Katlin Smith is a named 30 under 30, an Inc Magazine Contributor, and the Founder and CEO of Simple Mills. She believes that her entire journey as an entrepreneur contains valuable lessons, none of which she would take back.
Katlin discusses the long hours and make-shift equipment needed early on. She goes on to discuss the importance she placed on setting the appropriate company culture and the process of finding employees who fit the mold.
Finally, Katlin discusses how it felt to turn over responsibility to others and enable employees to work for Simple Mills. She talks about the stress of financial first rounds and what that looked like then, versus how financials look now. She finishes up by discussing the importance of maintaining a work-life balance, no matter the workload.
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Good morning, Natalie!
Good morning, Brian!
So, I’m excited that Katlin Smith from Simple Mills is back in the studio today. I loved her first episode where she talked all about building this great brand, everything that goes into the culture, the product. But she has such another side to her that is so interesting as well and that’s the entrepreneur lens and that of a founder so, I’m thrilled that she’s gonna come in and talk to us again today.
Yeah! We had a lot of fun a few weeks ago when she came on to talk to us about Simple Mills. And so this time we’re interested in talking to her more about her own path as an entrepreneur.
Well, let’s welcome Katlin Smith back to the studio. For those of you who don’t know, Katlin is a Forbes 30 under 30, she’s an Inc. Magazine contributor, and she of course is the founder and CEO of Simple Mills. So we’re thrilled to have you back, Katlin, welcome again to the Brand Lab Series™. We’re thrilled that you could give us some more of your time. I know when we had you on in your prior episode you talked so much about the Simple Mills brand, which you know I love and can’t eat enough of. But there’s a whole other side to the story that is equally inspirational for me and that is being an entrepreneur, being a founder, and I’d love to hear you talk a little bit about that journey. I love your column in Inc. and if you haven’t read any of Katlin’s stuff make sure you read it at Inc.com ’cause I always learn something new from that as well. So, one of the things I love to ask a founder and a growing entrepreneur, and I know it’s a bit of a cliche, but if you could go back when you first started Simple Mills almost four years ago now, is there some piece of advice you’d tell yourself?
I don’t think I would change a thing, honestly. I really love how things have turned out and some of my favorite parts of the past four years have been the lessons that I’ve learned along the way. I really enjoy the learning experience so I wouldn’t wanna spoil that in advance.
Wow! You’re such an enlightened human being.
So, was there a big lesson though, at least?
Oh, there have been so many lessons. Absolutely! I think one of the largest lessons has been… especially when shifting to having a larger team, how to really lead a larger team, and especially an experienced leadership team, and really effectively delegating and not butting in where you don’t need to, and instead trusting your team members to really deliver results.
Yeah. That’s an interesting topic. Another fascinating one for me that we try to ask our guests is, do you feel like you have an entrepreneur gene, or maybe, in your case, also like a baking gene inside you?
I don’t think I have a baking gene. I think that’s been a product of a lot of hard work but the entrepreneur gene I think is there. My dad started his own business when I was in middle school, which he’s still running and working his butt off today. But I just look back and it wasn’t so much a “I have to find the business that I want to create,” as some entrepreneurs do, but instead it was just, “It was bound to happen, it was in my blood.”
Well, I know we talked on the prior episode about how I love the fact that the business is clearly not only in your blood but it solved a personal and a market need. So take us back to the early days of essentially, I guess, what would have been your living room or your kitchen, what was that like, it was just you obviously at the time I would think, right? Talk about that and what that was like.
Yeah, it was just me for the first year of the business. For the first year, I was still working full time as a Management Consultant at Deloitte which meant that I was traveling four days a week. And at the time I was on a project in the northeast during the summertime, which I thought was amazing because it meant that the sun rose at 4:00 AM and so I could get in four hours of work before I had to go to work. And so, I would do some work in the mornings while I was traveling. And then when I would get home on the weekends I would go to… I had a commercial kitchen rented outside of Atlanta. I would drive out there, it’s about an hour away, and then I would mix together flours until about like two or three in the morning and then I would run the product out to my car.
But honestly it’s like I couldn’t even afford to have a commercial mixer and so I figured out that if I used a food grade big barrel then I could just pour the flours into it and roll it back and forth across the counter and that would actually mix up the flours. It turns out that large commercial mixers kind of work that way, anyways. And so you find all of these creative ways to not spend a lot of money. Another example was, I would print all of our packaging on my home HP printer, the ones that jam every 10 pages and I’d hooked up these super cheap cartridges from, I think, China or something so that the ink was cheaper and you just figure it out.
Well, I love this scrappy story because I remember, I tell people that I mentor at the Bunker Labs all the time, about some of the things that I didn’t do my first year, let alone second or third year, because to me, revenue is the fuel to run the business and without that, other things could wait. And I remember reading somewhere, and I don’t believe everything I read, but I assume that this is true. So I wanted to ask you, is it also true that because the cost of simplefoods.com was too high that you, which I totally get because I didn’t buy aemarketinggroup.com until the business was four or five years old, but that had an influence on the name of your product, right?
Oh, it did yeah.
Or you brand, I should say.
Yeah, I originally wanted the brand name of “Simple Foods” and I tracked down the domain name which was available but someone…
Which is surprising on its own.
It is surprising. I don’t know if it’s still available today but I contacted the folks who were trying to sell the site and they wanted $3,000 for it and I was like, “Well, I don’t have $3,000 for it.” And so I was like, “Okay, what else can I name it?” And came up with Simple Mills, which I actually think is a lot better, and the domain name it turned out was $12.
That’s a great return on investment, I love that.
So once you started getting momentum when and how did you then go about expanding your team, just going from being just you to having some help?
Yeah, so I wasn’t able to recruit other team members until after we’d raised our first round of funding, because it was… I simply didn’t have the cash for it. And so, after we raised our first round, I sought out to hire our first team members. And those team members, they were amazing, they were more junior, they were very scrappy, and I think that that’s an interesting thing because at that point of the business, you can’t attract senior talent and so I sometimes see this dilemma for entrepreneurs of, “Okay, I need to hire my team, who do I hire?” I wanna go out and get talent and people who have experience but not only can you not afford it, but you can’t get the right talent in your organization. And so you have to figure out how to hire team members who are more junior and super scrappy and can pound the pavement with you, and once you’ve achieved some milestones, that’s when you really go in and hire your senior leadership team, the people who have spent 11 years in marketing or 15 years in manufacturing. And so that’s really what we ended up doing.
Well, obviously employees are critical to any brand, both through a customer experience perspective, a growth perspective, and even a bottom line perspective, whether they’re junior or senior. But as you start to add people at any level to the organization that also creates, especially through the lens of a founder, a bit of a dilemma about how do you make sure you maintain a strong culture? How do you continue to fuel that culture as you grow and add people with different personalities, different skills, different experiences? Talk about how you continue to maintain as a leader a strong culture in your company?
Yeah, the culture element is critical, I completely underestimated it when I started the company. I was really fortunate to have an advisor who coached me and said, “You need to be thinking about the culture and setting the culture.” And so with the addition of our first three employees, we partnered and put together our first culture documents, which we still have and haven’t largely changed today, but we call them our house rules, it’s kind of 20 lines of things that we believe, things that we value as an organization and honestly, they’re things that I value. And so I think setting a culture is something that’s… It requires some introspection from the entrepreneur to identify what are the things that I value in my organization. So, for example, us as an organization, we’re really analytical. That might not be true for every company and that’s perfectly fine, but it’s something that I value and if our team wasn’t that way I wouldn’t feel at home. And so you have to identify what these things are early on and then from there you use that not only as hiring criteria but you use it in the on-boarding process to help kind of indoctrinate, “These are the things that we believe.”
And then you have to continuously kinda check and make sure that you’re still adhering to the same things that you said, that you believe in. I think one of the things on our house rules that are particularly difficult or that require us to come back to and make sure we’re still doing is this idea that we love to have candid conversations and that we think that it’s important to voice how we’re feeling or talk about any kind of rocky things that are happening, because it really helps us kinda break down walls and not let things bubble up. But sometimes that doesn’t happen and so you have to come back and say, “Hey okay, we need to have a candid conversation, we’re not doing what we said we’re going to do.”
Well, as I mentioned kind of in your intro, I love the stuff that you write for Inc. Magazine at Inc.com and I particularly liked, well many of them, but I particularly liked “The Year in the life of the CEO” and if memory serves correct, you even actually had X number of hours of those kinds of conversations.
[laughter]
Yes.
Yeah, and to me, I know we joked about what would you go back and you had of course a really eloquent answer over what you would tell your future self, which I’m not surprised. But for me, I think it would have been I had no idea the amount of meetings you would actually have and then second of all, the candid or difficult, sometimes, conversations that you have to have that there’s not a great coaching process to that, you kinda have to learn and I think that’s where culture really is important.
Yeah, I never would have guessed that that’s what it looked like to be CEO. I think at least like movies or what have you, portrays the CEO sitting in the office and when they have a tough conversation, it’s like, “You’re not doing your work.” [chuckle] But in reality, it’s like, “Hey, what’s going on here? It’s seems like you’re struggling a little bit, how can I help?”
So through this rapid growth, you’re making open the way for new opportunities but no one is immune from risk, so what keeps you up at night? What do you think?
There’s really two things, it is primarily risk and growth. I would say growth in the form of enabling our team. There’s this interesting kind of point where your job flips from being the one that executes and does everything and the product and the business gets made by your hands, to when it gets made almost completely by other’s hands. And today we’re at that stage and so what that means is our team has to be working as well as possible and working together as well as possible. And so I think a lot about how to enable our team and keep them working together really well. And then the other thing that I think a lot about, is honestly operation. So, thinking about, “Okay we’re growing so fast, what risks are out there? What do we need to be planning for?” We as a business have seen greater than 3x year over a year growth, every single year we’ve been in business, which is just… It’s a lot to keep up with.
It absolutely is. And I think that ties back to the financials, and as we were doing some prep for the show, I thought what was interesting is I think back to season one, we had Think CERCA on, who’d just raised a series B for $10 million, we had Rumi Spice another CPG brand on in season two that were on Shark Tank and got a deal from Mark Cuban. As the CEO and as the founder, talk about the financial journey for you, what that was like. I imagine again, we were joking about meetings and some of those conversations, I imagine a huge component of your job has to include the investor component, or at least the thought around it, and the process around it. So talk about the financial journey, what that’s been like?
Yeah. So we raised our first round about a year into the business. And that was such an interesting process. First of all, I will tell you that my financial models told me that we would only ever be $200,000. Which I can see you’re smiling ’cause you know that that’s not right. And so ironically enough, $200,000 is actually the exact amount that we needed to bridge ourselves to raising our first round. And our first round was a little bit over $2 million. And so I took to calling every investor or family friend that does some investment that I could potentially network with. And then each person you talk to says like, “Oh, you know this is isn’t right for me but I know this guy, maybe he’ll be interested and then they give you three leads.” And then all of a sudden, those people give you three leads and so, all of a sudden you end up with this spider web of people that you’re talking to, and talking to like 10 people a day.
But eventually, my luck caught up to me, and in Charlotte North Carolina, two people stood next to each other in a grocery aisle in Whole Foods. And it was two people that I’d talked to but didn’t know each other. And one was now, our lead investor and he turns to the woman next to him, and he says, “So what do you think about this brand?” And she said, “Well, I’m thinking of investing in it.” And he said, “Oh, me too.” And so he calls me up, and he was like, “I want exclusive rights take a look at this deal.” But it gives you a sense of just how much work goes into those first rounds and how many people you have to talk to, and people have to tell you “no” before somebody tells you “yes.” And so that was certainly a long and difficult process. Raising our second round was a much simpler process, it was actually our original shareholders who did the second round. And then today we’re funded on debt, so it was really that first round that was the toughest one.
Well, and I know you joked about luck. And I was curious where you were gonna go with that. And obviously, it was lucky that they were standing there but at the same time it’s a testament to something that we talked about before we started recording, which is the hustle. Had you not been talking to three people that gave you another three, that gave you another three, that gave you that spider web. And I think that that’s the hard part that I tell a lot of people that I mentor here at 1871 is that you have to understand that you will be told “no” so many more times than you will ever be told “yes.” And you have to continue to kinda adapt and work through that and understand that just because someone tells you a “no”, doesn’t mean that you shouldn’t stay true to your mission.
Now, some cases maybe, that is a warning sign for something else but this idea, I think that so many of the headlines celebrate all the entrepreneurial success, they rarely talk about some of the hard downsides of that. Which is another reason why I really like what you write about in Inc., because I think you’re really candid and transparent, which goes back, I think, to your brand tendency, you talked about it in the prior episode as well. So super interesting and insightful to help people that are thinking about the financial road ahead.
Yeah, I’m really glad Brian brought up your Inc columns ’cause I did wanna talk to you about your writing. You wrote a great article on the ideal personalities to have on your company’s board, do you feel like you have them all so far at Simple Mills? And which personality has provided you the most value?
Yeah, I think what you really look to do between your board and also your advisory network is fill out a number of different kind of capabilities and also people that you can talk to about different things. As I look at my advisors and my board, I’d say, there’s really two things that I value and I think helps more than anything else. One is really approachability and the ability to have a candid conversation with them. And that takes some trust and belief that you’re not going to get judged or penalized in some way for the information that you talk about, so that you can have a really honest conversation and gain their insights from their experience leading teams.
And then the other thing that I really value in those relationships is people who don’t just give me the answer, but instead help me think through something and give me structures and frameworks or different ways of thinking about the problem. Instead of just saying, “Well, this is the way I’ve always done it in my experience,” or “This is the way I saw this company do it.” But instead say, “Well, these are the things that I would want to weigh if I were you,” or “Here is a framework that I would use in thinking about that.” That’s so much more useful because honestly, every company, every point in the market even, is different. The natural food industry is so different than it was 10 years ago, even. And so, you have to be able to shift your thinking.
Well, as we kinda wind down, I wanted to ask you about life outside the business. I know that so much has been talked about and written about this whole work-life balance, and I know that a lot of people struggle with that. A lot of entrepreneurs struggle with being able to kinda shut their brain off. I know I do sometimes ’cause you’re always kinda thinking about certain things. So, how do you find space for Katlin outside of Simple Mills and outside the role of a CEO and entrepreneur, and is that a bit of a challenge for you?
Yeah. So I think there’s a place and a time for both. So I will tell you the first two years of running this company, I honestly didn’t see my friends. I was telling you before we got started, I would be at the office well before 8:00 AM and be there well past 8:00 PM everyday. It was rare that I was outside in the sunshine. And that was really necessary for that point in time, I wouldn’t take it back. But I also don’t have pictures from those two years. But now, I do have a lot more balance. That’s kind of because I put in that time upfront and hired an excellent leadership team, so people who have experience and can help us more quickly jump to the right answer instead of trying a hundred different ways to do something and see which one sticks.
They can say, “Well, in my experience, these five tactics work better than all of those 100.” And so, you can narrow in that way and it saves you a lot of time and energy. And so what that means is today I do have more time in my schedule. But with that time, I do still have to schedule in, “Okay. This block is for this, this block is for that.” and defend that timing because you could easily spend an additional hour, two hours working a day or you could spend those hours catching up with friends or meditating or reading a book.
Well, great insight. And again, another insightful conversation. So I know you were on the episodes now twice, so we’re so grateful for you to give us your time. I think our audience will really appreciate some of the topics you’ve provided, some insight on as it relates to growing a fast company, some of the challenges and successes you’ve had in your role as a leader and I wish you all the best. I will continue to eat your product, read your column, and I’m excited to see what’s next for you, Katlin and Simple Mills as well. So, thank you so much for being on the Brand Lab Series again.
Thank you so much for having me.
Tags: B2C, CPG, Brand and Marketing, Employee Advocacy, Entrepreneurship
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