As part of our series about the lessons from influential ‘TasteMakers,’ I had the distinct pleasure of interviewing David McKean, CEO of Sherpa Chai.

After spending almost ten years in sales for the Discovery Channel, Mr. McKean left to co-found The Knowland Group in 2004.

The Knowland Group is a data company for the hospitality industry. Today it is the largest provider of group sales data in the world. Knowland is a provider of intuitive business intelligence products for the hospitality industry and has more than 3,000 client hotels and 50,000 users globally.

As the new CEO, David is taking his business acumen and applying it to building Sherpa Chai into the leading chai brand in North America.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

As a child, I was exposed to hard work and an entrepreneurial spirit as my father was a lawyer and always had a passion for professional growth. He perused many different business ventures that he either founded or became a business partner in throughout my life, and that shaped my mentality on what it meant to have a career from an early age. I was always taught that the key to your success was to own your own business. From this mentality, my three brothers and I have all flourished in our careers and have been successful in several of our companies, just as our father had been.

Can you share with us the story of the “ah-ha” moment that led to the creation of the food brand you are leading?

The “ah-ha” moment was when I brought the product home to my family (I wasn’t a big tea drinker), and my wife and children loved the product so much that I couldn’t keep any stock in the house! I was quickly converted to an avid chia drinker once I learned the many health benefits and explored the multiple varieties available throughout the brand. They were drinking it so fast that I had to replenish multiple bottles of Sherpa Chai weekly. As a result of the family’s interest in Sherpa Chai, it drew me to learn more about the product and the back story.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I figured, “How hard could this be?” — I’ve run other businesses, I can do this, this can’t be that difficult. How wrong I was in this thinking! I had no idea what I was doing for the first 8–10 months in running Sherpa Chai — I may still be woefully ignorant. I quite literally was drinking from a fire hose about all aspects of the CPG industry — from manufacturing to selling, to distribution, to finances, to marketing — I had to learn about it ALL! Thus far, the most significant learning from this process is that you need to surround yourself with tenured experts in the industry to be successful. They can help give you the training you need to successfully run the business and quickly get you answers to your questions. This is inclusive of all “expert” resources (i.e., hired professional staff, consultants, data, reporting tools, etc.)

What are the most common mistakes you have seen people make when they start a food line? What can be done to avoid those errors?

My limited tenure in the CPG industry made it seem like my learning curve was as tall as the highest peaks in Colorado. Fortunately, I’ve been introduced to many industry mavens that have helped me along the way in making critical decisions that have benefitted Sherpa Chai’s performance and have allowed me the opportunity to immerse myself into a then-unknown world of the food industry. Throughout this process, I have concluded that to be successful in this industry, you have to have a personal connection to the product, or in this case, the chai. My family and I loved it as a consumer, which allowed me to connect myself to the brand easily. This is one of the biggest mistakes made when starting a food brand or food venture, not being related to the product.

Imagine that someone reading this interview has an idea for a product they would like to produce. What are the first few steps that you would recommend that they take?

  • Research the market as much as possible & understand what consumers want/need
  • Research the industry and know it intimately
  • Research the TAM (total available market)
  • Understand the upside/downside of all aspects of the industry and make decisions to start the business and enter the industry based upon the “opportunity” and unique business offering you bring to the open market

Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?

If you have a great idea, do the research, find the people to make your dream a reality, and take a leap of faith in making that dream come true. You never know what door will be opened next!

There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

If you can afford it, hire as many smart and seasoned people as you can! They are often the industry experts that become your closest advisors that can guide you in bringing your unique product and offering to the market for optimal exposure, penetration, and performance. Frequently it is the questions that a consultant asks that sparks the next sensation in your brand.

What are your thoughts about bootstrapping vs. looking for venture capital? What is the best way to decide if you should do either one?

Bootstrap as long as you can and find a trustworthy investment/tax/accounting expert to guide you through the landmines of bringing-in venture capital investment. Look for someone who has built a company and worked with investors, someone you trust, knowledgeable, well-connected, and an experienced advisor to help navigate this challenging and risky process of securing funding to help build a business. Over time, I have found that most entrepreneurs love to offer advice and assistance — this will be the key to navigating the VC world. Always be cautious when it comes to investors, money, and the perceived quick fix. The quick fix to investment issues is almost certainly the wrong answer. This process takes time and patience — be prepared for the long slog. In the end, the pay-off will be well worth the wait.

Can you share thoughts from your experience about how to file a patent, how to source good raw ingredients, how to source a good manufacturer, and how to find a retailer or distributor?

Surround yourself with experts in all areas of CPG (i.e., food science and ingredient procurement, production and operations management, skilled and experienced sales/marketing professionals with a background in selling across all channels, and a tenured finance team). These professionals can help support your overarching business growth goals while teaching you how to run various aspects of a business, ultimately making you a knowledgeable CEO at both macro and micro-level within the company you’re leading.

Here is the central question of our discussion. What are your “5 Things You Need To Create a Successful Food Line or Specialty Food”, and why? (Please share a story or example for each.)

  1. You need an excellent idea for a unique product
  2. You need to find people with expertise in the industry to help you build and grow your business.
  3. You need to find a skilled accountant/bookkeeper/tax person.
  4. You need a committed staff to grow and expand your business strategically at all levels.
  5. You need passion and patience — it takes time!

Can you share your ideas about how to create a product that people love and are ‘crazy about’?

In the case of Sherpa Chai, the backstory was what made me, and consumers fall in love with the product. Our founder, Pemba Sherpa, and his story of growing up in Nepal, moving to Boulder to pursue his passion of starting a guiding and climbing business in the US, which eventually led to him opening-up a Sherpa’s Adventure Restaurant & Bar and bottling Sherpa Chai, all while supporting his family and community back in Sengma, Nepal immediately drew me to the product. The chai, which was very popular at the restaurant, was a generations-old family chai recipe that he made/shared with patrons of the restaurant. The chai was so popular that Pemba was encouraged to produce the concentrated chai in a small batch production facility, all while giving the Sherpa Chai business proceeds back to the native people in his village in Nepal. The product is incredible and authentic, but it’s the story of giving back to his community that draws my family and other consumers to Sherpa Chai tea.

Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

When I came to Sherpa Chai, the business’s most inspirational aspect was our founder, Pemba Sherpa, giving back to his native Nepalese community and continuing to perfect a recipe that was a family legacy. As a business owner of Sherpa Chai, I have run the business in the spirit of providing the world the best chai tea made all while giving back to our community, local and abroad. Our goal is to produce the best tasting chai product that helps people, our community, and the world and keeps us rooted to the thing that matters most: family.

You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Sherpa Chai operates on four core company-wide values: the movement we have operated under since opening in 2014. The values include:

  1. Give back to the community
  2. Create opportunities for those in need
  3. Stay positive (in our heads, hearts, actions, body, work, and product) — Nepalese word “bistarai” or slowdown is our mantra
  4. Always produce a product with added health benefits for our consumers

We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.

Since becoming involved in the CPG industry, I’d love to meet Clayton Christopher, the CEO of Cavu. Cavu is a VC fund that focuses on supporting very successful start-ups. Christopher’s CPG industry experience started as the founder of several successful companies such as Sweet Leaf Tea and Deep Eddy Vodka. I’d love to meet him because he has successfully built-up and sold very small companies to some of the largest beverage companies in the world. I’d be very interested in getting his perspective on growing a brand from the full perspective of running a company that includes but is not limited to marketing strategy, product development, production strategy, sales forecasting/distribution, and funding.

News Link :  Dave McKean of Sherpa Chai: You need an excellent idea for a unique product

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