old Japanese couple. And I didn't speak any Japanese. They didn't speak any English . And so we were like trying to Google translate and pointing on maps, like tea farm, like where is the tea farm?
[00:29:49] No luck. So Google it again. And there's another one like, it's like a 20 minute walk. We're 10 minutes into that walk, all of a sudden a black [00:30:00] SUV pulls up, the driver's side window, rolls down, and it's the old man that we'd just seen in the shop. He motions to us, get in my car, like waving.
[00:30:11] And so we got in and for the next few hours we drove around visiting all these different tea farms.
[00:30:19] Hala Taha: Wow.
[00:30:20] Steve O’Del: It was like, we're outta a movie. Like all of us were just stars. So after that happens, we give him a business card and we're like, thank you so much. If we can do anything for you, let us know. A few hours later we get an email from that guy's boss who turns out to be a team master, and we ended up meeting him a few months later and we created what is now Tenzo ceremonial grade.
[00:30:42] It's a proprietary blend of matcha that we have, and you can only buy it from us. And that's what we sell today. But it was this kind of, this long journey with a lot of serendipity and luck, and it's just what I was saying earlier, if you follow your heart and put yourselves out there, the world will answer the call.
[00:30:58] Hala Taha: That's amazing. That's [00:31:00] inspirational. Everything's always meant to be?
[00:31:01] Steve O’Del: Yeah, it is. So is.
[00:31:03] Hala Taha: Like I said before, matcha is really blowing up. The global matcha market size was valued at 2.62 billion in 2016, and it's expected to witness a 7.6% compound annual growth rate increase from 2017 to 2025. How do you plan to capitalize on this market?
[00:31:22] Steve O’Del: Without going into too many specifics in case any of my competition is listening, , really though, nothing crazy. We want to focus on doing what we're already doing really well. We want to be the leader online on Amazon and our own website. And we want to run a great subscription business and we want to treat our customers really exceptionally well and then build a great brand that lasts.
[00:31:44] Hala Taha: Cool. So you were explaining to us before how you got interested in matcha was basically you love the product. Did you do any research on the matcha market or did you just decide, I love this product, I'm gonna start this business.
[00:31:57] Steve O’Del: No, of course. I did some research, so [00:32:00] I also knew the stats that you just posted, the 7% compound annual growth rate. And what that told me was that okay, this is a potential market that's gonna grow. Maybe I can start a business in it. But one of the things I had learned when I was in college working on a company called co2, and I hate saying this now cause it sounds so dumb, but we were an on-demand printing company.
[00:32:24] So clearly students would pay us to like print something for them and deliver it wherever they wanted. Sounds crazy. And what I learned was that the world's moving digital, so why would you start a printing company? And the meta lesson there is that you wanna build a company that's aligned with the way the world is moving.
[00:32:39] You want to ride a wave. The notion there is like Mark Zuckerberg is thought of as the next Bill Gates, but he didn't build Microsoft. He built Facebook because social networking at the time was the wave. And all he did was create the best platform to ride that wave. And so when I looked at matcha or whatever my next business idea was gonna [00:33:00] be, I wanted to make sure that my timing was perfect.
[00:33:02] And when we started Tenzo, there was maybe three other matcha companies, some small players, but it still is a very like small and very new market. It's not matured at all in the United States. And so we literally brought matcha to Los Angeles cafe scene when we were, when we started in Long Beach, like there wasn't any matcha anywhere.
[00:33:25] And then when we closed, like the first 20 or so accounts, that was like boom, like its here. When we moved to LA and then like matcha bars is doing pretty well. And so Chai matcha is also a pretty big deal. And so really it was more about the timing and just trying to ride that wave. And then the other like tangible takeaway that I'd give to anyone who's just starting, there's a great website called Google Trends and you can see the aggregate search data for any keywords.
[00:33:54] So when I did that for matcha, it was like the curve was like far up into the right, and so it was growing really [00:34:00] fast and we were still pretty new. We were still pretty early in the market. So I thought that with my competitive spirit, work ethic, I could compete and win the market.
[00:34:10] Hala Taha: Very cool. I love that. Google trends. I think that Steve's on my team. She's our marketing girl. She uses Google Trends for us, .
[00:34:18] Steve O’Del: Nice. That's great. Yeah, it's super helpful.
[00:34:21] Hala Taha: Okay, so you did great. You started this company and so far you've been pretty successful. But if there was any advice that you could give to yourself, third year of college when you were just starting this business, what would it be? What would your advice be to yourself back then?
[00:34:36] Steve O’Del: I would love to say to myself that you're on the right path. And why I say that is that too many people look at great risks that eventually worked out. Wow, this person's a genius. They knew that it's gonna work out this whole time. Like how are they such a visionary?
[00:34:54] But in the end, like being real I didn't know this was gonna work. I had no idea that I'd be able to start a matcha company. [00:35:00] In the end, I was truly wondering, can I do this? Am I gonna be strong enough? Can I figure this out? Can I learn financials? Can I learn operations? How do I import something from Japan?
[00:35:08] How do I close a cafe? And even the fact that I dropped outta school was like a massive risk. And in the end, looking back on it, it makes sense and I say it so casually now follow your heart. But that's a lot harder when you're really in the heat of things and you lost trust with a lot of friends and family, and that brings in a lot of self-doubt and that can turn into self-hate and all these questions.
[00:35:31] And so if I had a strong mentors as I do now, back then , I would've been in a lot better situation, like emotionally and for my own sanity, honestly. So that'd be my piece of advice, is just knowing that I'm on the right path.
[00:35:45] Hala Taha: Yeah, and I think that's great advice. Okay. Steve, I enjoyed this interview so much.
[00:35:51] How can our listeners get in touch with you and buy some matcha?
[00:35:55] Steve O’Del: Yeah, so the best way to reach out to me is actually on LinkedIn. I'm super [00:36:00] active there. You wanna add me on LinkedIn? It's great. Shoot me a message. I respond to every single message that I get unless it's like an automatic bot. It's a terrible, dumb thing, , but any of the legit ones, or even if the bot is legit enough, I respond to everyone.
[00:36:14] So if you have questions or wanna talk more, Please don't hesitate to reach out there. And if you wanna buy matcha head to tenzotea.co. We have great subscription. We have Tea Wear Blender bottles to mix your matcha on the go. And I would love for everyone to try Matcha, and if you have any feedback, let me know.
[00:36:32] Hala Taha: Cool. Thank you so much, Steve.
[00:36:34] Steve O’Del: Thank you, Hala. It was great being on.
[00:36:37] Hala Taha: Thanks for listening to Young and Profiting podcast. Follow up on Instagram at Young and profiting, and check us out at youngandprofiting.com. And now you can chat live with us every single day on our new Slack channel. Check out our show notes or young and profiting.com for the registration link.
[00:36:51] And if you're already active on YAP Society, share the wealths and invite your friends. You can find me on Instagram at YAP with Hala or LinkedIn. Just search my name Hala [00:37:00] Taha. And a huge thank you to the team, Tim, Danny, Chritian ,Steve, Stephanie, Nicholas, Ryan, Kayla, Shiv and Julian. Catch you next time. This is Hala signing off.
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