 How do you evade the three-tier system and go DTC with liquor? The reason you've never seen liquor sold direct to consumer, it's because it's illegal. Woody and I, together, ended up discovering a loophole. Elena Hambriggs, co-founder of House. You ready to answer some questions? I'm ready. Why the name House? It's a nod to Berlin, where Woody and my co-founder and husband used to live in discovered operatives. What other names were you toying with? That was it. It came to me two days after I had the idea for the company. Any Lady Gaga SEO concerns? Yes. What brands were on your mood board when creating House? Print magazines, appartamento, things that were more vintage and tangible. How did you decide on your brand aesthetic? I would say it came to me quickly, but it was based on a decade of brand experience. What's your goal with House? To be a portfolio. How do you ensure your brand had immediate visceral appeal? Visual brand is everything. Who do you consider your biggest competitor? Big alcohol. Who do you take inspiration from? Old versions of storytelling, lots of print collateral, old magazines, old traditions and rituals, very little about that. Why? Because drinking has been a ritual that humans have enjoyed since the beginning of time. And same with gathering. It's all about focusing on what works in that ritual and that tradition and investigating what doesn't work. So is texture a big part of the brand? I like for the brand to feel as tactile as possible. I want you to look at your phone and think that this could actually live on the page of a book. And what instincts do you find you need to avoid to make sure you ensure this tactile nature of thing? For us, I think it was photography. We wanted to show where the product will actually live in your life versus it being alone on a colored seamless backdrop. What's the coolest moment of the brand so far? Watching everyone unbox it and share it on the internet. When the brand is so hot, does the product even matter? We're lucky that our product is really good. It got a lot of hype, but at the end of the day, if it's not good, then hype doesn't matter. What's it like working with your husband? It's fun. I think the reason it works is because we don't have an overlap in our skill set. Woody is focused on making the product. He made the recipes. He built out the production facility and logistics and shipping and I took it to market. Would you have gone into this if your husband's family wasn't always in the business? House exists because a Silicon Valley creator married a wine and spirits guy. The little ABV thing makes no sense to me, but I see everyone doing it. Please help me understand why this is so popular. Part of being a business owner or a person who's focused on their career, you're out drinking all the time. You're at industry events and you're networking, and you're also probably having friends and dates. And so some people end up drinking five to seven nights a week. And while there's something great about drinking and how it brings people together, there's downsides that weigh on me and weigh on a lot of people that I know. So people are looking for a better way to drink. And there's not much out there. How do you evade the three-tier system and go DTC with liquor? The reason you've never seen liquor sold direct to consumer, the reason you've never seen brick and mortars, it's because it's illegal. And you have to go through the three-tier system. It's the way it's been for 100 years. But Woody and I together ended up discovering a loophole where if you are under 24% alcohol and you're made mostly of grapes, you can bypass the system. And we happen to be grape farmers. Does that freak you out a little bit now that you're talking about the loophole and it's out there? I thought it would be quickly stolen, but everyone we talked to in the industry thinks that we're crazy. They don't understand why we would go direct to consumer and not go through the system. Where do you spend your marketing dollars? Nowhere. We haven't done Hade yet. We've really been focusing on making the best experience for the consumer and then everything's been word of mouth and press. What was your first bit of press that started the whole domino? Our actual highest performing piece for acquisition was a Medium post that I wrote. Did you surprise yourself? Every day. How much money would someone have to plop down right now in front of you to say sold? $3 billion. I heard you raised a few hundred grand and put all your chips on Jin Lane and launched and then raised a much bigger round. Is this true? Yeah. I mean, when we said yes to signing with Jin Lane, we didn't have enough money to pay them. We literally lived investor paycheck to investor paycheck and put it all towards Jin Lane. Am I overplaying the risk you took or did you really consider it a smart calculated risk at the time? I felt like it was important and I also felt like working with the best in the business would de-risk the investment opportunity for many people and I was right. What is a piece of advice you live by? Do what you say you're going to do. What do you love about yourself? I do what I say I'm going to do. If you had to give a dictionary definition of your design aesthetic, what would it be? Nostalgic. What do you hate about yourself? I care what people think about me. What's the hardest thing you've had to learn on the job? To not let it get me down when people say no. What keeps you up at night? The future. What part of your brand still needs work? Communication. I think it's a big challenge introducing a new type of product to the world even if it's something that they need. It's a challenge to make that message really succinct and able to live not just in an interview but on a Facebook app. So what are you playing with? The messages that really resonate with people are that we're a third of the alcohol of a whiskey or a gin or vodka. One of the interesting things about our loophole is we can't call ourselves a spirit so we have to do creative things to imply that we're part of that category. The name house does not imply any low ABV so you said you could be in portfolio. I presume there will be things coming that are fastball for someone like me who loves to drink. So when I think about house I don't think of us as a liquor company. I don't even necessarily think of us as a beverage company. I think about the way that drinking culture has been which is really gathering culture and historically it's been like loud drunk bar. It's the way that it's been and then you have this rebellion which is sober life and functional beverages and recess and kin and sober clubs and then you've got this whole space in the middle that's for people that want to imbibe and they want to gather and get a buzz and have fun but they don't want the way that drinking's been and when we're focused on this kind of culture of moderation alcohol works here but so does non-alcoholic and so do physical spaces and so do cultural events and there's a lot here to own in how people gather today. What part of the brand are you most proud of? We built a brand that people have an emotional connection to upon seeing it on the internet and continue to have a positive relationship with it when they actually try it. Are you lucky? Incredibly. What does Sunday look like for you? I try to survive a day with a toddler. How important are reviews? Important. We have the ability to iterate quickly based on feedback and that's a luxury that we have and we need to make the most of it. What's your biggest business challenge at the moment? Setting up a business where you own production and retail and ultimately a lot of logistics instead of outsourcing it to vendors means a lot of costs up front. If you could start all over again what would you do differently? I'd raise our last round at a higher cap. Who is a person you'd love to have coffee or drink with that are live? I would really like to drink house with Chrissy Teigen. Does PR sell products? I think that PR is essential even if it doesn't directly tie to sales metrics all the time. We can tell our story all day but it's 10 times as meaningful if other people tell it for us. What are the key indicators you look to determine the health of your business? Largely whether or not people are excited by their order. Do you have your repeat rates yet? Yes they're above average significantly above average. Do you work with influencers and if so how? I want to work with people who have cultural influence over our audience but I don't want it to be as transactional as offering someone money to post about our product. We really want to work with people who actually would find this product useful for them and fortunately the same dilemma we talked about of drinking all the time and needing to be on your game is a pretty pertinent problem for Hollywood. If someone said I want to be you what would be the first thing you'd tell them to do? Start in the middle of nowhere in North Carolina and then work your way up. PR or influencers? PR. If you had one marketing dollar to spend where would you spend it? Product. How important is community? It's important to us more than most people I think because we see an opportunity there. What part of the business surprised you the most? How quickly it got outside of my network. What are you working towards? The most exciting thing we're working towards is retail. So the same loophole that allows us to go direct to consumer is a loophole that allows us to build our own brick and mortar retail. You've never seen a makers mark brick and mortar because it's illegal but we can do it. So that not only gives us a chance to own retail spaces where people can impulse buy our product or they can gather or they can participate in events but those double as inventory hubs that allow us to ultimately control logistics. So suddenly we own the three tiers. Halleida Hamburg co-founder of House. Thank you so much for coming here and answering some questions. Thanks for having me. I'm Ian Wishengrad and I'll see you next time on I'm with the brand.