Sashee Chandran, founder, and CEO of Tea Drops talks candidly about her experience of starting and funding a venture-backed business, how the changes in digital marketing are impacting D2C brands, and the importance of mental health.
This transcript has been generated by an AI tool.
00:00 - 00:21
I would always brew tea at my work, and one of the things I realize is the art of making tea is actually a very long process that involves a kettle, a strainer, the tea leaves, time to steep the tea leaves. And so that's not very conducive to a fast-paced corporate environment. And that was really the first light bulb moment that, oh, you know, something like this doesn't exist, a quick way to make loosely a cup of tea.
00:21 - 01:02
Sashee Chandran is the visionary and maker behind Teardrops, an Organic and Fair Trade Tea Company that has disrupted an age-old industry by providing both convenience and quality in compressed dissolvable shapes. Basically a bath bomb of tea. Hi, everyone. Welcome to the Inflection Point, where we talk to entrepreneurs, business leaders, and innovators about their journey and the make or break moments of their career. I'm your host, Brian Haloossim, senior managing director at Bernstein. And today we're on the line with Sashee Chandran. Sashee, thanks so much for joining me today. I really appreciate it.
01:03 - 01:06
Thank you, Brian, for having me. I've been looking forward to this discussion, too.
01:06 - 01:24
So you left basically a career to do this, and it takes a lot of courage, takes a lot of thought and strategy, and I'd love for you to start with, what was the impetus for actually getting this thing going and leaving maybe something that was a little bit more comfortable and entering the stage of entrepreneurship?
01:25 - 02:11
Yeah, I think it's definitely a situation that a lot of entrepreneurs face, leaving something that seems pretty secure to jumping into a passion project or a business. And you know, for me at the time, I had a really fulfilling career at eBay and Silicon Valley. I was working in marketing and market research, and I was on this rotation program, and really just kind of going up that corporate ladder, and on the side, you know, I always had this passion. Tea was always part of my upbringing. My dad was from Sri Lanka, my mom's Chinese. My dad was actually born on a tea estate in Sri Lanka. So, you know, it was a beverage that was always served in my household to guests and at family gatherings and something that I came to love as more of a touchpoint to my community, you know?
02:11 - 02:47
And so as I grew up, I always knew I wanted to do something in the tea space. I always thought it would be owning a tea shop when I retired. I never thought it would actually be part of my life's work. But as I started working in this more formal office environment, I would always brew tea at my work. And one of the things I realized is that the art of making tea is actually a very long process that involves a kettle, a strainer, the tea leaves, time to steep the tea leaves, and so that's not very conducive to a fast-paced corporate environment. And that was really the first light bulb moment that, oh, you know, something like this doesn't exist, so a quick way to make loosely a cup of tea.
02:47 - 03:19
So after I created the prototype and shared it with friends and started selling it at farmers' markets, I think that point of deciding to leave eBay just became clearer and clearer, because it's kind of that feeling you have when you have one foot in one boat that's going in one direction and another foot in another boat that's going a different direction and you're feeling split into two. And both are very demanding and both require a lot of time. And so I think for me, it was just building the confidence to, like, leap into this business and actually call it a business.
03:19 - 03:42
I hear what you're saying, and in a lot of ways you were being maybe a little bit more protective of yourself in that you were sort of leaning into it, but you weren't like making the complete jump at that time, wanted to make sure that perhaps there was like a proof statement out there. But what gave you the confidence to ultimately say, I have a good idea? People are reacting to this in this way? What was that?
03:42 - 04:10
I think it was a couple of things. You know, I was doing a lot of these artisan shows on the weekends, those open markets, farmers' market type of shows. One that my friend had invited me to to do in her neighborhood block. And so I brought all my teardrops there, the prototypes I made. And on the side, I also had this other floating business idea of basically baking cookies on the spot as it's like unrelated to Teadrops. But really, it was my gateway to making Teadrops the business that it was.
04:10 - 04:44
But on this particular day, it was going to be 95 degrees. And so obviously I knew very little people would want freshly baked cookies at this show. So I brought my Teadrops prototypes just as a backup in case I could sell them and I put it on a plate. It wasn't anything fancy. I didn't even have packaging for the Teadrops. I honestly was packing it in Ziploc bags, but people started buying them without really having much context to it. And they're like, Oh, tea that melts in hot water. Cool. That's an awesome idea. And I ended up selling 50-60 of the prototypes I had brought with me. In total, I maybe had 60 or so.
04:44 - 05:22
So just from that initial sales push, I kind of knew that this was something interesting. You know, I didn't think it would be a full fledged business, but I knew that this was something I should latch on to and figure out. So I feel that was one moment and then I think the second thing was, I was very lucky at my corporate job that I had vacation stacked up, my manager at the time gave me...every five years you work at eBay, you get a sabbatical, one month paid time off. He let me take that earlier than the five years because I had floated that, hey, I was thinking of leaving to do this idea. He kind of was like, Well, why don't you take some time to explore this first,
05:22 - 05:52
fully anticipating I would do it, I would come back, and that would be the end of this. But that time I was given, both my vacation and then the sabbatical, it allowed me to fully dive into the experience of working on this idea, day in and day out. And after experiencing that, it's almost like you really do get the entrepreneurial bug. I couldn't turn back. That was it for me, even though I couldn't justify it with sales numbers. I knew that I'd found something I would love to do, and it was really hard to turn back at that point.
05:53 - 06:04
Yeah, I can tell for you, a lot of this was almost convincing yourself that this was the passion project you wanted to follow even more than maybe what a customer or potential audience might say.
06:04 - 06:31
Yeah, I think it was that, but I also needed to have validation from people, you know? And so the sidebar of that is like, I launched Teadrops on my 28th birthday and I said, I didn't call it a business. I just said it was a project. I knew that at that time, the most amount of traffic you got on your Facebook page was on your birthday because everyone had to go to your page at that time, and everyone had to say Happy birthday, right? So right, that was when I was getting most traffic to my own personal page.
06:31 - 07:06
That's the day I announced it, saying, Hey, I'm like starting this thing. I'll send you guys samples of it. If you provide feedback, I'll send you a survey, just give me feedback on it. And I had over 70 or 80 friends respond to that. And that also was like the point of validation to say, OK, people are actually giving me pretty decent marks for this. Yeah, they have feedback on packaging and like certain taste notes. But overall, I do think I have a product-market fit. And I also knew just from my own experience as a tea drinker, this was a gap in the market for sure. That product validation plus like my own desire to really jump into this both fueled the decision.
07:07 - 07:35
Yeah, that's absolutely understandable and clear in your story. You know, I know you have a passion for tea. I know that based on what you said, it wasn't easy to do it in a fast-paced world. But how did you come up with this idea? Because this idea actually got a patent recently, and I saw a photo of you on social media with that final approval, like, I got this, which I think probably was pretty meaningful to you, but I'd like to get an idea of how you came up with it and what this patent really does mean to you at this stage of the business.
07:36 - 08:08
Yeah, I never thought I would be in inventor of any kind, that wasn't in the cards for me, but I started experimenting with different tea blends early on in my kitchen at the time after work, and as I was thinking about this idea of a more bagless and instant tea experience. And one thing led to another. And one day I think I was honestly in a bath. I was inspired by a bath bomb, which is like, you drop it in hot water. It kind of dissolves. And I couldn't get that out of my head, and that was like what I was trying to make, even though I didn't know how I was going to get there.
08:08 - 08:36
How do you even go about creating something like that? But I started experimenting in my kitchen. I contacted some food scientists, got their insight and honestly, this was all derived in my kitchen over the course of a year and a half. The approach I took was very much like the scientific method. You learn in seventh or eighth grade where you have a hypothesis, you testit out, you have observations, you go back to the drawing board and iterate. And that's kind of the approach I took until I created this bath bomb of tea.
08:36 - 09:30
And at that point, I went to a local business resource center called SCORE. They provide free mentorship. It's a lot of retired execs, et cetera, that give back and provide business insight and resources to new emerging businesses and business owners who are just starting out. So I went to a SCORE mentor, and he's the one who really inspired me with the idea, like, I think you actually do have something that's defensible and you could consider patenting it. And I didn't have that knowledge of how to go about doing that or, you know, it's such a costly endeavor. So I remember him saying, because he had some legal experience before he was like, look, if you write your own, it's called a provisional patent. Anyone can write one, you can submit it to the USPTO. I'll look at it and review it, and then you can submit it. And that at least gives you one year to secure the idea. And if you really want to pursue it after a year's time, then you go down the traditional path of patenting the idea.
09:30 - 09:53
So I didn't know anything about writing a patent or how it works, but I went and spent a weekend on the USPTO site. I looked at kind of all the other existing patents, and the format they use, and the drawings, and all that stuff. And I just took a stab at like writing down my idea and everything, all the components that were involved in it, and ended up going that route of writing it. He reviewed it. I submitted it on the USPTO site.
09:53 - 10:43
So that was the beginning of the journey. Obviously, it took over five years from then to to really defend your patent and the fact that this is a true unique invention. I honestly never thought that it would go through. I was just like going down this path because I'm like, well, I guess it is a unique invention. I should try to defend it. But I think it was something where I didn't actually think it would happen. So to actually get the USPTO patent papers last week and see that it is really a recorded invention, it just kind of blows my mind because it's nothing I set out to do. But it's obviously a really gratifying feeling to have that under our belt and also to prove that I did go through a ton to just defend this idea and that now there's a reward for it.
10:43 - 11:04
Yeah, and congratulations again, an amazing accomplishment. So now you have this idea, you have a consumer audience that is giving you good feedback, showing you that there's some efficacy there. But now you've got to scale this, you know, a lot of businesses, they're able to maybe get, they have a little bit of money themselves or they're able to get some friends and family.
11:04 - 11:16
Talk a little bit about how you got there because the whole idea of fundraising around Teardrops is a big part of the story. And I'd love to hear a little bit more about that.
11:16 - 12:11
I always preface this because I think everyone's journey is so unique. And so when you talk to other entrepreneurs, I think everyone has this. I have this business idea, now I should go out and raise money and go to any VC I can to raise this capital. And I would just preface it with, there's so many ways to approach this that you don't have to necessarily go down the path of raising traditional VC. There's a lot of different lenders, alternative financing, and also depends on the type of business you want to build. For me personally, I didn't have a lot of connections to the VC world. I didn't actually didn't even know what an angel investor was when I first started. The first capital I used was my own. I had my savings, at the time I was thinking about doing an MBA, so I had secured some savings and I also had just purchased a home. So I took a line of credit on the home to use both for the home, but also in case anything happened with the business. So with that in hand, that's what I used as my startup capital.
12:11 - 12:55
And in the meantime, I started just educating myself on alternative financing options. So I read this book called Venture Deals by Brad Feld, and there's another co-author to that which talks about what the various financing instruments are, from a convertible note to an equity raise to a bridge round, etc. So I kind of understood the language a bit more, but I think the hardest part, obviously is knowing where do you find investors if that's not naturally who you're networked with. And so that was the hardest part, I think, finding them, but then also convincing them that I had a scalable business because I think before, when you look at my product, it's super cute. So people were thinking, it's a novelty item. How are you going to scale it right? Is it going to be a multi-million dollar business, right? So I think there was a lot of convincing of that.
12:55 - 13:31
But then secondly is like, where do you find these so-called investors? So for me, I just started pitching and I would realize that there are startup pitch competitions, and there are specific ones that might be related to your industry. So for me, it's the consumer packaged good world. It's being a woman founder. And so there were a couple of different pitch opportunities I came across. And what I noticed is that the judges on the pitch competitions are oftentimes VC managers or notable angel investors. And so if you can get in front of them, even if you don't win, it's a great gateway to just get a conversation going, get an introduction.
13:31 - 13:58
So that's what I did because I didn't know anyone in the space, so I started entering pitch competitions. We would make the top 10. Some of them, we would win first place. And honestly, that's how I rounded out my first set of investors for my seed round. I was going down this route. Out of the four institutional investors I have, three of them I met through a pitch competition. So that is like my advice for people who don't have any connections is just figure out a way you can get in front of these guys. And that was my way of getting visibility.
13:58 - 14:17
So now you have this capital, and obviously the expectation is to continue to make this bigger. And so what does that look like for Teardrops? Because a lot of what you're doing right now is direct to consumer, but they're, you know, obviously a lot of other options. What does that look like for you in terms of the growth?
14:17 - 14:46
So we actually didn't start out to be direct to consumer. I was selling to boutique retailers, mostly corporate sales, and grocery retail sales. We're now in Whole Foods Midwest, where in Costco in Southern California, but honestly, that started first and then we started seeing this huge opportunity online. If you look at the Tea category, there really isn't much out there online. And so I saw this huge opportunity for us to build a very unique tea experience and also a tea community.
14:46 - 15:31
And so that's where I started focusing our efforts around 2018-ish. And so since then, we now become, 75-80 percent of our revenue comes from direct to consumer online. We have a whole set of products and I think the grounding element in all of this is the brand and community aspect of Teadrops. So our mission is to create magical tea moments that connect you to what's important. And when we say what's important, that means connection to oneself, connection to one's community, connection to one's family. So there is this element that a lot of our tea kits, et cetera, are experiential and to be shared. And so that's why we've been seeing this huge surge on direct to consumer, especially during the pandemic, because people, like, really craving that. So I think that will continue for us, that direct to consumer is going to be still a huge source of growth for us.
15:32 - 15:57
But we also see this insane potential to obviously grow the omni channel experience in Teadrops, whether that's in store retail, but also internationally. The tea category is huge globally, tea consumption is, actually in the US, is actually fourth or fifth when you compare it to the rest of the world. And so we have a lot of untapped potential that we can pursue internationally and that gets us really excited.
15:58 - 16:46
Yeah. And to do that, I think you have to obviously build the brand and you've got a great emerging social media platform. But that world is changing a lot, like where you put your marketing dollars and which platform you decide to fund and use, and the influencers and all of that. It's a big topic that I wanted to discuss with you because I think there are a lot of people that are maybe not quite where you are, but they're grappling with the fact that Facebook and Instagram have changed their algorithms, and it's not as easy to do what you used to do before. And you can do YouTube, and there's all these different things out there. So I know it's a big topic, but maybe we could dissect it a little bit by talking first about your marketing experiences. What you see are the challenges out there. What you see is the opportunity.
16:46 - 17:18
Well, I think you're right, and we touched upon it a bit last time just how the paid digital marketing landscape has completely transformed the last several months. And if you're a DTC brand, I'm sure you feel as to where [...] has made some privacy changes, which is affecting your ability to really target your end consumer, both prospecting, so acquisition, but also re-target your customer on Facebook and Instagram. That has completely challenged our business so much.
17:18 - 18:00
But I also think that it's also forced brands to be really clear about their messaging and who their target customer is, because it's no longer a situation where you can just spray across the board and see what sticks. You have to be super intentional about your brand and your messaging and who you're targeting. And so for us, that means that we're trying to really assess our whole acquisition funnel where our customers are, also have a clear sense of who this is, our customer base. She's primarily a woman, her average ageis thirty-six, you know, she has certain characteristics and hobbies, et cetera. So are we really reaching her in the right place? And is the messaging that we have in our offering, is it really adding value to her?
18:01 - 19:00
So I think the best brands that can really deliver high value to the consumer, but also they're really clear on who they're serving. So I think you have to be just a lot more intentional about who your customer is, and then subsequently, how do you acquire them. It's no longer that for us personally we're going to invest a lot more in the Facebook channel if it's a situation where we actually can't really target our core customer. And it's driving us to actually be really creative and think outside the box of alternative channels both online and offline of how we're going to reach this end consumer. So that means a lot more marketing budget is going to go to out of home, to just very unique paid channels. You know, Pinterest is now a huge part of us being able to reach our end consumer. TikTok is another emerging channel that it shows a lot of promise. So this is actually, as much as it as a crisis, I'm looking at this is like, whoa, this actually opens up your whole universe of how to reach your end consumer, which is exciting. But obviously the double edge to that is that it's very... Very.
19:00 - 19:08
And I think that all the business owners that we're talking to grapple with these decisions, whether you're a product or service, you have to really figure this out.
19:08 - 19:42
So you've brought this up a couple of times. And I mentioned at the beginning a woman-owned business, a female founder, female boss. How have you seen that change since you started? Do you view it right now as an opportunity? What does the landscape look like? Because I go to some of these trade shows and I actually see money now seeking female founders, looking to empower female-run businesses. And I love what I see. And so I just was wondering from your impression, how does that look and what have you run across?
19:42 - 20:27
Yeah, I mean, there's no better time to be a female founder than now. And when I say that, I also recognize the certain challenges and hurdles that female entrepreneurs are actually faced with. At the same time, I'm looking at all these different doors that have been opened, as you mentioned, from financing institutions that just purely focus on women-owned businesses to pitch competitions that are focused on women, to certain conventional programs that cater to minority- and women-owned businesses, you know, a lot of the retail partners we work with do want a subset of their vendors to be women-owned businesses. So like all of these, different opportunities exist for us that were definitely not there even three years ago, five years ago, seven years ago. And so I think we have to recognize the progress that has been
20:27 - 21:14
And I would say the second part of this is that I do think that there are very real challenges women face, whether it's access to capital or some other hurdles. And that is all true. I do think, though, that it's very important to stay focused on the things you can control, which is your own performance and the validity of your business. Any time that I've gone in to have a discussion around financing for my business or pitching or buyer conversations, I think the fact we're women-owned and have a woman-forward supply chain is very important to our brand. But also we do perform, you know, we perform in terms of velocity, we perform in terms of our other metrics. And so I want to always have the conversation lead with that and not some of the perceived disadvantages.
21:14 - 21:16
Sure. Yeah, makes sense.
21:16 - 21:32
There's also another angle to the business that I think stands out, which is there's this purpose-driven social impact component that not everyone may know about. Can you maybe give us like a little bit of a better sense of what's important to you and the characteristics of Teardrop that fit that description?
21:32 - 22:27
Yeah, I think there's a couple of different layers to that piece of it. I think that we're really proud, as I mentioned, to have a very woman-forward supply chain that carries through from our manufacturers to our warehouse team to our actual corporate team as well. So that's one thing. I think the second thing is just reducing waste when it comes to tea packaging and packaging in general, and we're on track to really deliver on that. Our cylinders are 100 percent compostable, so are the wood boxes that the Tea comes in, and the next frontier is the tea wrappers themselves. So because of food grade reasons, we've had to use a recyclable plastic and now we're moving to completely plant-based material by the beginning of next year. So that's going to make in effect, our entire packaging compostable. So we're really proud about that and reducing the waste of a tea bag and the associated microplastics in your tea bag, et cetera, are all being removed. So that's on the sustainability side.
22:27 - 23:23
And then in terms of our mission, we partner with the Thirst Project, which is a nonprofit based in Los Angeles that focuses on the water crisis. So building water wells around the world, but also investing a lot in youth education around the water crisis. And so they've been a partner with us for the last four years. So for every box of tea we sell, we donate what's equivalent to a year's supply of clean water. We've built, I think, up to four wells with them at this point. We've also now investing in their Youth Legacy Summit, which is providing scholarships for amazing teens that are focused on fighting the water crisis. So I think that's our relationship. We're really proud of that. And it's something that has given us just a purpose outside of the business, that without access to clean water, you can't enjoy the basics, clean hygiene opportunity, economic opportunity, but you also can enjoy life's simple pleasures like a cup of tea. Right.
23:23 - 23:28
Great and understandable angle and an additional aspect to a phenomenal product.
23:28 - 23:48
I have one tough question, and I hope you don't mind that we will venture into this, but I think in our previous dialogue, you were open to it. I get the feeling that you go through the same ups and downs like everybody else, and I'd like people to hear about that. The challenges, right? The mental, physical strain that you go through in creating something like this.
23:48 - 24:26
Yeah, I think what people don't talk enough about is the mental health journey and component of entrepreneurship. And then also that when you're pursuing an idea, it's not that you're just living and breathing your passion day in and day out. You're also dealing with scaling a business and the logistics that come with that, whether that's hiring, scaling a team, operational issues. And so those facets come with the territory of pursuing your business and your passion. Those elements can be really challenging, making the right hiring decisions or something,
24:26 - 25:14
you know, I was just talking to another founder this morning who had a recall on her products and her business and the financial costs of that. The morale cost of that. One thing could could happen and completely destroy your business. And so the vulnerability that is your business, it can be very anxiety inducing. And I think so much of entrepreneurship is just weathering that uncertainty, the uncertainty that, you know, something could blow up and destroy your business one day. That your all-star employee could leave another day; if you're selling a food good, that you could have a recall tomorrow and what are you going to do? Like all of these little things, and these are all isolated instances. Imagine, like every day, there's like some version of that.
25:14 - 25:47
So really, what I see entrepreneurship is just the ability to have a state of equanimity, like a state, a mental state where you can handle that. And that's a different practice for everyone. For me, it's like being centered, having meditation, having like a, there's a larger mission here and reason that I'm doing this, other than just like, want to see this project in the world, want to scale this business. That's not my why. But everyone has the kind of face their why and also build a tool kit to weather some of this because it can be really, really demoralizing.
25:47 - 25:54
I appreciate you sharing that. Is there anything more to the why behind this that you haven't shared yet?
25:54 - 26:47
I think it's something I'm continuously exploring because it's also what I ask myself. I think that there's an element here that goes beyond just like growing a business and scaling it and making a lot of money like that. I understand that there's a journey here, but for me personally, it's really been this process of self-discovery that I don't feel I could get a lot of places. I've had to confront my demons. I've had to be really uncomfortable in this business. Also, like, I've experienced the highest of highs, you know, like getting some kind of organic celebrity endorsement or something happening that's like, whoa, or getting a patent. And I'm like, this is amazing. So there's like an unfolding and discovery of oneself. I think that comes through this process. And that, to me, is like way more fulfilling, and way more interesting. And so as of today, that's the best way I can articulate my why.
26:48 - 26:56
It's a great way to articulate it. So what's next, whether for Teardrops or maybe other projects you might be working on? What does that look like?
26:57 - 27:35
Yeah, I mean, I think that there's so much white space for the Teadrops side of things. I think I'm very excited that now we have some sense of validation behind the idea and that we're able to now put the pieces together to really reach a more massive audience and also deliver on that whole self-care, first experiential tea brand that I've been envisioning for so many years to come to life, and now we have the true ability to really bring that forth. You can find us in Whole Foods, at Costco, Giant Foods, Natural Grocers. We will be doing more of a retail expansion in 2022. AndI hope everybody also follows you on Instagram at myTeadrop.
27:35 - 27:43
I am one of your 63,000 followers, something like that, now 62.7 I think we're at.
27:43 - 27:46
Yeah, I know, it's rising fast.
27:46 - 27:59
Sashee Thank you so much for your time. This has been phenomenal and I'm sure the people who listen to the Inflection point will get a lot out of this, particularly those owners that are trying to get to the place that you are. So I appreciate it.
28:00 - 28:03
No, thank you. It's been a really fun conversation for me as well.
28:05 - 28:21
Thanks for listening to the Inflection Point. If you've enjoyed the episode, please subscribe on Apple Podcasts, Google Play, or wherever you listen to podcasts. You can also find me on LinkedIn, and you can follow Bernstein on social media at BernsteinPWM.