About this episode

If you've been around The Startup Story for any length of time, then you probably know that many times I ask my founder guests something along the lines of "If we were doing a where are they now episode in 3 to 5-years, where would your brand be?" Well this episode is kind of like our first "where are they now episodes". It has only been a year, but I think we can all agree the last year felt like 5 years all rolled into one. I’m so excited to bring this update episode featuring Christina Stembel the founder of Farmgirl flowers. I am such a fan girl of Christina and it’s because her story is truly one of resilience, grit, and excellence in execution.

For those who might not know her story, she pitched more than 100 investors and every single one of them told her no. Yet she continues on, and has now built the business that is marching towards the $100 Million in revenue mark. It's an amazing story! But we’re not going to go into her backstory in this episode. In this episode we talk about the last 12-months of her business, all the lessons she learned about herself, the team, the brand, and what adjustments she had to make in order to survive.

In this episode, you'll hear:

  • What her profit margin is like at her various revenue milestones.
  • Christina tells us that she gave the company one year to increase profitability and get up to 10% net.
  • She explains how February (before the pandemic hit) was extremely challenging as she and her husband got a divorce.
  • Christina shares that luckily just before the pandemic she had just launched Ecuador and was able to transfer the orders to her South America team.
  • She shares how she first thought the company wouldn’t make it through to the pandemic and estimated that they would last eight weeks in any scenario. When she came to this conclusion this kicked in her fight-or-flight mentality and she knew she was going to fight her way through the pandemic.
  • In 2020 she opened additional 2 distribution centers in Ecuador and Miami. With orders being moved to Ecuador she had to give a 2 day crash course to train the employees (who usually plant flowers) on how to make bouquets, all in spanish.
  • She shares how she opened 4 fulfillment centers, where they trained the farm's workers how to ship the flowers for them. Since then they have opened 5 more.
  • Christina shares how she keeps her head and heart straight despite the varying stress that she walks through.
  • She shares how the shipping partners they used for Farmgirl Flowers used covid as an excuse to not honor their money back guarantee. This put her company in jeopardy.
  • She shares how she started creating video to connect with the customers, as it was the most efficient and direct way to communicate. She also created weekly video updates and video tutorials of flower arranging to give back to her community.
  • Christina shares how Farmgirl Flowers is not great at marketing but great at brand, which means she only spends 1% on marketing and PR.
  • She shares how she is transparent to her community about everything that goes on behind the scenes.
  • Christina shares how her team is over 70% women and she would like to get on site childcare.
  • She shares the struggles of being a female founder, and how people don’t extend the same level of respect to her as they do her male founder counterparts.

Resources from this episode

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The Startup Story is now on YouTube: https://www.youtube.com/jamesmckinney
The Startup Story on Instagram: https://www.instagram.com/thestartupstory

Christina Stembel, Founder of Farmgirl Flowers: https://www.thestartupstory.co/episodes/christina-stembel-founder-of-farmgirl-flowers

Farmgirl Flowers: https://farmgirlflowers.com/

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Episode transcript

James McKinney: Hi, I'm James McKinney, the creator and host of The Startup Story, this podcast you're listening to, as well as the founder of Grindology. And in this episode, we reconnect with one of our fan favorite founders to hear all that she learned navigating through the mess that was 2020.

  • Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story. *

[00:40]

James McKinney: Hello everyone and welcome to another episode of The Startup Story. We have an exciting episode for you today and I'm pumped to bring it to you. If you've been around The Startup Story for any length of time then you probably know that many times - not every time, but many times - I ask my founder guests something along the lines of if we were doing a "where are they now" episode in three to five years, where would your brand be, something along those lines is the question that I pose to them usually at the end of the episode. Well, this episode is kind of like our first "where are they now" episode. I mean, granted it has only been a year so not that three to five year mark that I usually pose in the question, but I think we can all agree that the last year felt like five years all rolled into one, so it kind of counts as a "where are they now" episode, and I'm so excited to bring this update episode featuring Christina Stembel, the founder of Farmgirl Flowers, directly to you today. I'm so pumped.

But truth be told, I am such a huge fan of Christina's story and of her as a person. My teenage daughter tells me all the time that I'm such a fangirl for Christina, and she wouldn't be wrong. Her story is truly one of resilience, grit, and excellence in execution. Again, for those who may not know her full story, she pitched closed to 100 investors and every single one of them told her no, yet she continued on and has now built a business that is marching towards the $100 million in revenue mark. It's an amazing story. But we're not going to go into her entire back story at all in this episode, because we'll include a link in our show notes for easy access to that full episode. You should definitely listen to it because she is an unbelievable story teller, and an incredible human being. It's one of my favorites.

But in this episode, we're going to talk about the last 12 months of her business and all the lessons she learned about herself, the team, the brand, and what adjustments she had to make in order to survive. In addition to having Christina on the show today to share all that she's learned, today we're announcing that she will also be our featured founder on the cover of the Q2 issue of Grindology. Our Q2 theme is Content and the move that she has made in the area of content marketing over the last 12 months exemplified the purpose and theme of this issue, being all things content marketing. Usually when we discuss content marketing it is spoken of as a necessity and often times as the bane of our existence. As entrepreneurs, we know we have to create content to capture the attention of our customers, but we loathe the fact that it seems like a never ending process. That is why I've brought you some founder tactics from proven experts in the space, experts like Christina.

In the Q2 issue of Grindology you will discover simple shifts in creating content as well as ways to repurpose a piece of content so it delivers value long after your initial publish. That is the goal, right, to maximize the reach and return of your effort. And as if maximizing the reach and return wasn't enough, what if the act of creating content wasn't a separate process? What if creating content actually became part of your normal operations? I guess what I'm asking is what if you shifted the idea from creating to documenting? Well, we discuss all of those things within the Q2 issue of Grindology, and you can sign up today by visiting grindology.com and of course we'll include a link in our show notes. The tactics and shifts in perspective that we share in the Q2 issue of Grindology come from early stage startup founders with revenue under $1 million, as well as established startup founders exceeding $75 million in revenue. The founders contributing to this issue all understand the importance of this topic and are seeing the benefit from having integrated content marketing within the core of their business and brand. That is why Christina Stembel is our featured founder for this issue. The way she adapted her marketing, her messaging, her brand story and operations during the last 12 months is a case study in effective content marketing and storytelling. You and your business will benefit from this current issue, so make sure to visit grindology.com today to secure your copy. In fact, we discuss a few of these topics in her lessons learned in this week's episode, so let's jump into it.

[04:53]

Christina Stembel: Thanks for having me again, James. I feel like this should be like a three hour talk. I feel like the last year has felt like 10 years, and I hear people say that all the time, and it's true. It feels like it's over said but I can't stress it enough that I think when I think about my history at Farmgirl Flowers, there's like you know before Christ and after Christ, there's a before COVID and after COVID. I think the nine years leading up to COVID was pretty equal and I thought that was horrible. I think the last time I talked to you too I was at a really pivotal moment. We had just celebrated nine year anniversary and I was pretty burnt. I was just burnt. I was like I you know looked at our financials, and I'm like I have done nine years of 120 hour weeks, and we're still not profitable. I mean we are, you know, you have to be profitable to pay your payroll when you're bootstrapped, right? But I think that you're on a… let's see, we did $23 million. I like to just give numbers out since no one else can because they have a board, so I feel like it's something special I can do.

[06:00]

James McKinney: I love it.

[06:01]

Christina Stembel: I think in a $23 million year we did $34,000 in profit. So I'm just like, and I was paying myself $60,000 so if I add it to my $60,000 it's still not even six figure income. I was just I gave myself, it was a defining moment in my life where I said okay, I'm giving myself one year until our 10 year anniversary, and if I can't figure out a path to real profitability being 10% net then I need to give up. I need to either try to sell what I can of the brand and go start something easier, because that's literally where I was at.

I was 42 years old at the time. I started this at 32. I need to… going to be 42 I should say, I need to like while I still have some youngish years in me start something that I always talk about starting a sweater company or something like that instead of doing perishable product because I think it'll be a walk in the park compared to what we're doing, and I need to give that 10 years instead of give another 10 years to something that isn't working great. I think that's something entrepreneurs do soon enough is call it quits when it's not a viable thing. So that's where I got.

So that's when I had the idea to open Ecuador when I was there. We opened it January 5th and then I think that's about when I talked to you, and then March 16th the shelter in place happened. I should say just because I like to be fully transparent February was also a really challenging month right before the pandemic hit. It's always challenging with Valentine's Day, but also personally my husband and I decided to get a divorce as well, and that was the week of Valentine's Day as well.

[07:43]

James McKinney: Oh man.

[07:44]

Christina Stembel: So then a month later the shelter in place happened. So to say it was stressful would be an understatement because I was going through a divorce where literally the thing I kept was my business, that was it.

[07:56]

James McKinney: Wow, wow.

[07:58]

Christina Stembel: Then I was like looking at my business as oh great my business isn't worth anything now because we're probably not going to make it through this, because in 12.5 hours we had to shut down San Francisco. Out of 197 team members, I furloughed 191 that day. I didn't know what we were going to do. Literally for the first time ever, I didn't have a plan B because nobody plan B's out a pandemic, right?

[08:26]

James McKinney: Yeah, yeah.

[08:27]

Christina Stembel: But the thing that really helped a lot was that we just launched Ecuador. I say that it saved us. I don't know that it saved us because it was still really, really hard but it allowed us to then transfer 100% of the orders that we currently had in the system to a facility that was still open and operating. So that helped. They didn't have the infrastructure set up to be able to handle 100% of the orders. We had to really quickly get that up to speed and they were amazing. Our South American team, I don't think our North American teams could have done what our South American team did, so I just want to really… I'm the biggest proponent for offshore teams because what I've seen in North America for manufacturing versus South America is light years different.

[09:12]

James McKinney: Yes.

[09:13]

Christina Stembel: Just light years different, and that's a whole other contrast that we can talk about some time.

[09:16]

James McKinney: There's definitely a whole podcast just around the work ethic side of things. There's such a sense of entitlement here in the states, it's crazy to me. But you brought up a lot of things, and I remember hearing about the challenges because now everything was coming from Ecuador, hearing about the challenges related to FedEx and holding up planes, and all the things with that. We had a chance to unpack that. But what I didn't know until now is that at that same time about the divorce taking place in that same season. So there were just a lot of things coming at you at that moment in time. As a founder, how much of your own personal worth did you wrap up in all the things happening to you? Or is it like water off a duck's back for you and you just completely compartmentalized?

[10:04]

Christina Stembel: I wish it was water off a duck's back. I need to get to that place. I would say 95% of my self-worth is probably in Farmgirl. People call me Farmgirl. It's been really challenging even because without your company, like that's your worth to people. I'm impressive to people because of my company, not because of who I am as a person which is really sad when you realize that. You're like people think I'm really cool and want to be my friend, but it's because I'm Farmgirl and not because I'm Christina Stembel. That does play with your mind a bit.

There's this like false celebrity-dom kind of thing with entrepreneurs that you build them up to be something more than just a human being. When I'm sitting on the couch thinking I just essentially laid off 191 out of 197 people, I did a crash course financial how long can we stay in business with this, not being able to operate most of our facility, not being able to operate, and gave us eight weeks. That's, if I paid off all the bills we had, we would have gone out of business that day. We were in debt. That was just me like going really slow on paying things. So in any scenario we didn't make it beyond two months. Like I said, if we paid everything off we'd be out of business that day. That definitely weighs on you and you're like I'm a failure. You know?

After a second of crying about it in the shower, a couple minutes, literally that night I didn't sleep on March 16th. At like dawn I went for a walk on the beach at like 4:30, I don't know it was before the sunrise even, and I kind of had like a come to Jesus with myself and I was like, "Look, you know the positive of this is if I go out of business no one's going to blame me." You know? It's like that fear of failure kind of thing, it's not going to be looked on as… because everyone is facing the same thing. So if I go out of business right now and have to declare bankruptcy personally and professionally because of the debt we have, it's going to be understandable more so than if I just make a big mistake. So that's the pro. The con is 10 years of my life, not taking a paycheck for five and a half years, paying myself $60,000 a year after that, I would have made more money if I just stayed at Stanford. Just do the math. I would have made more money working way less if I just stayed at my last job.

And so on that walk I decided you know what, I have nothing to lose right now. For the first time ever, I have nothing to lose. So I'm just going, if I go out of business, so be it. I'm going to give it everything I've got and I'm going to fight harder than I've ever fought, and if that still doesn't work it's the same outcome anyway if I just threw the towel in right now. So all of those pitches that I did for the 104 no's that I got from investors, where I showed them how I was going to scale but I just needed the money to be able to do it, and they all told me they didn't think I could do it, I just did it.

I was like okay, we're going to open Miami. And so I drove to Miami, because you couldn't fly, and we opened a facility there right after Mother's Day. We opened four facilities in five weeks before Mother's Day, smaller ones, and then we opened a bigger one of our own right after Mother's Day. And then we also opened a secondary one in Ecuador before Mother's Day via WhatsApp. The stuff we did was crazy. Just nuts. Nobody would have said you can do that. I'm like we've got to do this. We've got to try and if it fails, same thing, it's just two months later, okay, and I'm a little bit more in debt but I have to declare bankruptcy anyway, so let's do it.

[13:47]

James McKinney: I love your ride or die mentality, oh my gosh.

[13;51]

Christina Stembel: That's what it was.

[13:52]

James McKinney: I love it.

[13:54]

Christina Stembel: It worked. I literally looked at it and I was like oh my gosh, all those pitches where I so confidently said this is how we scale, I really didn't know because nobody has ever done what we've done before, right? It worked. So they should have given me money.

[14:06]

James McKinney: That's awesome. So how many facilities, in 2020 how many new facilities did you open up?

[14:11]

Christina Stembel: We opened… we did a completely different model that nobody's done in our industry where we opened an additional two distribution centers which are our team members.

[14:22]

James McKinney: So that's Ecuador and another place.

[14:24]

Christina Stembel: And Miami, yeah. And we moved San Francisco to Watsonville, so we also opened that one in two weeks and that one was the hardest thing I've ever done. We had to use team members that were used to planting and harvesting flowers, and train them in two days in Spanish how to make bouquets instead. And I had to do that, me and one other team member because our head of ops was out sick not with COVID but they thought it was at the time. And so it was, I mean, I would drive down to Watsonville an hour and a half south every morning before dawn, and I would drive back when it was dark late at night at 10 to do it all over again with like my cheeks all on fire from all the stress. It was just, it was the hardest work I've ever done in my life, and we did it, and we opened it within two weeks of the shutdown. We opened another facility, full fledged 20,000 square foot facility in two weeks.

And then we also did a hybrid model where Miami is not a full distribution center. We make the bouquets in South America, ship them there, QA them there, and then ship them out. It's basically a drop shipper. We can't use 3PLs because of the perish-ability and design factor, so we made our own 3PL like hybrid model. And then we also opened four fulfillment centers, as we call them, which are at the farm level where we went and trained them how to ship for us from their farm. It helped the farms because all of their accounts cancelled overnight and we were able to still buy tons of flowers from these farms, and have them ship them for us which was really helpful. Since then we've opened five more of those as well. So we're doing this total hybrid model right now that some are distribution, some are hybrid, some are fulfillment only, and it's working really well.

[16:11]

James McKinney: That's fantastic. So much has happened in 2020. And again you made a comment there, driving with your cheeks flushed, being red because you're just so stressed and overwhelmed. Let's talk about the mental health side of this. Again, 2020 a lot of things both personally and professionally thrown at you, but one of the questions that I get often, that I haven't asked until recently from our founders, is how do you keep your head level? How do you keep your heart straight? What are the routines you have in your life to just kind of help you decompress so that you just don't break and buckle?

[16:46]

Christina Stembel: it's a really good question. I think I've always been really bad at this, always. I hate, and everyone is going to give you hate for this and I'm sorry in advance-

[16:58]

James McKinney: That's okay.

[16:59]

Christina Stembel: I hate the term self care so much. It just goes against everything that I was raised on a farm with, and it's not that I hate taking care of yourself, it's just the times that it is used is when people don't want to work hard it seems like. Like, "Oh my self care," and stuff and I'm like no, if you're choosing to be an entrepreneur, you're choosing to take on 120 hour weeks. You just are, so get over yourself being like… it's like when I worked at Stanford Law School one of the big issues with the newer generations coming to the law school that we were always addressing and hearing about from law firms that were hiring these people were that they didn't want to put in the hours. It's always been at law firms that you sleep under your desk, all those memes are true. These kids are like, "We need to make $300,000 a year starting wage out of law school, but we only want to work 40 hours." And that's not life, right? So I guess I just get really tense about the whole self care thing. However, I believe in self care, I just will never use that term. I believe in taking care of yourself, and I wasn't doing that well. I was so run down on that nine year anniversary, I knew I needed to do something different.

So that year actually I started prioritizing myself in a way that I took some time off. Every day at noon I would go to a Pilates class, and that sounds so little but I had gained weight because I was just working 120 hours and eating carbs, because I'm a vegetarian which is really a carb-itarian when it's grab and go stuff, right? So I had gained a bunch of weight just from lack of taking care of myself. I felt horrible about it, I felt sluggish, everything hurt from standing on concrete for so many hours every day. So that one hour a day, before COVID, that year, it just helped me so much. It just gave me an hour and it was so hard physically to do that I couldn't think about work. It was like the one thing where it was like if you're biking or whatever, going for a walk, I'm still thinking about work constantly. But when I was doing something so physically challenging that I'm like I have to hold a plank for how long? I can't think about this HR issue I'm having or this profit margin issue I'm having, or anything like that. That helped. But then going into COVID, I couldn't go to the gym anymore and I saw that really impact my, just the way I thought about myself and just how I felt physically even. I'm not one of these people that talks about this all the time because I feel really bougie, but I got a Peloton.

[19:28]

James McKinney: Nice!

[19:29]

Christina Stembel: Yeah. That helped me a lot, be able to transition that time where I could still take that time for myself every day, and get out of my head business wise. I don't do it every day like I did Pilates and I need to get into it because it is harder when you're not going somewhere that somebody's going to yell at you if you break that pose, but it definitely has helped. I think the hardest thing with the self care, taking care of yourself thing for me was I really was able to compartmentalize last year just because I knew I had this misguided thought that there was this big light at the end. At the end of the tunnel, there was this big light and it was the end of 2020. I thought, "You can get through this year. You can get through nine months, no matter how hard it was."

And the hardest thing I think for me with this question is this year has been way worse. Because when December 31st came and that light at the end of the tunnel, you're right there and you think the pandemic is going to be over by then because who thought it was going to go this long, and it doesn't change, and then this year has gotten worse even than last year as far as operational challenges with shipping because everybody is shipping things. And because of COVID our shipping partners, and I say partners very loosely, the vendors that we use and pay millions and millions of dollars to, over $20 million a year to, were able to use COVID as an excuse not to honor their money back guarantees and things. And so we've been more in jeopardy as a company this year than we were last year, which just blows my mind.

For the self care part, I definitely think I compartmentalized enough last year to just think just get through this and then things will be better and you'll have more time for yourself, and you won't be so stressed and all that. When this year came I'm like okay, it's going to be another year of this, working this hard, running this fast, pivoting this quickly. And you're going to have to take some time for yourself because you can't play the long game this way.

[21:35]

James McKinney: Do you find for yourself to be, I want to talk about the challenges of this year in relation to last year, but to wrap up this idea of what keeps you stable and grounded, one I love… I almost want to get a Peloton just so I can connect with you on Peloton and we can race, but aside from that, aside from the physical side is there a mental exercise you go through or is that physical and mental one circle for you?

[22:03]

Christina Stembel: I've never been a person that needs validation from other people to feel good about myself. I think that's what sets me apart from a lot of people. I don't need other people to tell me great job, because you're not going to get that as an entrepreneur, so I think that helps a lot. And just growing up in an environment where nobody believed in me, it's cool, I believe in myself you know? So that helps. I do take more time than I ever did.

My team, one of my team members actually pointed this out to me in a positive way recently that she's noticed in the last year I've taken more time to Zoom with my friends and my family. I think that's something that we all kind of have experienced through the pandemic that we've gotten closer. We've known… we've just kind of reintroduced ourselves to the importance of people and connection, and so I have, and I'm very like strict about not overbooking, double booking those times and making sure I take time to talk to my family every week and talk to my friends.

I have a girl's night every Monday night Zoom and stuff like that, that's been really fulfilling for me to still feel a connection with people. Especially going through a divorce in a pandemic where then you're like it's pretty lonely. I never worked from home before. I've always been in big warehouses with lots of people, and so not feeling that connection, that's helped a lot mentally just having that connection to my best girl friends and my family has been really helpful. So there's that.

Also, the ocean has always been like a refuge for me. I go for walks on the ocean when… It's my version of meditation since I've never been able to get into meditation, that's my meditation. I recently had to move away from the ocean. I'm very concerned about that having an impact on my mental health. I just moved out of state because of business taxes, so everything is for Farmgirl, and moving away from the ocean I'm kind of am a bit concerned about what that's going to do, so I'm going to have to find some other ways to get that I think.

[23:59]

James McKinney: Yeah. I two years ago moved from Orange County so from Seal Beach to Texas, and the ocean was a place that I absolutely loved to go to and to walk, date nights, everything was just ocean bound. Now being in Texas not having it… but I will say, just the open space, the air, there's just so much that is so different. It has taken a rewiring for sure. But you mention something. Talking about the greater challenges of 2021 because of some partnerships.

I'm going to assume, and correct me where I'm wrong, part of the challenges are because last year globally people understood the impact that was going on everywhere because of COVID, so there was a lot of grace extended from consumers. Not all consumers, there are a bunch of jerks out there nevertheless, but for many consumers there was some grace extended, some understanding across all levels, and you're right a lot of brands like logistics companies, and a lot of brands in general use COVID as a cover-up for just poor operational execution. Now we're in 2021, I suspect part of your challenge is those brands are still operating poorly but now the public doesn't see the impact of COVID. Is that kind of where you're seeing 2021 being an increased challenge for you? Or is there something else?

[25:17]

Christina Stembel: Yeah. It's all of those things, and it's even bigger than what you're stating. So I'm just going to call a spade a spade. I'm sure I'll get some NDA's or cease and desists for this, but FedEx and UPS, they're giants. The more I've learned in the past couple months about them, the more corrupt it is. You're not allowed to sue them. There's legislation that's been written that you can't sue them basically. I don't know how that is legal-

[25:45]

James McKinney: Really?

[25:46]

Christina Stembel: Yeah. I have no protections myself. This is how my understanding is, so I should state this from lawyers about it. And pre-COVID you had money back guarantees, not only for day of but time of. So if you ship priority overnight, which we have to do because we're perishable, which puts us in a whole different risk category than any sweater company that I talk about all the time. So like Stitch Fix just released something saying their numbers were not where they wanted them to be for the quarter, and they're saying it's transportation related, but theirs are clothes. So yeah, consumers are pissed off and you're right, last year there was so much more grace given. We hear so many times now, "Stop blaming COVID. It's been a year, it's over, get your shit together."

And it's not over, it's definitely not over, and it's actually worse than it ever has because now shipping is up what like 86% or something crazy year over year. These companies are showing 200-300% growth numbers on their stock prices. First quarter earnings I believe with FedEx or UPS showed $2.3 billion more in revenue than they were anticipating. They're having banner years. But after COVID they were able to then put all these clauses in. first of all, they added a bunch of surcharges so our subsidies have gone up $6.50 per box. We had finally gotten our subsidies down to $0 and now we're back up to $31.50 a box to ship, and we charge our consumers $25. So we're subsidizing that's with all of our packaging that's a $5.525 million subsidy. In addition to that, they were able to get rid of their money back guarantees not just for hour of day, but day of. So when Valentine's Day, both of them in shipping cost alone it was over $500,000 that they charged us to ship packages that they delivered like a week late, dead flowers.

[27:38]

James McKinney: Oh my goodness.

[27:39]

Christina Stembel: They don't even give us that money back now where we used to get that credited. So we're still fighting with them and I'm hoping that when we talk next I'll say at least one of them came back and gave us the money back. Both of them, they're still reviewing it. It's now going into Mother's Day and we don't have resolution for Valentine's Day yet. So I don't know how they get away with it other than maybe lobbyists that pay enough money to get people elected-

[28:07]

James McKinney: That's exactly what it is.

[28:08]

Christina Stembel: … that then get legislation through, that then you can't sue them for anything other than fraud. It's not okay. They're making record numbers on the backs of small and medium businesses that they are then ripping off. That's the real news story that nobody wants to talk about right now, and I don't know why. I don't know why if there's gag orders. I've been looking in the press but nobody is going after them. This is not okay. This should be in front of congress. The fact that they can show, and literally one of our sales reps said, "You know we're a public traded company." And I was like you're just telling me my interpretation of that is that you care more about your shareholders than the small and medium businesses that are potentially laying off people or going out of business because of their losses at the hands of you not doing your job, and they can claim COVID but what does that mean?

From our records for Valentine's Day with FedEx alone, 70% were operational errors, 30% were weather. But they can just say, "Well it's COVID." Well what does that mean? I understand having COVID challenges. We are operating manufacturing facilities where people are still coming in, and you have to make all kinds of concessions with knowing how many people are going to be out for quarantining at a time, test people every other week. We test our entire team every other week at our expense for over $100,000 a month. I understand COVID related challenges, but you can't rip off small and medium businesses and then show record numbers to your shareholders, showing that you can absolutely afford to give those money back guarantees, and they both did this last week reinstated their money back guarantees. I fought hard enough, but I want the money back that they've already taken from us because that's what has put us at risk and put us back in debt.

[29:51]

James McKinney: Oh, I love it. If there's anybody in the news our journalism space listening right now, pick up that story. That is the stuff that people need to be hearing about because small and medium size business is what keeps this country afloat, and to have these massive organizations like UPS and FedEx treating small and medium size business like this needs to be told. That is incredible. I love how you… you just always put it out there. Every time we've gotten together, you just put it out there and I just love that so much.

I want to honor the time as we get this update episode with you, so when you look back at 2020 what are some of the key learnings that you learned about either yourself personally or professionally that you took out of 2020 and were just like holy smokes, this has changed everything for me in whatever category you want to put that in?

[30:38]

Christina Stembel: Yeah. I think the last year taught me what true resilience actually is. I talked about it a lot but I had no idea how hard it could get. Resilience is truly the thing that got us through. Not just with me but my whole team. Watching them just work so hard. I've never seen a group of people work harder than my team did to open that many facilities. It wasn't just me working those hours, it was all the people around me. So the importance of team.

I think I'm a better leader now because of it. Also, I always thought I was really transparent but last year that's also something that really got me through was being truly transparent and authentic, which is the most overused word ever, and vulnerable, another one that's overused. But as soon as the pandemic hit, I started doing videos to our customers and really that was… I hate doing that. That is not… I like being behind the scenes. I didn't name my company after me because I don't want it to be, I don't want Farmgirl to be Christina. I want Farmgirl to be the amazing Farmgirl team that we have.

It's become more about me in this year, but that's because I started doing these videos as a way to just communicate in the most efficient way possible because I just laid off my entire customer care team except two people. I needed to get in front of thousands of people as quickly as possible to tell them that their orders aren't going to come on time, and why. That one video, the first video I did on the day of the shutdown was viewed 150,000 times, way more than the orders we had on the system. Then I just started doing weekly that people started asking for updates and doing weekly videos. Then it showed me that people care. They really do care. You just need to tell them and be honest with them.

I've definitely doubled down on that in the last year in just the transparency and honesty. I think that's what we should all be doing, not having this opaque want everybody to think everything is going great mentality of the Instagram perfect thing. No, things suck and this is what's happening right now. I'm asking for your help to just be patient with us. They are then. I just am so grateful that this last year has taught me that you don't have to put out this rose colored glasses mentality of your business and people will respect you more if you don't do that. That's helped us a lot.

I also started doing like DIY flower arranging videos which I always said I would never do, because I wanted to be known for business and not flower arranging, but that was kind of like a gift back to all of our customers that were being so patient and understanding and wonderful with us, and they love it. So I'm like why was I so like getting my hackles up about I don't want people to, as a woman, just look at me as a Martha Stewart… nothing against Martha Stewart, I love Martha Stewart, so much respect for her. But I just didn't want to be like this, Martha's an amazing business woman but she's also was known to just make things pretty and I didn't want that to be the case. But you can do both. It's definitely taught me a lot about myself and my company on how we should operate, and just really double down on keeping it real.

[34:08]

James McKinney: I love it. You are going to be the cover of our Q2 issue of Grindology and I'm super pumped. I said it before we started recording but I'll just go public with it now, I'm such a fangirl for you. I love your story so having you on the cover of our Q2 issue is going to be exciting. The theme for that issue is Content. One of the things that when I look at content, I look at content from just the perspective of just assets that are put out there. Whether it be video or audio, or graphic, but content depending on the brand is used in so many different ways and you've touched on some points of content that Farmgirl Flowers has used, especially in the last year with video, the DIY. You mentioned how you didn't want to be seen as the make things pretty type person, you wanted to be seen on the business side. So can you kind of talk through how you view content, both personally and professionally with regards to telling stories and what you're doing within both your personal and professional side of the business?

[35:06]

Christina Stembel: Yes. First, thank you for making me the cover. I'm so honored and don't know that I deserve it, but I really appreciate it and am so excited about that. Then yeah, I think I always hear especially in our industry people are like you know, because people are catty right in every industry and competitive, which it's so funny because it's never the big guys. I have great relationships actually with the CEO of FTD and CEO of Urban Stems. I think we all could play nice in the sandbox, there's plenty of room for all of us. It's always the middle tier, they're catty. They're just like, "She's not doing anything special, she's just good at marketing." And the funniest thing to me is we're actually not good at marketing at all. I'm not saying that to slam my team. Neda does an amazing job, her team does an amazing job, but we have literally like one person in marketing. We have a couple people that do social content and one person, two people that respond to social customer service basically. That's our entire team. That's entire team for marketing and communications.

[36:07]

James McKinney: Wow.

[36:08]

Christina Stembel: It's tiny for… this year, before the FedEx and UPS debacle that made us have to pivot our entire company again this year… We didn't get into that where we had to cut 20% of our revenue off by limiting shipping days by one, so that was really hard. We were on track to do over $100 million this year before that. Now we're looking at more like $85 million or so. Still amazing bootstrapped, right, and it's amazing that size of company and not have a very robust marketing team. But the difference is we're not great at marketing. We're great at brand I think. We are really good at building content around our brand and who we are as a company. That becomes marketing for you. It becomes marketing very cheap. We've spent, last year, 1% on marketing. 1% and that includes marketing and PR. 1% of revenue was spent on marketing last year. We shouldn't spend more than that, we can't right now so we have it all in operations to open all these facilities so we took it from that bucket. We turned off marketing for nine months last year.

We've only turned it on at a fraction, probably about 20% of what we used to spend prior at a $20 million company size, we're spending now at a $85 million company size. It's because we believe more… I believe in marketing. Of course I believe in marketing, it works. But I believe in something so much more. I believe in just building a company that you show people behind the curtain. You just show them what's going on and you build content and brand around that. I truly believe that people want to connect with a company they buy from now. The younger generations do. They don't want to buy from this opaque company that has flashy ads and that's it. They just, they don't. They want to like believe in where they're putting their money. And so that's what we found to be really true.

We don't just show… I mean, if you look at Instagram yeah we have beautiful flower pictures. If you look at Instagram stories you see behind the scenes. We show funny pictures of us like sleeping on the floor in an office after a 20 hour work day. We show the behind the scenes of this is not a cute little flower shop with subway tile and reclaimed wood, this is a flower factory. We try to show the real side of things.

And then I send out these long, book long emails that I just can't believe people read. Literally because I can't write anything in less than like 25,000 words or something. It's literally the equivalent of like three chapters in a book. We now have to put them on the blog so we have a place to put them so we can link, because Mailchimp is like, "You have too many words by like 10 times." We just, I write them. We're getting ready to send one out about Mother's Day and why we're going to sell out really quick because we're limiting instead of 400% growth like we have at holidays, we're going to do 100% because we can't take the risk we just took for Valentine's Day or we'll go out of business if FedEx and UPS screw us again.

We tell the why behind everything, and I know it's very Simon Sinek-y, but we do. We just tell the why behind why we're making these choices. I just moved out of state because of tax policy in state that we can't afford as a perishable product company where we're never going to have high enough margins to be able to pay what the governor wants us to be able to pay in state. They don't do tiered tax policies so we're looked at like a software company the same way and have to pay the same amounts. And I tell everybody why. I'm like I'm not trying to evade taxes, I'm just trying to like not pay more than we make in taxes every year. So to do that I have to move out of state. And I don't want to move out of a state I lived in for 20 years, but that's what I'm willing to do to move to a brand new place just for my company.

So we tell the why and the response has been incredible. People, and I hope it's like saving people some of the hardships that I've gone through. I don't want everybody to have to learn the hard way like I did. I'm hoping that as hard as I'll fight, I will fight FedEx and UPS like they know. I'm definitely the squeaky wheel with everyone, with vendors, with farms that literally wouldn't sell to me until the pandemic that then were coming sheepishly to me and being like, "I don't remember telling you I wouldn't sell to you, can you buy our flowers? Nobody else is buying flowers." I'm like it kills me to have to buy their flowers, but what I'm hoping is that I'll do this and I'll be fully transparent, and I'll hopefully help some people along the way. Hopefully the woman that comes behind me won't have to do this, won't have to fight so hard.

[40:45]

James McKinney: That's incredible. That woman who comes behind you obviously references mentorship. Who are the people that you look to as mentors?

[40:53]

Christina Stembel: It's been challenging since I don't have a board at all. I don't have any. We're still bootstrapped so I don't have a board. I don't have that group so I joined some entrepreneur groups like YPO that's been really great and I get star struck the people that are in it that I get to meet through that. We also put together an advisory board for D&I this year, and some of my biggest idols like Lisa Price from Carol's Daughter is on there and I just literally, I have to like mentally, every time I talk to her I'm like I have to not giggle. I have to not feel like I'm oh my gosh I can't believe she's talking to me, you know? So there's women like that I get to meet through entrepreneur groups and through this D&I board that we started. And just through partnerships and collaborations we've done with companies. Like Levi's we're doing partnerships with and I'm just in awe of what they've built. So through those avenues I'm so lucky that they've heard of my company and they like us, so they're willing to work with us.

I get to talk to people just way smarter than me that I look up to so much. My dream is to the CEO of Patagonia to get to talk to him and be around their amazingness some time because they're the only other company I know that's bootstrapped to over $100 million in product I should say, not in software. So I have those wish list dream people that I look to, and I basically look at Patagonia as my guiding light on the company I want to become. I'm really working hard to get onsite childcare. I'd love to have that at all of our facilities because I think that's the thing with over 70% women on our team, that we can do that will move the needle the furthest for our team. It's not like bubbly water on tap and fancy free lunches. I think it's things that actually impact people's lives and that's what Patagonia does. I look at companies like that, that I want to emulate, and then I just copy them because, you know, that's a good-

[43:01]

James McKinney: That's what they're there for. When we look to those who are further down the road because we want to be where they are. We want to learn from their challenges and obstacles. That's why I love having you on the show because you're so transparent. Everybody who listens both to your previous episode for those who want all the back story on how Christina grew up and the challenges she had to overcome, and how she grew up in an area where women just really couldn't be much more than a homemaker, to where she is now, and to see all those footsteps. You can catch it on the other episode and here, hearing about the challenges of 2020 and all that you learned in that. I'm just thankful for how transparent you are. I know I'm going to manufacture ways to continue to reach out and have you on the show because I love having your story. I love everything it is you're doing. But if this was to be our last time ever recording together, what would you like to say to the audience as a final word for your episode?

[43:53]

Christina Stembel: I hope it's not the last one, because I love talking to you.

[43:55]

James McKinney: I'm going to manufacture ways, I'm telling you.

[43:58]

Christina Stembel: Okay, good. You're one of my favorite people in the world to talk to.

[44:02]

James McKinney: Oh, that's awesome.

[44:03]

Christina Stembel: It's true, though. You get it. You get what entrepreneurship is and you don't ask me what my favorite flower is and stuff like that, that everybody asks that's so like oh cool, you know, cool I'm sure people are going to learn from that, you know?

[44:15]

James McKinney: I'm going to pause you real quick, and I want everyone to understand this. The reason I don't ask those questions, and we're not going to be wrapping up the episodes now, we're going to get on a different topic real quick, but the reason I don't ask those questions is because I have such tremendous respect for you as a founder, as an entrepreneur. And I want to get your opinion on this, because I've seen a lot of these images where it will say, "I'm a female founder," and female is crossed out. As a male… how do I phrase this without getting too much pushback? I hate that because I think there's something so dynamic about a female founder. And I know what it's trying to message, I understand it, but as a female founder what is your take on this idea of removing this "female founder" and "I'm just a founder"? I just think there's something so dynamic about a female founder which is why I love connecting with you.

[45:09]

Christina Stembel: We should actually unpack that in a long podcast episode because I'm on the other side. Only from the standpoint of I agree with you. I think that there are so many things that females have that… like we're just more intuitive beings typically. If there's so much science behind how we're different, right, that we can… that can make us really special and unique and amazing leaders. But I also get really upset that when I look at interviews with myself, other ones not this one, that's why I wasn't joking I love that you ask me real business questions and I never feel like you're treating me different in a negative way.

Most interviews, I would say 90% of interviews I do, I feel like my gift to the world is making things pretty. And so it's sharing all of that with them. That's where I get very hesitant to do DIY videos, and I'm like I don't want to be the dog and pony show of let me do arrangements on camera and stuff. I had to get over that because it was great marketing. It's amazing marketing to go on the Today Show and arrange flowers, right? But all of my counterparts in the entire industry are men, 100%. They're not getting asked to make arrangements. It helps us with press and so I'm not looking a gift horse in the mouth. They're not having to go do that. Their value is being business people and I don't get that. I don't get that same respect, I just don't. The fact that there's a word "female entrepreneur" versus just entrepreneur, why isn't it female and then male entrepreneur? So I do see it on that and I understand why people are scratching off the "female" because I get really… a heightened awareness for why do I have to be grouped into this female category?

I also think we just need to stop asking stupid questions to females. We need to stop asking them how old they are and like if it's true you can't have it all, questions that nobody asks a male that happens to be a entrepreneur.

[47:26]

James McKinney: How do you handle work life balance? What's that like having kids? Like oh…

[47:30]

Christina Stembel: Totally. I get asked if I have kids all the time and I'm just like why is that relevant to this discussion? And so things like that, it's like the same as I love Cate Blanchett, my favorite thing is the actress Cate Blanchett when she was being photographed and they did the whole pan up and down on her body and she just squatted down to be like do you do it to men? Then don't do it to me. And so I feel the same way with this where I'm like if you're not going to ask a man if he has children or how old he is… And I got asked in pitches all the time how old I was. I'm like you've invested in 23 year old tech pros in your portfolio over and over again, and by the way I'm 43. Then they're like, "Wow, you look good for your age." I'm like why is this relevant to you investing in my company that has had rapid growth? So it's just I can see both sides of it. I do think that I bring a different set of unique skills that I might not have if I wasn't a female. I think it helps me in leading a team with empathy and vulnerability, and things that you know a counterpart that's male might not have.

But I also see and I've seen this very clearly in operational management, there's a respect given, even in our team like if we have a male manager and a female manager in the same position, the team will respect the male manager more. There's an inherent like respect level that's just given to men that isn't given to women, and I see it all the time, and I think that is the same with entrepreneurship as well. There's you know I'm the only one in our entire category that hasn't raised capital, that hasn't been able to raise capital with good terms.

[49:15]

James McKinney: That's crazy, just crazy.

[49:17]

Christina Stembel: And I just can't wait to have my Pretty Woman moment with them, when we make it to over $100 million which I thought it was going to be this year, might not be until next year now. And I'm just going to send them all flowers with a picture of our balance sheet and be like, "We made it to over $100 million. Show me one perishable product company that has done that bootstrapped. Just show me one, and then tell me I can't do it. Tell me you don't believe in it." So I think if I was a man would I have been able to raise with good terms by now? Absolutely, I'm 1,000% sure of that, and that's because I'm a female entrepreneur that I haven't been able to.

[49:56]

James McKinney: Man. I just want to grab a sword and shield and just get on the front line with you and fight this BS. This is crazy to me. All right, so back to the initial question before I got sidetracked by the female founder question. This is not going to be our last time together at all. I'm too invested in your life, your story, I just love everything it is that you're doing. But for the sake of role-playing, what would you like to say to the listening audience as they in the next couple weeks will be getting their Q2 issue where you're on the front of it, and talking about content. Where they're heading into 2021 and maybe they're experiencing similar challenges or they haven't quite seen the ripple effect impact their industry. What do you have to say to them?

[50:41]

Christina Stembel: I think surrounding content what I would say is to not underestimate the value of brand as opposed to marketing. And something I didn't say that I would love to say, so I'm just going to say this now, is I see so many small businesses spend more money on outsourcing marketing to people that know nothing about their company, so build very sterile looking, horrible looking ads and content, videos and stuff that just look like it's just a playbook that they just plop your business into that they do with 100 other companies or 1,000 other companies. To not spend your money on that, spend your money on people internally that will get to know your brand, know who you are, and be able to tell the story better. I think it's telling the story of who you are that is the most important thing in content marketing. You can't do that with an outside company unless you have enough money to.

So most people don't have enough money to do that well. If they're the lowest rung on the ladder of the pay scale, entry level, this is what our monthly stipend is basically, they're not going to get true storytelling of their brand. That's what's going to propel them forward much more than the outsourced company that they're thinking about using. Almost everybody uses an outsourced. I never have. I'd rather spend the money, bring in somebody in house and then have them tell the story of who we are. That's what I would say around that. And really understanding that they don't need to make everything look like it's coming through rose colored glasses. People are going to respect them more the more real they are with them, so to do that. To really lean in heavily to that. I think that they'll see that people are sick of that. They're just sick of the perfect looking scenario.

Then I would say I know this sounds really silly but this year has been hard for everyone. When you're especially a small business entrepreneur, we're now medium but like I see so many people around me that are small, they don't have the network yet. They're not big enough to join groups like YPO. They don't have a network. I was completely on my own without any board. If you're bootstrapped you're just like on your own. Know that you're not alone. Just know that you're not alone because that's one of the hardest things is just feeling like you're going crazy, you don't have anybody around you that you can see that's also going through the same crap that you're going through.

And especially coming out of 2020 where you think everything is going to get better and it's not getting better yet. It's actually I feel like we've almost hit the bottom but we're not even quite there yet. It's going to be another 12 months minimum of the hardest crap they've ever had to deal with. Just knowing if I could just say one thing to them, I'm rooting for you, so many other people are rooting for you. I know you don't hear it every day and to know you're not alone. We're all dealing with it the best we can too. In 12 months I do think we'll be close to the end of it and things will be getting back to normal hopefully, or a new normal. To just wait it out.

[54:09]

James McKinney: Once you've had a few moments to process all the value Christina Stembel brought us in this week's episode, please hit me up on LinkedIn, Facebook, or Instagram and share with me your thoughts on this episode. In fact, I hope you will show up for Christina and the Farmgirl Flowers brand in a huge way and visit farmgirlflowers.com to place an order. It doesn't matter what size order you place, it's about showing up for a fellow entrepreneur and expressing your appreciation through commerce. If you've been around The Startup Story for any length of time then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. She supports entrepreneurship and all of us so incredibly well, so please hit up our show notes for a link to farmgirlflowers.com and show your appreciation through a transaction. I know it sounds crazy but you, more than anyone else, should know the power of that thank you through a transaction. That is you showing up for them, so let's show up for Christina and Farmgirl Flowers. And now for my personal ask.

The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.

These simple actions can make a huge impact in getting these amazing founder stories out to the masses. And please make sure to tag or mention The Startup Story when you do share so that we can connect with you and say thank you directly. I'm so incredibly appreciative of the fact that you listen to the show each and every week, and I look forward to sharing these amazing stories with you every Tuesday with hopes of encouraging and inspiring you to start your story.

Listen Now

May 25 2021
UPDATE EPISODE: Christina Stembel, founder of Farmgirl Flowers

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