 This is Served-a-Storefront. You don't have to look hard to find a national brand that started from a single family-owned restaurant. There's In-N-Out, started by the Snyder family, McDonald's, started by the McDonald brothers, and Chick-fil-A, started by the Cappy family. While we're on this topic, go ahead and add Shouch J into the mix, or XCJ for short. But unlike the previous three brands that spread primarily through new brick-and-mortar locations, our guests today started with a single restaurant and expanded into a CPG brand. Jen Lau and her then-boyfriend, Caleb Wang, who is now her husband, started the business as a way of connecting with their family's history, since they're both second-generation Chinese Americans. Their modern take on Chinese street food was an immediate hit with the locals of Bellevue, Washington, and they knew that their recipes were destined for a much bigger audience. So just like those other family-owned brands that came before her, Jen has her sights set on national recognition. Her goal is for XCJ to become the default Chinese food company in America. So listen in to cover everything from why most of her customers live in an Asian food desert, why hiring someone to handle XCJ's marketing was low on her priority list, and what it means to be a third-culture kid. Now, on to the episode. All right, welcome to the podcast on today's show. A first, a company name I cannot pronounce. Jen, who's here. Please tell us your company. Our company is Xiaotzejie, or XCJ for short. It actually stands for Chinese Street Food Avenue. Oh, no way. And what made you want to start the company? So actually, three and a half years ago, we opened a restaurant first in Seattle, and selfishly, we just wanted to eat our favorite foods. So I'm married to Caleb, who's also my co-founder, and at the time we were dating, and his favorite food is something called Xinzhenbao, or SJB, and it is the better version of Xiaolongbao, or soup dumpling that everybody knows. So Xinzhenbao, yeah, it's a pan-fried soup bao. So it's pan-fried, it's bigger, there's more soup, it's juicier, you know. All the faves. Yes, exactly. But it's really difficult to cook, which is why it probably hasn't been brought over. You do have to have a large cast iron pan, and you cook about 80 of them at one time, and then you have to sell out within 20 minutes. So, yeah, for soup dumplings, you can do as many as you want, since it's just steaming, so it's a lot easier of a process for kitchens. And I think people like the idea of the delicacy of soup dumplings, and it's a little bit healthier than pan-fried, of course. So we had never found a good version of it here in the U.S. We tried New York, L.A., S.F., all the hot pancakes. I mean, there's just a few different versions of it. So what we did try, it's actually more of a leavened version where it's like soft and doughy, but there's no soup inside because it's leavened and the soup would soak up, and it's not pan-fried and steamed at the same time. They kind of just have a crust. So we wanted to bring over the real version and just eat it for ourselves. That was really the idea. You and Caleb were dating. Yeah. At the time. Were you both thinking like, okay, our relationship's going to go somewhere? Or was it just solely like this makes it like, because I think of like, it's like having a baby together. Yeah, exactly. You're committing to something. So like, were you thinking that you were also going to commit to a future together as husband and wife? Or was it that not even in the picture yet? I think we had an idea that we would be together. We did have a third partner and he was actually the one that encouraged us to do this. So his name is Norman. He's our third co-founder and he had started a poke restaurant and he wanted me to start the poke restaurant with him at first, but I'm allergic to fish and had not been in the food industry. So I was like, no, thanks. And on the second one, he brought up the idea again, which is when I proposed this piece of it. And it really wasn't that I was going to be involved at all in the beginning. I wanted Norman to do it so I could eat it. That was the whole idea. So you're solving your own problem. And at this stage of the company's life, are you thinking big enough? Like, are you actually thinking this could be a household brand? Or are you just thinking, I want this food. Let's create it. Let's see if there's a market and then whatever happens happens. Yep, more of the latter. Okay. Although in Shanghai, there is a chain that has thousands of stores that sell this one item. Okay. So you knew at least there's a market for it somewhere in the world. Yep. Can we replicate it? Let's find out. Exactly. And I think that was our signature item, but there were just so many street foods that we had tried that weren't really available here. And so I was like, there's an endless possibility of what we could bring over. We could do a night market. We could do a food hall. So I think we did want to do a single location and then expand it where you had many different stalls or a larger space where you could bring in lots of different foods that were our favorites. How big was your first space? It is 1600 square feet. Okay. So it's sit down also. You can sit inside or... It's in a food court. Okay. Yeah. Okay. So you basically order then you go to the food. Yep. So it's counter service, fast casual. Yep. Okay. And then so what did you learn on this journey of one, you want to create a product that you like, but then also two, now you're dealing with employees and like real restaurant stuff, which is probably not so glamorous. Yeah. So I mean, I think we had a really great team to start off with. So that definitely helped. So I think the hardest thing was stability of kind of having a team together and scheduling shifts. So because this food was so niche, no one had made it before. And so we had to 100% newly trained people to do that. And to newly trained people, you actually have to find people who have somewhat of an experience with it. And so what actually ended up happening in the very beginning for the restaurant is we had hired a husband wife couple and then two best friends that drove together. And that means that you have to schedule shifts around them and they come as a pair. As a pair, yeah. So then it's really hard to schedule differently. And because of that, we were only open 11 to 2, 5 to 8 Monday through Friday. People were very confused about our hours, but we couldn't find other people to just do Saturday Sunday. So we couldn't open on the weekend for probably six months. Okay. So besides that, once you're open, what's the feedback you're getting? Are people loving it? Is it taking some sort of education? Is there a curve? Yeah, I mean, so we opened in Seattle's there. So there is a lot. It's Bellevue East Side. So there is a large Asian population there. On the first day, we actually had a line out of the building. So how did you mark it? We did not mark it. That was all word of mouth. You didn't? Yes. Well, we did a soft opening. We didn't even have an open sign. I think people had been walking past and just checking if it was open. And then when it was open, it literally just spread on WeChat and WeChat. Yeah, exactly. So for the first two weeks, it was so busy. I was actually living in San Francisco at the time. Caleb was living in New York. So our third partner was the only one in person. My family was luckily in Seattle. So they actually, my mom and my grandma recruited their friends. They all got food handler permits. And then they went and helped in our restaurant. That's amazing. Yeah. For people who don't know, WeChat is basically like Instagram plus Facebook plus Venmo. And it's like the largest social media platform in the world. But if you're not, or if you're outside of America, you're aware of it. Predominantly Asian community on there and during Chinese New Year, you can send red envelopes to people, which is really fun. Yes. Yeah. Okay. So then you have this crazy line. That's incredible. You run out of food? Yes. We run out of food every day. Every day? Yes. So we were sold out for three months. And are you selling it at the right price? Or was it? Yeah. Okay. So you weren't like trying to low ball or high ball. You're just, this is the price and it's working. And then at some point, what happens? Are you like, what's next? Should we open up more of these? Where does your brain start going? No. So actually at that time, I had a full-time job and at a health tech startup and Caleb was in finance. So we didn't have plans to do this full time at that point. So three months in, we did staff up. Then we were open, you know, seven days a week. We had enough staff. We weren't running out of food anymore. That was great. So that was kind of a phase. And then about a year in, we have a lot of corporate traffic because Expedia was headquartered across from us. And then they were switching to Amazon. So there was a lull. And then during that three month transition, basically we got things in order, but then three months after that COVID hit. So it actually was very, we were only open about a year and four months before COVID. And then when COVID hit, what happened? How'd you pivot? So you guys are still, but you still have jobs. So at least like financially you're secure in some way. Are you thinking this is the end of the company? No, I think for us, we were able to work out with our landlord pretty good terms. So it was just pushback. I think, you know, we would have to pay it back later, but they delayed it six months for us, which really helped us in terms of figuring out what to do. And we did shut down for three weeks. People got COVID obviously on our team. And then we need to just assess what to do since there was zero foot traffic. We were mostly fast casual counter service. So we still could do takeout, but we weren't really set up on any of the delivery apps like Uber Eats or DoorDash yet. So we got set up on that. And essentially we started to experiment with another item, which was the soup dumpling. So that's actually our e-commerce item is frozen soup dumplings. So during that time period, we had experimented with it and then we tested out freezing it. We didn't know how that would go. And it actually worked. Like first time? No, it took. Yeah, it took a lot of trials, but after it worked, then we posted on WeChat again. And on Facebook groups. So there were a lot of communities on Facebook that were supporting small businesses and just saying like, Hey, here's this restaurant. If you didn't know about it and they're open again. So that's what we leveraged. And we got a lot of orders for the frozen soup dumplings, which allowed us to then bring back a couple of employees. And after about a month and a half, we were open as the restaurant again. But now we had an additional line of business that we had started. First of all, your product's amazing. I should say this up front. So we got sent, I think the two, three different flavors you have. Yeah. And it comes with this little bamboo thing, which is amazing, right? The steamer. And my wife and I tried it. We were hungry and so we didn't have dinner. And at some point we're like, What do we have? And so this is the thing in the freezer. And we're like, okay. And I've been trying to, I've been meaning to try this forever. And so we make it right away. And my wife says, Are they raising capital? We need to invest. This is unbelievable. And that's the reaction. And it's so good. And it also for people like me who have no cooking skills, it really makes you feel like a chef. Like there's a real component to this, which is like, I just, I didn't do much. I mean, you're steaming water, but to some extent, you're like, wow, you just prepared this. And then you have a lot of creativity with the sauce is the dipping sauce. So you can, so like the dipping sauce is really your own concoction of what you like, which was fun. But the product's unbelievable, like unbelievable. Thank you. I think there's this thing when you order something frozen, you're thinking, maybe it's not going to be as good or blah, blah, blah. Sacrificing taste for convenience. Here, zero. It was like no sacrifice. Felt like we had just made it from scratch. I mean, really next level. Yeah. Kudos to you and the team. I mean, super, super good product. Thank you. I mean, I think two points here. One, I think frozen food in the U.S. is actually kind of a stigma because it feels like there was microwave dinners and that's what really perpetuated frozen foods. But that's not really the case outside of the U.S. In China and Europe, it actually is high quality foods are frozen. I mean, even when you get seafood that is delivered from the ports, they're flash frozen. And most food that we get, it's frozen at some point to preserve it. And then it's defrosted and cooked or whatever prepared into a format. And so somehow it's a very U.S. thing that has happened where it's low quality, cheap, convenient microwave. But actually in France, there's a pretty gourmet grocery store that just does frozen foods and it's all high end, high quality foods and China's like that as well. So it's very interesting that that is the case here, but it definitely is the case here. I read a stat about this. So like Americans rediscovered their freezer aisle during COVID. Yeah. Yeah. Whereas I think most countries, there's like a weird stat where it's like 60% of the freezer is full in most countries, but in America it was like 5%. Oh, really? And then COVID has thrown this into, like COVID really gave people an opportunity to go, oh, and it wasn't so much of like, I want frozen food. It was more of like, I need to stock up. And so people started buying like secondary freezers, but in that rediscovering the whole thing. Yeah. And so it's an interesting thing. I think there are some households that have a secondary freezer if they're really big into seafood or fresh meat. And so then you're buying it from meat vendors or butchers or seafood vendors, direct from the source. And I've definitely seen people with secondary freezers for that purpose. And a lot of Asian households also have always had a secondary chest freezer that they fill up for these goods. But yeah, I agree. I have not releasing that happen until recently. Yeah. Who is your consumer? Where are they? Yeah. That's a good question. So the restaurant is very different from the e-commerce side. So for the e-commerce side, it is all across the U.S. So we actually did a hotspot, basically heat map of where our customers are versus the U.S. census. And it almost matches up perfectly. So it's all across the U.S. And I think it's surprising to people because they would think it's only bicoastal. But actually by coastal, you have a lot more options. You have restaurants where you have access to this food and in the middle of the U.S. you don't have that many options for it. So you might have, you know, a Chinese takeout restaurant here or there, but it's very much American Asian food and it's not Chinese food. And even the grocery stores, there's not a lot of ethnic grocery stores to go to. So we have done lots of user interviews with our customers directly. A common pattern is that they used to live in a city where they had access to it or they've tasted this food and now they live in an Asian food desert. How do you get to Indiana? That's the question I always ask people. How do you penetrate Indiana? So are you doing like ads? Are you doing a lot of paid social media? Yep, exactly. So that's how we really scaled up was direct to consumer, Facebook ads, Instagram ads. We're trying out different channels now like Google search, Google keywords, TikTok, but those are still very new. And is it a subscription service that you have or how do people like is, do you have a subscription for this? Or is it just? We don't really. So we actually did a subscription service the first few months only in Seattle. We still have 80% of the people who signed up two years ago subscribed from Seattle. It's a very small number, but yeah, but we haven't really done a subscription piece. We really want to think through that quite a bit because actually it's hard to get through a hundred dumplings. So if you have a hundred dumplings and you're not a family of four. Not for me. Yes, exactly. But for a lot of people, I think if you're two people it takes a few months to get through it. And so if you're on subscription then you would churn very quickly. And so we actually want this more to be a quarterly cadence of subscription where you refill and we also are actively expanding our product line so that there's more variety and choice that you can get through and not, you know, solely soup dumplings. So we're actually launching a new product on Thursday. Oh, what is it? Yeah. Chinese barbecue skewers. It's called Sao Kao. Yeah. Also frozen? Also frozen. Yeah, so it's pre-marinated. Yeah, pre-marinated, ready to grill, ready to air fry with spices that come with it. Have you given any thought to that map that you said where you pulled up your customer base and it matches with the U.S. census data? Have you ever given any thought to maybe using that information to open up more restaurants in areas where they are in an Asian food desert, as you said? Yes and no. I think that's still different because that heat map covers, you know, 100, 200 miles, whereas people only drive within 10 miles of where they live. So you can't cover enough with density unless you are, unfortunately, in more of an urban. Got it. So then it does fall onto the East Coast, West Coast, urban centers. Yep. Have you guys been surprised by the success of the product? Yes. I mean, I think it's not surprising, but we didn't expect it. I think we did hit on kind of a lightning in the bottle situation to begin with. So soup dumplings. It feels like a lot of people have been educated on it where they know what the item is. They know how hard it is to make and also how hard it is to find a really good soup dumpling. And I don't know like why this phenomenon happened, but for this particular item, that is the case. So people are willing to, I think, pay the appropriate price for a really good quality item and have the frozen shipping be OK with that because there's no other options, but they understand it. Tell people how much they cost. So it's between $34 and $40 depending on what the flavor is. And how many come in the bag? How many dumplings? 50 soup dumplings. Yeah, hard to go through, but delicious, to be honest. I think we went through a bag in two days. That's pretty good. It is pretty good, yeah. We went ham. I mean, literally 25 dumplings each. This is, I mean, they go quick and they're so delicious. I don't plug many things on our podcast. I really don't. I'm more interested in the journey, but the product that you're making is spectacular. Awesome. I mean, I hope our other products are just as good. I'll have to try them. Yeah. Where are you guys at from a funding perspective? Are you keeping it in-house? Are you fundraising? We closed around in January. How big was the seed round? Or where are you guys at? Seed A, we haven't announced it yet. OK, congratulations. Thank you. Is that why you're testing new products? Well, what were part of the goals of the raise? Yeah, so for the raise, we did want to grow our team. So even without the raise, we had wanted to expand production and expand our product line. I think the whole idea is we become the modern Chinese food brand. So I think because we started with one item, you can easily kind of put us as the soup dumpling company. But we've solved a lot on the back end in terms of the frozen logistics. We are vertically integrated in terms of manufacturing our own food. And we've gone through a whole journey of trying to find co-manufacturers, and they don't exist in the US. To be able to produce Chinese food. Let's talk about the shipping of it. Yeah. So shipping frozen is more expensive. Yeah. Kind of tough. Was it easy to figure out or? No, that was the most. That's the hardest part. That's the hardest part, but also our biggest. Can you explain why it's hard? Well, ours is a little bit of a harder item than most items because it's so sensitive. So when our dumplings melt, the dough becomes sticky and it actually becomes a clump. And it's as sensitive as ice cream. So ice cream literally cannot go above like negative 10 or zero degrees, otherwise it will crystallize and it's not as good quality wise. So ours was super sensitive, which is good and bad if forced us to become very disciplined in the very beginning but also meant high failure rate in the very beginning. So right now there's gold belly. A lot of people buy frozen food on gold belly. It's a marketplace where you have gourmet foods and you basically drop ship it to your customers. So gold belly is a marketing platform, essentially. So that shipping is about $70. Literally just for air shipping overnight plus the styrofoam or packaging, insulated packaging plus the dry ice all in is $70, which is extremely expensive for a food item. And unless you're like a well-known brand and it's already perceived as a gourmet item that just doesn't work and it's mostly for gifting. So for us that was what we wanted to bring down quite a bit. And so then all three of those components we work on a lot. So for the air shipping because it's so expensive and it's also not exactly reliable even our two-day air shipping takes three or four days sometimes through some of the larger networks which also their failure rates increase because of COVID. So I'm sure the throwback to two years ago it was all set up for a lot of like B2B shipping before. And then now that everyone's in their house they had to expand into residential. And so it went from like, hey, 98% guarantee for FedEx and UPS, which they used to have to there's no guarantee. So that happened during COVID. And so 98% guarantee meant that the 2% they would pay back if it didn't work and then without the guarantee you don't get paid back. You're on the hook for everything. Yes, so if it melts and you reship it, it's all on you. And in the very beginning the first year we actually had about 25% failure rate which was very painful. But I think for us the whole idea was we're introducing a lot of people newly to this product and because it's a cuisine that people are familiar with but there's not a lot of like honest represented food. We want this to be a good experience. So they keep trying and keep educating themselves on it. So we're like, we're just gonna bite the bullet and reship and then we have to figure out the failure rate and what's going on. Of the 25% failure rate, do you know how many of those customers you were able to retain? Like the, I'm sure they sent them back and then you ship them a new product. Were they receptive to that all like they understood or did you lose some customers? Yes, because we're proactive about it. So actually we set up systems where anything that was in transit for three days or more we automatically reached out and asked if it was still frozen and if it wasn't we would just reship no questions asked. So how did you end up figuring it out? Did you look at, like I know, so for example we're an investor in like this frozen almond milk company and so they had the same problem where because there's no binders or gums there's basically no shelf life. There's five days, but it's frozen and so they sell it frozen and they went through tons of iterations but in the vegan marketplace as a whole there's a lot of frozen products and so it's like that's where a lot of the innovation around your type of product like frozen has like a lot of them have figured it out. I've come to learn, but it's hard. Yeah, so we actually have like five warehouse three P.L. partners and so they're spread out across the U.S. so that we get full two-day coverage across the U.S. for shipping, for ground shipping. Where is your number one state? Is it California? Yep. So I mean, Washington because we're our hometown is Washington so everyone knows us but yeah, California is pretty large and then actually Texas, Florida, New York areas are really large. What's next for you guys besides the skewer? What else are you working on for maybe 2023 at this stage? Still 2022, noodles? Noodles, yeah. Tell me about the innovation. Any innovation, what's different? Not necessarily innovation but basically because we can do frozen shipping that does change things a lot. So right now most noodles that are available are dry noodles and then plus a shelf stable sauce. No meat, no vegetables or anything and so for us it is the whole package. So I think there's definitely a market for actually what you described really well where you are kind of cooking it. So people don't really want to make, not everyone wants to make it 100% from scratch. That's a lot of time and also microwave is perceived as low quality and this is in the middle where you actually feel like you are preparing something fresh. You know I wanted to ask about something I found on your website. You have a FAQ section and there's a line under there that's like I'm an influencer and I want some of your product for free. And then your response was like you kind of leaned into the ridiculousness of it but I wanted you to like go full ham into it. I think your response was something along the lines of oh look at you using your cloud for free product but then you gave them an email address and I wanted you to just be like no, no, we know what we're serving here. I want a 404 page. Yeah, I want pages broken. Exactly, it doesn't exist. We're not in the business of that. Like when you view influencer marketing what are your thoughts on it? And do you work with a lot of influencers that way? I would say not a lot. Well, okay, so mainly the gap is that we don't have a full time marketing person at all yet. Why, can you explain to me why? Like how do you personally view that? No, we're doing it actively right now. Very necessary. I'm really curious about this and I think this is good for other entrepreneurs. Yes. So you're sitting here in a position of like you're almost embarrassed that you don't have one. Yes. Like you're very like on your face. It's very like, oh God, I know. But why? Why do companies wait so long to do, to like turn on what I would call like a very essential function? Well, in our case, basically we were in a really lucky position where we had actually sold out of our supply this entire time up until now. And so for us, our first priority was unlocking production. And so then we're super focused on making sure our facility was set up, our production lines were set up, our production staff was hired. And then the second priority after that was hiring a product team because we had one chef for the restaurant. And basically he was working on our CPG products as well. And for a one person product team that's just not going to move fast enough if we wanted to be more like a modern Chinese food brand that had a larger product line. So it was more just a prioritization thing. I got you. And then third after that was definitely marketing. And I think actually one thing we didn't appreciate was once we unlocked production, we were able to scale up our spend a lot more. So from, let's say, October until now, we've actually five exed. So moved very quickly. And that was because we were able to unlock production and there was still a lot of demand for it. What we didn't appreciate is the marketing catch-up that we would need to do. So now that we've unlocked production, it actually does mean that our ads and creative out there are served to a lot more people. And that fatigues so much faster where basically before that point because we were serving it to so few people, it could last like six months for a single thing that we had put together kind of scrappily. And then now because it's obviously accelerated 5x, it just isn't the case and we need new creative a lot more frequently. But we haven't invested in the team. And so now we're catching up. So how big of a team do you envision this marketing team to be? Well, so we don't have no one on the marketing team. They're just not full-time. So we do have a growth person right now. We have a PR agency. We do have a design person. We have a Google person. We have an email marketing person. We have like a specific landing page person. And then we just hired a creative director and marketing partnerships person. So those would be our first two full-time hires. And then basically everyone else is, you start to shift that full-time because there's more demands on that. But we do have like a built-out, I guess like armory of folks. They're just not full-time. Yeah. Where will you spend most of your dollars? Is it like Instagram, TikTok? Mm-hmm, yeah. I know we talked about geographic locations, but how about age demographics? Yeah, it's actually more families. So between 25 to 45 is kind of our core demographic right now. That is 70% of our listener base. Yeah. Great. So you're speaking of it right here. I think it's a little bit of a chicken and egg thing though because we only have one product and you have to buy, you know, 100 soup dumplings in order to get the free ship. Exactly. So because we started with one product and you have to have 100 soup dumplings to begin with, then to hit the free shipping, you know, to consume that many, it just is self-selective who would purchase. But we also do believe once we have a wider product range and we're able to partner with, you know, microsites where you could pick up, for example, and not have such a high delivery minimum, then that also broadens who can purchase. Let's build the future together right now. So let's ideate. So you mentioned a couple of things. So one thing is you're giving people like the ability to become a chef in their home in a light touch way. This is interesting. They could change the whole direction of your company. Yep. You're creating another product, smart, smart for your investor deck. So if I'm looking at your deck, let's say in six months time, right? You're closing your next round or maybe Q1 next year. What is the thing you're tackling? Is it creating more products? Like what's the one? What's the thing? Or is it making people feel like chefs at home? In which case your culinary expands to everything. Yeah. How do you view that? I think it is making progress towards becoming the default Chinese food company. So it is more on the product side of things, but I think you see that happening through a lot of the metrics around obviously region expansion and also repeats. So for us, our repeat is pretty strong that we see, but it's not super frequent. And so that product line also solves for that a little bit, but essentially for the repeat, that's kind of how you see whether a business is healthy. I mean, in whatever industry you're in. Sure, the retention, yeah. Do you ever envision where you're not, I don't know, maybe shipping-wise it's hard, but where it's less dumplings, like there's like a starter pack or like I'm not sure pack, but I wanna try pack. Yep. Yeah. We would definitely do that, yeah. Okay. And actually, maybe this is an interesting anecdote. So we almost had launched our noodles last year. So we had Dandan noodle ready to go. And Dandan Mian is basically, it's a spicy numbing noodle from Sichuan. And it's pretty common in the US, but there's a lot of formats and it's not always actually Sichuan style. So there's different regions that do it. And a lot of the peppercorn that's used here is not actually numbing. So when you eat it, you don't feel that tingling sensation. So we had a product, it's been in our restaurant for about eight months or so. So it's been there, people can have it. And we did do a regional beta launch at the end of last year. And we got a lot of feedback around, format packaging instructions, but beyond that, what was actually very surprising to us was even though it was Seattle, half of the people had never heard of Dandan noodle or tried Dandan noodle, but they still had purchased and tried it from us. So it is a lot of brand loyalty. But then what we saw was a lot of people very unfamiliar with the taste. So they didn't really understand what was going on with the tingling. They're like, I don't know, but I need to drink water. Maybe it's too salty. We're like, it's a different reaction that's going on. But it was very clear they had no idea what was happening. But at least they're jumping off the diving board. You know, that's interesting. Exactly. That's a really interesting data point. Yeah. So for us, I think we didn't want to compromise on what the dish is supposed to be. We are kind of reformulating it for something we like a little bit better, where it's not super traditional or classic, but it has those elements, and then it is a little bit more innovative in the recipe. But we did want to do the noodle variety pack so that people had a choice. So they can try other things that are also good and authentic. They don't have to do this one, but they have a choice. And when it comes to your business, do you ever envision more restaurants or is it just simply like R&D for now? We'll do more. We're actively looking right now. Different markets. Different markets. And so when it comes, this is just a question I'm curious about. I get this question a lot sometimes, but it's like when you are raising, but you have like two restaurant businesses, are they separate businesses? They are, like under different LLCs. The first restaurant is separate. So actually for that one, the first restaurant we put in our own money, and then we had friends who put in their money as well. And we were super clear when we went out with that that was a single entity. And at first the intention was if this works, we may expand other restaurants. But if we expand other restaurants, that would also be totally separate. This is just one single location. And so in this case, even though it's not a physical building, it is a separate business. Separate business, yeah. That's smart. That's the advice I give people all the time. So I'm glad you're on board because I was about to be like, oh, sorry, everyone. Because we build breweries, you know? And so it ends up, we're like this coffee shop and different things and development. And so sometimes there's a question of specifically with a brewery, a brewery can be a tap room where you go in person, but it can also become a distribution. And so these are two different businesses. And they always ask me like, what do I tell investors if they're investing in my company, which today is one location and could serve distribution or tap room. I'm like, you have to be very careful actually because you could give away the farm without really knowing it. And so my advice is always to set up different entities because you never know what'll happen. And then in the future too, it's like your location too could maybe only be manufacturing, right? And so that's a completely different game, different business, really focused on distribution, not on tap room sales. And so that's good. That's good to know. But in this case, for our second raise, it would include everything that we kind of create from here on out. Interesting. But I think for us, how we view a lot of this is Omni Channel. So you will have DTC Core and I think no matter what the share of sales is, it'll still be core in the sense of we're directly interacting with our customers. We get to iterate a lot faster. We get to try out beta tests with them and there will be a lot more available DTC than there would be in retail locations. Retail is just much slower and it's locked down. Like once you have a product in there, that's it. You don't change it, right? I have a weird thought and idea for you, but I think your product hits it. So the way I think about your product in some ways, almost like it could really take off in an airport setting because it's healthy, right? It's quick and you have so many different groups of people in there. And so like there's this place called Rold in Australia and it's like these Vietnamese rolls. They're unbelievably healthy, super amazing and they just crank money and they don't need that much space. And so like I think about your product similar. I don't know if that makes any sense to you, but I'm like, that would be dope because it's quick, but it's delicious. And I think American airports as a whole are so behind when it comes to even the perception of good food, you know? Like most people that I know that are healthy, they bring their own food on the plane, which just sounds crazy, but it's just like America has shitty airport food. Yep, we actually did have an airport distributor reach out to us. They really liked the taste, but they wanted it to look handmade. But it does. What does that mean? Does it not look handmade to them? That's a great question. I mean, like if I'm not a professional, I assume most of the people buying these are not professionals. So therefore, what is that actually? What's the metric for knowing it's handmade? To me, it looks handmade. Did hands make it? Hands make it. So I mean, arguably it is. I mean, it's totally handmade. Yeah, I mean, we definitely have obviously automation to help produce it. I think most people assume that, but yeah, I am not sure why they wanted it specifically that way, but that's kind of where the conversation went. Where we have seen some just interesting fit is also festivals. So we did Coachella. So we're a food vendor in the VIP section there, and we did super well. We set a record in their section, and part of it was probably there's different food than burgers and fries there. Part of it was we had our operations super efficient since we could scale up or down. We had our soup dumplings and skewers there, and basically it was just like, okay, here's our line, bam, bam, bam. We have it ready right when you order. And so that did really well, and we're kind of looking at other festivals as well. Here's another interesting question. So from my perspective, there's a lot of innovation in the food space where it's like you can make a vegan dumpling and partner with a brand that has a big name. And so as any of that, and almost like make it like an American flavored or like, oh, I'm partnering with an American brand, therefore it feels okay to try this thing from this company I've never even had before. Do you guys spend a lot of time in that space or like partnerships? Yes, so we're starting to do that a little bit, and vegan vegetarian are the number one requests for us everywhere. The difficulty for vegan soup dumpling is gelatin is an animal derived product. So that's what we've spent a lot of time working on R&D for, but this is requested a lot and gluten-free. Yeah, is gluten-free achievable? Potentially. That seems like a hard one. It's a hard one, yeah. But there is a lot of pasta out there that's pretty good gluten-free now. So I feel like- But freezing it. Yeah. Because it doesn't hold well. We'll see how all of that is, yes. But- My wife's gluten-free and she had your dumpling and she loved it. Oh, nice. So you have someone who's willing to take the pain. Yeah, and she had multiple. As you know, we went through a bag in two days, so. There's a good customer testimonial for you. So good I'm willing to get sick. Worth the pain. Now I like the collaborations happening in the food space. It's something like, it's brand new, it's so new. Just because of probably like the brand allegiance people have. And so it becomes like an easy way to bring in another market. Yep. How many restaurants do you wanna open this year or next year? Is it 10s? Not too many, yeah. Probably under five. Located next to your distribution hubs probably or not necessarily. Not necessarily. We'll be right back to the episode after this quick break. Warby Parker offers everything you need for Happy Your Eyes and you can shop with them online or in stores. 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So head on over to joinfightcamp.com slash start up to storefront and get free shipping with your first order. Now, back to the episode. You know there's a really touching story on your bio, on your website where you talked about as a kid all you wanted to do was fit in with the other kids in the school cafeteria with your lunchbox and how yours looked different and so you threw it in the trash. And I'm wondering with this goal that you stated where you wanna be the number one Chinese food distributor in the US and the proliferation of, not just proliferation but the items that are seen today in the food landscape are much more diverse than they were 20, 30 years ago. And I'm wondering if part of what you're building is an answer to that problem where you felt like you didn't fit in and so by making this a more common household staple you would then maybe prevent another little girl from not feeling like one of the crowd by what's in her lunchbox. Yeah, definitely. I mean, I think as you asked why did we start this at the beginning it wasn't so profound it was very much like we just wanna eat good food and then obviously through this journey I think we've explored a lot what this means to us and there is a lot of I think emotion attached to it especially obviously with all the attention on AAPI the last couple of years I think that also has led us to introspect on what all of this means to us. So I think two parts, one for the thing around foreignness I think there is a lot of visibility around that and I was speaking to the owners of Cafe China they're in a New York restaurant and they put it a really nice way where it's foreign food because you haven't encountered it but if you have accessibility towards this and people experience it and it becomes familiar then it actually just becomes food and that just is then naturally integrated and I think that definitely is the idea around the accessibility piece and if you have good education it's approachable people try it then it's no longer foreign that definitely solves for that. I think a second part is actually around creating our own culture so I actually was in LA this weekend to speak with Chef John Kang he is a big proponent of something called third culture so as a third culture kid that means your first culture is your parents culture which is likely a different home or culture than where you currently reside so your second culture is where you reside now which would be the US and your third culture is basically this in-between piece yeah it's hybrid you're not really 100% part of either so definitely going back to China people don't think I'm Chinese because I speak English, I'm darker and I have different mannerisms obviously and behavior and so they even when I was eight they would call me American and not let me participate and I would be really sad and in the US people would say like you're Chinese you're not American and I didn't even understand what that meant I was like what does that mean like I was born in the US I've grown up American I literally barely know how to speak Chinese like why are you saying I'm not American I didn't even understand that concept then and so I think that third culture piece is really important and kind of actually to your question about are you going to make food with American partnerships I think the answer is yes but it does have to be done in a way that is true to who we are and I think like there are culture dishes that mix where we come from where I think vegan, vegetarian, gluten free these are not things that you really find in China maybe in the future we will but mainly because there hasn't been a demand there and that isn't the culture there but this is the culture where we are now and that is something that people care about and pay attention to and you can meld those in a way that is true to who we are so I think like that third culture piece is definitely undefined, it's gritty but that's where I think we want to keep exploring you know what does that mean to us to that point I've also seen like I'm from Peru, I'm born in Peru and so what I've seen in Peru is there's much more appreciation like now if you have ceviche people will attribute that to the Japanese Nikkei food and so Peru's very forward on letting you know it's the Japanese influence of Peruvian food and I think if you peel back the onion on enough foods you'll realize like all of them have an origin that wasn't there and it's all connected and someone just rift and they were 200 miles away and then a thousand miles away and so it's almost like there really is no place it's just a function of like if you're next to the ocean you're probably gonna make some seafood and then your riff on that is whatever the humans around you or the ones who immigrated there end up creating and it's really cool because when you have it I think there's a moment of like you're talking about real integration and immersion of different cultures and a spice could be from a different place than the food, you know what I mean? It's like the whole fusion of it is what people are enjoying and there's an education in that which is pretty cool. Exactly and I think that third culture piece is I think it's more of a lens shift than anything else because I think like here a lot of Asian food has been American Asian because it's Asian food that is designed for Americans to be palatable and this space is basically food that we would design for us to eat given all of our influence of all the other cultures that are here as well which includes American and all the other Asian countries and like you can't remove that from our experience. How do you think about this context in terms of your content strategy? Like how important is that messaging or is it too confusing? Is it too like too high brow, too much, too far? Yeah, it is really important to us because that's what feels natural to us. I think we don't have an answer for how to do it yet. Yeah, it's hard. Yeah, so I think even when we explore our brand and our name it's really hard to even convey that to people who aren't actually necessarily culture kids because I think like it makes sense definitionally but then when you ask for a representation of what that could look like it's super hard to figure that out. So sure, I remember when I first moved here my mom would make like I had my lunch look nothing like anyone around me and I think here it's so fascinating and maybe you'll feel a certain way about this. So I was in like, I remember I was at a table all my friends were obviously from Massachusetts. You know, they were born there and probably there for generations and so I show up with like real food, real food that I have to go to the teacher's room to microwave and it was like, it was super healthy also and then my classmates, it was like a fruit roll-up and gushers and peanut butter and jelly sandwich and maybe an apple, maybe an applesauce and I was like, I didn't have a fruit roll-up till I was like nine and I was blown away when I had it. I'm like, this is delicious. What's my mom doing? And then I was like, let me look at that and I went to the store. It's a total shift of like, and then you start to realize like, you start to realize the programming I guess where it's like, what are they watching on TV? Oh, that's why they're buying that. What grocery aisles do they go to? And it's like, you start to realize also, at least for me, when I was growing up, no one knew where Peru was. So there was no Google, there was no internet, right? And so I think also it's easier today for people to be like, oh, where's the food from? And you could say 14 places or two places and they'd be like, oh yeah, I've heard of those. Whereas back then I had to go to a globe. Like I literally had to go to class, go to the globe. Like I'm from right here. And they're like, how'd you get here? Like a plane flew me here. And they're like, what is, where is that? I'm like, that's called South America. And like no one knew what it was. Cause there was no Google, there was nothing. It was funny, when that happened to me, I was like, I'm eating way healthier than these people. Like I remember that. I'm like, my food is way more delicious. My lunchbox looked a lot like yours. I wasn't one of the gushers for roll-up students. Sorry to judge you. Yeah. I just wanted to throw that out there. Cause I knew that was where you were going. Oh totally, I was trashing your parents right there. Yeah. In that case that you pointed out the lunchbox story. So that definitely happened in my mom and what I describe essentially throughout my food. My mom was like, oh wow, you ate all of your food cause I actually had a bad appetite then. I was like, yes, I ate all of it. And she's my mom, so she knows when I'm lying. So she found my spoon, it was clean. And she's like, you didn't eat it. And then she stopped cooking me food again for lunch. So I had lunch money to buy the cafeteria food and that was it for the rest of my school years. So I'm like sad for my, you know, former self. I missed out on all of the good food because I didn't know how to approach it or embrace it at that time. And I literally would steal my friend's sandwiches and be so jealous of the food that they were able to bring. Peanut butter and jelly sandwich changed my life. What is this thing? This is so delicious. I had friends that like their parents like they crust off and I'm like, oh, this is just happiness derived into this thing. And now I would really, I don't know, obviously peanut butter's gotten a lot healthier since then, at least more natural. And also to your point around the like seeing where things came from and culture. So for music, this is really embarrassing but my mom only let me listen to classical music and radio Disney until like high school. That's awesome. Basically, but then I missed out on all the pop culture things, some horrible at trivia and also tons of movies I didn't get to watch growing up. This is me. Yeah. Well, first of all, it's same boat. Literally couldn't mention a movie at all ever. People make all these weird references in public and I'm like, why do you do that? Like, why are you just quoting old movies that I think suck? Or like I've never seen before, right? But it's really interesting like a societal thing. And then I remember in college or post college I was living in Boston and a friend of mine I thought he was the funniest kid in the world. Like literally, I thought I was like this guy is so funny. I was always laughing with him. And then I start watching Heim at your mother and I'm realizing he's recycling every single show. Oh my gosh. And I'm like, where are the people with their own personality? And then I realized that pop culture has a real way. Yeah. It becomes part of your personality. Yeah, you become copy and paste. Yeah. So you don't have that, you're an original. That's how I come to terms with it. So what's next? What else is next for you? I mean, I think we have our plates pretty full with the new products and then. You're opening in LA, can't wait. I'm going to be there. Exactly. Fall 2022. Yeah. And I think you were joking about this actually before we went on the podcast around no economy questions. But that actually is a really big thing for us. It is very much changing environment in terms of how people spend, where they spend, you know, where they're paying attention to things or how that shifts just consumer behavior, generally speaking. So I think we're seeing a lot of that reflected pretty acutely. So what does that mean to you specifically, to your business? What are you more careful about? And what do you maybe more bullish about? Yeah, I mean, I think there was just a heyday for online advertising during COVID. Right. People were shopping online a lot and scrolling through their phones a lot. And there was definitely access money because you weren't going out at all. And now that has shifted. And so then ad performance, you know, isn't as strong. It doesn't get delivered as strongly. And so then you do have to start thinking about, like, how do you survive for your company? And we actually got sent, we have a few VC friends, but they all forward like the same emails around, how does your company survive through these times? And all of them are just about, you have to get to your profitability, you have to get to a place where you won't rely on funding to survive through the next few years. I disagree. So I attended a talk recently, a couple PhD, economic, whatever. And so the whole high level is America has never been in a better time in terms of excess money. So it's the best time in history where your average household has the lowest debt ever in America, which means they have the highest cash on hand ever in America. And so this whole thing of like looking at the micro around are people going poor, are they spending less? All that doesn't matter. That's why people are buying money. That's why people are buying NFTs because they have excess capital to just, whatever, bet the farm on. And they're spending it, but not in an unhealthy way. And America has never seen a time like this before. And so people are sitting on a bunch of cash at home. Yeah, I mean- The profitability in general from a VC is probably a good email to send around at any time. It's like, let me scare the shit out of them. Let me send them some go profitable fast. I can recoup my funds or sell, right, exit. But in general, I mean, you should be shooting for that in some way. Yeah, I mean, it's hard to tell what is acutely felt right now where everything is shifting immediately right now versus how it will feel in a few months. I mean, there's definitely a few, we're gonna be in a recession soon. That's almost a definite. The interest rates are going up. That makes it harder. Yeah, those things are real. But who cares? It's not COVID, right? You survived COVID. I would argue like that's way harder than this. This is like nothing, child's play. I also always think in the back of my head like imagine if I could interview someone that survived the plague and I asked them what was happening in COVID, they would be so happy. They'd be like, you have a phone. You get sent alerts every day. We had to sit by a newspaper every once a week to figure out what our next move was and you're getting real time data and people are mad at Fauci or whoever. Like that's a privilege. So it's like not that bad, right? Yeah. Keep building your shit. Go ham. Everything's relative, yeah. Yeah, yeah, yeah. We're on easy street right now. Anything else you wanna tell people? Where they can find you? Where they can order these amazing products? Yeah, our website is thexcj.com, thgxcj.com and that's where we can be found and we do have our restaurant in Bellevue. So that's where we are right now. Thank you for coming on the podcast. Right on, thank you so much, Jen. Yeah, thank you. That was our conversation with Jen Lau. 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