00:00:00 · Pete Maldonado, Guillaume Moubeche
[00:00:00] S0: Doesn't matter how healthy the product is going to be, if it doesn't taste good, it will not sell. I'm the guy with my foot pinned on the gas. Rashid's the guy steering. We went so deep on just a handful of products, we did one thing really, really well, and we became known for it. We're approaching a billion dollars in revenue this year, so we don't wanna go in and be number two. We just won't do it. Last year, we undershot it by nine figures, which is a terrible feeling. We thought we were losing our houses and all of our own personal everything. [00:00:25] S1: Today on Billions, I'm sitting down with Pete Maldonado. I wanted Pete on because history breaks pretty much every rule you give you about building something big. $6,000, no investors, no food background, just a bet that the gas station meat stick could actually be good for you. Everyone say the category was dead, they ignored it, stayed profitable for almost ten years before taking a cent. And now, they're selling 2,000,000 sticks a day, still majority owned by the cofounders. Pete, welcome to Billions. [00:00:58] S0: Gee, thank you for having me, man. [00:01:00] S1: Super excited to have this conversation with you. Before I start you chomps, can you, like, talk a little bit about Frozen Fitness and what it kind of taught you about starting your own business?
00:01:11 · Pete Maldonado
[00:01:11] S0: Yeah. Absolutely. So I think, you know, my background... I'll start with my background. How about that? So I was in I was in college. I was a personal trainer. And and I was... I grew up in the Hamptons, like, right outside the Hamptons. And so during the summer times, I would train my clients in the Hamptons, but they lived in Manhattan and worked in Manhattan. So they meet with me on the weekends when they were at their Hampton homes. And then I'd work with them. I'd create these... You know, I'd put them through some workouts, create these, like, elaborate meal plans and grocery lists. And I found that when they went... They got my back to Manhattan, it was really tough to get them to stick to it. Right? And we all know, like, nutrition is the most important thing when you're trying to achieve any type of result when it comes to fitness and dieting. And mind you, this is over twenty years ago now, so just just... Things have changed. So back then, these meal delivery delivery programs didn't exist. It was like Nutrisystem. It was Jenny Craig. There was a couple of... These, like... And the food was terrible. And so and I... And so in my mind, I was like, I could create, you know, better for you meals that are pre portioned out and make life life easier for my clients and for myself. Right? So that was the idea for it. So Frozen Fitness was born. It was born as an idea at first and then slowly, you know, started trying to build it up and selling it out of gyms actually, because building a website was gonna be too expensive at the time. I think this was like early, early days of WordPress, and I had no idea what I was doing in terms of building. And then, you know... But I I I was able to get these ice cream freezers with a glass top, and I was able to place that into a gym and started selling meals out of that. And so that worked out for a couple years actually. So I got to about, like, 72 different gyms selling the product from South Florida up to Atlanta. And then I was like, now it's time. I've proven the model. Like, there's, like, product market fit. Like, this is great. Now let's build the website, and let's let's go right after, you know, the Nutrisystem's of the world. So I decided to raise some money, and that's kind of where things start unraveling because I had never raised money before.
00:03:24 · Pete Maldonado, Guillaume Moubeche
I didn't really understand the concept of, you know, you know, cash is kind of a commodity, and we wanna bring smart money to the table. And so I brought in some guy who was a real estate guy that was in, like, mobile home parks that lived here in Naples. He had no experience in food whatsoever and didn't know how to market or any of that stuff and didn't... We were not even aligned remotely on the vision for what I was trying to accomplish. But, yeah, learn the hard way about that part. But I think, you know, I made so many mistakes with that company as well where I think it's that, like, that that founder's conundrum, like, you want everything to be completely perfect. I wanted the website to have every bell and whistle before I brought it to market. And so I spent so much time and money and quite honestly never got to the point where I was even able to take a single order on that website that I blew a bunch of money on. So in the end, you know, the company just didn't work out. He... The... We had a falling out. He wanted his money back. The real estate market was getting obliterated down here, and he needed his cash back. So... And I'm like, I can't give you your cash back. It's in inventory right now in frozen food. So I literally just handed the company over to him and and walked away from it. And I moved from Florida to Chicago, and that's kinda the story of the frozen fitness. But... That was a... [00:04:45] S1: And and when did you start, like, to think about Chomps and and starting something new from that?
00:04:45 · Guillaume Moubeche, Pete Maldonado
[00:04:45] S1: And and when did you start, like, to think about Chomps and and starting something new from that? [00:04:52] S0: Yeah. So in between there, you know, I'm a kind of a go getter entrepreneur type guy. I can't stop thinking about and having my hands in too many things. So I got into real estate, did that for a few years, started with renting apartments, then got into selling big fractured condo projects to hedge funds and that type of thing. So... But I loved... I liked doing those things. It was a means to an end for me. I I wanted to raise some capital because I love the the food and the nutrition business. Anything to do with with fitness nutrition was, like, right up my alley, and I just needed to get back into it. And so that was the plan, but this time I was gonna do it, you know, self funded. I was not gonna rely on outside capital, and I learned from all my previous mistakes. And so that's kinda where we started Chomps on. [00:05:43] S1: And how do you start a company with just, like, $6,000? Like, how does that work out, especially like in the in the food industry?
00:05:50 · Pete Maldonado
[00:05:50] S0: Really good question. I still wonder to myself, I'm like, nowadays, I'm like, why did I even bother trying to do that? Like, I I think, you know, it was only fourteen years ago or something like that now, but times have changed, you know, drastically since. But I I would say what we did is we got some samples made, and it was a very small run. And so... By the way, finding the co packer was very difficult because you need to find somebody that's small enough to actually wanna make you a small run of product, but also has the ability to scale with you. We were very fortunate to meet this co packer that we initially started with back in the day, but I'll tell you more about that story after. But we we... I start... I I actually got a $99 Photoshop Elements subscription and taught myself how to make some packaging. So I kept going to the store and I'd buy, like, different different types of packaging and other categories, and I would take little elements. So, like, if I had my claims for my calories and protein and whatever and, like, it was surrounded by a little circle, I'd figure out how to, like, make that little circle and put that in the package. And then it was the same thing when it came to building the website. I started on WordPress initially. I was having a hard time with that, and this is when Shopify was starting to get pretty big. And so I tried... I tested out Shopify, and I was like, oh my god. This is so easy. Like, I... So I had a working website very quickly and also inexpensively. And then this is kinda where... How I know you actually is by our buddy Noah Kagan. And the way I heard about Noah was from... It was this blog post, and I wanna say this was in, like, twenty nine... Two thousand nine or something like that that he wrote this with Tim Ferriss. So it was on Tim Ferriss's blog that I was following, and then Noah was, like, the special contributor to the to the blog post. And I actually can't remember the title of what it was, but it was essentially something to the effect of, like, start a a million dollar business over the weekend, which, by the way, has has kind of morphed into his book that he wrote, The Million Dollar Weekend. Right? So in there, he was giving these tips and tricks on, like, how to test test the market and then find product market fit inexpensively. And I had a couple pictures.
00:08:07 · Pete Maldonado
I got some some professional pictures taken of the of the actual product. I used that. I put that up on... For Facebook ads, but we didn't even have any inventory to sell. It was like samples for handing out. And so I put I put a couple bucks. I I know it was maybe a couple $100 behind some of these Facebook ads. Because we needed to see that somebody, random people that have no idea who we are, would actually take their wallet out and spend the money and buy the product. And it happened... We got that product market fit and that that confirmation very quickly. So... But then I had to reach out to those people and just be like, hey. Sorry. We're gonna launch this, and we're out of inventory. And would... Would you mind waiting? And, you know, people are very just nice about it and patient and we kept in touch with those people. A lot of them are still customers of ours today. So it's like pretty awesome.