Like many people, I love Sriracha. This story makes me love it even more. Via TechCrunch:
The company name sounded Chinese – Huy Fong Foods. Was this the latest Chinese product to take off in the US?
Turns out it is a family-owned business started by a refugee from Vietnam (of Vietnamese and Chinese roots) and named after a small village in Thailand Si Racha. So grateful was David Tran for the people who provided safe passage from Vietnam for him that he named his company after the Taiwanese ship that carried him away.
Tran moved to Los Angeles and started his business in Chinatown with a need he personally had. He noticed that Americans didn’t have good hot sauce. So he made hand-made batches in a bucket and drove it to customers in his van.
But his goal wasn’t to make a billion dollars. He wasn’t driven by quick riches. He was driven by wanting to provide a great product. How much could the new generation of entrepreneurs learn from that?
I know it’s what I look for when I want to back companies.
“My American dream was never to become a billionaire,” Tran said. “We started this because we like fresh, spicy chili sauce.”
And build a great business he did. While still owning the business he now does $60 million in annual sales built from nothing.
Could he have grown faster with outside money? Or by selling to a big company and taking it international? Sure.
But it wasn’t his ambition.
You’ll absolutely love this quote:
“This company, she is like a loved one to me, like family. Why would I share my loved one with someone else?”
How many of you could say that?
He didn’t want to compromise on product, as he knew he would be forced to if he had to expand too quickly. He wanted to keep his prices low (apparently he has never raised his wholesale price in 30 years).
What I learned from the article? What touched me? What lessons could you learn from a Vietnam refugee who makes chili sauce? Quite a bit it turns out …
1. Extreme product passion. When his packaging suppliers tried to get him to change his product to make it less hot or more sweet for American customers he refused: “Hot sauce must be hot. If you don’t like it hot, use less,” he said. “We don’t make mayonnaise here.”
2. Uncompromising product quality (he processes his chilies the same day they are harvested)
3. He had a guiding principle for the company
4. Focus on the customer and provide value – ”We just do our own thing and try to keep the price low. If our product is still welcomed by the customer, then we will keep growing.” He said this in response to the fact that several other companies are now stealing the Sriracha brand name. He can’t trademark it since it’s the name of a city. By the way, he has never spent a dollar on advertising
5. Provide something distinctive. What will you be known for? Given the brand dilution going on with the name Sriracha how can he still grow his business? The distinctive design of his packaging. That crazy rooster. All those freaking languages on the bottle – the mystery of it all! And the green caps.