 Okay, we're back. We're live. I'm Jay Fidel here on ThinkTech, and this is Asia-Pacific Business Strategies, which, as you know, is every Thursday at 1 o'clock. And we have Michael North, and he's in Beijing right now. He is the true host of this. I'm only acting as the local host, so to speak. And Michael is going to interview our guest, who is Bronson Chang. Bronson Chang is associated with, name of the company now? What is it? Uncle Clay's House of Pure Loja. Uncle Clay's House of Pure Loja. It's in Aina Hine. It's going to be in Alamoana soon enough. We're calling the show Tasty Business Thrive's with Hawaii Spirit. So welcome to the show, Bronson. It's great to be here. Thanks, Jay. Michael, are you ready to ask some questions? I'll turn it over to you. Born ready, Jay. Hello, Bronson. Hey, Michael. Hello. So my first question is, Shave Ice. We get some viewers for this program from the mainland, from across America, really from across the world. And not everybody knows what Shave Ice is. It's a rather local specialty in Hawaii. Can you define the term for us? Sure. So I guess aloha to all the brothers and sisters around the world tuning in here. It's great to be on the show. Shave Ice is really one of Hawaii's local treats that's really part of our culture. It started with a lot of the immigrant plantation workers needing a way to cool off on a hot day in the fields and taking some sugar, some fruit, and then shaving some ice and creating in Hawaii what we call Shave Ice, not shaved ice. And what we do at Uncle Clay's House of Pure Aloha is really go back to that original form of it, which is all-natural, small batches, homemade, versus no artificial flavors or preservatives. So it's a dessert. It's a food, and it's sweet. But I think part of your point is to make it natural and healthy and combine all those elements together. Right? Right, and it's part of our local culture here and being able to do it in a way that celebrates that. One other thing I should mention about Hawaiian Shave Ice that is very unique about it is how fine it is. So you should not be chewing or crunching on it. It should just melt on your tongue, and that's one of the distinguishing things about Hawaiian Shave Ice, because there are other forms of it elsewhere and delicious forms, you know, in other cultures and places around the world. But Hawaiian Shave Ice is, I guess, known more so for that fine texture. And Ray, could you show us the image number eight here? This is a shot of the original Uncle Clay's in Aina Hina. For those of you who may not know it, it's a relatively small neighborhood-style shopping center just east of downtown Honolulu. And this is the picture of you, Bronson, with your Uncle Clay. Talk to us about Uncle Clay and what part he plays in the formula. Sure. So Uncle Clay is an uncle to all, but he's my actual uncle, my dad's younger brother. And, you know, in this photo here, we're at Aina Hina Shopping Center, which is really where the dream began. Uncle Clay used to come to the shopping center as a young child. And there was a very popular, what we call in Hawaii crack seed store, or lihimui shop that he would go to and buy, you know, crack seed and candies. And even back then, you know, which now is over half a century ago, he actually would tell the owner that he wanted to own the store someday. And he was that kid. 40 years later, he turned that childhood dream into reality and became the fourth proprietor of that store. And, you know, when he was five years old, he said, I want to run that store one day, right? Yeah. Yeah, it's a true story. And, you know, it's one of the things that I think we are happy to be able to share as our company takes on, you know, new heights and continues to grow is the importance of having a vision, having a dream, and holding on to that and doing what you can with persistence and belief to turn it to reality. And, you know, Uncle Clay has definitely showed that. And he's inspired many, many people, including myself, to continue to dream big and to take it from there. So you, as the younger generation, you took over the day-to-day management of Uncle Clay's. He's still there though. He still greets people and works with you. And he's still part of the trademark, right? Oh, absolutely. He's there almost every day serving our guests. He likes to say that his only job is to love on to others. And he's really good at that. You know, I was reading reviews of your stories on a couple of the websites. One of them is the well-known site Yelp. And your place is one of the very top reviewed places to visit in Hawaii by visitors from around the world. Let me read you a couple of quotes. Okay, Brunson? Sure. One interview on Yelp says, the staff is friendly and the service here is great. I can't wait for this place to open in Alamoana. The Shea Bice is so ono here. I've only tried the classic rainbow Shea Bice with mochi balls. Their flavors are just so ono. All fresh made, real fruit syrups. So it's an inspiring multi-generational story, really, that you're able to turn a family tradition and a local cultural tradition into a good business. Talk to us about the business and how you run it. What are your objectives now? Sure. Well, you know, speaking to Yelp and we're also, you know, very highly rated on TripAdvisor. Certainly, it's the 21st century word of mouth, you know, brought to the internet and we've been so fortunate, really, by all the people who have expressed their positive feedback and reviews for us. And that's really, I think, the foundation and what makes our company really unique is we really see ourselves as integrated into the community. We would not be where we are today if it weren't for all the multitude of relationships that really make a small business successful. It starts with our guests and they're more than just guests, but they're really our ambassadors and all the way to our team members and the staff and the team we tried to really empower with opportunities to not just work a job, but to be part of a greater movement of sharing Pure Loa, our vendors. Ray, maybe you can show us graphic number three here. It shows the review of the store from Yelp and we've got five stars all across the way. I forget. I think it's several hundred reviews and I think there's like 98 percent five star reviews of your place. I noticed that you're using some language, Bronson, that's kind of modern and kind of corporate. You talk about people being team members and so on. It sounds like you're a Starbucks executive or something. You must have done some study of the food service industry and of retail and so on. Where does your education come from and how did you pick up on using sort of 21st century terms for a really 19th century concept? Yeah, well my training started with the breeding, raising and selling guppies to pet shops. When I was in middle school that was my first company and ever since then I always have been very entrepreneurially inclined, started another online jewelry company in high school and so I continued down that path and studied entrepreneurship at the business school at the University of Southern California in Los Angeles. You definitely learn the how-to's of business by real world experience combined with the classroom experience I had there but I think one of the most important parts of my philosophy really comes from bringing values into the business workplace, into building a company. As passionate as I am about entrepreneurship and business, I am maybe even more so I would say passionate about making a difference about service and I believe that what we have tried to do at Uncle Clay's House of Piraloha is to use the tools of business as a mechanism for impacting our community in positive ways. And so it's a learning journey, I still don't know a lot but through experience you continue to grow and learn. So what to you, Bronson, is pure aloha. It's a word that is tossed around and it's become a commodity and it's used so much that it's become a cliche in some places but I know that for you aloha is not a cliche and you just give us a spotlight on what it means to you personally and what it means to the employees that you bring into the store and to the clients who walk through the door. Sure, I mean at its core in one word we use the definition of love, pure aloha, pure love and you know aloha is something that you see used very commonly and the reason why we added the word pure was to emphasize the true nature of that which is an unconditional love. I think as we go we also know that it's such a deep word with a lot of need for reverence and it has a multitude of meaning and layers to it. You know so it's at times hard to just define in one word but if we were to choose it it would be love but we've also you know seen that living pure aloha is most important and how does that reflect in our behaviors, our actions as far as how we treat each other and how we act with integrity and you know it's a continuous journey here that we're doing of trying to live up to this concept of pure aloha. Yeah it's a lot to go. Ray if we could bring up the next graphic which is number four. I believe that's the review from Trip Advisor. I wanted to read just a short passage from that. It says if Uncle Clay is there you're in for a treat. He is kind and outgoing and likable. So I guess that's pretty much the spirit of aloha right in conventional terms. That's what the spirit of aloha is about. Absolutely yeah welcome and kind and we our vision is is our entire one world ohana living pure aloha. So that's another you know concept that that we have a vision that we have is really how can we see that as humanity we are all part of one world ohana one world family. Yeah well in a world where welcoming and kindness and integrity are in increasingly short supply it's good to see that they're available at the Aina Hina Shopping Center and I know that you have some pretty big ambitions for the business and you're expanding into aloha shopping center which for those of our viewers who may not be from Hawaii is the the premier retail destination for aloha. It's one of the largest multi-function retail sites in the entire United States and recently went through a huge expansion and I believe your your store is going into part of that new expansion. Can you talk to us a little bit about that and why you're making this this big move. It's kind of risky for a little guy for a little business like yours to make such a big move onto a big platform with a lot more people and a lot more cost and very fast moving. Sure yeah so aloha moana center is is the world's largest outdoor shopping mall and the reason why we decided to venture there is is really it goes back to our mission of sharing pure aloha you know we have been actually asked to open more houses in different communities over the last six and a half years or so that we've been open and we really have been waiting patiently for the right one and we were so fortunate to be invited to the project yeah you were saying so you know we were invited to this project and as we learn more about the opportunity we felt that we could yeah really bring our mission of sharing pure aloha in an unprecedented way you know on the world stage as as we like to see of aloha moana center oh going places that's great we're going to take a short break now but when we come back i would like you to address this question michael and brunson you know we live in a world in a state where diabetes is is prevalent there's a lot of people who react to sugar and their doctors and medical counselors tell them stay away from sugar and of course shave ice is all about sugar it's a real sugar high so people like it so much how do you deal with that i mean the fruit is partial partial solution that's healthy but how can you tell them your product is healthy when we have a an epidemic of diabetes in this state right after this one minute break think about it brunson i would like to hear the answer to that we'll be right back you'll see this is think tech hawaii raising public awareness for every game day assign a designated driver hi i'm pete mcginnis mark and every monday at one o'clock i present think tech hawaii's research in manila where we bring together researchers from across the campus to describe a whole series of scientifically interesting topics of interest both to hawaii and around the world so hopefully you can join me one o'clock monday afternoon for think tech hawaii's research in manila okay we're back we're live on jay fidel this is think tech it's asia pacific business strategies michael north is the host of this show he joins us by skype from beijing and our guest for this show is brunson chang and he is part of uh uncle clay's house of yoruboha in aina haina now assumed to be also in the shirokia space at alamoana so you guys have any comment on the question that i posed before um how do you how do you achieve a healthy food uh using you know using shave ice as the product when shave ice is consistently full of sugar sure so you know life is about choices and what we do is try to give our guests you know the the healthiest choice when it comes to having a dessert obviously there's limitations to that you know we could do a purely you know uh non-sugar version and we've tried a lot of you know very hard to to do it and it's quite difficult to actually make it taste good and all we can say is that we do sincerely care about people and obviously that means that we have to look at our menu and how we develop it and um you know one thing that we've done is really um you know if you're gonna splurge on some some sugar and and have a shave ice well why don't you do it without the artificial side uh parts of it the other is don't eat you know uh a mountain of it and we have a nice tiny portion right that um that you can have um if you want less syrup we can also do that you know we really want to tailor it to what your needs are and we're still on that quest to find the uh perfect tasting purely healthy shave ice i'm not going to give up on it yet but we're doing our best yeah but one thing is clear if you pour the syrup all over it as some shave ice vendors do you just load it up with the syrup it's going to be you know all sugar but if you limit the amount of syrup that you put on it it's going to be it'll still taste good but it won't be all sugar it'll be sort of not as sweet yeah right right maybe we need to implement a uh training program so if you get you know you if you want to buy that big shave ice well you better do 10 laps around the mall i'll be happy to be part of your testing team ronson i know i can come down and help you out all right michael yours now okay yeah if we could bring up uh graphic number seven here so people can see what we're talking about we've got uh we've got pineapple we've got strawberry we've got chocolate we've got lily koi all these beautiful flavors everybody can have a look at that and and uh and you can probably taste it through the screen if you think about it and i want you to talk to us now ronson a little bit about the uh the business side of this uh of this project um you've raised some capital in order to expand into alamuana and you've raised capital in a somewhat unusual way without selling stock in your company how how did that work what was the idea there well uh i'm talking to the guy who helped me here michael and uh i was introduced to um to you uh to discuss uh the opportunity to use royalty investing uh royalty based financing and it really intrigued us because uh as a growing company you know we wanted to manage how we you know managed uh ownership of it um we also knew that we had a lot of people that really wanted to invest in a way that wasn't about necessarily the traditional notions of maximizing shareholder return uh personal you know gain from the investment but really uh with the spirit of of sharing pure loha and and doing that through you know uh financial um agreement that allowed them to just get us going and and started and you know if we did well that we would able to we'd be able to share in that as well um but not you know give away the company and so uh you know the structure that we use was a royalty royalty based structure whereby uh the return on it would be based on uh the sales of the business right so you're able to substantiate that there's uh solid projections for increasing revenues so if shareholders share in that in that increasing revenue then they will have immediate return rather than waiting for you to be able to sell your stock at some time in the future and you didn't want to go into debt so it seems like an interesting way to finance a small business medium even a large business talk to us a little bit about the about the the equity part of the program because I know that this is a closely held family business this is you and your uncle and small number of other participants and why you wanted to preserve your equity instead of going the standard venture capital route to finance your company yeah sure so I think because our philosophy on the business is so unique you know it was really important that we preserve our ability to continue to manage the business accordingly and you know the entire notion of of a royalty based investment has been very consistent to I think the type of business that we are and even when we opened our first location we tapped into the crowds and used crowdfunding as a key mechanism for raising the capital that we needed and you know it's this notion that when you have support and desire from the relationships that you've built over time and we have a lot in what way can they those relationships engage with helping us achieve the goals that we have and you know in this case raising capital it was something that we needed and being able to go to our relationships and find a win-win type of arrangement that they would be getting what they want and we would be getting what we want we were very open to these more creative ways of financing so how does it work we're talking about royalties or they also call it revenue sharing which is fairly explicit how does it actually work investors put in some capital and what do they get back sure so capital is put in and then revenue shares are calculated based on the actual revenues that come into the business and then a percentage is the gross revenues not the profits right gross revenues right and so it's a almost guaranteed you know repayment because it's based on those sales that are coming in versus you know the profits and so you know the better we do the more sales we get right from the beginning right there's a distribution of of that to the investor right I think that one of the keywords that you use there was right from the beginning because generally people who are investing in the stock of a private company as venture capital investors they have to be prepared to wait five years at least the average time for a private company to have a an exit or a liquidity event for private investors in the US now is eight years you have to be willing to wait for the for the ship to come in but with with revenue sharing I think you could say that the ship begins sailing immediately is that correct right and it makes it so that you don't have to lose your precious equity up front you can conserve that possibly for future rounds of financing so that you're not getting deluded by by waves of investors coming in right was this was it difficult to arrange this from a legal and security standpoint well it took great people like yourself Michael and we brought in an attorney as well to review documents and make sure that it was structured in the right way I do think that it was a learning process of setting it up you know it wasn't just a template fill in the blank but really a process of making sure that we created an arrangement that our investor was happy with and as well as we were happy with as a company so why don't you make this your last question maybe you can speak to us finally about where you see the business going and what is the meaning of this project ultimately for you and your family Bronson yeah well we really do feel that we're on a mission of pure loha and we're doing that one shave ice at a time you know from day one till today we've always had that as our north star we've been very blessed to have more opportunities come our way and I think we're in for an exciting month ahead as we open our shop in Alamoana Center beyond that what's your target date when do you open the doors we we hope to open by early December if not sooner we're trying our best to to rally the project forward but you know I think when we open this location we really hope to show that you know pure loha has a place in the marketplace and if we could do it anywhere to show that I mean Alamoana Center is is a great place to do that and you know you know what they say if you make it in Alamoana Center you can make it anywhere I think that's what you're saying well thank you very much Michael and Bronson great to have you on the show and to learn about your business and this this new chapter and I hope it works well for you and your investors thank you much Bronson thank you Michael Aloha everyone we'll be back next week with more from Asia Pacific business strategies