As a frugal Business owner, one must be ready to shift focus quickly. This week, Jim talks to Ruben Seyde about the importance of pivoting a startup. Ruben started a business in the burgeoning industry of cannabis. . . and then things got weird. You can listen to Frugal Living with Jim Markus on Apple Podcasts, Spotify, Amazon, Anchor.fm, iHeartRadio, or anywhere you go to find podcasts.

How do you pivot a startup?

Ruben Seyde knows how to pivot a business. His startup, Delivered Inc., began as a completely different business model. He changed business partners, locations, and ways to generate revenue. He shares his story in this episode of Frugal Living.

We talked to Ruben because he raised more than $350,000 to launch his business, and he was willing to share his story. . . a story that began with an ad on Facebook. Check out the full episode (or read the transcript below) to find out how he got started.

Sponsors

Today’s episode was sponsored by Aosom. Check out their site, or see what the editors at Brad’s Deals found for more discounts.

More about Frugal Living with Jim Markus

To hear more episodes about running a business, check out the latest episode of Frugal Living. Frugal Living is a podcast for smart consumers. How do you spend less and get more? The show, sponsored by Brad’s Deals, features interviews, stories, tips, and tricks. Jim Markus hosts season four, out now.

Read a Transcript of This Episode

Jim (00:02):
This is Frugal Living. What does it take to start a cannabis business? Ruben Seyde knows. He’s the co-founder of a cannabis delivery company and raised more than $350,000 for his startup. I was lucky to hear his story. How did you get started? From what I know, it looks like you had a pretty normal career to start with. You worked for other people. But you left that all behind. How did that happen?

Ruben (00:43):
My entire childhood and teenage years, I always knew that I didn’t want to work for anyone and that I wanted my own business. But I never really knew how to get there. I didn’t have too many family or friends that had their own business or had any type of experience with that. My parents being first-generation immigrants, all they knew was that I needed to go to school in order to have a chance in this country. So that’s, kind of, what was instilled in me and that I needed to do really well there and, and follow what, you know, what needed to happen. So that’s, kind of, what I did and I never really branched out much. I wasn’t big on making friends or networking or anything like that. I just kept to my myself. So I, I never really found what steps to take. So I went to college. I thankfully got accepted into Boston University. I spent four years there, which were really fun and, and it was a great experience. But I kept to myself too much, which looking back at things, I kind of regret now. And I wish I, I had put myself out there more, but I didn’t. So I graduated college. I got a BA in International Relations. I spent a couple months looking for a job, still no idea what to do. I landed a paralegal job at an immigration firm just because I hit close to home. So I figured, you know, this makes sense for a couple of months or years, or let’s see what happens.

So as I’m working there, I’m scrolling on Facebook one day and I get an ad or, like, I see some message from the Cannabis Control Commission of Massachusetts. They had a Facebook post that’s saying that they opened a social equity program, which was supposed to help people who were disproportionately impacted by the war on drugs and help us have somewhat of a equal footing with a big corporation that has millions of dollars who’s trying to get into the cannabis industry. So me, I, I actually have a bit of a criminal record due to cannabis. So when I saw this, I was like, “Wow, that’s really exciting.” I, I started doing some more research… But I talked myself out of applying. So I was like, you know what? This doesn’t seem like it’s gonna be that much helpful. Like, I don’t know if this is right for me. I let that slip my mind. And I didn’t think much about it for months. Then February, I wanna say of 2019, again I’m scrolling on Facebook and the same exact ad appears by the Cannabis Control Commission with the difference saying that the application closes tomorrow.

So I was like, “What are the odd that this comes back to me with such a short deadline?” And, you know, I know I have an interest in business. I know I have a love for cannabis. So why not do this and see what happens? So I, I submitted the application and then a couple months go by and, and I find out that I got accepted. I was psyched, eh, but I still had no idea what it really meant. I go to the orientation session and that’s really where things, kinda, really started changing for me. I walk into the session and… Again, before I was very, kept to myself and, and I started realizing that I need, that I needed to start putting myself out there more. So I, I decided to sit in the very front row of, of this classroom thing we had. And there’s this guy sitting there next to me who seems very eager to be there as well. So we just started talking and we immediately kicked it off. Our personalities vibe really well. And he started telling me about a operation he had in Oklahoma. He went out there and started his own cultivation facility. He’s originally from Massachusetts. So he was back here and he also got into the social equity program and he wanted to essentially copy what he did in Oklahoma but in Massachusetts. He started opening up and sharing everything that he went through, his business plan, the application process, blah, blah, blah. And that, like, I was just captivated. And, and that same day, he invited me to his place because I told him that I always wanted to practice cultivating my own cannabis, but I never had the opportunity. So he said, “Hey, why don’t you come pick up this equipment for free?” And I give it a shot. And I was like, “Are you, are you serious?” And he’s like, “[Expletive] yeah, come on over!” So I, I immediately go to his place, we’re smoking a joint, he’s showing me all this crazy equipment, and we basically, at that point, knew that we were gonna do something together. We just didn’t necessarily know what was gonna happen or, you know, where we were going with things.

So we started meeting up almost on a weekly basis. Because he has cultivation experience, we started fleshing out a plan to do that. We ended up, you know, going to a lot of parts around the state, looking for a good facility that we could use. And eventually we found a 55-acre farm out in western Mass that was for sale. And it seemed very promising. We put down a five grand deposit on it, and that gave us rights to the property for six months. We started the application process for the license that we need with those rights. And things were moving forward. We, we started fundraising. That’s really where things, kind, of slowed down. We didn’t have as much success as we wanted, but we were able to, to find enough Money to buy the property. But here’s where things really, kinda, got twisted. The orientation session for the equity program was in August, 2019. We’re now in 2020, right before COVID comes around. We find out that the application was deemed complete. They’re gonna approve us our provisional license, which is the first step from the state process that we needed to move forward. So things were looking really good. But then the economy shut down. And when the economy shut down, the investors we had lined up to close on the property decided to pull out on their money. So at this point they pulled out their money when we had about two weeks left to close on the property. We scrambled, we contacted everyone we could, but we weren’t able to raise enough money for that one. So even though we got the initial local approval, we got the state initial approval, things were looking really good, but we couldn’t get the money. So we had to put that on pause.

So we’re in May now of 2020, which happens to be when the CCC, the Cannabis Control Commission, they start rolling out a new type of license for the industry: the home delivery license. And this one has a much lower cost to get the license. It’s significantly cheaper to do home delivery than to do cultivation. So because of that, you know, it made sense for me to, to start looking at that a bit more. And right around that time… I don’t know if you know of Drizly, an alcohol home delivery company. Yeah, so they, they created a spinoff called Lantern, which is their company now that they use to be in the cannabis space. Which is separate from their alcohol side of the business, which they actually sold. So this Lantern came up as an incubator program to help social equity people have more of an understanding of what happens in a home delivery company. So I applied for this program and I got into it. That just told me that the next path would be to forget cultivation and definitely apply for home delivery. So I do this program, meet some great people, make some great connections, and learn a lot. So I set out to the world and try to find a new location. At this point, my previous partner, he moved back to Oklahoma to deal with his cultivation facility. I do have a friend who’s helping me out. His name is Dan and he was there helping me out. And we went touring for new locations. We managed to tie one down again in Maynard, and we had a great deal with the landlord. So we, we were saving some money and moving forward with the application process. But then we have issues with them because they have another cannabis tenant in that same property. And, and the other cannabis property was there before us. The other tenant was there before us. So they had more rights than us. So we were essentially kicked out of that property. And we had to restart yet again. This was November of 2020. No, no idea what to do now.

So I’m back to the drawing board, looking for new locations. We start losing some momentum here. We get into the holidays. Still haven’t found anything. We get into spring, no updates. And then in June of 2021, my new partner, my new business partner randomly hits me up. His name is Jackson Mejia. And we had connected earlier through some volunteering we were doing. We weren’t partners back then. We just knew each other. And we stayed in contact. June, 2021, he calls me up and he is like, “Hey man, I think we should work together.” And at this point, I, I felt very deflated. I, I had no idea what to do. So I was like, “Yeah, if, if you wanna lead the ship this time, let, let’s go for it.” So we partner up, he manages to find a location very quickly. Now we’re in Holyoke. We get the initial city approval. We apply for the state licensing. And the, the licensing process is very complex. You need to get something called a pre-certification. Then you need something called a provisional license. And then once you have those two is when you can finally begin the actual build-out of the property. Then, like, you spend a couple of months doing the construction. And once everything’s ready to go, that’s when you actually get your final license.

So we get the pre-certification, we start running around looking for more money so we can finish purchasing the property and, and begin the build-out and whatnot. And Jackson has a lot of connections. He used to own a bar and he’s a lawyer. So he’s a pretty good guy. He really runs deep into his network asking everyone and anyone he knows. And things are looking pretty bad again, because we weren’t able to find the money. And at this point we had, like, a week left to close on the property. And eventually, out of the woods, one of his long-time buddies from way back in when he was in college comes out, and this guy’s willing to invest in us. He actually invested in Jackson’s original bar like 10, 20 years ago. So, because that was a success, he was like, “Yeah, I, I can, I can take another chance on you.” So he jumped on board and he put the money to finish the location in Holyoke. And that’s how we got to where we are today.

Jim (10:34):
What a story. It sounds like you started with almost like a happenstance of seeing an option for a program, getting approved for it, and then thinking you’re gonna cultivate. You know, which is, like, a pretty distinct business within cannabis. Like, you’re growing this and you’ll be distributing to sellers. When that opportunity went away, it sounds like you pivoted very quickly to another, almost like a happenstance opportunity. You, you saw an option to deliver when that became legal. And then you started pursuing that. And it sounds like you worked with a number of different people. Dan, then eventually Jackson. It’s just, it’s so many steps. It’s, it’s incredible though. This episode, as always, was brought to you by Brad’s Deals. There’s a community of people here scouring the web for the best deals on everything. The site is B R A D S D E A L S.com. One trick for deal hunters: You can sign up for the Brad’s Deals newsletter. That way, you’ll have a better chance of snagging something stellar before it sells out. Thanks for listening.

Ruben (11:45):
Evan was the name of my original partner for the cultivation. He’s the one that really inspired me when I saw how much he was able to do despite his background and, and the troubles he went through in life. But he just didn’t give up. And, and he kept pushing and pushing, and eventually he had his own business. And he’s doing very well for himself. So, when I saw that, I became really inspired and I knew I had that within me. So when things started going south with cultivation, I knew I wasn’t gonna give up. I still had the passion for being my own boss and owning my own business. Uh, I still had the passion for cannabis. So, you know, I figured I should keep going and, and actually how we can make something happen. And thankfully, I didn’t quit my job yet. So I still had an income coming in. And it was a very stressful days, it was long days. But it was very well worth it because I knew it was for me and I stuck with it. And thankfully things are actually moving forward.

Jim (12:41):
That’s incredible. And I mean that moment is so big. I think for anyone who wants to start their own company… I think people who aren’t familiar with business think, “Oh, you just, you quit what you’re doing. And then, you know, create a business plan, get funding, and start doing that.” But it seems like a lot more businesses start the way you’re talking about where you’re, you’re working. You know, you have an income. You need to pay for life. And then only once you have your next footing, do you let go of that other job? And that’s a really big step. And it’s one that, it sounds like you took last year, the year before?

Ruben (13:14):
Yeah, last year. July of 2021 was when I left my paralegal job and said goodbye officially to being an employee.

Jim (13:21):
That’s incredible. Congratulations. So I’ve been to, it’s deliveredinc.co, your website, and it looks like it’s, right now, still in the launch phase. Do you know when your expected launch date is for the company? Like, when you’ll open it up to business?

Ruben (13:36):
Unfortunately, because cannabis being such a regulated product, it’s a very long process to be able to be up and running. So the earliest we’re looking at right now is early summer.

Jim (13:48):
I know licensing–I live near Chicago, kind of, in the Chicagoland area, and licensing here is crazy too. It’s very difficult to get licensed for any kind of business in the industry. But it sounds like you’re working with someone who has experience with… Opening and running a bar has a lot of those same bureaucratic barriers. And it sounds like Jackson might be your key to understanding those and navigating them better than anybody else.

Ruben (14:14):
Yeah. And it’s funny, you mention that because, you know, tying this back to what you were saying about the difficulties of starting a business, the cannabis world is a whole other beast compared to traditional businesses. And I know this because in the time since I quit my job, I’ve actually started another company. And that one’s already up and running and, and we have revenue coming in and, you know, no issues. And that process took less than a month from the day that the idea came to mind to when it actually became a reality compared to this cannabis thing. For this delivery project, we started it technically in June 2021 and seven, eight months later we can’t even begin building the property or, like, doing construction on the property yet. Like, either way it’s difficult to start a business, but the cannabis world is just, uh, the, the regulations make it significantly harder for anyone.

Jim (15:07):
That makes sense. And you’re, you’re talking about your publishing company, right? Newbury?

Ruben (15:11):
Yeah, Newbury Publishing.

Jim (15:13):
With those levels of experience, what advice do you have for people who wanna do what you’re doing?

Ruben (15:19):
I alluded to this earlier. I really regret not networking more. My college and high school days, especially college. If, if you get the opportunity to be on a college campus, it is ripe with students with, full of ideas and more than willing to implement those ideas and, and having the capabilities to implement them. So, you know, really put yourself out there and meet as many people as you can, shake as many hands as you can, ask as many questions as you can, read as many books as you can. You know, just do whatever you can to fill your mind with new information and new knowledge. And some of it may seem irrelevant. And some of it might be irrelevant at the end of the day for you. But the more you can fill your mind with new ideas, people, concepts, the more you feed your brain and the more it can subconsciously process all of this. And when you least expect it, the idea’s gonna come to you. It really makes a huge difference to do that type of stuff.

Jim (16:23):
That seems like really good advice. And I love that idea of, like, you can’t connect the dots going forward. You can only do it when you have the full picture behind you. And it sounds like that’s what you’re saying. You know, take the chances now, meet the people now, learn the lessons now. You know, expose yourself to a lot of new ideas and you’ll be able to make something. You just won’t be able to pre-plan what that something is. You might think it’s gonna be cultivation, but you’ll end up in publishing and eventually distribution.

Ruben (16:50):
Exactly. What I like to say all the time is throw as much [expletive] as you can to the wall and see what sticks. And then go with that, you know. And then forget about everything else. But eventually something’s gonna stick if you keep trying.

Jim (17:04):
I love that. You gotta keep at it. One unique thing that I wanted to make sure we talked about was you raised more than $350,000 in funding for your startup. That’s incredible. When does it make sense for someone to raise funds? Like, you have experience with publishing now and with, you know, a marijuana company. And you have two different fundraising stories for each of them. When does it make sense for someone to start thinking “I should bring in outside funds to this?”

Ruben (17:32):
I think that’s a great question. But, it depends on a case-by-case situation. So for cannabis, it’s next to impossible to get into the industry without some type of funding. Whether it’s your own funding, family and friends, or you go out into the world and raise it, you’re going to need money. First of all, you’re gonna need to tie down the property and hold it down for months before you can even begin to think about making money with it. So that alone, you’re gonna be paying a lease or a mortgage. Most people pay for lawyer fees and consulting fees because, again, the industry is so complex that it’s very hard to navigate without someone that actually has done it before. Thankfully, for me, my consultant was Evan, my original partner. So I learned everything that I needed. And, uh, we’ve been able to move forward without much legal or consultant representation. So if you’re going into a complex industry like cannabis, you have to make sure you have the right team in place. But it makes a lot of sense to start raising that money as soon as you feasibly can. It is smart to use as much as your own money as you possibly can, but I know that’s not always possible for everyone. So that’s something that you should probably start thinking about when you’re doing your initial business plan, how you’re gonna fundraise and what your plan B is if you can’t raise enough money. Then something on the traditional end, like book publishing or digital marketing, or, you know, whatever it may be, that I would say to hold off as much as possible. Most times when you’re just starting off, you don’t need someone else’s money. I just read a quote the other day. I forgot what book it was in, but it really hit me that raising money isn’t something to celebrate. It’s making a commitment that you’re gonna get [expletive] done. And if you’re not ready to get [expletive] done, or you don’t know how to, and you make that commitment too early, you’re really putting yourself in a bad position where you’re gonna end up screwing someone else over or screwing yourself over and someone else. So you really don’t want to do that. So I, I’d really recommend first, you use your own money and you learn with your own money. You know, start creating ads by yourself, start publishing books by yourself, and see how far that can get you. Really learn the process. And once you actually have it honed down and you feel comfortable teaching it to others and talking about it to others, that’s when it might make more sense to raise money if you even need to at that point. If you already learned the whole process and you’ve been practicing and, and going at it, you probably already have some sales and you’re probably starting to pick up momentum. And for all you know, that momentum might be enough to get you to where you want to be. It may take an extra year, but at the end of the day, you’re not giving up any portion of your company. And you’re gonna have a lot more fulfillment in knowing that you did it by yourself as opposed to seeking outside help.

Jim (20:35):
I like that. It’s concise. Don’t raise money unless you need to. And if you’re working in cannabis, you’ll need to. No, I like that a lot. You’ve, you’ve answered basically every follow-up question I had with the fundraising as well. Is there anything else that you wanna share or talk about with a frugal audience and with an entrepreneurial audience?

Ruben (20:53):
Yeah. You know, another, uh, piece of advice is when you’re young and starting off, or even if you’re on the older side but you know you wanna start a business. Like I was just saying, it’s best to use your own money for that business as opposed to someone else’s when you’re just getting the wheels going. So, you know, learn the budget for your family that way you have enough money leftover for the business. Or make sure you have a partner who can help you. In my case, I’m really fortunate that my fiancé has a very stable job. So I know that if I ever run into any financial issues, we have a backup plan. And it may not be the ideal situation, but we know we’re prepared for the worse that can come. So make sure that you’re thinking about your family resources and your business resources in the way that makes the most sense for everyone moving forward.

Jim (21:50):
Ruben’s story is unique in his tenacity. He didn’t just start one business. He pivoted again and again using every tool at his disposal to navigate a complex industry. One with a bewildering level of bureaucracy and one that’s still so new it changes all the time. Will his current venture thrive or will he face another unexpected challenge? I’m looking forward to following along with his progress. You’ll find him at Deliveredinc.co. Thanks to this week’s guest Ruben Seyde and our podcast editor intern Genny Baluvelt. I’m Jim Markus.

More about Frugal Living with Jim Markus

To hear more episodes about how to start a business, check out the latest episode of Frugal Living. Frugal Living is a podcast for smart consumers. How do you spend less and get more? The show, sponsored by Brad’s Deals, features interviews, stories, tips, and tricks. Jim Markus hosts season four, out now.

The post Frugal Living: How do you pivot a startup? appeared first on The Brad's Deals Blog.