Mapping Out The Future - Zach DeAngelo - The Revenue Maze - Episode #021

While today’s guest lives in Colorado, he was born in New England and still carries that Northeast spirit in his heart. He grew up with his mom who had her own catering business, which opened his eyes to what he does today. Zach DeAngelo is the CEO, Founder, Investor, and Food & Beverage Strategist at Rodeo CPG. Zach joins the host Valerie Cobb to share some of his tips for how companies can work to increase their revenue. 

Takeaways:

  • One way to get out of the revenue maze and build up the profits for your business is to clearly define what your goals for success with your business are very early on.
  • You have to be mindful of your cash flow as a business owner. It’s the lifeblood of your business and you need to keep a watchful eye on it.
  • You should try to map out your business and see how much it would cost you to make your product and how much you can sell it to make a profit.
  • There is always going to be a high element of unpredictability with a business. The most successful businesses are the ones that are able to adapt to changes.
  • We as humans have the capacity to learn most things and figure them out, so don’t be afraid to really dive into something new and learn it.
  • It’s hard to get a bunch of people in an organization to change direction when something isn’t working, so you need to practice the change to make it a smooth transition.

Quote of the Show:

1:27 “One piece of advice is to clearly define what your goals for success with your business are very early on.”

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Mapping Out The Future – Zach DeAngelo – The Revenue Maze

Welcome to another episode of the Revenue Maze. I’m super excited about our guest. He has made it his mission to build an action-based ecosystem, probably stemming from some of his roots of being in purgatory from finance on the East Coast. I have been super excited about talking about him being from Maine and Colorado and loving the outdoors and we’ll get into that a little bit later. He has started a company that is in the food and beverage strategy at Rodeo CPG. Welcome, CEO and Founder, Zachary DeAngelo. Zach, welcome.

I appreciate it. Great to be here.

Before we get into all the fun and exciting things about Maine, Colorado, purgatory of finance and all this stuff that brought you to Rodeo CPG, we always answer one question in this show. What is one thing that you can do to help the readers get out of the revenue maze?

It’s incredibly pertinent, particularly in this what’s going on in the world and how that translates to small business and investors and all of that. The one piece of advice is to clearly define your goals for success with your business early on and be willing to be flexible around that to create and generate a moment for the long haul.

Part of that is getting a clear understanding of how and when you can become profitable and create a solid business that generates positive cashflow. That is something that some brands or companies have not been able to do up to this point. In times like this, that becomes hard for people to figure it out on the fly. That’s the initial talking point that I’d say.

That is a lot to unpack. We talk all the time that 99% of the business in the US and the UK are small businesses. The number one reason for failure is due to cashflow. I love that you talk about goals. Making sure that you’re l having that end goal in mind to keep the momentum going and all that stuff. Could you do us a favor, though? That is a lot. Give us three-pointers. You’re successful. We all need those pointers. That’s why I love doing this show. I get great pointers for myself as well.

Success is a general thing that, to me, is a moving target. Success for one person might look very different for another, which translates to what strategy you’re trying to build out for your company. An example is if you want to start a company that scales to $150 million in the food and bev space. You have to be sure that you have a pretty robust investing strategy plus a product that is ideal for a very large demographic versus a niche product, which means the price point has to be pretty low, which means your cogs have to be pretty low.

That’s one strategy. If you’re a small business that wants to grow a beautiful niche product that is more suitable for a very small audience, then you probably wouldn’t have to raise a lot of money. You have to be mindful of your cashflow and it’s in a different hiring strategy and all of it. All of those components of a business need to align with that strategy. That’s, again, easier said than done, but a lot of people go into it without thinking about what they want out of the business and what is meaningful to them. What would constitute success in their mind in 3 or 5 years or whatever the timeframe it is?

TRM 21 | Mapping Out

Mapping Out: If you are a small business that wants to grow a small audience and a beautiful niche product, you have to take a different hiring strategy and be aware of your cashflow.

You and I have both been in some similar spaces. I haven’t been in the food and beverage industry, so I’m not going to say that I’ve been in that space but in the revenue space in the past where it’s the whole, I’ve used this on the show before, it’s the Alice Wonderland thing and the Cheshire Cat. She’s asking, “Where do I go?” He goes, “Where do you want to go?” It doesn’t matter where you go if you don’t know. That’s a clunky summary of it but at the end of the day, what you’re saying is it depends and you’ve got to define all of that. You’ve got to define where you want to be then work backward that builds the teams and the who we are targeting?

You run up against this all the time. A salesman is supposed to be hired. What is my target? How do I get there? What am I doing right? A lot of times, you run into these smaller businesses or a lot of these startups and it’s not well defined. They have like five steps for a go-to-market strategy because everybody says to keep it simple. It is simple. You’ve got to give it to a team in simplicity, but when you’re trying to bake something five years in the future, I don’t feel like there’s much simpler about that. There’s a strategy behind it.

A lot of times, you can assert guardrails and parameters based on pretty back-of-the-napkin math. A lot of my context is going to come from the food and bev perspective, but if you know that your product is a sauce that costs $10 and velocities at stores are below one unit per store per skew per week. If you think you’re going to create a $100 million dollar business, I can very quickly show you that’s not possible with those low velocities, with that high price point and with a presumed smaller audience. There are a lot of analogs to that very simple map that people can figure out.

That’s not to say that you can plan explicitly what’s going to happen over the next five years because you can’t but just being like, “Is this rational? Is there a logical hypothesis for this to happen?” That’s all I’m talking about. It’s not like creating the entire vision all at once because the other piece of advice for an entrepreneur, founder, or anyone is there will always be a high element of unpredictability. You’re going to have to pivot and keep pivoting. The most successful companies are good at shifting, changing, and adapting because almost no one gets it right initially. No matter what, a drunkard’s walk, where you think you’re going one way, then you don’t and you go the other way, you have to be up for that.

The most successful companies are good at shifting, changing, and adapting because almost no one gets everything right at the beginning.

I love the back of the napkin analogy. It is simple math, but you run into people who are going, “I don’t know where to go.” Think that’s been one of the biggest challenges is to say, theoretically, where can I go? It’s a simple question, but it took me to create my why in business. It’s taken me many years. That’s because, like you said, adapting and things change. That came from a Vistage leader, but we’re not going to get into me now.

We’re going to talk about some of the back of the napkin stuff and what you’re doing now to help those. You built Rodeo CPG based on some of this framework that you’re talking about. I’d love to hear how you came to it. A little bit of your story of why did you start building this. What did you find in the marketplace? What was going on?

My background, as you said, I always say I spent some purgatory and finance. I was pricing credit default swaps in 2006 in New York, which was a crazy time. Ultimately, I didn’t enjoy it. I have always loved food. I went to graduate school to figure out what a career in food meant and ended up starting a gluten-free cereal company with a partner that had Celiac and Cocomama Foods.

Traveled around the country in various co-manufacturing facilities, learning the operational side of the business and along the way, met a friend who had started a baby food company. I joined him in that effort and we grew Little Duck Organics to about 20,000 doors across the country and ended up selling the business in 2014. I moved from New York to Colorado and ran sales for a natural pet food company called I and love and you.

I had these various brand experiences and had always been disappointed by the services infrastructure in food and beverage. There were experts and advisors. There wasn’t a lot of innovation in that support network. Not a lot of data and technology, so I started Rodeo to try to build that better operational model to help many brands grow more quickly and more efficiently.

That was how I got there. Over the past years, we’ve been building the team. Functionally, we help all sorts of companies in three areas, operations, product development and sales management. Those three things allow us to help brands in an integrated way and help them navigate the crazy world of retail and DTC and all of those things that apply to my industry. That’s where I came from, the need that I saw and where we’re going. The fun part for me now is b building software to try to address some of these problems at a greater scale. We’re in the midst of that as well.

I could see how that was a need in the industry. When we talk about that and how you got there, there’s a backstory even further back in your history. You talked about finance, about some of those things but didn’t you say you had a mother that was in catering and that sparked? Tell us a little bit about that.

My mom always owned a catering company as a kid and ran the company. We had a commercial kitchen in our house since I was little. There were always cooks and chefs and things going around. I was always in the kitchen, so learning to cook always happened at a very early age. As I grew up, my appreciation for food never went away. I would always spend my last dollar on a great meal. That’s still what drives me when I travel and all of those things. Food is very much a part of my life in many ways.

We talked about some of the formative years with that. I love this type of thing. If you could tell your younger self, now that you’re older and wiser, what is one thing that you would tell yourself to do differently?

For me, a lot of the intermediary steps were important to ultimately figure it out. That question’s a little hard for me because I do believe that a lot of the trials and the failures and the successes all wrap up into who you want to be. There are certain things, like in college and high school, I wish I had been a little bit more dedicated. I wish I had figured out my passions earlier than going for them and realizing them.

TRM 21 | Mapping Out

Mapping Out: A lot of the trials, failures, and successes all wrap up into who you want to be.

The biggest impediment to entrepreneurship is that people tend to be like, “That’s too hard or I can’t or I don’t even know where to start.” We do have the capacity to learn most things and figure them out. It took me a while to unleash my own realization or capacity in that way. If my earlier self could grasp that, then that would’ve been wonderful, but since I didn’t, that’s okay too.

I know it’s a bit of a hard question because that is who we become. I’m a big science fiction person, so taking one thing out of the past totally alters the future. Someone brought up a good topic and it was, why do bad things happen to good people? Now, this was an interesting perspective on it. His perspective was defined as bad. Only because something is hard doesn’t mean it is bad or wrong. As you said, if there are successes and failures, those failures or things that, are they really failures or were they things that mold us into our learning journey? I don’t know. I don’t have any answer.

I’m not that good at it, but I get what you’re saying. You got to where you are because of those life experiences. For me, I answer that question. I would probably enjoy the journey a little bit more. That’s one of the things because I get very focused on tunnel vision. I look back and go, “That was a great experience,” but in the middle of it, I wasn’t enjoying the journey all the time.

A lot of us had that issue and there are always going to be a lot of things outside of our control. While we don’t control those things, we do control how we react to them. Now is a good time to recognize that because, at least in my industry, there will be a bunch of industries. This is not an easy time and there’s a lot of uncertainty. Investors are getting a little spooked. The markets have taken a hit.

There are a lot of exogenous factors, wars, shortages, price hikes and inflation, a lot of it. The ability to fight through that and recognize that it is hard and there’s no way it’s not going to be hard, but that’s part of it. It’s an important perspective to have, especially if you’re a small business owner or entrepreneur.

Although there are many factors out of your control, it is important to know that these things are hard to get through. A small business owner or entrepreneur should know this.

When we talk about some of those things because of the recession, it was a great game of business, which is also a methodology. Jacks stacked those guys. They always said there isn’t a recession if you prep for it. Even in the Depression, there were lines of businesses that weren’t selling. As we talk about some of that pivoting that you’re talking about, that takes a lot of what I think is emotional stamina.

I’ll use a little bit of analogy. One time I was working with a sales team and they were in manufacturing. They were down against, “Operations doesn’t like us.” We always hear that revenue against operations. We sent out a company survey. I remember talking to the CFO, saying, “Sales has this extremely downtrodden look at what operations thinks of them.” You’ll hear that all the time.

I heard it with one of my clients and we were talking. This CFO said something that was so important to me, especially during this time. There was a post on LinkedIn that was also very relevant. He said, “They’re not looking at the data. They’re doing everything from a motion.” When we got the surveys back, I went into the sales meeting with them and counted the times they had complimented sales.

It was the whole demeanor of the group that was changed. One person said one thing and it’s that whole 1 against 10. In the recession portion of it, when we start thinking about that, we’re only two markers, apparently. I’m not an economist. I play one or I quote a lot of people, but the reality is there was only two markers that say recession and everybody’s all worried now about a recession.

There is. There’s a war going on. There are all these things. In my years, there’s always been something going on and it never changes. There’s always something somewhere going on that is not ideal, so to speak. I love how you talked about pivoting because that speaks to your stamina, your emotional stamina. You need to do it while you’re going into the future for it.

You’re right. It’s not easy for us emotionally to set a strategy, then has to recognize that we were incorrect and we have to move to a different strategy with the same enthusiasm and energy. It’s even harder to do that in an organization where you’re getting a bunch of people to do that. If you’re used to it and you practice, it becomes less of an emotional slog and much more of an exercise and execution. It’s great.

I’m not emotionally attached to that thing. It was a hypothesis that we made. The hypothesis was incorrect, so we’re going to readjust and create a new hypothesis, work against that, measure it, and rinse and repeat. That, to me, is very applicable to my business. It’s very applicable to the businesses that we help.

I’m assuming small business at large is bigger, and that becomes hard because you’ve made capital investments. You’ve made human personnel investments. You’ve made all sorts of things that the larger you are, the harder it is to move the ship as it were. That’s why small business has such an advantage is that we are not constrained by and large by those huge capital investments.

TRM 21 | Mapping Out

Mapping Out: Small businesses have an advantage in not being constrained by huge capital investments.

It’s the birthplace of some new business lines because they can pivot. Small businesses can pivot very fast. As you talked about that pivoting and in your organization, what I liked is you said, “I’m not attached. It was a hypothesis. Now we’re moving.” It’s not an emotional attachment. I find that what that CFO was doing. It’s saying, “It’s not an emotional attachment. You need to see the numbers. You need to change what you’re thinking,” because it’s not real.

It’s what I term the matrix effect in the Matrix, in the movie where they realize that it’s not real and it’s all this mind-blowing stuff. I like that a lot, Zach. People want to know what you like to do in your free time because now you’re building your company and working through the dynamics of everything else that’s going on, but what do you like to do? What are you passionate about?

As you mentioned, being outdoors is important to my wife, myself and our family. We’re constantly biking in the summer, mountain biking and road biking. We’re swimming and playing tennis and all those things, staying active, which is important for us and probably a lot of people mentally, especially if you’re in a high-stress environment. In the winter, we’re skiing. If I were to distill it down for us, it would be outdoors, exercise, reading, traveling and eating. That’s not that complicated.

It sounds like a heck of a lot of fun. I didn’t know you were a tennis player. I’m a tennis player too. We may have talked about that before and I just forgot. Forgive me, so who’s your favorite player now?

It’s funny. I don’t watch a ton of sports. Nadal’s great. Djokovic is a good villain to have but also incredibly talented. In tennis, some of the players now are some of the best that we’ve ever seen and it’s been remarkable how long those careers have been between Federer, Nadal, Djokovic and all those guys. It’s a fun time. I’m sure there are some new upstarts that I don’t know about, but I play much more than I watch.

I’m very much the same way. I’ll go and play any sport, but I don’t love watching it, but I do love watching the open. There are a lot of reasons why I like Federer as well. That’s a whole other story, but that’s awesome. I hear that you have a beautiful son.

Our son, Van, is about to be two in October. That’s been a fun journey and, in some ways, the shift toward remote and all of that. Rodeo’s always been remote, so that wasn’t much of a transition for us, but by and large, it’s been a time where we’ve spent more time with our son than we otherwise would have. That’s one silver lining to the past crazy couple of years.

One last question, there’s never one last question but one more question. If you had a mentor, who would that be?

I have lots of mentors. We seek mentors within our own family. I have my parents, my aunts and uncles, have all been impactful in how I see the world and how what I aspire to be in the business that I want to create. There are mentors in sports, as you know that I have. Again, someone like Federer or Serena Williams or someone like that’s been able to compete at a high level for a long period of time. That’s great. In business, people like Richard Branson or people I look up to, someone who can have a ton of fun, maintain huge businesses and also preserve family life. It’s things like that that I look toward in terms of mentorship.

TRM 21 | Mapping Out

Mapping Out: When looking for mentorship, look for people like Richard Branson who can have a ton of fun while maintaining huge businesses and preserving family life.

That’s awesome. This is the last question if people want to know about you and about Rodeo CPG and all of those things. How do they get ahold of you?

Super easy. There are a million forms on our website that you can contact. My personal email is Zachary@RodeoCPG.com and I’m always available on LinkedIn. We generate a lot of content there, very accessible. I’m very available if there’s a question or is interested in learning more.

Zach, thank you so very much for being on this show. I want to thank all those who are reading the Revenue Maze. It has been another fantastic show. If you loved it, liked it, comment, all those things. Let’s show Zach and his company some love there. Again, thank you, Zach, for being on the show.

I appreciate it. It was a good time.

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About The Author : Valerie Cobb

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