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Flashfood has become well known across North America as a grocery app that helps you save money and reduce food waste. With massive grocery partners like Loblaws, Farm Boy and Meijer, Flashfood is quickly becoming a household name.
All too often, entrepreneurial success stories skip the messy middle: the details, mis-steps and failures along the way to their ultimate success - in this episode Josh Domingues, Founder & CEO of Flashfood spares no details. With specific examples from early failures, to conducting interviews with early users, and rolling up his sleeves to generate his first sales, Josh highlights how authenticity is a competitive advantage for entrepreneurs.
The Ivey Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
You're listening to the Ivey entrepreneur podcast from the Pierre L. Morrissette Institute for entrepreneurship at the Ivey Business School. In this series Ivey entrepreneur and Ive faculty member Eric Janssen will anchor the session.
Eric Janssen
Here with Josh Domingues from Flash Food, Josh, thanks for making the time brother.
Josh Domingues
Yeah. Thanks for having me. This is awesome.
Eric Janssen
Appreciate you coming in to share the story.
Josh Domingues
Yeah, lucky that I didn't get caught in the snow or there's bad weather for the drive.
Josh Domingues
Great weather for a drive down from Toronto.
Eric Janssen
I want to rewind the tape. Where did entrepreneurship come from? Your parents, grandparents friends, like where did you get the bug?
Josh Domingues
So both of my parents started a lawn sprinkler company together. My dad was an immigrant from Portugal. And my mom was from New Brunswick. And my dad started working in the irrigation business. And then he ended up leaving one of his bosses, and started the company with my mom. So my whole life growing up at the table, everything was around the family business. Like that's all they were talking about. For the most part, I've got three other siblings. So there's four of us and the third child. And to me, I played hockey at a high level. And I knew that whenever hockey was done, I was going to do something for myself. So I always thought like, there'll be a couple years where I'm basically in training of like learning how other people deal with business, or different things in life. And then eventually, like starting my own thing.
Eric Janssen
So did you work for the family business growing up, or observe?
Josh Domingues
I worked one day when I was 14 and then I retired. My dad told me to put these flags that you see on irrigation sites, he told me to put them in a straight line for like 100 meters. And then so I put them down. Then my dad comes back and he starts yelling at me. He's like, what are you doing? I'm like, what do you mean, I put flags down for 100 meters. he's like, they're all crooked. So he walks through, like reorganize all the flags. And I'm like, okay, that's it, I retire. I'm gonna go play hockey. And so then I just worked at like hockey camps after that. And my two older brothers and my younger sister are all in the family business now.
Eric Janssen
So it definitely was in your family and I was going to bring up, so when doing some research here, I found a press release when the Brantford blast, resigned right winger, Josh Domingues, to bring some added toughness and grit to the right wing. So do you think that part of your experience playing competitive hockey led to you becoming an entrepreneur or helped you be an entrepreneur and anyway?
Josh Domingues
it's so wild. So I played in the NHL, I play for Owen Sound. So I played at the John Labatt Center, which I think is called something different now. Budweiser, yeah. So like 10,000 fans, and when I was in junior, I wasn't good enough to just be a skill guy. So I'd have to fight sometimes. And do like all the grunt work that like you'd have to do in hockey to try and get yourself noticed. And there is no more risky scenario than being in front of five or 10,000 fans that are screaming and you drop your gloves and you square off with someone that satirize because there's so many different dynamics that come into play, you have like the fear of getting hit in the face, and like bleeding or like breaking your nose like physical injury, you have the fear of making a mistake, and then your teammates will laugh at you, you have the fear the crowd laughing at you, then you also have the fear of not being good enough to stay at this level. So when you get in a scenario like that you are completely vulnerable. And when I was coming up to junior, like YouTube was a thing too.,So I'm like, oh my god, like, if I don't do well, in like a fight, then so many bad things will happen from that. So that was one thing. And like I fought a couple of times, I wasn't like the toughest guy. But also just being in shape, eating the right things, training the right way, sleeping properly, at a really young age I was doing that, like very strictly. So those things now that I look back on. So there's those things and then the most important aspect for me was being a teammate. So I always have a leadership role in a lot of teams that I was on. And for me being kind of like a middle pack player on my team, I had to be a good guy in the dressing room, people had to like me, it was something that I had to do to stay at a high level. And you can pick people that are not good people off really quickly on a team. And that skill set has helped me immensely now as a CEO of a startup. Like when people come in, I could see through people pretty quickly if there's ego or if they're treating me differently than they're treating other people like a lot of things don't go unnoticed. And that's a skill set that I have, that I'm fortunate for and it came from playing a team sport my whole life.
Eric Janssen
So judging, say that's a superpower. Like being able to judge someone's character what they're really like quickly.
Josh Domingues
I would say maybe, yes. But also if you're not sure being able to get to the bottom of it relatively quickly. So if I have like inkling,I'm not stubborn or arrogant enough to be like, oh, this is how this person is. But I'm intelligent enough to be like, I gotta ask a couple different questions and see how this person is in different elements.
Eric Janssen
So not being afraid to actually ask the tough questions to figure out what people are actually like. Your second point, the self care one, I find really interesting, because a lot of people, we've had a lot of guests on to talk about, sort of being younger, graduating from school and then starting their first thing. I feel like, people forget self care for like five to 10 years, and then maybe realize it again, once they come out on the other side of a startup or something. And I've had a lot of friends that played in the NHL. And I feel like you learn really early the benefit of habits, like leading indicators that are going to eventually lead to something better, and self care. If you don't get the right recovery, sleep, diet, then you probably feel it on the ice. So things that people maybe don't learn for 10 years, when they're an entrepreneur that you learned pretty early in competitive sports,
Josh Domingues
You also learn how it affects your performance. I mean, like you did CrossFit, competitively, and you're a serious athlete, you know, going into a gym, or going into competition or going into work, if, you've cut corners. And as soon as you like, get into that routine, and you're not performing like you should be, you're like, geez, like, if I could just like not had a Big Mac yesterday, or like any little thing, like for people that are really self aware, you're honest with yourself and yeah, I mean, like, I got fat. After school, I played hockey university and then after that, like, I worked on Bay Street for a couple years, like I got fat. And then it was really difficult to get back into shape. And now I just turned 30 not long ago, and I'm doing more reading than I ever have on diet. And I always told myself when I was playing, that when I was done playing, I'd be in the best shape of my life, because I wouldn't have to spend two hours a day on the ice. Now it wasn't the case. But now being 30 versus being in my teens or my early 20s, it was more difficult to get back into shape. But I'm way more aware of like eating, and the things you have to eat and the way that you're eating and like what that does to your body. And I see how it does to me like from a business perspective. So I mean, like this week, for example, I'm typically doing like, omad now. So one meal a day, so I fast the whole day and I just eat dinner. And then, when I kind of like fall out of whack, I'll do a 48 hour fast. So just this week, I had dinner on sunday night, and then I didn't eat again until tuesday, like three hours before a meeting with a big grocer in Dallas. And it's actually easier to do that when you're traveling because like you're just in an airport anyway, like have a couple soda waters, anyways, like I could bore you but yeah, to me now. There's another thing here too, I met with a founder the other day who's 24. And really successful, really impressive company, just raised a lot of money. Like he's really intellectual. And I was sitting across from him. And he's like talking about the grind and talking about like being in it. And he's like, yeah, I put on weight, like I've got to like try and think about like, how I'm carrying my body from now on. But like I work so much. And I actually think that you get a higher return on your time at work. If you focus on yourself first. And I think that's true of our company. I think it's more important to put people in front of what you're doing. And the output is far more superior over a long amount of time. So I'm now four years into our business and we'll go in the early story, but I don't feel like I have to get to an end, I don't feel like oh my god, I'm drowning. I like what I'm doing, I like the people that I'm doing with because of my background being on a team and we focus on ourselves before we focus on work, or whatever. And that makes a big difference. I think
Eric Janssen
That's great. I teach a class here called Hustle and Grit, in the Hustle and Grit course, I think we spent a lot of time in, I don't know, education, talking about the nuts and bolts of startups. How do you come up with an idea? Raise money pitch, you know, those sorts of things, hustling grits about the person, like self care and mental health and what motivates you and those sorts of things. Cool to hear you talk about that, like you're running a marathon, but you're going to be able to do it because you're going about it the right way.
Josh Domingues
Yeah. I mean, like, we'll see, it's going well right now, it could blow up at any time. I feel confident about it and you're right, like the other thing too, is when you challenge yourself physically, you get more confident mentally. So when things go sideways, or like challenges arise in the business. If I'm consistently challenging myself physically, I feel better to handle those things that happen with the business.
Eric Janssen
Yeah, no doubt. So you said you play competitive hockey, then you worked on Bay Street for a bi, so you were an investment advisor management consultant, I saw that you did some time working with Sage I think with pro athletes. What was that phase? You had this entrepreneurial inkling, but you went ignored it, put it off for a few years, what happened there?
Josh Domingues
Yeah, because I was only exposed to a small family business my whole life. And then, I think I was the only one of my family to graduate university, which is funny because I was like, by far the dumbest out of my siblings. I mean that not like self deprecating, if you looked at grades and transcripts, like I was the worst student, but did well in school, and didn't know what I wanted to do. But when I got to school, I realized that like, okay, I'm not gonna play in the NHL, probably not even gonna play pro hockey, like I don't really want to go into like the minor leagues and grind it out. So I had really good grades university, came out of school, started on Bay Street as an investment advisor. So I basically worked on a team, I was cold calling for one of the biggest tier in sales. Yeah, like legitimately, like 200 dials a day, we're calling small business owners and trying to convince them to give us their personal savings. So first, you try and book a meeting, then you go through the whole process and I couldn't be doing what I'm doing if it wasn't for that sales experience. It was like a boiler room style work. And during that time, while I was doing it, I got accepted to law school. So I had applied and I hadn't heard back yet, and everybody rejected me. But Ottawa accepted me. So I went to my boss at the time, and they had a training program for people to go in and build their own book of business. And there were targets associated with that. So I went in, I said, look like his name is Dwight. I said, Dwight, I got into law school, I'm either gonna go to law school, or I want to do this on my own, I don't want to work for you anymore. He's like, okay, here's your targets. It was like August when I got in and I had to decide by the end of the month, and November was the next training program. So he's like, here's your targets, if you hit them, you can go in the next training program, you'll be the youngest person who's done it, like gone in that early, like, I don't think you're ready. I don't even think you'd be ready if you hit these targets. But like it is what it is, I'm like, okay, so I hit the targets, gone in the training program, did it for about a year, and was like building my own book of business. And I remember we had a sales coach who came in every two weeks, he was like this seventy-year-old guy, who did not take care of himself. And no matter whether you're doing well or horrible, he would tell you how bad you were doing. And it's like, this is so ineffective, like, you're not coaching me, you're just literally every two weeks telling me the same thing. So I remember coming out of that meeting, and like looking around at some of the other brokers in the office who are like in their 50s, or 60s. And these people, they're making personally north of a million dollars a year and they're all miserable. And I remember like, coming out of this sales meeting, where the sales coach is telling me like how useless I am essentially and he's telling me to be like these other people, I look around the other people, I'm like, these people are not happy. So like, okay, like, I'm young in my career, like, I don't want to be doing this, so I left that and I started management consulting, because a friend was there, they got me a job. And there I learned, basically like process engineering. And this is valuable, I think for the listener base but it was a company called Karpedia International, they're based out of Oakville, and they work with companies mainly like operating companies and the projects are typically longer but let's say it's a three month project. So your first month you get dropped in, you spend time with everybody in the business and you take down what they're doing. And then you separate all of their time by green time or red time. Green time is value added red time is non value added and then you find out how much the average person makes you find out what the loss is from red time. The second month, you work with those same people that you've worked with before that work at these companies. And you figure out why they handle this red time, like what were the blocks for them and their companies and you come up with strategies to implement. Then the third month, you implement those strategies, and you tie it back to the ROY and you actually show the savings. So the projects were longer than three months but like that's how they worked and I did that for about a year and a half and three different projects. And I'm like, okay, I've learned how this works, like I don't want to stay here forever. And then my old agent playing hockey was a pretty prominent NHL agent, still is. And we sat down and we were just like, talking about whatever and he's like, listen we have some of our young clients in this family office that manages money for the NHL players, like would you want to come on and do that we don't have anybody running it. So I did that for a year and a half, we had six guys that were NHL players and I was basically flying around North America, meeting with NHL players more or less like getting them to sign papers and like don't buy these stupid things. That was really fascinating because you saw the difference between like some people who came up with money, some people who cared about money a lot, some people who didn't care about money, and you could start to see at an early age what that does to a person what that does to a family for people that like dealt with it intelligently and people that didn't so that was really eye opening too and then from there, I left and started Flash Food.
Josh Domingues
I feel like you've had some really interesting like key learnings. It was like sales in the beginning, process and eliminating, you know, on not useful time. So working super effectively. And then almost like this grown up inside of like the way that money impacts people, either positively or negatively. So like big takeaways from each of those three experiences.
Josh Domingues
I think people, specifically people that are coming out of school are not open, like, it's so cookie cutter, right? Like you come out of school, you take a job for two years, and then you try and get into an MBA program and then you go into debt even further, then you cut out and you're like, now you're making like between 100 and 130, depending on whether you're in banking, or consulting, which is generally where you get filtered into. And you get caught in this loop, where you never have the opportunity to be creative. And so I would love to be in that loop at the time, but I didn't get accepted to the right schools, well, the school that I went to was a good hockey school, I went to St. Mary's in Halifax, but it was so far away that like I couldn't land a good consulting job and like, I wouldn't get into a good MBA, because I didn't have that background. So I didn't have the opportunity to like go that route and I couldn't make my way into investment banking so I started as a broker, which was sales. And what I did when I realized that I didn't want to be an investment advisor, I was like, okay, like, what am I learning from this, what can I take from this and how can I get more seasoned? So to me, it didn't matter how long I stayed somewhere, for me, it was like, once I feel like I've learned enough that I don't want to go deeper at this job, move on to the next one, and I didn't care about the optics of that and what it would look like in a LinkedIn profile or a resume because when I sit across with somebody who's intelligent, and they're thinking about hiring me or not, I could communicate it that way and they're like, alright, like, this is somebody that we can trust that's relatively intelligent and that's what I found.
Eric Janssen
The way that you tell the story makes logical sense. So then you left and Flash Food came right after, so you left to start Flash Food or did you get it on the rails while you were still working, or did you quit? And then?
Josh Domingues
The idea happened, so when I left BMO initially, before I became a consultant, I wanted to start a company that was a robo advisor, so the same thing as, well it's simple. There's a couple companies doing in the States at the time and to me, it was like, this is just so obvious. So I tried to bootstrap and like hire international developers and get a product built and couldn't, because I didn't know what I was doing. Well, sample raises money and then like, I end up getting disinterested, I go to consulting, whatever. So when I was still at Sage in the family office, the Bank of Scotland, fired 250 other financial advisors, and everybody who had less than $200,000 of assets in the bank now got rolled into their proprietary robo advisor, which was like just a financial service platform. And I was like, okay, like, I couldn't execute, but the vision that I had, and like the market that I was thinking of is maturing in front of my eyes, like, well, simple, had just raised a bunch of money from Power Corp, like, this is a thing. So I told myself, the next time I get like this kind of feeling, I'm just going full tilt into it. And the story with Flash Food is my sister was a chef, she gave me a call after a catering event and she was like, I just threw out $4,000 worth of food, I started laughing, I'm like, you're an idiot. why would you do that? She's like, now this feeling sucks like, my boss was overtop my shoulder and like basically yelling at me to throw it out, like, I feel horrible. So I calmed her down for the next few days and started reading about food waste. And what I learned is when food gets thrown out, most times it ends up in a landfill gets covered by the garbage, when it rots, doesn't have any oxygen that produces methane gas. So the statistic is f international food waste, we're a country, it'd be the third leading cause of greenhouse gas emission behind the US and China. So it's not cars and factories, its food and there's so many people that are hungry, so that was like the problem that I learned and at the time, I lived in Downtown Toronto on top of a grocery store and I had to figure out two things, like naturally these grocers can't be selling everything in their stores, like there's no way. I had to figure out how much food they throw it every day and what's the lead time, from the time they throw it out, till the sell by date? Because then you got to think like, is there even an opportunity here and what I learned was the average store throws out like between 5 and $10,000 worth of food every day. And it's anywhere from two or three days, sometimes weeks before the sell by date. If you think about Thanksgiving the next day, Christmas the next day, Halloween the next day, like all that food generally is getting tossed. It's not just a grocer problem, it's a consumer problem. When you and I go shopping, and if we're going for chicken breast, we're reaching at the back for whatever has a longer shelf life, all the near data stuff moves to the front and the groceries have to pull that because people won't take it. And on the flip side, if we go buy a watermelon and there's only one there as consumers, we assume it's the worst one so they have to overstock the shelves and if they wanted to get rid of all that food and donate it all of it, It's logistics, that's a challenge. Who picks it up, who drops off, who pays the price, and who guarantees the safety? So all of these things combined, I'm sitting in my condo, and I'm like, geez, if there's a way for the store to mark the price of the food down, I could see the deal through my phone, pay through my phone, and pick it up in the store the same day people shop like that all the time. And that's exactly what we built, we took the discount food rack made it look sexy, put it on your cell phone and there was like a whole bunch of stuff, really like as we talked about my background, I think it's salting aspect of my background, going into like understanding process and how to work with people to create new things and strategies and tie back to the financials like that experience. ICAR Pedia was the most invaluable that I've had, because learning how to cut through an organization and like, change manage people, we couldn't be doing what we were doing if it wasn't for that.
Eric Janssen
But how do you prove out some of this? So you said a couple things here, you first said the experience of having missed out on the robo advisor thing was like, you felt the pain of not acting, you kind of acted like you put money to have something developed but didn't take it far enough. So you were looking, like you were actively looking for the next thing you had primed yourself to look for the next thing, so you were ready, you had the pain of missing out on the other one, so you were looking and you were ready to act on the next thing and the next thing you said I'm whatever it is, if I feel this way, I'm going to do it. So then found the thing you said you had to prove two things, that the delta between the sell by date and the throw out date there's enough of a window to actually so how did you prove that out?
Josh Domingues
I talked to people at the stores, I went to like a whole bunch of stores talk to everybody like, managers, people in like the deli departments, like I talked to everybody in stores, and they're the ones who told me the volume, they're the ones who told me like the time like there's no research on this stuff like groceries never want to get out this kind of data. So I just had to talk to people on the ground.
Eric Janssen
I'm thinking like my dad's been in the grocery industry for probably 30 years, maybe more, since high school. And yeah, he could talk to to a lampshade for half an hour, you know, he'll talk, he loves to talk. So if you went in his store and asked him, he'd know the numbers like that. So you just walked in there started talking to people?
Josh Domingues
Yeah, a whole bunch of them.
Eric Janssen
Not downloading market research reports, googling, you actually went and talked to real people.
Josh Domingues
These grocers, they weren't even tracking how much wood they're throwing out for the most part like they had, they were just starting to try and figure it out because it's been a cost of doing business for so long. So even that in of itself, I was like, oh my gosh, like this is such an inefficiency. But yeah, just talk to people.
Eric Janssen
Get outside of the building. Go talk to me. Okay so, when I was a student, I shopped at Loblaws, it was the closest thing, they would slap the 50% off sticker on it, so were they doing that and still not selling it and still throwing out a bunch? Like, why don't groceries just throw a 75% off sticker on something.
Josh Domingues
So yeah, that's it like. Partially they're doing that and still not selling it, partially they don't want to sell all their products at 50% off. When you put a sticker on a product and leave it in the store, the only person who's going to buy that is somebody who's coming willing to buy a full price item. So what we've done and what we were able to prove through the app is that we're actually driving in new customers that weren't shopping at your store beforehand. So new customers are spending more money while they're in store on full price items.
Eric Janssen
Got it. So the problem with the 50% off is, I was willing to go in and buy the normal apples, but I saw 50% off, so I'll get those instead.
Josh Domingues
Also, it's not like you want that. So what I'm learning now about retail anything particularly grocery, is that you have different customers that are going to shop different ways. So you want to have an offering for people that are only going to buy the sticker program, you want to have an offering for people that are only going to get delivery, people that are only going to have pickup, people that want to sit down in a grocery store and have a coffee, like grocers have to think that way now. We also got lucky on the timing in the market, because it's changing so drastically.
Eric Janssen
So how was the initial? How did you get the initial sell? I mean, this is an overwhelming for me cool idea but I'm thinking, there's so much to figure out here like, oh my God, I've got to get retailers on board and then I've got to get people to download an app, and like logistically, like, where did you even start?
Eric Janssen
I hired a team off of Upwork to build the app and it was a team in China, I think, and the name of the person was Nazima, and they had a picture of an asian woman and I didn't know until like, five months later before the app was even done, that if you reverse Google that image of that person on their Skype, it was like a famous Chinese actress, so I've no idea who built the first version of the app and also, we only talked through Skype, they wouldn't talk to me on voice call or video, only typing and like the english was so horribly broken. So I have no idea who built the first version of the app. And the way that we got our first grocer was a guy that I went to university with. His dad was a former CEO of a big retailer in Canada and his right hand person ended up being a guy named Jeff York, who is now the CO-CEO of a grocery chain called Farm Boy that's based in Ottawa. So Jeff used to play hockey, he has a hockey background. And he's, I don't know, maybe like, mid to late 40s or early 50s. So I got connected through my friend's dad to Jeff, the flash route deck went through to him and I ended up getting his like contact info and I'm emailing back and forth, and then he just starts ghosting me. So it was like, tuesday, of whatever week it was, I was making no money. I'd quit my job at Sage, and I'm literally like, how the hell do I get a grocery? So I call Jeff, his phone numbers on the bottom of the email and I call him and I'm like, hey, Jeff, Josh Domingues. He's like, hey, how you doing, good, listen, I'm coming out to Ottawa because farm was based on Ottawa. I was like, I'm coming out to Ottawa on friday, because we're looking at hiring somebody for Eastern Canada, we don't have any stores, we have nothing this app that is being built by somebody who I've never talked to in my life and I'm like, are you free to like sit down and like talk shop while I'm there? He's like, yeah, sure, come by the store at 10am. I'm like, perfect.
Eric Janssen
So let me see if that works with my calendar.
Josh Domingues
My calender of nothing, oh yeah that should fit in well here. Well, the funny thing is, like I'm telling my now wife, who was my girlfriend all this and she was like, like, what? What are you going to tell them? I'm like, I don't know. So I wake up at four in the morning on friday and I drive to Ottawa, I meet Jeff at the store for like 25 minutes of that 10 minutes, he's on the phone, talking with somebody else, giving them an idea of like what we want to do and he's like, okay, yeah, we'll give you a store in London, Ontario, because it's like the furthest away from their hub in Ottawa. He's like, we'll give you a store out there, good luck, all right, shake his hand and like, drove right back to Toronto, it was like a 25 minute meeting. And we did both farmboy and we did another grocer in Canada, three star pilots, like meaningful grocers with no contract. So like we're selling near dated food, like you want to talk about risk, like now we're well past that, everything's contracted like these are done properly. But I have investors now that are like trying to put money into our company, like, fortunately, we're at that point and they're talking to me about like, well what if you miss out on this? Or what if you miss out on that, like, you're being too risky on the market in front of you and I'm thinking like, we just sold food that was near expiry, like basically having like, all the liability on us for two years, like, this is not risky in comparison to what we did. So yeah, actually funny story about Farm Boy. We got one store in London, Ontario, and the model was horrible, the app was so bad, this was the app that I had developed by the team in China, the experience was brutal, we actually came to Western and we had a pizza party at Western and we convinced people to come out for free pizza, and then we gave them credits, or we just E-transfered them money to try the app and in that first week, we didn't know how long it was going to be, we had no contract sign. So basically, this like operator in London, who like already has so much on his plate gets this new thing dropped on him, so he doesn't even like me, nobody in the store likes us and we run a one store pilot, and it only goes a week and in that week, like we didn't know how long it was gonna go but in that week, we had like, I don't know, 11 people that bought, and of the 11, like six or seven of them bought a second time in a one week time period and we sold like, almost half of the food they made available, so we meet with Farm Boy, that same operator who didn't like me at the end of that week, and he's like, listen, like we're starting to get some backlash on like the app and how bad it is, how slow it is, and how miserable the processes it, and like they had no access to the numbers so they didn't know what they had sold, they didn't know what they made available, like we knew that, so selling whatever it was like almost 50% of the food, like repeat customers that were new to Farm Boy. So I'm like, okay, why don't we do this, Ryan, we have a whole bunch of things we have to figure out with the app let's just take this out of the store today, we'll rebuild it, and we'll come back in January. So this is like October and he's like you know what that actually sounds like a way better idea and for him, he was just like getting a headache from a store staff, so for him, he's just like, yeah, whatever, like I don't ever want to think about this again and for me, we stopped that day in the store and that was like one of the riskiest decisions that I made because we only had one store, we only had one opportunity, but I knew the numbers and yhat was really it, like I knew the numbers and I make sure like this is not going to be sustainable, so we ended up pulling out, we hired an agency in Toronto, we raised a little bit of money at that time, we hired an agency in Toronto, they built the next version of the app, which like is still the foundation now. It's like a really good agency in Toronto, came back to that one and then we pitch the metrics to Farm Boy and they were like, wow, okay, like, the fact that we were in and out of the store so quickly, we didn't let it linger long enough that people had a really bad experience, employees. And so they saw the results and they're like, okay, like, maybe there's something here so they gave us another store and we started in another store that january and then eventually, we had three stores in London and then eventually, we have three stores with loungers that came on and through that whole time, me and my team, were driving to London all the time, like we were in stores all the time talking to people trying to figure out how to make it easier and I think the store staff seeing how hard we were working, I don't know if they pitied us or like appreciated us but they were giving us really useful feedback, which is kind of like the theme of what we're going to talk about today nut they saw how bad we wanted it and they aligned with the mission of reducing food waste, that's the story about my sister had to throw out food so they want it to work too.
Josh Domingues
So yeah, gutsy call, but the right call when I think about if you let it linger few people use it , issues and complaints pile up, that could have been it. You know that could have been the end, that could have been the first and last pilot,
Josh Domingues
We would have 100% failed, like it would have absolutely like crash and burned.
Eric Janssen
Yeah, so pull it out. So you raise the money to develop the app properly is that?
Josh Domingues
We had raised on those metrics that we had from that one store. There's a group in Toronto, and whatever, I don't care, I think it's public, I think it's on our website, but they own the chase hospitality groups, they own like Collette, Little Fin, Quasimodo in Yorkville, like they own a bunch of restaurants, high end restaurants, and at the time we were gonna do this in restaurants, too. So before I had gone out and raised money from any friends and family, I was like, I have to get somebody who's actually gonna like who's not my friends and family, that's gonna write a check and they were the first ones that wrote the first check and it was a significant check, like, significant at the time. Yeah, every check is significant into a startup, so when they put the money in, then I told everybody else, here's our metrics, here's what we're doing, we're going into another store in january and here's who wrote the first check and that's where like, other money came in. So we ended up raising 450k that first round, 100,000 of it went to getting the app developed but like, even funnier, like we're talking about early days, we had our first, our CTO, I got introduced to because I'm not technical I'm like the app that I built is basically broken. But there's a guy that I got introduced to who was on a sabbatical, he had sold a digital agency, and he was at Salesforce after and he just got ground down, so he's like, I'm just chilling, I'm just going to like consult with people for the rest of the year. So he was consulting on the app that we had built from the agent team, and he's the one who told me like, I don't even know who's building this and I was trying to give it some enjoying the company, we had no money we hadn't even got our first check. And then I'm pushing, I'm pushing, we're paying this guy like a couple $1,000 to like do an audit on the tech and he comes back is like it's actually not horrible but these are the things you need to switch around and we ended up getting our first 60k in the door and what I did was, we're in Toronto, like I found a two storey loft in Liberty Village, and we signed a three year lease. It was like $4,000 a month we had 60k in the bank, no idea how much more money was coming in, signed a three year lease, went on Kijiji bought a whole bunch of us furniture, me and my CFO and we drove all around like the GTA, we've packed the place and we were like to the guy who was doing the tech audit, we're like Chris, why don't you just at least like come check out the office, so he like yeah alright, I'll come by later this week. So Chris walks in the office, he's like, wow, like you guys have a real thing here, all right, fine, I'll join, forget my sabbatical. So like that could have blown up the company too and I had no idea how much more money was coming in.
Eric Janssen
Ridiculous by the way, but whatever needs to get done. Where did the Dragon's Den experience fit in? So was it after all of this?
Josh Domingues
Yeah, it was after this.
Eric Janssen
I watched the episode, season 12 and the story is a good story. They were pretty bought in but the metrics were like, they were right, there wasn't enough there yet. So where did fit in?
Josh Domingues
So it's funny that you asked because that happened. The show got filmed in the beginning of April and my episode didn't air till the end of October and they filmed for 45 minutes and then they put four minutes of it on TV. So like, I had no idea what was going on TV, but yeah, we had just at that time got back into that one store in January and like it wasn't doing much volume, but the percentages were still like onpoint as what we saw on the first pilot, but how I got on the show, was I met Michelle Romano at a conference in Ottawa, SAS north, the October before the show aired. So we were about to start the first pilot that like, no, I think we just finished that pilot that like we were now hiring an agency in Toronto to build the app. So I met Michelle at this conference, and I introduced myself to her, talk for a couple minutes, she's like, I know what you guys are doing, somebody has sent me the Flash Food deck, I think it's cool. She's like, here's my personal email, send me an email in March and I'll get you on the show and I'll offer you a deal because I like what you're doing and if you take it, you take it, if not whatever. I'm like, alright. So sure enough, I sent her an email in march, no response sent her a follow up, she gets back to me. She connects me to the producer, like, gets me to like the final interview phase and then I go on the show and she's the one who jumps up with the deal with an offer on the show and I was like, wow, like, regardless of whatever she actually came through. It was really, really cool.
Eric Janssen
That's neat. You did a deal on the show. Did it end up going through?
Josh Domingues
The deal on the show did not go through, which like often they don't. I mean, the reason why it didn't go through is because from the show, they wanted six months to do diligence and we were like, on the last legs that 450k like that was almost gone. So I'm like, even if I want to do this guy's like, if you take longer than like, a month here, like we're bankrupt, like, it's over, like I can't even think of outside of this because like six months, like, I'm probably going to be at my fourth career job by then. That's how this is going right now. We had to bring in money faster.
Eric Janssen
Got it and so at that point, I mean, you run out of money, the numbers are good, but you're running out of money. Did you do a bigger raise then?
Josh Domingues
Yeah, we raised 750K, that like summer, towards the end of that summer and one of our investors in our first round wrote a 250K check and he wrote a 250,000. No, he wrote a 25K check the first round and the 450 round, then he wrote a $250,000 check and a 750 round and that led the next round. Because of what I had learned from other people on like sending out a monthly email to your investors, that second round of 750. For one, when we close that round, we had $753,000 in the bank. So like, when you talk about like timing, like we were right there and from start to finish, it took three weeks to close, because we kept people so informed on what we were doing and people just appreciated how open and honest we were with everything.
Eric Janssen
What did you do? You send a monthly update letter to your investors?
Josh Domingues
Yeah, it's a MailChimp, it's a drip campaign, on a monthly basis, we still do it, we send out an email with like, what's happened last month, what we're looking for the next month, like just in general highlights on the business. There was one of our investors, so part of that 750K came in, we won a pitch contest in Montreal called Startup Fest. So you get $100,000 for the prize, which is actually a $10,000 investment from 10 different people, which is like a complete headache for the cap table, like looking back, like it's like, okay, this should be communicated way differently. We knew it was an investment, but we didn't know it would be from 10 different people 10K each. So it is what it is we needed it to survive. But further down the road, I think this was like, I don't know, so that that happened in 2017 and in 2018, one of those investors who I never met, and who was like, very wealthy, has a bunch of real estate, a bunch of restaurants in Toronto, sends me an email after one of my investor updates, and he's like, hey, give me a call as soon as you can, this is my phone number. So I call him is like, hey, Josh. I'm so and so we haven't met yet, but I just want to let you know that because of how transparent you are on these monthly updates, like I appreciate it so much and if you end up doing something else, if this doesn't work, like let me know because I'll fund you and he's like, I've written way bigger checks into a lot of other people, and I just don't ever hear from them again. So this is like, I really appreciate what you're doing and I would assume that a lot of the other investors do too and it's just like a simple monthly email about what's happening in the business, what are the challenges, what are the opportunities and how am I, CEO thinking about the next month?
Eric Janssen
And how long is it, it's like literally just typed up, it's not fancy.
Josh Domingues
Sometimes I'll put pictures in, sometimes I'll put gifts, I started off putting gifts. One of our investors now has said that like, they know that the business is doing well now because we say less, like before, we were just telling a story about nothing and like putting gifts in and like making a funny and now we're actually like, here are the metrics, like, we don't want to share anything else, but no, like sometimes it was like four or five paragraphs. I mean, we went through so much, we went through TechStars, Target in Minneapolis, like that was a big thing. We got a pilot with Loblaws., like there were some really meaningful things that happen for us. So I would say it's probably like, if you read off of medium, it's probably like a five to seven minute read every time.
Eric Janssen
Yeah, there's a few companies that I've been involved in that did that and I found it really helpful and I do have some investments out there right now that I get updates when I asked for them. Good or bad, I feel like I'd rather know, I'd rather be along for the journey than like surprise, here's an update at the end of the year. So that's a good practice.
Josh Domingues
It's funny, that's actually what most of our angel investors get value in just being part of the ride, because they're just like, I don't want to go through it, or I can't go through it. Like, I've got kids at home, like I can't drop everything and start a company but yeah, I'll give you 10 or 15, or $20,000, just let me feel like I'm a part of this and, from what I've learned from our investor groups, awesome and like, sure, like people ask me questions, and I'm like, leave me alone, like, wait till the update and like that happens, like we have like 60 people on our cap table now. The other thing too, is everybody tells you not to raise from that many people, but like, good luck, try not to go bankrupt. So do whatever you have to just survive. But our investor group is like, because I'm so open and transparent, like they appreciate it and they're having fun, and they're along for the ride with me, so like they're in it right beside me.
Eric Janssen
Yeah, that's great. Something strikes me about your whole story is you just doing it your own way. You're not doing it the way that you think you should, or just doing it authentically and unapologetically in your own way. I think it's awesome.
Josh Domingues
I have a friend who's uh, yeah, I mean, like, there's so many stories. There was one where this was actually probably meaningful, we're meeting with a VC and this VC is this guy was a JD, MBA, like came up through finance and ended up being like, an associated VC fund, and then a principal like a reputable VC fund. So he's like, why have you not scaled faster in Canadian grocery? And I'm like, well, Canadian grocery, like, it's all a cop lipstick, it's basically like white, male and I said, like, big expletive like, like complex, like big ego complex and he cuts me off and he's like, don't ever say that to me, because you'll never say that to a grocery executive, so don't say it here and as soon as he said it, I was like, like, actually, like, I don't know if I ever would or not fast forward, like literally a month later, it's me, somebody that I've tried to get to invest in my company that I have ended up getting, but they tried for like two years and we're sitting in front of to like the CEO and the CEO of one of the biggest retail companies in Canada. In like one of the biggest, yeah, a big company, and they're just like, why have you not scale faster, in Canadian grocery, and I like kind of like hold in my laugh and I'm like, well, like you guys would know, it's like white, male, like big, expletive complex, and they just both broke out laughing. They're like, yeah, okay, like, we get it. So what I learned by having so many investors, and like, having really good people in our company, that are employees that are like, partners with me is that, I'm going to talk to so many different people that like, I just can't lie and I have to be myself because even if I wanted to lie, I would catch myself in a lie, like there's just too many people that are accountable to me. So what I've learned is like you have to be yourself and from a sales perspective, like when you sit across from somebody at a grocery chain, and you're just telling them how it is, it's so much more effective, like the story, the sales process, like, we now get to a point where it's like, listen, like if you don't care about this issue, like we're not going to be partners because it's just, it's gonna waste our time and you don't want to sell your garbage that you're gonna throw it at a discount. So being authentic I think now and like Mark Cuban said it to like being nice is really overlooked in business. But I think it's critically important because basically, the way that we got Loblaws is, I'm sitting across from one of the executives, I finally got in front of the right person and tell her the story, this kind of the same way that we talked,
Eric Janssen
How did you get there, cold email, cold call? Separate? Okay. Well, we'll come back to that one.
Josh Domingues
I mean, like I could go into it because it's like, relatively quick,
Eric Janssen
In brief, how did you get the meeting with Loblaws?
Josh Domingues
I got asked by a PR company to speak at Nestle's employee day for like, 1000 people and then they're like, how much do you charge? And I'm, like, broke at this point, I'm like, ah, this number, I made it up. They're like, okay, yeah, like, we want you to come do this, you're going to do like a Q&A on stage with their CEO for 15 minutes. So I take the CEO of for coffee after, Shelley Martin and I'm like, listen, I'm trying so hard to get into Loblaws, like, can you introduce me the right people, she introduces me to a guy named Grant Froese the former CEO, I take him for breakfast, he's like, this person is the right person that you need to talk to I'll introduce you to her, I meet her, we talked for 15-20 minutes, I tell her the exact same story I've told everybody else and she looks at me and she's like, I think my son would love to shop this wa,. I think he'd feel really good about it, like, we're gonna try this. That's how it all happened, it wasn't like a like, for us. It's like, check the money box, like sure, whatever, but like, this is just the right thing to do. You shouldn't be throwing out this food and if we can do it by driving people into your store and spending more money like, you should just be doing this.
Eric Janssen
Yeah, yeah. So you were in the meeting and you're talking about being like authentically you in a meeting getting to the Loblaws meeting?
Josh Domingues
Yeah, it's still the exact same like, whoever I've met in these organizations and through time now, actually, there's another side story that's probably meaningful, we got into TechStars, retail. So TechStars is like a three month incubator and why that's important is, we got into the cohort that's partnered with Target in the US and they pick 10 companies, they fly you out to Minneapolis, you work at a Target set office and from week two to week four you have this thing called mentor madness, so you meet with 10 different people a day for 20 minutes, and they poke holes in your business and then they get to pick after, if they want to be a lead mentor for you and that means they work with you through the three months and help your business out. In one of those days at this cohort we had executive day. So we had five of the top 10 people at Target that we would meet with, so I ended up getting the Chief Strategy Officer of Target and the CEO ,Brian Cornell, as my lead mentor, Brian Cornell grew up without money, his dad passed away when he was young, his mom was on welfare. He's a CEO of Target. His mom was on welfare, she gave him up to his grandparents because she couldn't afford even having him and he had a really difficult upbringin, so the day before this, like mentor madness executive day, I didn't sleep for a single second and I'm like, if I can't sell this guy who came up with nothing on the concept of what we're doing, like I have shut the business down, because it's just not going to hit and sure enough, like, he ended up being like, yeah, I love this and it was the same way that this person at Loblaws, like, you just have to get to the right people for what we're doing and they're just like, yep, check the financial box, okay, like money, sure. But this is the right thing to do and yeah, like the CEO of Target, and I like he'll get back to my emails almost immediately, and I fly down still once a quarter, try to meet with him in person for 20 minutes and we just sit down, and I just asked them a whole bunch of questions, he tells me what he thinks and then I usually cut the the meeting shorter, because I give him back his time and he appreciates it and that's what gets him like to consistently answer me, I think.
Eric Janssen
Yeah, there's like different sales models for different companies, right. But I think yours is, especially in the early days to get a company bought in at this level, like you're not going to get that from a summer analysts doing cold calls to the you know, middle management, I think it you have to go about it the way that you've been going about it for this one, it feels that way. So if you were to think back, what were some of the best parts and worst parts over the last few years of getting this company going? Like, what are some of the highlights, the highlight reel of some of the super high highs? And what have been some of the most challenging things?
Josh Domingues
So I'll say two things, and then I'll go into that answer. The first is that every day is the best day of my life and every day is the worst day of my life and it's all the time that never goes away, so you have to be comfortable with being uncomfortable. The other thing and I don't know if this is teed up that you're going to ask or not. But what I did at the beginning before I quit my job. When I had the idea was I told every one of the smartest people that I knew about it and they all poked holes on it, and said like this is bad, this is bad about it, this is bad about it. And what that did at the earliest phase, was it like vetted through a bunch of bad ideas that I had and it got me to like that, that team in China that built the first version of the app, it wasn't good, but it was very simple. Because I had asked as many smart people as I could about what they thought and they gave their honest opinion. So a lot of people will tell you like keep your idea close to your chest to me I think it's the complete opposite. Nobody's gonna copy you like that doesn't really happen for companies that have nothing. Tell us many smart people as you can get holes poked in it. The highlights, man, like we had one of our top customers is a young mother with three kids and she's like our husband just got laid off from work, we can't afford food, our kids never eat the kind of stuff like they'd never even tried some of the stuff that we're buying through Flash Food right now and like some of those reviews like, that's just the stuff that matters to me like, that and the environmental piece like the fact that, even if right now, we can't scale this internationally and all we are is like a grocery platform for Loblaws, the biggest grocer in Canada to produce their food waste as significantly as it as they are like it's millions of millions of pounds of food that otherwise would have been thrown out, like even the environmental angle of that, to me, it's like we've kind of already not made up, but like, we've put a dent in this and even if all that happens is a bunch of copycats come out and copy what we're doing and it's effective everywhere and like, I still think we're driving a lot of value to a big partner, like, we'll be okay, we'll do well. But the market will copy this and like, that's a win collectively for everyone. So the biggest wins is like seeing how much this affects people like some people are saving 1000s of dollars, like annually, which is awesome. The biggest losses, firing people is really tough. Firing people and which sometimes it's warranted, sometimes it's not. But one of the like, I had to let go of a friend of mine, just because like she came on too early, we had too many people, there wasn't enough for her to do and like sitting across from her having to let her go like that was really difficult. That was probably the most difficult thing, but outside of that, like, I don't say that you get a high output from people if you like, if you make things to like life or death, I think that your work has to be even keel and you'll have your highest amount of output if you have ownership of what you're doing. So I guess one of the challenging things is like as a CEO and learning to be a CEO, you have to relinquish basically everything. Like I still think I could do a lot of things better than other people can in particular categories of our business like specific things but if I do them, then I'm a worse CEO, because I haven't given other people the ability to grow and do those things better than me and the ROI of like, what some people are doing now is, like so much better than what I would have done. So being able to relinquish that was really difficult but I learned it because I had a really high level team and they're like, let me do this or like I'm leaving and I'm like, okay, that's enough, all right, you can do it.
Eric Janssen
So how many people now in the company?
Josh Domingues
We went from seven, last December to like 35 now.
Eric Janssen
What do you as a CEO of a growing, well funded, 35 person company, what do you what do you do? Like what should a CEO of a company that size be spending his time or her time on?
Josh Domingues
Making sure that things aren't breaking and communication. So keeping people accountable, driving people to like, why we're doing what we're doing, like reminding people that every week, so we have a weekly stand up on friday, and then keeping the bar high. So Netflix, I don't know if you've read much about like Netflix is HR. So Netflix will like only hire good people that will do like the best job and if they can't fulfill like Netflix is high caliber, they'll let them go but they'll pay them more than they have to and they'll help them find the next place, like that's ultimately like what I want to do and like create, but also at the same time, I want to develop people and I want people to like get there. So what do I do like, I was in Dallas this week, I was in Minneapolis last week, I'm still at the point where it's me and one other person who are doing partnerships and trying to get in front of more grocers and that is the most important thing that we could be doing right now because we've done this in Canada. Now it's less about like, will this work or not? Because we're past that, like, every metric is so solid and I say that humbly, but now it's like how big can we build this business? So it's kind of a different challenge where like, how many people can we get in front of that are meaningful people in the US specifically and how quickly can we execute on the US like we did in Canada and can we even do it or not? So it's around, like just making sure people are happy and motivated and then also just not letting everything break?
Eric Janssen
It's been a cool story to see, because I mean, a year ago, you and I were on a panel in Growth To, and you were working on trying to get that first major partnership. I told you that the reason that I knew it was doing well, was not that you'd raise money, not that you had 20 more employees on LinkedIn, not that there were new logos on your website. The reason I knew that you were doing well is because I know good people have joined your company and stayed. And there are people outside of you know, the tech community that in my own friend groups have shared with me, hey, there's this cool new app that I'm using, so it's being picked up, the partnerships are happening, it feels like all the leading indicators are good. And that's why I think it's cool to bring you on the show now because you're sort of like right in the middle of this journey. Who knows where it ends up, but it cool to take a snapshot or picture in time of where you're at today.
Josh Domingues
Yeah, thanks. It's exciting and like it could still all blow up, it seems like it's less and less likely to blow up, but yeah, like I mean, it's working, like I'm really living the startup dream right now and especially from the fact that like, we don't need capital. So it's also very different being on the other side of the table where an investor, or anybody is trying to sell you money and you don't need money because it's not going to fuel growth, like that, in of itself is a really, really strange place to be. But yeah, like things are going well, like they could blow up at any time, but like, it's going on right now.
Eric Janssen
That's great. So now that we've got to our listener base is growing nicely. Is there anything that the community can do for you? What can we do to help? Where can we find Flash Food? Let's start with that.
Josh Domingues
Flash Food is across the country, in a whole bunch of grocery stores, Superstore, we're going to be adding other banners next year, Loblaws, we're in Zehrs, basically like a lot of the Loblaws home banners across the country and you could download it on the App Store or the Google Play Store, actually follow us on Instagram at FlashFoodInc. We're at like 9400. Well, I think it's like 9000, I think we're like 70 people away. But once you get to 10,000 there's a whole bunch of other features that open up, so that's like a really that's a big thing. So at FlashFoodInc, all one word, that would be cool. Follow that.
Eric Janssen
Are you hiring?
Josh Domingues
Yeah, we're always hiring. So I don't even know what the roles are like, when you ask about what a CEO does. It's just like, hey, what do we need for different people to be easier for their job.
Eric Janssen
So if people are bought on to the mission, always hiring for good roles? If it's not up on the website, keep in touch.
Eric Janssen
Yeah, FlashFood.com. We have a whole like careers page or just like send us an email with your resume and we're in Toronto, like, yeah, reach out to us.
Eric Janssen
Cool. hey, I appreciate you taking the time to share this snapshot in time of your journey and I think you're all the leading indicators look pretty good, so wishing you guys best of luck in the next chapter.
Josh Domingues
Yeah, thanks. It's cool to be at the snapshot of like this point and seeing you again after like you saw basically like the clutch and grab and scratch and like, alright, we got to this phase, we'll see where it goes next. But yeah, it's cool to run into you again.
Eric Janssen
We'll do the chapter three episode.
Josh Domingues
Yeah, cool, awesome.
Introduction/Outro
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