Episode 57: Five grand and a backpack: Starting out in business


All Xero Gravity episodes

Hosted by Elizabeth Ü

Most tequilas are 51% agave, which means 49% is sugar distillate, corn syrup, caramel. Which equals awful smell, bad taste and nasty hangover.

Many of us can relate with a nightmare tequila story of our own. Eric Brass turned his into a dream business, Tromba Tequila, one of the world’s hottest premium craft tequila brands.

On Xero Gravity #57, he joins Elizabeth to share his journey, which began with just five grand, a backpack and a whole lot of serendipity.

Tune in and hear how Eric’s humility, persistence and kindness got him into the practically impenetrable spirits marketplace, and how grassroots methods — bottle by bottle, bartender by bartender — is moving his tequila like wildfire.

One entrepreneur who took his shot, literally, and turned it into the #2 premium tequila in Canada and #3 in Australia. So far.

Small Business Resources:

Episode transcript

Hosts: Elizabeth Ü [EÜ]

Guest: Eric Brass [EB]

Intro: You’ve just tuned into Xero Gravity, a podcast for small business leaders and entrepreneurs across the world. Now to your host, Elizabeth Ü.

EÜ: Hi everyone, I'm Elizabeth Ü, and this is Xero Gravity.

Guest soundbite:

“If you try to become a flawless entrepreneur, then you're going to be pretty doomed. You have to be afraid, and you also almost have to embrace mistakes and learn from them. If you don't learn from them, then you're in trouble.”

EÜ: Meet Eric Brass, CEO and founder of Tromba Tequila. He's based in downtown Toronto and has a very funky plan office that features a bar, and as you can imagine, it gets a little rowdy in there. Eric fell in love with one hundred percent agave tequila after a college vacation in Mexico. In fact, he rather serendipitously began his own craft tequila brand, Tromba, and did so against the odds.

Now here's something I find really interesting. Last episode, we talked to Manu Jaffrin, who had a completely different take to Eric's, on being the first to market. It all goes to show that there's no one size fits all approach to starting a small business. It's always going to be an individual journey with unique learnings, and sometimes success comes down to dumb luck. It's what you do with it that counts.

Eric also taught me why we've all had that awful experience with tequila, but it no longer has to be that way.

Guest soundbite:

“Everyone thinks tequila is that terrible shot at that horrible bar at that seedy hour of the night. I was definitely in that camp. Then I went down to Mexico on exchange, fell in love with, with tequila. So I tried a good tequila for the first time and was totally floored by how unbelievable it is. The culture, history behind it.”

EÜ: We’ll have all of that and more on Xero Gravity, right after this.

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EÜ: Eric, thanks for joining us on Xero Gravity.

EB: It's my pleasure. Happy to be here.

EÜ: What do you get up to outside of running Tromba Tequila?

EB: Well I have a baby girl who’s one, so she takes up most of my time and you know, makes sure that I get up very early in the morning every day, so I can always answer my emails and go to the office. So certainly family's very important to me, trying to stay fit, keeping friends obviously. Being an entrepreneur is pretty life-consuming. So trying to have that balance as much as I can.

EÜ: I understand that you worked in finance before launching Tromba. What was it like deciding to leave the security of a corporate role to become an entrepreneur?

EB: You know it was a tough call. You know, those life-changing decisions are not easy to leave the security of, you know, a good-paying job with good people, good hours. I liked everything about my job to kind of take the plunge and go into a market that I didn't really know. You had no security, you weren't going to take a salary and so and so forth. I remember the look on my boss's face when I told her that I'm going to quit my job in finance and go for the dream and start a tequila company. It was something that I'll never forget.

EÜ: I know a lot of people have a love/hate relationship with tequila. What's your relationship with tequila like, and when did it start?

EB: Everyone has a bad tequila story, and I had many bad tequila stories when I was at university. Everyone thinks tequila is that terrible shot at that horrible bar at that seedy hour of the night. I was definitely in that camp. Then I went down to Mexico on exchange, fell in love with, with tequila. So I tried a good tequila for the first time and was totally floored by how unbelievable it is. The culture, history behind it.

And then I came back to Canada and you know, as we've spoken before, I worked a day job for about five years, then one day, much to my mother's dismay, quit my job, went for the dream, and started Tromba. And tequila definitely is the most misrepresented, misunderstood spirit in the world — bar none.

EÜ: Pun intended.

EB: [Laughs] Exactly!

EÜ: Why is tequila the most misrepresented beverage?

EB: Well, most tequilas in the world that are consumed, unfortunately, are still a tequila called 51% agave tequila, which is 51% tequila, 49% sugar distillate, corn syrup, and caramel. Also known as a Mixto tequila. That's where the bad hangover, bad taste, bad smell comes from. That's where most people have bad tequila stories coming from. And that’s where I had my bad tequila story come from as well.

So what you always want to do is you always want to look for a tequila that's called 100% agave tequila, which is 100% pure. So there’s no additives, there's no corn syrup, there's no caramel in there and that's growing extremely fast. It's one of the fastest growing sub-sectors of the liquor industry. But we have a lot of work to do in terms of people misunderstanding, misrepresenting what they think tequila actually is.

EÜ: You know, you're clearly so passionate about this, and I'm wondering if there was a particular person in your journey, maybe when you were in Mexico that helped you develop this passion.

EB: I think that when I was in Mexico, one of my good friends happened to be the son of the original master distiller of a tequila brand called Don Julio. So he was kind of our gateway into starting Tromba. When we came back to Canada and I worked a day job, we had the idea of starting Tromba. We'd go to bars and restaurants around the city, and we'd say, "Could we have a great quality tequila?" They would generally say, "We have some really cheap stuff or some really expensive stuff." None of, nothing that really spoke to us. Kind of the chest pounding "look how much money I'm spending" tequila or the really cheap, you know, “close your eyes, plug your nose, hope for the best type tequila.”

There was nothing that was in the middle that had a great grassroots authenticity, and so on and so forth. So that was kind of our idea for Tromba, to be that accessible ultra-premium craft tequila.

And so we pitched our friend down in Mexico, Rodrigo Cedano, for his father to be our master distiller. He was the original master distiller of Don Julio for seventeen years. So kind of asking, you know, I don't know, Tom Brady to play in your men's league team or Wayne Gretzky to play in your men's league team. We were expecting a "No chance guys," and you know what? We went down there, we pitched him on it, we said, "We want you to be part of this brand, not only our master distiller." He said, "Yes." That's really how Tromba was born.

EÜ: You were so lucky. There's obviously something about you and the vision that you were presenting that really spoke to him.

EB: Well better to be lucky than smart I think and everything’s, you know, business is all, a lot of it has to do with timing. So we were in the right place at the right time speaking to the right person.

EÜ: As a first-time entrepreneur, looking back, is there anything that you would do differently?

EB: [Laughs] Yeah, I mean, you know, there’s all kinds of mistakes that you make as an entrepreneur.

But I wouldn't take back most of those mistakes that I made, because one of the great things about making those mistakes is that's where you really learn. As long as the mistakes don't put you out of business or don't alienate supporters, or you know, or if something were, you know, invokes dishonesty, or anything like that. Those mistakes really can be the best learning experiences. And if you try to become, be a flawless entrepreneur, then you're going to be pretty doomed. You have to be afraid, and you also almost have to embrace mistakes and learn from them. If you don't learn from them, then you're in trouble.

EÜ: Well thank you for that insight. It's time to dig a little deeper into this episode's theme, which is of course: what it takes to start your first business. First up, you've done what many people only dream about. You started your own spirits company. How did it all start? I understand there was five grand and a backpack involved.

EB: Yeah, so once we had our team together and the product, we had about a whole whopping five grand in marketing to go around town and sell Tromba with.

So it was a backpack, a bottle, and five thousand dollars. And when, you know, when I wanted to start Tromba, a lot of the guys said, "You'll need at least a million dollars for big markets in order for the brand to launch." So five grand's quite different than a million bucks.

I took it around, bar by bar, bottle by bottle, saying to bartenders, "Hey, try this." It was a bit of a new, novel concept. It was kind of you know, cold calling, and a lot of guys telling you no, but going back with the smile on your face the next appointment. And we built it up bar by bar, bottle by bottle, to the number two premium tequila in Canada, the number three premium tequila in Australia. My partners are Australian. And now we're in Chicago, New York, Los Angeles, DC, and Maryland. So it’s been quite a journey. And every single bottle we've sold has been grassroots word of mouth. It's all been somebody telling somebody else, "You've got to try this product. It's fantastic."

And the angle we went is we went to the bartenders. We went to the trade. We made our bartenders kind of our best unofficial brand ambassadors for the brand. A lot of companies, when they went into the bar, they would go right after the purchasing manager or the owner. We didn't do that. We spoke to the guy that was actually pouring the product and what that did is when somebody came in and said, "Hey, can I get five shots of tequila?" the bartender would say, "You've got to try Tromba." He knew the story, he felt passionate about the story, and he would recommend Tromba. So we haven't paid a cent for print advertising. We haven't paid a cent for any sort of "conventional marketing." Everything has been grassroots.

EÜ: What a great insight: that you need to find the person who’s actually going to be the most influential decision-maker. How did you know that that was going to be the bartender in this case?

EB: You know, timing really is everything. And if I did that strategy five years ago, I would've failed quite miserably, because the bartender didn't have the influence five years ago that he has today.

People didn't really look at bartenders as, you know, as kind of spirits gurus. It was still a time where people looked at bartenders more so as just somebody who was pouring your drinks. Now people rely on bartenders, they want to know what bartenders think, and so on and so forth. And that came with cocktail culture, came with the rise of great cocktail bars, the rise of craft beer, the rise of craft spirits.

So it all fits into one another, where people now not only want to know what am I drinking, what's the brand, and how much does it cost — people want to know, okay, what am I drinking, why am I drinking it, who's making it? Is the story legit or is it, you know, is it a bunch of marketing jargon? And, you know, am I drinking something that's, you know, that’s made with love and care, or am I drinking something that's just made in order to squeeze you know, as much money out of me as possible?

EÜ: When you launched in Canada, what did the tequila market look like? Was there an opportunity there for you to enter the market?

EB: Yeah, I think there's an opportunity in most markets in that category. I still think there's a hole in the tequila market where, again, the vast majority of market share is either the really, you know, competing for price point, "I want to be the cheapest product possible," or the product about, "Look how much money I'm spending," or "I'm a celebrity tequila," and so on and so forth.

There's not a lot of really great craft tequilas out there at accessible price points that speak to, you know, speak to people like me or speak to consumers who really care about genuine stories and authenticity, and so on and so forth. There's a lot of skus out there, but there's not a ton of brands that do that.

So we found that hole, especially in the Canadian marketplace, and a lot of people said, "That's no man's land, and there's a reason why no one was there." In fact, that was most of our feedback, but we kind of closed our eyes and did it anyway. And it's seemed to have worked out — whether it's in Toronto, New York, Melbourne, Sydney or Chicago.

EÜ: When did you realize that you had stumbled into success in the liquor industry? And what role did timing play in all of this?

EB: Timing again is everything. If we launched Tromba five years previous, we wouldn't have had nearly as much success as we had today. And if we launched it today, I would say the same thing. There's truth into the old saying, "The first man gets the oyster, second man gets the shell."

EÜ: [Laughs] I have to ask, what does Tromba mean? What inspired that name?

EB: So Tromba means big rain. It's a rainstorm that waters the agave fields that kind of cleanses the agave, and brings life to agave. Agave is a raw material that's needed to produce tequila. And we are a super highland tequila, so we produce the highest point tequila could be made in the world, in a place called Arandas, Mexico. And in the highlands, you need that rain. You need that rain to come, where if you're a lowland tequila, which is the other major area where tequila comes from, tequila can survive in a much dryer climate. So it’s our testament and our salute to being a super highland tequila, calling ourselves Tequila Tromba.

EÜ: How did you raise capital to finance your business venture?

EB: Well, it’s funny because I was, you know, thinking back on it, if we tried to do that again today, I'm not sure how we would. We effectively you know, we secured our master distiller, we got a mockup of what we wanted the bottle to look like.

We took a, you know, the business plan with a piece of paper and the picture of a bottle around to friends and family, and raised money here, money there, and so on so forth. There wasn't any Kickstarter five years ago, so we did it the old-fashioned way. And we got 10 grand from one guy, and 20 grand from another, and five grand here and there, and we ended up raising enough money to do our first production run. And again, everybody said it was impossible. Everyone said why. And then submitting my first business plan to somebody who was quite smart in this area, and he said, you know, it came back with all red ink. It was more red than black ink on it.

EÜ: Uh-oh.

EB: You know with words, exactly, impossible can't be done, undercapitalized. Competitors are too big, too strong, too knowledgeable, too many connections and looking back on it, he wasn't wrong. He was right. And I just you know, I guess better, great to be naïve in that case. I said, "We're going to do it anyway." And somehow some way, it all worked out.

EÜ: Was that person who gave you back your business plan covered with red ink, did that person become one of your mentors or advisors further on down the road?

EB: Funnily enough, actually, I didn't speak to him after that moment. Not because I was upset with him, or angry with him, because it was, you know, it was a very unemotional thing, but I should actually probably connect.

EÜ: Send him a bottle of your tequila. [Laughs]

EB: I think I will. Maybe he should buy a bottle now, I don't know.

EÜ: In terms of mentors and advisors, who did you find that could help support you as you launched this business?

EB: Yeah, my father, He's an entrepreneur who started his company selling extension cords out of the trunk of his car, and built it to a great medium-sized to large company, all from you know, his hard work, and so on so forth. So that was a great inspiration for me to see.

Looking at people like that and getting mentors here and there from, you know, from the liquor industry and outside the liquor industry. People who are entrepreneurs. I tried to stay away from people who worked for big companies for a long time, who didn't really understand the movement, you know, the new movement going on with craft and with being able to do things without the amount of money you used to need. You don't need big billboards anymore. You don't need to buy newspaper ads anymore.

Sometimes what I found is mentors can even be harmful. You have to really pick and choose as to who you want to listen to and what you want to filter out.

EÜ: Well you've mentioned a lot this craft movement. So I'm curious, how important consumer trends have been to the success of your business, or any business?

EB: Well, I can speak for the liquor industry: extremely important. People, again, want to know now what they're drinking, why they're drinking it, who's making it, and what's the story behind it. People want to hear the story, where 10, 15 years ago in the liquor industry, people were just consumed by, you know, what brand was was top of mind and, you know, what the price point was for the brand. Not that there's anything wrong with that. I think it's just evolved so much, and I think it started with craft beer, and it's filtered into craft spirits and obviously into food, as well.

EÜ: What about the increase and appreciation for Mexican culture?

EB: That's been wild. That's been totally wild. It’s been pretty cool, you know, to see cities go through Mexican booms, where generally speaking, it’s usually not Mexicans that are doing it. It's, you know, it’s non-Mexicans who are starting, you know, amazing taco places, amazing Mexican food places. And sometimes they try to be traditional, and sometimes they take pride in putting the quote unquote "gringo" influence on it. So we launched Tromba in Toronto, for example, and in Melbourne as well, right when that Mexican trend was just kicking off.

There used to be mentality when I started off Tromba, where you go to a bar or restaurant, and they would care about the, you know, the quality of their meat, their produce, their bread, so on so forth. But liquor was almost an afterthought. They thought they could cheat a little bit on liquor and save, quote unquote “save cost there.”

That's changed now with the more mature purchaser, a bartender influence, but also the consumer knowing more about "Hey, I don't want to drink crappy booze with great food. I want my booze to complement my meal."

EÜ: What do you think prompted that new interest in going beyond the plate and into the glass?

EB: It’s a great question. I think it's just the evolution of dining culture and bar culture. You know, I don't think there's one specific thing, and it's not like it happened overnight. It happened over numerous years, and I think it's just education. I think it really did start with craft beer coming in and bringing new flavors, and just a new mentality and new mindset to the buyer, where they said, "You know what? By me having craft in our bar and restaurants, I can sell more, and my consumers are happier and they get a better product." So from that influence, it's been great.

EÜ: Speaking of selling more, Tromba is now sold in Canada, Australia, Chicago, New York, LA, DC. I understand you're even starting to sell into Mexico. What obstacles did you face regarding selling across international borders?

EB: [Laughs] There are a ton of obstacles. I mean you know, every state for example, in the US, is a different market. It’s effectively a different country, every province in Canada. Australia's actually a federal market, so it's easier. So there's a lot you have to deal with different distributors in every state, for example. You have one national importer, but different distributors in every state. Different states are controlled by the government, some states are not controlled by the government. Controlled states, for example, are what they're called when the government purchases all the liquor.

It’s a very, very difficult business in that sense. The drinking culture in Boston is very different than the drinking culture in Los Angeles, which is very different than the drinking culture in New York, which is very different than the drinking culture in Seattle, and so on so forth. You can’t have a one size fits all mentality when it comes to your strategy, your penetration strategy for each market. You really have to adapt to the market and figure out what will work in one market, and what won't work in that one market.

EÜ: What were some of the other big challenges that you've had to overcome in your business journey?

EB: Oh I’m still overcoming them. I think it’s, you know, Mexico is obviously an interesting place to do business in. Tequila's a tough spirit because it's aged, it has to sit in the ground for eight years before it's harvested. So that creates supply chain issues. Our competitors are big companies with big budgets, large sales forces, that in a lot of cases can be pretty intelligent. And there’s a lot of competitors — there’s a lot of competitors in the market as well. And some of them are really good. So there’s a lot of, you know, if somebody wants to pick a difficult business to make a living in, well, liquor probably is one of the most difficult ones. Very satisfying, but very difficult.

EÜ: Well with a company like yours, I imagine that one of the biggest decisions that you had to make early on was were you going to focus on the wholesale market or of selling directly to your consumers?

EB: Yeah, so one of the strategies we made was to be a brand that speaks to the on premise, speaks to bars and restaurants, speaks to the bartenders, and so on so forth. We believe in building your brand on premise and then building your volume off premise. So building your brand in the bar and restaurants, and building your volume in the retail stores. And there was a great Grey Goose quote or line that I saw many years ago. Not many years ago — five or six years ago, where they said, "For every bottle we sell in a bar and restaurant, we'll sell two in the store and it won't be tomorrow, it won't be next month, it probably won't even be next year, but eventually, that one will equal two.” And that’s the mentality that we have as well, and that's why in some markets, we are the number one premium tequila brand sold in bars and restaurants.

EÜ: As far as accolades go, what do you hope to achieve with Tromba in the future?

EB: We think we can be one of the top premium tequilas in the world. And we have a great shot at doing that. We want to give our master distiller, Marco Cedano, also, his moment in the sun. He's been the master distiller for other great brands, but never had a brand of his own, where it's his family legacy that he can have with pride. So Tromba is an opportunity for him too, to make sure that he gets the recognition that he feels he deserves as well.

EÜ: Well, I have to say that even though you said that you were very lucky, it's very clear that your passion and your expertise in this market has really contributed to that success. So I do wish you those successes in the future, and to give you and your staff and your products a moment to shine.

EB: Thanks very much, I really appreciate that.

EÜ: We're going to finish up with our question countdown, which is five quick questions and five quick answers. Are you ready?

EB: Sure. Ready. Let's do it.

EÜ: What business book or idea made the biggest impact on your life, and why?

EB: I would say The Art of War, by Sun Tzu, is the best business book that anybody can read. There's all kinds of amazing lessons that you can learn from that book, and I've read it multiple times.

EÜ: I'll have to check that out. What's the one thing you can't live without?

EB: Can't live without cocktails.

EÜ: [Laughs] And the most useful app on your phone right now?

EB: I'm not a massive app guy, but I will have to say it's either my my Outlook app or, of course, my Xero app is on my phone.

EÜ: Well thanks for that shoutout. In one sentence, what's the greatest lesson you've learned throughout your small business journey?

EB: Always be honest and be upfront with everyone. With your customers, with your suppliers, with your employees, with your co-workers, and so on so forth. Build that reputation for honesty and integrity, and for putting out a great product. And giving – giving a great value proposition to people, because when you do that, doors will open (they may not open tomorrow), but your reputation's all you have. If you have a sullied reputation, then you’re going to have a sullied business, eventually.

EÜ: Finally, what skill do you want to enhance this year?

EB: Oh, where do I start? I can't answer that question. There's a lot of skills I'd like to continually enhance.

EÜ: Well what a great conversation, Eric. Thanks so much for joining us on the show.

EB: Oh, thank you so much for having me. It was a lot of fun.

Promo: Enjoying today's show? Then why not join the conversation! Just use the hashtag #XeroGravity.

EÜ: That was Eric Brass. He's the CEO and founder or Tromba Tequila. Thanks for listening to Xero Gravity. Don't be stranger and tune in next week.

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