Founder Story: Popadelics with Marilyn Yang

Jordan Buckner: [00:00:00] Growing a CPG brand is really expensive and takes a lot of money and energy to make it work, but it's also very rewarding, especially when you're bringing a new product and innovation into the market. For today's episode, I've invited on Marilyn, who is the co founder of Popadelics, which makes crunchy mushroom chips to share her journey on building the company and using financial tools to grow her business.

Marilyn, welcome. 

Marilyn Yang: Thanks again, Jordan. I appreciate you having me. 

Jordan Buckner: So, for those who haven't tried it, describe to me what Popadelics are. 

Marilyn Yang: I guess at the base, we're trying to reimagine mushrooms for the modern snacker. So, you know, I feel like mushrooms get a bad rep. So, we're really trying to create a better for you snack that actually tastes good.

And namely, that appeals to both mushroom lovers and doubters. So, I bet most people probably haven't ever had a mushroom like ours before. Super crunchy, super flavorful all our flavors are vegan, gluten free, and also non GMO. 

Jordan Buckner: Well, I personally love them. We bought your twisted Thai chili last [00:01:00] year, I think it was a year before for corporate orders through joyful co and we're able to buy thousands of them.

So that was really exciting to be able to include those in those gift boxes as well, and something that if our listeners haven't tried, they should definitely try. Tell me about when the company got started. 

Marilyn Yang: So I founded the business actually with my husband during COVID. I guess we were in the batch of COVID babies that happened during that time period.

So we would have incorporated in summer of 2020. And as you can imagine, it takes quite a while to develop a CPG product. So although we had the idea and all these, you know, grand plans, it took us almost two years. So April of 22 is when we would have actually launched The first version of our product to market.

And I say the first version because we're probably now on the eighth version or something crazy like that. but yeah, so it's been a, for us over a four year journey, although our products only been on the market for just about two years at this point. 

Jordan Buckner: And it's definitely a long journey.

Were those two years spent doing like product development and branding? And where's it like working your full time job kinda thing and building Popadelics on the side? [00:02:00] What was that like in the first couple of years? 

Marilyn Yang: Yeah, exactly. And actually, I think that's actually not changed too much. So I do still currently work a full time job as well in addition to having some other entrepreneurial endeavors.

Mike's a bit more full time now as well, but I feel like because of that though, we've kind of, both of us have been doing this for so long that it's kind of the saddest quote as well. And actually that feeds into the financial piece. I think one of the reasons we at least one of us, and namely we're, you know, or a couple as well.

So I guess that plays into the consideration. It makes sense for at least one person to have some sort of stable income for household purposes, but also to be, I think one of our goals from the beginning was to be able to self fund the business for as long as we could. And I guess by self fund, I would say, Not relying on outside equity capital.

I think we were always open to debt financing or other kind of more creative kind of inventory related financing, for example, but we didn't necessarily want to dive straight into raising outside equity capital. 

Jordan Buckner: No, I love that perspective and that you started the business with a [00:03:00] husband, you needed that financial security for the company.

And so continuing to work and build the company alongside that, I think has a lot of benefits, especially of extending that runway that you have. I know some advisors, and a lot of times it's driven by investors have this mindset of like, you need to go all in on your business and spend every single waking hour focused on it.

How have you been able to manage working and running the business? 

Marilyn Yang: I actually think it makes both sides better. So honestly, I don't think we would have gotten Popadelics as far if I hadn't been doing other things. And I don't think I've been doing as well in my day job either, if I hadn't had the experience I've had with Popadelics.

So I feel like it is very much so a case by case basis. I think to your point, there's very much so kind of this romantic idea, right? That you have to, you know, drop everything and. You know, work on your business. And I think, you know, for some people that makes sense. I think for others, there's, you know, various personal or other reasons why that's just not practical.

And in some ways, I actually feel like it's a bit of a privileged thing to be able to do that. And not everyone, unfortunately, has that luxury. [00:04:00] And I would say for in our case, you know and so I think because of that, I've seen the other side and in terms of equity capital and what that entails.

And at least for a business of a CPG kind of nature, didn't feel like it was something we wanted to take on too early because it is a lot of work. It is a lot of pressure, just more cooks in the kitchen. And so I think we were, Unlike the common person who maybe isn't as deep into the finance world, we were maybe even more cautious about taking it in particular outside equity capital, and so that all fed into it as well.

But I think in general, the big piece of that is wanting to retain as much creative control as possible in the beginning because we knew what we were prepared for. Making, even though it's a very low hanging fruit idea, I feel like, you know, if there's kale chips, you know, why shouldn't there be mushroom chips?

It doesn't sound that out there. It, we knew in the beginning that it would be, there would be a lot of skeptics, and so, you know, depending on where those people are coming from, they may have guided us towards a direction we wouldn't have wanted to go at the time, and so again, just going back to that, wanting that flexibility in the beginning to be able to [00:05:00] control our own destiny.

And I think things just, you know, I think even more so in this industry took some things took much longer, but other things happen much quicker as well. And so I think it has allowed us to be more nimble in a lot of ways because we've been able to just make more decisions more quickly.

Without necessarily having to explain every little thing to some outside third party. 

Jordan Buckner: I love that. I mean, I think also in running and kind of having a job as well, automatically add some constraints on your time, right? Because you only have a, you have more limited time and it probably provides more focus in some areas of being able to like, just focus on kind of what's working and not explore a lot of dead ends, I think, , with the business.

Marilyn Yang: Yeah, for sure. And I think that's probably important for any business. And I think that's the benefit of any startup because you are able to pivot very quickly and then we've pivoted many times and in small ways and big ways. And I think that's given us the freedom to be able to do that. and actually maybe the hyper focused and need to do that when, when push comes to shove.

 But I do hope that at least you know, our journey or at least, you know, again, it's not for everyone. I [00:06:00] will caveat that. But. There are other ways than what you hear about in the news all the time to build a business. And you know, for those who, cause we have heard that, right? We've heard the criticism like, oh, you need to be all in or whatever.

Well, what I would point to is all of the success we've had, right? I know, and I'm not knocking on any founders, but I would say that we're more successful than some businesses that do have full time founders. And so at the end of the day, I do think that the results still speak for themselves. And I think it's whatever each individual person finds works.

Jordan Buckner: I love that. I think that's really great advice for anyone listening. I think with that though, right? Like a lot of people say, I need to raise money because I, you know, the business needs cash in order to find product market fit and to grow. So without that cash infusion from a potential investor, how have you been able to look for cash to fund the business?

I know you're working, you're able to put some of that money into the business. Has that been enough or how you had to see outside that resources? 

Marilyn Yang: Yeah, I would say the beginning. That's is every one of the reasons as well. It was helpful to have a full time job and that income to be able to funnel into the [00:07:00] business.

So I would say in the beginning was very helpful for that startup phase. I would say that as we've grown, especially this year, so Over the course of just probably even less than 12 months gone from you know a thousand stores to over 3, 000 So a bunch of our launches happened this year that that is very costly because most retailers require free fills that you know They require, you know other sorts of fees and stuff Slotting and marketing and promote promos and we're funding demos and all that thing.

So I think in particular, this year is where we've really gotten in and started to in more full force. I think gone out to find debt resources. So you know, we've had a line of credit as well, but, you know, as a startup business, there are, traditional banks that is, are limited in terms of.

What they're how creative they're able to be because they can only really base things off of historical revenue. But when you know, you're having such a step change from one year to the next, it's hard for them to maybe step up their ability to grant more capital as quickly. And so that has led us to some other more kind of [00:08:00] alternative financing solutions such namely in the inventory financing space.

So. Kickfurther, for example, is one of those groups that we've worked with and namely, you know they are a debt instrument, I guess, in some shape or form, but they're not actually debt on the balance sheet, which it's kind of something really unique in terms of at least how they structure their deal.

So and I think that was attractive to us as well, because we do have existing debt instruments as well. So the lines of credit. But we didn't necessarily want to make things too complicated with, you know, bringing in a second bank or a third bank. And so it was really interesting for us and valuable for us to be exploring these other options because at the end of the day, what we were really looking for the capital for they were all for very specific purposes as well.

It wasn't just that we wanted to produce inventory for the sake of it. We had very specific. And so the, in particular, Kickfurther works on a consignment basis. So that was also really just allowing kind of the timing to match up, I think is more kind of where it comes down because, you know, at the end of the day, if you need money to fund more inventory, hopefully that is ultimately going to translate into more revenue as [00:09:00] well.

So, but of course that initial timing mismatch, you can be a struggle to get, to bridge the gap for, 

Jordan Buckner: yeah, no, definitely. And I think so Kickfurther does inventory based financing and you had the problem where you were launching and all these new retailers, and you needed the upfront cash to pay for that inventory to get it produced based on, you know, having the pos for that.

So tell me a little bit more about how that process worked in working with a company like Kickfurther. Like what did it look like from start to finish? 

Marilyn Yang: Yeah. So actually they're a very I guess, tech forward platform. And so, you know, there's of course you know, some sort of intro call with someone on their team, but for the most part, the entire application process was all online.

So that did facilitate things quite a bit. They also work such that, you know, specifically if I think most of the most popular use case for Kickfurther would be to fund inventory and production runs. And actually how they work is they will actually, once you're approved. Pay your supplier directly as well.

So that also helps streamline things. So you're not having to, you know, wait, you know, if it was from a traditional bank, right, wait until, you know, the loan gets approved, then, you [00:10:00] know, draw on the loan and then you have to transfer the money still to your supplier. And by the time all that's happened, you know, maybe it's taken too long or your supplier is getting really antsy.

And so I think that's, you know, maybe down the road, an interesting Maybe streamline benefit for how they work. But again, it was just a kind of a click through. I think it was maybe seven or eight steps, something along those lines. Just online form asking about what your business is you know, specifically kind of, you know, the costs of each Yeah.

Individual item. That's kind of how they price their solution as well. and then ultimately you know, you're linking up your, you know, some of your financial information, you know, your bank accounts or whatnot. And eventually they'll give you essentially a credit limit decision. And they do work such that they have their own capital, but they, you are also kind of creating a third as part of the application process, creating a profile.

They have a network of private investors that fund. These projects as well. But it's very hands off. I think initially when we went into it, we were somewhat hesitant because, you know, it kind of [00:11:00] sounded a little bit like crowdfunding and it kind of is, but it's a lot more hands off than maybe the traditional crowdfunding platforms that maybe a lot of people would have heard of 

Jordan Buckner: like, did you have to do any of the marketing or Kickfurther handles that in terms of the crowdfunding element to get investors to go on the deal? 

Marilyn Yang: Yeah, so the crowdfunding element is completely handled by them. I mean, other than, I guess, you completing your profile, but by nature of doing the application, your profile is basically already created.

So it's kind of a all in one process to be able to do all of those things. But namely too, because Kickfurther themselves have their own capital it's not per se a timing issue. So, you know, it's not like you have to wait until, you know you have all the outside investors, you know, traditional crowdfunding, right?

If you're raising, you know, 20, to wait until you have enough, you know, backers, right. To get to 20 K versus for cake further they give you a timeline, like we'll have the funds by this date. And you know, they're able to work either with their own funds as well as with their network of investors to get there.

But at least from the the brand's point of view, you just get a [00:12:00] date from them. As well, and so it's fairly hands off of a process other than grading as well. But 

Jordan Buckner: how long did that process take from like filling out the application to being approved and being able to disperse the funds? 

Marilyn Yang: I think for us, it was fairly quick.

So I think you know, the application itself maybe takes like a day or two to fill out. I think we probably heard from Kickfurther within a day after that, if they needed additional information. And then once they present kind of an offer and you move forward funding can happen, I think, as quickly as a week maybe even in some cases a week or two.

And then, you know, depending on the timeline for their investors. But yeah, I would think about a week or two after they approve you. 

Jordan Buckner: Yeah, so it's a really fast process, and so it's not something that takes four or five months to do, but can be done. 

Marilyn Yang: For sure, yeah. It still takes a little bit of foresight, but it's not something you have to plan for six months in advance or anything like that.

Jordan Buckner: And then so do, they take then a fee on the amount that's given out, right? 

Marilyn Yang: Yeah, so they essentially add on a fee to, so you, you tell them that your unit cost is X, let's, you know, use simple numbers, like let's say your unit cost [00:13:00] is a dollar they'll, so when, basically how they work is you're essentially consigning them the product, so they're pre buying the product from you, basically, is kind of what the money they're giving you is.

And then they're trying to align kind of when you pay them back with when you're actually selling the product. And so the schedule of paying them back, it's not like a traditional loan where, you know, every month you're paying X percent back with, you know, X percent interest. It's more like you commit, you tell them, you know, it cost me a dollar to make this thing.

thing. You know, maybe I'm selling it for 3. And you know, every month I expect to sell 100 units, let's say. And so then at the end of every month, you just report to them how many units you've actually sold and they know it costs you a dollar to make and , they're funding you kind of that dollar to make it.

But when you're paying them back, They kind of frame it like an interest rate, but then they're adding, I think, their own spread above that. So maybe you're paying them back 1. 50 instead of the dollar they gave you initially, or maybe it's 1. 20. Now 

Jordan Buckner: when you're looking, I know you have a background in work in finance.

When you're looking at [00:14:00] that, whether you're saying the money that's coming from take Kickfurther just in this case you could absorb that within your margin comfortably. Was it something they were like, okay, it's a bit of an investment up front, but it's going to get us started so that we can profitably fund growth after how are you kind of thinking about incorporating their, you know , the cost of working with them within , your business model?

Marilyn Yang: Well, I think the goal is always to lower unit costs over time. I think, you know, initially, it's probably important to at least see if you can break even with where they'll come in at. Because, you know, the reality is that, you know, it's only until you get to certain volumes are you really going to get to your optimal margins.

And even we're not quite there yet. But I think it takes that first step, right? You can't get from a thousand doors to 20, 000 without going Getting to from 1000 to 3000 in between, and that's typically actually the hardest part, or at least the most capital intensive part, because the bigger you grow, at least the more cash flow you have on.

So I think it is a creative solution to be able to get from, you know, kind of that first step to that second step. In kind of a quicker [00:15:00] way, so it's much quicker, right, than, you know, going out and raising equity capital. You're also not diluting yourself, and if you have enough margins with where you are you should be able to, at least in the short term, absorb it, or think of it at least as a kind of a startup expense.

Jordan Buckner: Right. As an investment. Yeah. Because I think with debt, you end up paying some of those added fees, you know, now in the short to midterm. But with equity, you end up paying a lot more in the longterm if things are, are successful. So definitely understanding like the pros and cons of each. And I think it's important if you're using any debt product just to evaluate the effect that's going to have on your margin, your cashflow so that you can understand that picture.

So at least, you know, what's coming and you're not. Surprise, no matter, you know, what you use. 

Marilyn Yang: Yeah, definitely. And I think the biggest piece for the debt is just and this is the reason why banks are hesitant to give, especially startups debt, right? I mean as much as people knock on banks for being predatory, at the end of the day, banks want businesses to succeed because banks won't succeed either if all these loans aren't getting paid.

And so that's why they limit things, right? I think with more non traditional financing, where maybe it's a bit [00:16:00] more nebulous in terms of the implications, it is important, I think, for any startup. Brand owner or founder to at least have that confidence that, you know, is it realistic that X months down the road, whenever it is, I need to pay some of this back that we'll actually have the cashflow to do that.

Jordan Buckner: I love it. I think that's super important. So once you were able to get the funding from Kickfurther, that allowed you to launch in those 3000, you know, 2000 additional retailers, what's that experience been like growing so fast across so many retailers? 

Marilyn Yang: It's kind of crazy, actually, how, again, it's one of those things where I think not coming from the CPG space, some things happen much quicker and other things happen much slower in the industry.

So I feel like you know, for example, Whole Foods we just launched in about over 200 doors in Whole Foods this July. And we'd been speaking to Whole Foods since we first launched. So, you know, since, I don't know, June of 2022, if not even before that. And so it felt like a long time, especially in our, you know, brand short history that we were trying to get on [00:17:00] shelf.

 And then all of a sudden, once we, the opportunity actually came, it was kind of funny because we actually didn't have a ton of time to prepare for it. I think we were contacted maybe in April. March or April or something along those, maybe not too much before that in terms of launching in July which is of course is not a ton of time to start a very quick production.

that's just one example, but that's how it was, I think, for almost all of the launches we've had this year where it was, you know, maybe a longer initial. Sales process, but then once they were interested in an order, it was a very quick turnaround. And I think, you know, part again, part of, I guess, all this startup journey is taking that risk.

And so we did take at least some risk earlier on, I would say, at the end of last year. Anticipating that we would at least get some of these retailers to turn over. And so we did actually ramp up production in advance, but that was definitely a big risk that we took that in the long run paid off, but it was definitely scary at the time.

Jordan Buckner: Oh my gosh, I know. And that's always hard thing because you don't want a retailer to come in and say like, great, you're approved for hundreds of stores and we need the product in a month and you're like, Oh no, it's going to take a few months [00:18:00] to get their product. Right. And they're like, ah, we'll miss the reset.

And like, there's all these things that happen. I think you're right. It's like finding that balance between like being prepared and having everything set up and, you know, try to anticipate a forecast as best you can, and you do have to take some rest to figure out where you want to land. 

Marilyn Yang: Yeah, definitely.

I guess none of us would be be in the entrepreneur world if we didn't like a little bit of risk. 

Jordan Buckner: tell me about what's next for Papa Dell. It's what's the next big thing on the horizon for you? 

Marilyn Yang: Well, actually, funny enough, the next big thing actually is that we finally feel like we are at the point now where it is appropriate for us to bring on equity investors.

So so actually, we are in the process of doing our first ever third party capital raise on the equity side. And I think a big piece of why we wanted. To take our time with that is that now you know, we're at a point where we can show a lot more concrete traction. And so we're likely able to get, I guess, more sophisticated investors, but also perhaps more capital as well to kind of fund that next step.

And then I think it's just a lot of the low hanging fruit. I think, you know, a [00:19:00] big part of the initial CPG struggle is just getting into the distributors and you're getting into your first stores and then it's just blocking and tackling from there. So really, you know, driving velocity off of shelves are really ramping up our demo and merchandising programs.

Now that we're in you know, the distributors like KeHe and Unify really making sure we're targeting all of those retailers that Utilize those distributors. And so, you know, it's typically one or two retailers that get you in the door with those distributors, but that gives you access to, you know, tons of others.

So there's a few other large banners as well that we're submitting for category reviews for next year as well. But that was only facilitated because we were able to get these initial launches. So basically building on the snowball from there and prepping for kind of team growth and additional kind of marketing growth with those equity dollars.

Jordan Buckner: I love that. And I'm so excited for everything to come with Popadelics as well. And I think, you know, you have a bright future ahead of you. So thanks so much Marilyn for being on and sharing about your journey and then using [00:20:00] Kickfurther to expand into those new retailers because it sounds like it was really valuable.

And I also wanted to just drop a note that Kickfurther has a pitch competition that's coming up that's called CP Grow, and there's a submission deadline of January 31st, 2025, but their grand prize includes 250, 000 in no cost inventory funding from Kickfurther. So I'll drop a link in the show notes to apply for that as well, if you are interested, but Marilyn, thanks for being on.

Marilyn Yang: Yeah, thanks again, Jordan. Appreciate it.