- Speaker #0
Lots of times when we start building our business, we're focused on what's happening inside, what we're selling, but do you ever think, what's your brand? What is a brand? How does brand affect your business and your sale? We're gonna learn about that today. Welcome to episode 51 of the T-Hire Small Business Podcast, where we cover the issues that help owners scale their small business. I'm Corey Harlock, creator of T-Hire, and I'll be your host today. Our guest today is Eric Malka. He's a Managing Partner of Strategic Business Investments, SBI, where they focus on nurturing early stage companies. He likes to combine his expertise in brand building with a passion for high quality, sustainable products. A couple of cool things about Eric. He's been around. He's the founder of The Art of Shaving, a luxury grooming brand that he grew into a global success leading to a sale or it was acquired by Procter & Gamble. Pretty cool. He's also the author of a book called On the Razor's Edge. It's a business memoir that shares his journey and insights into entrepreneurship, wellness, and building proposed purpose-driven brands. Let's welcome Eric. Eric, how are you doing?
- Speaker #1
Good. How are you? Thanks for having me on.
- Speaker #0
Hey, it's our pleasure. The art of shaving, when does that date back to?
- Speaker #1
We officially opened for business in 1996.
- Speaker #0
Because shaving is a big business these days, right? There's like...
- Speaker #1
Well, for a long time, yeah. There's no shortage of hair growth, right?
- Speaker #0
Yeah, fair enough, fair enough. But now you have like Dave's Razors and all these other crazy... There's all these kind of clubs that are kind of coming out, right? 100%. Was that what that was? Was it like a shave club?
- Speaker #1
No, we were more on the chemistry side, to be frank. Really? On the luxury side. So we cared more about skincare than we did about razors. We adopted beautiful handles to the Gillette latest blade systems, but we really played in the chemistry side as a grooming brand.
- Speaker #0
Very cool. Awesome. And then tell us a little bit about your book.
- Speaker #1
So the book has been a long time in the works, but I was really inspired to write the book about a year and a half ago when I started to really understand how to make the book more valuable to the reader beyond just the story of an entrepreneur. I wanted to really reverse engineer why I was able to go from a kitchen table to a strategic acquisition in 12 years. When so many other entrepreneurs are aspiring to do that, there are very few make it.
- Speaker #0
Right. Very cool. Well, that's awesome. So today we're talking about building a brand versus a business. And we always like to start with definition. So how do you divide those two or how would you define the difference between a brand and a business?
- Speaker #1
Well, a business, well, a brand is also a business, but a business is not always a brand.
- Speaker #0
Okay. Just like champagne is sparkling wine, but all sparkling wine is not champagne.
- Speaker #1
That's right. And it's more expensive to buy champagne, by the way.
- Speaker #0
That's right, because it comes from champagne.
- Speaker #1
That's right. That's the brand. So yeah, you hit on the nail. The brand is more valuable than a company, first of all. Companies, where were we? You were asking me about...
- Speaker #0
The difference, how do you define brand in business?
- Speaker #1
How do you define the difference between a company and a brand? You know, a company's only reason for existing is to generate profits for shareholders. A brand's reason for existing is to change the world. I mean, that's one place to start, right? A brand exists to have a relationship with a consumer. And that relationship is selfless. Whereas a company... their relationship with the cons with customers is selfish i want you to buy my product at a profit so i can make more money and distribute it to my shareholders a brand is really a deeper deeper human than a company if we were to compare them to a human being a brand for example if a brand was if you were a brand and you are a brand by the way but if you were a brand branding is about who you are as a human being what you believe in, what your values are, what your history, who you are at the core in your soul. A company is more about how you dress. how you speak, what you say. That's also the marketing side of it.
- Speaker #0
Right, yeah.
- Speaker #1
So building a brand is really based on, first of all, being a unique product, something that is a breakthrough innovation, really is one of the pillars of branding. And a product that goes beyond its physical state, that has an emotional connection with the consumer.
- Speaker #0
so in a clothing brand it would be you know that cool trendy thing that people just feel elevated when they put it on or whatever it might be or you know yes nike is something that's exactly what i was going to say the epitome of branding is nike it's do
- Speaker #1
they make better sweat pants than the other guys you know arguably not they're probably coming out of the same factory they're probably rolling out of the same factory they're not better cheaper or anything else but When you wear that logo, so the highest form of adoption of a brand from a consumer is they steal the identity of the brand. I use an Apple computer, and when you see me at Starbucks with that logo, I'm telling you about my personal brand.
- Speaker #0
Sure. Yeah, I agree. So
- Speaker #1
I wouldn't be caught dead with a Samsung or whatever people say, right? Because you've adopted it. And Nike has done that. All the iconic brands in the world have done that. It goes beyond product. It is a manifestation of your own brand DNA that you mirror with the brand that you associate yourself with.
- Speaker #0
It's even like the Starbucks cup, right? You have the cup in the sleeve. You're a Starbucks person. You're a Starbucks snob. You don't just drink any coffee.
- Speaker #1
Yeah, and I pay six bucks for a cup.
- Speaker #0
My wife calls Starbucks five bucks because everything costs five bucks.
- Speaker #1
Like Neiman Marcus used to be called Needless Markups.
- Speaker #0
That's awesome. Very cool. So we always like to talk about, you know, moving to mistakes. So I think you've done a really cool job of defining the difference between a brand and a business. And I think ultimately we would all like to be part of the lexicon, right? And part of the vernacular of. of how people speak you know i think of a couple of them band-aid that's a brand that's their what they sell are plasters skidoo i mean i don't know if you're from the north i'm canadian but it's canoe skiddy and it's a brand name those are sleds yeah yeah that's when they own a category i mean kleenex you know the kleenex yeah yeah the fridge
- Speaker #1
is there for a long time uh but yeah that's when they own the category right you refer to the entire category as the brand name uh that's huge in our case here's something interesting we did you know when we talk about emotionality between the brand and the consumer we stumbled onto a masculine ritual that dates back to the caveman era and the ritual was really the secret sauce that we discovered after selling our company we always thought it was because we had a great experiential journey for consumers great products, natural ingredients, great results. But when we interviewed customers after selling the company, all they could talk about was that moment at the beginning of their day for five, 10 minutes with their tools and starting with the oil and the cream. And our consultants we hired to do the research told us we owned the ritual of shaving. And that was, to me, it blew my mind. And that is, again, one of the type of epitome of branding is when you're able to do that.
- Speaker #0
Right. That's very cool. Yeah. So what what mistakes, common mistakes do you see people? You know, we talk with small business owners who kind of target five to twenty five million dollars in total revenue, you know, give or take. I mean, we have clients and people that listen that are are much larger than that. But what are the mistakes? mistakes you see people making when they or missed opportunities maybe even Eric around building a brand versus a business well first of all some of the wealthiest people in
- Speaker #1
Entrepreneur world are companies. You've never heard of right They always say you make the most money on the unsexiest businesses around right yeah, you know I made this little metal thing that every airplane uses what is that a widget right yeah right um i i think first of all We made a decision to build a brand, not a company. That was a conscious decision we made. So it really takes you off on a different path. It's a very different engagement with your company, right? From marketing to financing to profitability, it's a very different ballgame.
- Speaker #0
So let me ask you, just sorry to interrupt. How did you decide to do that right from the beginning?
- Speaker #1
I think my wife being from, my wife and I come from a European background. We love, we, you know, we grew up with iconic brands. We love the world of specialty retailers. You know, we come from a place where you go to the butcher shop for meat, you go to the shoemaker for shoes, you go to, you know.
- Speaker #0
And where is that, Eric? Just because people are now wondering, okay, where the hell is he from?
- Speaker #1
Well, my wife is French. We're both French, but I was born in Morocco and grew up in Canada.
- Speaker #0
so hey i'm a canadian as well look at that there you go i know there's a different were you up in montreal yeah okay my wife's from montreal she's a she's a french speaker from montreal cool man love that i don't speak french but i live in miami though like most montrealers that i tried to smoke bridge yeah so you grew up in in in morocco paris all that morocco those are like you know yeah they're very brand driven
- Speaker #1
kind of so we've always i've always been for some reason i've always been brand centric i started my first brand when i was 19 years old it was a surfwear brand and my wife was always you know in love with all the beautiful brands that she grew up with in france so we really wanted to create something of our own and you know branding was just a natural instinct we had we weren't getting profits you know obviously i was seeing profits as a businessman but We wanted to create something beautiful. It was all about quality. It was about creating the most pretty products, the best experience for consumers. And my wife and I had very complementary skills. So, and also I was selling brands most of my careers, whether it was mine or... So, you know, the mistakes that people make is, first of all, they confuse their company for brands, right? They think they're building a brand, but they're really building a company. And there's nothing wrong with that at all. But you just need to be conscious about what you're building and why you're building it and what's the end game. If your end game is to build, scale, and exit your company, brands are much harder to build, but they also are more valuable. Yeah,
- Speaker #0
you get a better... Multiplier on a brand.
- Speaker #1
Much bigger multiple. I taught people out of selling their profitable companies for multiple of EBITDA. Just, you know, if you have a cash flowing company and you're making a lot of money, keep it for the rest of your life. Right. My company, when I sold it, for example, I sold my company for $60 million and it was losing about half a million dollars a month. So you can't even. calculate the multiples on the EBITDA. It's just not relevant. And 95% of my purchase price was for Goodwill, for the logo. They couldn't care less about my assets and my leases and my employees and my inventory.
- Speaker #0
They got your formulas though, correct? They got your recipe. Yeah.
- Speaker #1
It's all about IP, man.
- Speaker #0
That's what they wanted.
- Speaker #1
It's your trademark, your patents, your... uh technology your proprietary products this is all you're gonna sell at the end of the day you know asset-based companies are not worth uh so you know when you're building a brand really focus on your ip and focus on your market share and focus on your relationship with the consumer how you how the market and the consumer perceives you and usually you have to be like a dominant player in your in your pond, right? We were a big fish in a small pond. We were the leader in luxury men's grooming, which is hard to do if I'm trying to compete with, you know, the soda industry.
- Speaker #0
Right. And is it for Eric, is it fair to say that you were kind of, did you start that, that category, like the luxury men's grooming category? Because I'm sure there were people doing it a bit.
- Speaker #1
Yeah. You know, I was having this conversation recently. It's really not the first market that wins, it's the first to break through in the market, right? Yeah. So Starbucks was not the first espresso bar in America. Right. We were not the first men's grooming brand in America. But we executed it in a way that really struck a chord. It was also timing, man. 1996, if I would have started in 1986, nobody would have heard of it. Right. And 1996 was just around the time the metrosexual movement started to brew. Yeah. And we rode that wave. and that was a huge huge timing point you know the fact that procter and gamble bought gillette in 2005 timing was really working in our favor uh gillette would have never acquired my company uh the way it was but png would so you know there's a there's a lot of elements here but execution is everything when you talk about branding right it's not just It's a combination of a safe. You need to have your brand positioning, your distribution channels, your packaging, your messaging, your formulation, your pricing, your environments. Everything has to work in a perfect synergy with each other. It's almost like a combination of the safe. If you don't get it right, it just doesn't unlock.
- Speaker #0
Attention business owners, are you tired of wasting valuable time hiring for associate level positions only to have them not work out or show up? Let me introduce you to CareerSpring. CareerSpring connects first generation and low-income college students with employers like you for those crucial early career roles. Many of these graduates had to balance a full-time job and a full-time course load to achieve their college dreams. They understand the value of hard work and overcoming obstacles. And here's the best part. CareerSpring is free for employers. Yes, you heard that right. As a nonprofit organization, CareerSpring offers their services at no cost to you, making it easy to find and hire these incredible future leaders. They work with students all across the United States, from trade programs to Ivy League schools and everything. in between. If you're ready to make a real difference and connect first generation potential with future opportunities, click the link in the show notes below and learn how you can transform your business and support these exceptional students. And as you're talking, I'm thinking, you know, the difference between a brand and a business is business is kind of what happens inside the four walls and a brand is how almost how people interact with your product.
- Speaker #1
That's right. It's a relationship. It's like it's a combination between raising a child and having a relationship with a meaningful relationship with another human being that you will have for a long time. It's not based on superficial element like prices and products and delivery time. It's more about how do how do I feel, you know, and we were we were one of the first brands in the category because. As we used to say, you may not be able to afford a Ferrari, but you can afford the shaving cream that the guy that drives the Ferrari.
- Speaker #0
That's smart, right? Yeah.
- Speaker #1
You know, that's aspirational marketing, right? And today it's all about brand elevation, which is another level. How do you elevate your brand to an iconic status? You really elevate the category, right? You see Olipop with probiotics. They're turning.
- Speaker #0
They're turning Mars bars into putting protein in Mars bars.
- Speaker #1
They're putting.
- Speaker #0
They are. They're turning Mars bars into protein bars.
- Speaker #1
Now they have to. The consumer is at the end, right? You, you know, you fool them for a long time, but now you got to go with it.
- Speaker #0
So what are some of the other mistakes? Then let's, let's talk about it like this. If I want to build my brand. So I've got a company that I've had for five years and we're known in the market and kind of. but it's more transactional. What are some of the mistakes you see a business owner make or opportunities they miss to build the brand?
- Speaker #1
Two mistakes that come to mind for me is, one is I've heard people say, well, we're too small to think about branding, right? We'll do that later. No, branding starts day zero. You're a brand day zero. You just haven't achieved. the potential of that brand that's in your mind. Right. The second thing I think that applies to every entrepreneur out there. is they're trying to go too fast. You know, it's especially true with branding. You can't, unless you have unlimited amount of money and you can have Super Bowl ads to create brand awareness, you need to really go through the stages of building your brand, of establishing your brand, of nurturing your brand to be ready to scale. If you try to scale a brand that's not ready, I mean, that could be disastrous, right? you need to get the products right you need to get your organization right you need to get your distribution right and then you can bring in the funding to launch the rocket ship if you will right and then you run into the problem though you can have all that in place but then you launch
- Speaker #0
you get a level of success and you blow you blow through all of the process and procedures and logistics you had set up and then you have to re reevaluate and bring in bigger more people with bigger, more horsepower, more capacity to reimagine what those process and procedure needs to look like as well, if you're successful.
- Speaker #1
You know, it took us nine years to get from zero to 10 million. And it took us another nine years to get to 100. And that's what I teach entrepreneurs. It's crawl, walk, run, fly. And when you bring in the rocket fuel, when you bring in the big growth capital, you have to have... everything ready to launch that rocket ship. If you try to launch the rocket ship when it's not completely, completely, you know what happens. Yeah.
- Speaker #0
We've seen lots of that in the last couple of years, right? With everyone, the race to the moon, everyone's rockets are blown up all over the place.
- Speaker #1
What I tell entrepreneurs is, would you prefer to succeed in 15 years or fail in five? You know? There's no, I don't know why they're rushing. I know we're impatient. That's how we're wired. But urgency and impatience are not the same things. I think a sense of urgency to be an entrepreneur is essential, but impatience is a handicap. You gotta run when you're ready, man. You know, I see too many people. A lot of the work I do with entrepreneurs is that I make them go back before they go forward.
- Speaker #0
Yeah, like to go back and say, okay, this isn't good enough or this isn't set up or you think you have the person. But yeah.
- Speaker #1
You're trying to scale and you don't have a scalable business model like you understand.
- Speaker #0
A lot of the thing, I mean, you're looking at the model. I look at the talent, right? A lot of people that want to scale and you go and assess the talent. And you're like, you have a lot of constraints here in terms of talent.
- Speaker #1
Yeah, you have to have an incredible team ready to roll.
- Speaker #0
Yeah.
- Speaker #1
If you're still a CEO working on all the functions inside your business, there's no time to scale. You have to have a team in place. You have to have processes. You have to have a well-oiled machine ready to blast off.
- Speaker #0
Very cool. All right, well, let's move into the advice then, Eric, because, I mean, you've been giving advice as we've been going, but what are the top three to five pieces of advice you would give a small business owner who's trying to get ready to blast off, right? Maybe they're in the... the crawl walk stage they want to get to the run and and fly stage um what what can they do to really start moving their brand working with urgency not being impatient but being urgent to move their brand forward what what pieces of advice would you give them well
- Speaker #1
you know if you're in the run stage that's the time when you're really putting your c-suite team together If you really want to start flying, you need to put that team in place in the run stage. You also have to know what stage you're in. The way to know what stage you're in is how much stress are you feeling.
- Speaker #0
Okay.
- Speaker #1
If you're feeling way too much stress, you're going faster than you should.
- Speaker #0
Interesting. Okay.
- Speaker #1
You know, it's like learning how to drive at 70 miles an hour. That can be stressful on your first day. But 20 miles an hour, no stress. So there's an appropriate speed for where you are in your journey. And stress is a real important element of your gut feeling. You know, when we talk about trust your gut, that's really all it is. Your body's, you're stressed out. How many entrepreneurs have you met? that are completely overwhelmed oh yeah you know just slow the f down until you're stressed meets where you are. It should be low. And you'll do better work. You'll enjoy it more. You'll make less mistakes if you're going at the appropriate speed that you're capable of going at.
- Speaker #0
This episode is brought to you by Key Hire Solutions, where we work exclusively with small business owners who need the right team to scale and grow their business. Are you struggling to find the right talent for your business? As a small business owner, your time is precious, and sifting through unqualified candidates can be frustrating and costly. At KeyHire, we can eliminate time-consuming and disruptive DIY hiring by leveraging our market expertise and our proven process to ensure you get a custom hiring solution that fits your culture, your needs, and your budget. We take the hassle out of hiring by delivering the perfect candidate for your business. guaranteed. Let us handle the heavy lifting so you can stay focused on what matters most, growing your business. With KeyHire Solutions, you'll secure the right talent without the stress or guesswork. Stop settling for the best of the worst candidates. It's time to build the team your business deserves. Click the link in the liner notes below to schedule a call and start your journey to success today. That advice is almost... anti to what many people think and hear.
- Speaker #1
It's anti, but I'll challenge you with that because 99% of entrepreneurs are failing or struggling big time.
- Speaker #0
Yeah, I'm not disagreeing with it. I'm just saying it's counter to what most people believe or think because a lot of entrepreneurs are just, they get way out over their skis and they're moving so fast and the business is out growing the talent of people in there. And then they're... They're just getting jammed up, right? The words are getting all gummed up.
- Speaker #1
Yes. And that's because they're listening to sexy comments on social media. They get clicks. My comments don't get clicks, man. My comments don't get clicks. You know? But I'm here to help the 99%. You know, we talk all day long about guys like me and the 1% that have succeeded. And, you know, it's beautiful. We're saying how. great they are but a lot of advice we're hearing and that's really what i'm trying to do is change the conversation we've been hearing for the last 10 years of scale fast you know fail fast all the things that are not serving the entrepreneur well now if you're in the tech world that advice could be relevant right crash and burn or you go to the top right and that's why those vcs
- Speaker #0
put money before it's even business right and you spray and you pray and you have enough money out there that one of them is going to make it right sure yeah it's an ro it's a gamble right you hope that one success will cover all the the nine losses but
- Speaker #1
for most entrepreneurs in the real world you know they're trying to scale so fast you can see it in their business you know when we talk about grit for entrepreneurs what are we really talking about is running a marathon, not a sprint. Grit is about running a marathon. And a lot of entrepreneurs get to the start of the marathon with a sprint mentality and a business plan to match. So, you know, I deal with them every day. You know, they blew $3 million worth from investors, and they're at a million dollars with a non-scalable business model and no team and no more cash. What do I do now? Well, you've learned a lot of what not to do. Let's try to just bring that, you know. So any speed you lack in the first couple of years, you're going to make up tenfold later on. That's really, it's not about going slow. It's about starting small and thinking big,
- Speaker #0
right? And being intentional about what you're doing and what you're putting in place. that's right very intentional in the beginning yeah but that's that's not what happens a lot of people start a small business they hire their neighbor they hire their neighbor's cousin they all go in they all do everything they can and if they do a good job the business grows beyond their capabilities right and i always say no one no case no one starts a company and the first thing they say is okay we've got to create some amazing process and procedure they just start going right
- Speaker #1
It's not the time to create process and procedure because you're the only one working. Correct.
- Speaker #0
Yeah. Yeah. But there is a time. There is a time when that becomes really important.
- Speaker #1
You can't grow without it.
- Speaker #0
Correct.
- Speaker #1
That's part of your growth process. That's part of that running stage. Running stage is about process. It's about building the team. It's about fine-tuning your model. And, you know, I was going to say something about what you said before, but I forgot. Forget about it.
- Speaker #0
It'll come back to you. What other pieces of advice do you have for anyone listening, Eric? Any final thoughts, final pieces of advice?
- Speaker #1
Look, being an entrepreneur is uncomfortable. And I think that you can kill two birds with one stone by reducing the pressure on yourself to enjoy the ride more. And that will turn into a more successful long-term journey for you.
- Speaker #0
It's sage advice. The only thing I would think of is what if they need... Maybe this is part of the problem. It could be a whole different conversation. But if they're, I need the income, right? I know a lot of, I'm sure you did too. When you own a business, you wear that responsibility of making sure your people can put food on the table and pay their mortgage and all of that stuff. And I personally, I think that's where a huge piece of that stress comes. That's a big burden to carry when you're responsible for others.
- Speaker #1
I agree with you. And in that. In that sense, I would say don't be obsessed about revenue growth. It's about, first of all, cash is king, profit comes second, and top line is third. A lot of entrepreneurs starting out, they just want to have a bigger company. And I think that's really important from the beginning to really, you know, I train, I'm coaching a guy now that's been in business for eight years. He's never tracked his cash flow. I mean, he does not have any cash anymore, but maybe that's why. And it's about cash flow and cash flow first, profitability second, top line third.
- Speaker #0
OK, it's interesting. I mean, it sounds like, you know, what you're saying is get in there, create a good, stable business, make sure you can take care of your people and then very intentionally. I think you said work with a bit of urgency to start building a foundation and a scalability for the company. Don't grow the company and backfill the stability, right? Build the stability, grow, then go out and get the business.
- Speaker #1
It's like being in a pharmaceutical lab. You've got to work under the microscope before you mass produce that medication.
- Speaker #0
That's a great analogy. Yeah, very cool.
- Speaker #1
I would say that the profit first. or the cash flow first and is no longer applicable when you are heavily funded and scaling rapidly then it's all about market share at that point but in the beginning if you want to see the light of day you know focus on profitability and cash flow but once you get big investors in because you're ready to launch the rocket ship then it's all about top line market share growth
- Speaker #0
So a lot of people are afraid to go get those investors, right? They're a privately held company and they get to a point and they have people wanting to come invest. I know a couple of business owners are like, I have PE firms calling me all the time and they're like, I don't want to deal with those people. You've referenced it a few times, like going to get that capital.
- Speaker #1
So you seem to think it all depends on what you want. It starts with what do I want? In my case, I wanted to build a company and sell it for a lot of money. I didn't build a company that was profitable, to have a great life and give it to my children. That wasn't what I wanted. Right.
- Speaker #0
Okay. That clarifies.
- Speaker #1
Absolutely. I always start every relationship I have with entrepreneurs is all about what do you want? Because if you want to be a billionaire, there's a 0.0006% chance you're going to make it. You need to know that going in. If you want to just have a nice little business and you don't work for anyone, that's a whole different strategy, a whole different ballgame. Right. It all depends what you want. First, you figure out what you want. Then you figure out what you have to do to get there.
- Speaker #0
Very cool. Well, that's great. I think that's a great point to end. So, Eric, if people are listening to this and they're like, man, this guy knows this stuff, I'd love to talk to him or engage him and see if he can help my business. How can we get in touch with you?
- Speaker #1
ericmalka.com or strategicbrandinvestments.com they both get you the same website okay perfect and then we had matt do you have a link for the book the art of shaving
- Speaker #0
they're over the razor's edge sorry available on amazon and kindle so google that on amazon and kindle you can read all about eric's story that's awesome man hey thank you so much for your time this has been great uh um i wasn't sure where the accent came from but uh once when you laughed when i gave my champagne comment i was pretty sure you were from france at one point yeah um it's confusing trust me yeah i know yeah yeah you it's uh it's a it's a beautiful country though
- Speaker #2
all right man thanks so much i really enjoyed the conversation appreciate it all right eric malik a smart smart dude that was great we could talk to him all day uh so thanks to you for tuning in to the key higher small business podcast if you got value out of today's episode and you want to keep up for data on our new content make sure you leave a comment below let us know what topics you'd like us to discuss and be sure that you subscribe to the youtube channel If you prefer to listen to your podcast, you can listen to us on Spotify, Apple, your favorite platform, just Google The Hire Small Business Podcast. Thanks for listening. I'm Corey Harlock. Until next time, stop grinding, start growing.
