Working up from dishwasher to senior leadership of $3B, Hans Schatz has a lot to share. | Rise Grind Repeat 089

Overview:

In his 30+ year career, Hans Schatz, CEO of Cult Artisan Beverage Company, has watched a lot of corporate leaders, read their books, and read the books they’re reading. Two of the more important lessons he shares are:

1) Lots of them talk about the four C’s of leadership: credibility, competence, character, courage. But no matter how successful your business is, if you don’t have good character, it doesn’t mean anything.

And 2), People can get blinded by their passion. Like it says in “Good to Great,” you have to be willing to pick up the rocks in your business, look at the squiggly things underneath — and deal with them. Be committed to your purpose, but be willing to alter your route.

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Rise Grind Repeat Podcast
powered by EIC Agency

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Hosted by Dustin Trout
Produced by Andrei Gardiola

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Check out the full video episode at:

Youtube Channel – https://bit.ly/3dlwjnJ
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Apple Podcasts – https://apple.co/2MiQdUv

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Check out the full video episode on YouTube at:

https://www.youtube.com/watch?v=8Ab6aEtS4G8

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| Rise Grind Repeat 089 |

00:00

As it turns out, made in Arizona is it people have reacted in a way that I’ve been overwhelmed in a good way. And I like that they think is the coolest thing that we put out on our products. I mean, and here’s a kind of a tongue in cheek thing. You know, AZ Iced Tea is made in New Jersey. And so it’s like, you’re almost like lying. Right? Well, you know, we’re just gonna play around. We’re not playing around. You know, we are from Arizona. We make really great products. We’re gonna call it out in the label, we’re gonna tell you who we are.

00:40

On today’s episode of Rise, Grind, Repeat, we talked to Hans from Cult Artisan Beverage Company, talking about the ups and downs of growing a local beverage company. Let’s dive right in. Hans thank you so much for joining another episode of Rise, Grind, Repeat, I’m excited just digging up some of your history, just how much you you know, enjoy the leadership side, the need for leaders in America kind of what you’re doing with with Cult, where you’re at now a huge Arizona company. You know, I’m an Arizona native. And so I love when things in Arizona are just, you know, rocking and rolling. But before we go too deep into that, I’d love to just hear your history. How did you start as an entrepreneur and kind of what is your your backstory?

01:18

Well, we’ll try not to put your listeners asleep. I grew up in the food business. It’s just that simple. I was a military brat my father’s an Air Force, we moved around the United States. He was a Strategic Air Command. He’s a navigator on B52. So believe it or not, so. And their job was to make sure that the other big, nasty red tide didn’t come over and do anything. And they had the big bomb on board. So they came over, we went over you know, and so it was crazy. But so I live in a few different places. But I got I just fell in the food business as a young age and loved it and got a business degree and and worked in the hotel business and the restaurant hotel business. And that really parlayed into what got me into a really holistic view of the industry is getting the food distribution side of things. And I worked for the parent company that became US foods. The US foods is the company I work for called White Swan out of Texas back in the late 80s. A lot of people in the room anyone born. So I’m probably 57 but learned a ton, dragged the bag in the back of restaurants and hospitals and hotels and prisons and you name it and they were in a hotel food service business. I knew them. And so my career just took off and they had moved. I got hired by a company headquartered out of Seattle called food services of America. And I ended up working for them almost 21 years and they hired me out of Texas to Alaska, then I went Alaska, Oregon, Montana, Nevada, Idaho, and then Arizona. And I was a young division president and Idaho’s beautiful place and and then got told I was being moved to corporate and I said no, I don’t want to be one of those guys. I like being the guy like me with the you know, the hard working people, not the ones that think that they’re that smart. And the third time I said no, the owner said the moving truck will be at your house. And there’s no choice, right? And he was a billionaire. So when people get confused about what it’s like to work for somebody like that, I tell them no, it’s pretty much all those things you hear. And the Stewart family was that way they took great care of me and I learned going through that whole shift you know, you just see a lot of everything. And so I learned a ton and I worked for some great people and worked for a couple skunks but that’s you know, you’ll learn a lot from both right and and it gave me an opportunity to get involved in some amazing projects with my work some amazing projects outside of my work I get to help start a nonprofit for at risk youth that’s still thriving today. And and I spoke at the first 16 graduations and I got to plan collegiate bowl football game on a bowl game and in Boise on the smart turf on the blue turf there at Boise State and got to speak at the players get to dinner with all the teams and go you know, help award the Humanitarian Award. And, and you know, just a slew of things that this little knucklehead from Texas grew up in a military family should never had the opportunity to do and so I you know, I just feel blessed and I left my big corporate job I spent a lot of time in a Lear 35 buzzing around the country. And I don’t know if you know what that is was basically a cigar tube with a jet engine strapped on it. We worked hard five, six days a week on the road and had an idea for a concept and technology play for the industry for the food service industry to untangle some knots are in the industry and took the plunge and what I didn’t realize I was taking a vow of poverty but I took the plunge to build that company and started building it went to a process kind of sort of went the process to get bought. And it ended up being a made for television movie where at the end of the deal, I didn’t realize that I got removed from the industry because I had made some enemies there was going to like turn the lights on in some rooms and nobody wanted they wanted to keep on dark. Yeah, I’ll just leave it at that. And I sat across the table from the guy that said I finally said you know you have no intent on closing this deal. Do you As well, Hans, I know this is gonna hurt, but it’s gonna be a great lesson and you’re gonna grow from this. I’m like, get to the punch line. Yeah, it goes, Well, we know you’re out of money. And we know you can’t sue us. And so we just wish you the best. And I just reckless, you’d write a product, like Atomic Jerry cartoon, I want to fall apart in about 20 pieces. But you know, I walked around my neighborhood was about 119,000 degrees and, and here in Phoenix and I walked around and I thought, all right, breakdowns lead to breakthroughs. Right. And I was, but I was mad. I was really mad. And my wife’s like, you know, it was like, just you need to give me about an hour. So I literally walked around profusely, sweating, getting my sunglasses on, didn’t put on my hat. And I just thought, you know what, something’s gonna happen. And the very next day, a buddy of mine called and said, Hey, I heard you sold your business. I hope it went, well. I’m like, not really. Because there’s these guys out of Australia. They’re doing something just like what you’re doing. They needed a domestic us guy that has no industry, dadada, do you have their phone number handy? And he’s like, I’ll call them right now. Anyway, so we got this thing. Literally the next day, I was in a lunch meeting, they offered me to CEO position. And long story short, the company never went anywhere. They went back to Australia, but the chief investor in the business was a guy’s company I run today.

06:14

Wow, that’s I mean, believable that everything happens for a reason. And I mean, it’s, it’s it’s so tough to not get, you know, so focused on the the negative, I mean, it’s that focus on the negative makes you blind to the opportunity that might be right around the corner.

06:28

You know, you can only lick your wounds for so long. And then because everybody things happen, people fall down, people get up, great things happen to bad people, bad things happen to great people and everything in between. So, so I was I felt very, very thankful. And I dove in and, and this great little company, it was Copper Reserve was a parent company, and, and the owner said, Hey, what do you think? And I took a look. And I said, Well, there’s five things we’ll need to do. If you’re willing to do those five things, I’d love to help you do it. So that’s how it all got started.

06:54

And so now that is you are

06:56

Right. So spring of 2016. We we you know, we we spit in our hands and shook hands, you know, we did the old the old fashioned blood oath thing. And so we just we attack the business and we had to create a brand, because the company was a company, but we have white label products for all these like Shamrock Foods and Nicolas foods, these big c store. Nobody knew who Copper Reserve was make great products. But we had to create a brand because we needed that equity. So we created Cult. And Cult initially, it was called Coffee Roasters had a really cool vibe. But then we’re like, well, we do a lot more than roast coffee. So we had to evolve that. And that’s where it ended up. It’s a mouthful called Artisan Beverage Company. The whole idea is like, you know, like with, with Nike, all you have to look at is the swoosh, right? BMW, pick your iconic brand. Clearly we’re not there. But we designed it so that everything could fall off. And it would just be ours our red circle with Cult in it

07:52

now that’s that that’s awesome. There’s so much to navigate. I mean, just unpacking all of that. I mean, it’s so you’re here now, but kind of going going back? I mean, it sounds like you’ve gone through the ranks pretty quickly. I mean, now you’re CEO of this company. The biggest thing that that’s interesting is I mean, corporate startups and all that you’ve gone through the experience of startups, small business to corporate and then it sounds like this was a startup that, you know, you had to build from the ground as well. So I mean, what is that? Like? What are the things that you liked or didn’t like in startup world and corporate world?

08:23

Well, I do tell people, I’m a recovering corporate executive. Hello, my name is Hans. And I’ve had lots of opportunities to go back into that world. I got a lot of buddies around the country, and I just told them, Hey, I appreciate it. They throw a lot of money. I appreciate it. And I wish you the best but I until I that’s the only thing I can do to feed my family. I will never go back. So how’s that for a pound the table statement. But in Cult’s been around been roasting coffee since 97. So this not a startup company, although went through a major facelift, they went through a strategic shift. We had some customer issues we had to make go away. We had a new customer. When we had them, the thing I told him was look, you do a great job and coffee, do a great job and tea. But we have to innovate, you know, the consumers always moving the consumers always looking. So you know, saying Can we look around the corner? And we got some ideas, some things and you know, we’ve had some hits, we’ve had some misses. But the I think that is a great question. Yes, about going from corporate. And I worked for a small family business to high school to college. Matter of fact, I put myself to college and I graduated the owner of this restaurant company showed up with a car for me. Wow, wasn’t mine. Wow. It was his his companies. But I’d had a car in four years and he threw me the keys and he gave me the look I’m like, you know, I did the me cuz I’ve been bumming rides for four years what’s really stuck. And he’s and he gave me the you know, the nod and a wink. And so, you know, again, I was just in a great place. And so, going through all that you really have to go through a mental shift to go from a corporate environment, to run a business and whether you own it yourself or you’re in a small office. Only business, you’re in it for a family. Because I had a corporate credit card, I get it up to 50 or 60,000 in a month sometimes and it kept working. Wow, I have a company core company credit card now too. And I get to 50 or $60, sometimes in a month in decline.

10:15

And sometimes it works. Because we buy a lot of equipment on it. So we made a big equipment purchase today before I was like, I’m sorry, sir, your cards like going through like, Okay, I got another one. You know, and so it’s a whole different ballgame. I signed the paychecks. I thought, you know, and so if anybody has owned a business, and there’s millions and millions people have realized how real it is and how right now it is. And so I you know, I wished that I could have learned that I had to go through my own transition mentally. To understand that, you know, a pure startup is very different from a corporate entity. It was about a $3 billion company, we had almost 5000 employees, it wasn’t small. And when I made the corporate I was one of the senior execs. And so we ran five different companies, and it was insane. But to now run a small family business for the family, they don’t operate it, they just own it. And 16-17 employees, couple parts, you know. And so it’s like, it’s just a whole different thing. And you do have to wrap your mind around that everything you do has to be intentional, everything you’re doing needs to matter today. And you still have to be strategic. But it’s in our small business or small business. One of the things I loved about this company is they just made phenomenal product. And a lot of long term. Now we’ve grown we’ve added some people but when I first got there, the tenure in our production area was about 14 years.

11:33

Wow, that’s huge. unheard of. Yeah,

11:34

yeah. And the guy that runs our beverage beverage, our VP of beverage today has been with the company 19 years, one of the most amazing men I’ve ever worked with. I don’t think you’ve met them, Chris Marceto and, and he’s been a master roaster. He’s been roasting coffee for almost 29 years. And he’s a master roaster. He’s one of the top guys in the West. Everybody in the business knows him. We’re lucky to have him. And he’s a great guy. He’s a great guy to work with his hard work. And so he apprentice for 10 years to get this role. The guys are senior roaster now apprentice for 10 years under him to replace him as our senior roaster. So we’ve had this great split a succession plan, and I can’t even tell you is strategic. But because it’s a great place to work with people that just hang out, right, they stay, they stick around. We all know each other, we all love each other. We fight through the hard stuff, we celebrate the good stuff. And I don’t expect somebody making $15-$21 an hour to have same passion I do. I love that quote when the there’s this, the guy’s speaking to a bunch of business owners guy raises his hand, he says, Well, you know, I got a question for you. How do I get my staff to be as passionate about my company as I am? That guy says, Oh, it’s super simple. Pay them what you pay yourself. Funny. They’ll be super passionate, just like you. And it guys, I walk into that, you know, so. But the points made that, you know, you so you, everybody has, you know, you talk about the leadership thing. It’s everybody has a place. Everybody’s got a role and responsibility. And understanding that that, you know, treating people treating them like

13:00

like people like him made. Yeah,

13:02

right. Right. And yeah, I mean, yeah, it just is a huge thing. Knowing first names and knowing wives names, kids names and all that jazz. So

13:10

yeah, well, I mean, I grew up playing baseball. And it’s it’s amazing how you can have top talent, but at the locker room isn’t there you don’t know each other on a personal level, it’s men are great that talent is you don’t win that championship. And I’ve been on teams where it’s just like, no one’s really an all star. But we came together and it’s that camaraderie, that teamwork that helped, you know, everyone had the same direction, same vision, and I think that does so much better than, than just having a group of all stars that don’t have the same vision. Really,

13:35

I’ve made a living out of hiring outliers. Apparently, I have and is created stress most of the places I’ve been because I don’t work inside the box. Super. Not there. They’re not good teammates. But they’re not like everybody else. And and so I you know, I get that because you get a bunch of all stars. They’re not always, you know, there. It can create that I was in a sport. It was an individual sport. But I I watched us modern pentathlon team and some of these guys know each other. And struggle, struggle internationally because they couldn’t, they couldn’t do things that they shouldn’t be doing to have each other’s backs.

14:12

Yeah. And speaking of vision, and long term success, I mean, knowing that you kind of had to go through a whole rebranding of Cult. I mean, that’s, that’s tough. I mean, especially whenever you’re small. I mean, any rebranding typically is it takes a lot of resources and resources and money to make it happen. I mean, what was that process like especially going from the corporate level to here and like Alright, guys, we’re gonna go do this. How do you do it? I mean, on what was probably a shoestring budget compared to the corporate budget.

14:40

How did you guys leave the couch cushion change? Well, that’s another fun story. We knew what needs to change. Right before I got involved the company they tried to go through a rebrand and it was like a dirty diaper. I mean, it was so bad. And everything about it was bad. And so you met Taylor on our as a friend of mine to graphic design, creative director guy, we work together in the corporate thing he wouldn’t started his own company. And after I left, he helped me with all the stuff I’ve done since then. And I have a lot of respect for him. And in his design his I was trying to come up with a name for the company and being an ex corporate executive, recovering corporate executive, I had on my dry erase board, you know, culture cultivating always powerful corporate words, like I like that. And he’s like, Hans, there’s, there’s a billion companies that have some version of that trademark, you can’t do it. So I was getting frustrated. So the beverage guy was sitting next to me, were in my office, and Taylor says, okay, beverage guy, in one sentence, what are you trying to get accomplished? at this company? And he said, That’s simple. We want to create products that are so good. They create a Cult like following. So Taylor went to my board, erase the word, I don’t remember his culture cultivated down to Cult. Got on his laptop, did the mad scientist thing. And he we sat there and watched him for 10 minutes. I’m like, you know, you want to talk he has, you know, especially me. He says, I just got eight domains, and blah, blah, blah. And we’re now Cult Coffee Roaster. How’s that sound? And I’ve already designed a simple mock up logo in 10 minutes. Wow. And I’m like, book. It is awesome. So I went told the owner, and he’s like, oh, he almost had a coronary. And he just didn’t he told his sweet sister who was a marketing executive in New York, because Madison Avenue, Oh, she did jingles for Oreo, I mean, all kinds of stuff. And she said, Yeah, what about that Jim Jones guy, they’re gonna This is you’re in a beverage business. And you got this stuff in here. And like drinking the Kool Aid, you could just have faith. And now it’s funny because he tells a story about how when we we ran to the company, when we came up this idea, which I love it because he complete ownership. And it was a little risky. But man, people love it today. And it’s iconic. And it’s going to be we’re going to be in the beverage world. And we’re gonna be everywhere on every shelf. And all they’re gonna do is look at the round circles, like, ah, did you get your get your Cult today? And I’m like, you just go Rick, you go, man, you go, this is beautiful. So so you know, a little bit of luck, a little bit of risk, a little bit of fear. But that that’s kind of how we granted that out. And we’ve been really happy and people love it.

17:06

As I say, what is the feedback? Like? I mean, I that I mean, hearing all that feedback? It could go great. I mean, it is definitely

17:13

love it. You know, not all of our customers, say who they partner with some do some don’t I get that I respect that. We got a new place opening right now. And it’s not this cup. But on one side of the cup is Cult logo on the other side of the cup to say, Hey, can you put our logo and so we did it collaboratively. And it’s a beautiful big, white heavy mug, and they’re opening in a couple weeks. And so we’re like, Hey, we should start doing that with other people. Because now we get branded, they ran out. And we floated the idea a few and they’re like, Oh, we love it. So people have anything we put our logo on, they want it. And I was buying hats and beanies and hoodies and T shirts. And Mike, our clothing apparel guy said, Hey, here’s some shorts or some boxes. And when it’s time out, we’re not that far yet. But I can’t we don’t sell it. We just have been giving it away and give it we have a amazing customers, amazing customers operators all over the valley. And they love it. They love it. And I love it when I’m out and I see somebody wearing one of our things like, Hey, you know, Cult? I don’t even tell him? You know, you know, the Cult? Yeah, what a cool company. I’m like, Yeah, they make great product. You know, we’re like, you know, and I just let it go. Just let it go. I just let it be.

18:19

That’s awesome. No, that’s definitely a cool story. And kind of going back a little bit before the rebranding, I love that. You mentioned the white labeling, it’s, it’s how he kind of got started as white labeling for other agencies, but you kind of get pushed into the you do great work, but no one knows it’s you doing it. And it’s tough, because it does generate revenue that helps you grow, but kind of getting out from under that is difficult. What was that like going from from you know, white labeling to grow on the on brand and try not to create, you know, burn bridges and relationships? Well, it’s

18:49

a business model. strategy, right? You got to just figure out who you want to be. Think about was two years, five years ish look like my past five years, it’s kind of hard to keep getting a vision of the beach and my bringing you you know, drinks with umbrellas on it. But you, I think you have to figure out who you want to be. And then you have to go attack that. And I knew that the growth that we wanted that we had to build. The reason why I got involved with Cult is I just, I saw that mental picture of how they we have, we have this, the people we have the facility, this beautiful 16,000 square foot facility, amazing equipment, we need more equipment, that’s a tactical thing, right? You know, our bank will fund it and we’ll get another road we’ll get whatever it is. And so can we take this and scale it? And if we take it and scale it? What are we scaling to the consumer? And so we had to come up with something that could be iconic. And that’s really, really hard to do. Yeah, right. That’s really hard to do. And most time it’s not. And people do emotional things and you see a lot of bad labels and brands and names and all that stuff. So I’ve always because I had a corporate experience and worked on a on a national level and had a lot of exposure to now the Kellogg’s the world’s and Simplot and Tyson Foods and richest all these people and all their I knew all their guys that did all that work. And the people that did that work at my company rolled up to me Not that I did it, but smart people that did it. But I got to say I like that I don’t like you know, that kind of thing. So you know, you’ll learn, you’ll learn along the way. And I knew that that we had to have that if we built a brand. And then we really started pushing our brand and getting out in the market. And week before the pandemic, we did all kinds of events. I could go through the name big clients were today that I met me serving at an event again, my new in my hands, I’m new, and I’m trying, nobody knew who I was. I want it that way. But I wanted to see reactions to our products. And which was great, because I could tell, you know, I could we could tether things, or we could speed things up or slow things down and put on reactions and and we had to have a brand that people because now people are cold. You know, that’s all they say. And so it was it was very, very intentional.

20:58

And we got a little lucky.

20:59

Yeah. Right. So let’s be honest, right people like it. And I think we can I think we can scale it. And we’ve got some new products we’re launching. Outside of our core of coffees and teas and this cool category called botanicals, we got some new products we’re launching from those core products that will be nationally launched products that, again, this our logo is going to become iconic. And that’s our goal. And we build we build that value in the brand and we build value in the company.

21:25

Absolutely. I mean, it sounds like a lot of a lot of big decisions that you’ve made have been a little bit a little bit of luck, a little bit of risk. I mean, how do you navigate the decision making? I mean, again, big corporations. That’s tough. And I think a lot I mean, our audience is a lot of entrepreneurs, small business owners and I think have a difficult time making not only just the decision, but sticking with it and being intentional and run with it. I mean, it’s the mindset thing, personally, I think but I mean, how do you kind of know, it is

21:52

a mindset? I do. Because of my experience? I do think you have to plan you have to think about where everything is going to be purposeful, right? And you think about what am I doing? what’s the what’s the echo of this action? what’s the what’s the good things that can happen? What are the unintended consequences? And a lot of times you can think of some and then something happened? You’re like, Oh, we didn’t think of that. You know, that’s why it’s called an unintended con unintentional consequence. And so but I think he’s to be very intentional. And just think about what is it you want to do? Not everybody wants to be listen to everything we have says made in Arizona on it for a reason. We’re absolutely proud to be an Arizona company. This company got started in Arizona, is owned by an Arizona family. It’s run by people that live in Arizona, we don’t live anywhere else, we all work in the same facility. We’re super proud. And even even with that said, some people you know, we show products to California, we’re in about 30 states with different clients. There’s people that look at some of retail stuff, they’re like, hey, do you really think you ought to have that on there? And we’re like, yes. Because people say, hey, that’s really cool. Wow. I want to know where my stuff’s coming from. And as it turns out, made in Arizona, is it people have reacted in a way that I’ve been overwhelmed in a good way. And I like that they think is the coolest thing that we put out on our products. I mean, and here’s a kind of a tongue in cheek thing. You know, Arizona Iced Tea is made in New Jersey. And so it’s like, almost like lying, right? Like, well, you know, we’re just gonna play around, we’re not playing around, you know, we are from Arizona, we make really great products, we’re going to call it out in the label, we’re going to tell you who we are. And we don’t have cute-sy labels with like butterflies or dragonflies or, you know, coffee bean with things sprouting out of them. We’re just not you know what, that’s not what we’re, that’s not what we are, we think a little bigger, we have a slew of local customers. And we would be nothing without them. And and they are amazing. They’re scrappy, hard working operators. We have local chains, with regional chains with national chains, we got into retail, which which really was a blessing because that thing called COVID. Right, really hurt our food service clients. And so it’s you asked a question about the brand thing and about how do you make that decision, I think that owners have people that are have a business, going to sit back and say what’s realistic, and if that’s what I want to go now, if you I always I do some consulting work. And I say, here’s what we are, what it was there. Yeah. And they tell me where there is. So if you know what there is, and you can be honest about where here is, now you can you can create a bridge or draw map to get there. If you don’t know where there is, or it’s something that’s ridiculous. If you’re not honest about what here is, you just can’t make those steps going forward. So if you if you do the here there and you really know what you’re trying to do, then now you can be you can be a little bit more methodical about how you how you attack that and you get there, the you make the next they’re here, they’re changes, right? And here, they’re changes in here, they’re changes, and that’s a good thing. That’s progress. That’s movement. Sometimes things happen like COVID, how many companies pivoted

24:50

millions? Yeah,

24:51

I mean, hopefully all of them. I mean, obviously, that wasn’t the case. But I mean, it forced a

24:55

lot a lot of people to sit back and go you know, I could Ah, but what do I do now? How do I deal with that? A lot of people and you know we have lots of friends in business that went away now I got friends in the distribution industry that are struggling in that and all throughout the supply chain they’ve just gotten hammered my got friends that run big companies like richest food products and, and Nestle. So the CEO of Nestle in North America later had to layoff 50% of his staff.

25:19

That would be so tough. It’s brutal. Yeah,

25:21

think about it. Now. They’re you’re not cutting fat, you’re cutting people. That’s, that’s, that’s Yeah, that’s a big workforce. I mean, it’s families that they have is so

25:30

it, you know, it hurt and hurt me to see that happen? Yeah, I’m to see what we’ve gone through. And, and so I hope that we get our arms around this. But, you know, getting back to that question, I think the owners have to be very intentional, you just can’t run by this, you can run by the seat of your pants, because there’s a lot going on. So you’re multitasking, you got to know where you’re trying to go. Otherwise, you’re gonna work, work, work, work, work, work, work, work, work like crazy. And the end of the day, you’re gonna be like, you know, I don’t feel like I accomplished anything. I know, I’m being mastered the obvious, but it’s a lot of our clients, our customers will come in and sit in my office and close the door and say, Hey, I need some help. Can you help me with this, and that, and so I would get up on the dry erase board. And I start with here, there now. And we break it down to really basic, simple things. And and most the time we’re done, you know, we hug and they just keep buying our coffee place. And they leave and you know, and that’s that’s kind of how that goes.

26:22

Yeah, I mean, it. It’s having a plan of attack and knowing where you want to go. And it’s it’s not making decision making in the moment just to make that decision. But it’s, who are you trying to serve? What problems are you trying to solve? And based off of how I’m going to make this decision, is that going to produce the outcome that I want? I think more times than not, it’s everyone, especially business owners, you get so stuck in the day to day that it’s tough to come up for air. And look, I mean, 30 days out, 90 days out, I’m

26:45

guilty of it all the time now, even with the things that I’ve done in my past, but it’s it’s intoxicating to run a living, breathing company, as opposed to big corporate entity. I was a professional meeting attendee, really, most people in corporate are your professional, you got a lot of meetings, you take some random stupid notes. And then you follow up with a couple email. I mean, and people you know, and it’s like, the old decisions by committee, you know, they asked for a horse and the camel comes out is because everybody has to have a voice. And you have to have consensus and all this stuff. And it’s, you know, there’s some benefit to that. But there’s also, there’s some rough spots for that.

27:20

It’s tough. I mean, when the last agencies I used to work for I mean, it was national brands, and it would be so tough to like, give give, you know, we think is good strategy, a lot of agreement there. But then it has to go through the bureaucracy. And that might not be what another department is intentional about right now.

27:35

Around now. It’s reading square What happened? You know, the CEO. Okay, got it. Yeah, that’s not gonna work anyway. It’s okay. Just do your best that day. Yeah,

27:44

yeah. And that’s what got tough. And and I mean, it, there are pros and cons to it. But I could see where it gets difficult, because you’re very much it seems like a newer go get things done, have that vision, figure out how to get there, and then kind of getting held up with bureaucracy would get get frustrating.

27:59

Yeah, yeah. And, you know, what I loved about it is I never, when I never saw anything bounce out of the checkbook was big, big fat. And there’s a bunch of really smart people sat in a room that they only they locked the door from the outside, they did all the finances and whatnot. And so, you know, there’s there’s pros and cons to everything, again, comes down to what is it you’re trying to accomplish. And if you’re a business owner, he probably had a multi billion dollar company, because then you have a board and you’re, you know, you got a year run by it, not a not an advisory board, but a board, just running the company a whole different model. But if your local business or regional business or you’re starting to do things that’s traversing the Interstate, you got to make tough, tough decisions you got to make every day and you got to pay attention. And, you know, data is not as easy to get it, you know, we have an old ERP system, I won’t say it was from I would like to, don’t ever use them. But we have a hard time getting data out of it. It’s simple stuff. And so my CFO has to build these, you know, like, the string telephone thing now, and we got big stuff going on. Right now we’re doing a fundraiser to launch a new category that we’re working on that you have a little bit of knowledge on. And you know, we have to be professionals, and we have to provide professional information and Yep, and things like that. And and so is the small business owner, you got to you got to pay attention to those things.

29:14

Yeah. No, I can agree I data in real time, that’s a huge goal of ours to do for every business. I mean, it’s crazy that I got to take 30 days and figure out what’s going on, it’s by the time you get the data to make that decision that what you’re making a decision on. It’s it’s not as relevant as it could be, I

29:29

mean, it’s worse, or you get bad data, that you’re going to have to shut down. Right. You know, and so I

29:34

see that more times than not, but I mean, you’ve done such a great job, you know, rebranding this, you know, helping run Cult you’ve, you know, been an executive at at a multi billion dollar company. What are your thoughts on just the overall I guess, trajection of of American leader are not American, but American leaders, just at the corporate level, just leadership in America. How do you think that that’s trending?

29:57

We get a really interesting time to ask that question.

30:00

Well, I think it is because I think there’s a lot that’s being exposed through COVID on on the leaders and how they’re, they’re operating their business, how they’re navigating, moving forward, how they’re taking care, not taking care of employees. I

30:09

mean, there’s a lot, I don’t really think you can look at a mega company CEOs and look for leadership, because that’s one of the things we talked about a little bit, their hands are tied a little bit, the boards are running them, you know, the whole profit over, you know, people, all that kind of thing. There’s a there’s truth to that. But there are also great companies tell me how many books they have, that have to do with the subject of leadership? A couple 120,140 8000?

30:35

And, you know, so you think about it, you think that all 148,000? Those books are the same? Of course not. But there’s some themes that have to be similar. There’s some themes that have to be based, you know, character based and, and integrity and trust. And, but as a leader, you still got to make tough decisions. Right. I mean, you think about the guy from Nestle that had to lay off the big workforce, because international because it’s not a it’s not an American company said, Hey, you got it, you know, and how hard and gut wrenching that moment was, does that make them a bad leader? Absolutely not. As a matter of fact, you go through those times, and you just literally want to gouge your own eyes out and you come out of it. You’re a little a little more hardened, but you’re also you you understand how to deal with that. And then part of that had to reflection us How was it handled? How was it dealt with? How are those people treated? And I know how they were treated, they’re all treated fairly. And so I think leadership is such a broad topic. You know, where do you want to talk about it, you will talk about as a coach, as a mentor, as a boss, as a teacher, they all have a little bit different role. Right? And, you know, you think about, you know, the one of the things I like to talk about you talk about to people that moved people, and if somebody can move a country and may change the world, somebody can move minds and hearts and change the trajectory, are they both great leaders? have leadership skills, right? Yeah,

31:59

well, ones Adolf Hitler and ones Martin Luther King, Jr. So Hitler almost took over the world. He didn’t do that, because he was a bad leader. His character was bad. Right? Yeah. So you gotta you know, there’s a lot of things that tie into this and as a fun topic that I, I can talk your ears off about. So when you think about the the four C’s of leadership, character is a foundational piece, credibility, competency, character, character, is a physicist is a foundational piece. And if your character is bad, it doesn’t matter what you do. It just, it doesn’t matter. You can get results, you can have the you can have all the stuff and all the the obvious success, things that we say their success cars, clothing, family, whatever, money, whatever you want to say that that’s what success looks like. But if if they have bad character and have bad, you know, bad morals, and all those other words that go in that category, you know, I just my my, my humble opinion that it doesn’t mean squat. It’s just flash. And it’s. And so when you ask a question about leaders is you gotta go, you gotta really have to dig, peel the onion, to go see what people are doing. And understand, and Hey, listen, I’ve got a history of my life, or I went to a really rough time to do really stupid things, some major failures, I’ve had some great successes. And so you can you you have a group of guys that I work with, outside of work that we just is kind of, it’s like a men’s club thing, and a lot of them are walking wounded. And I love them, because when you go through fire, you know how bad fire hurts. And so we can be very real. And they, you know, kind of mentor them a little bit, but we can be very real about life, as opposed to this macho, you know, you know, I’m shucking and jiving thing. And so, and then we talked about how to be men and leadership and all that kind of stuff into real authentically to know the real guttural parts of that. It’s tough. It’s tough. Sometimes, you know, you get put in a situation, you gotta make some decisions. But anyway, I’m going to I love rabbit holes. So I just went for rabbit holes in it. One simple question from Yeah,

33:56

no, I mean, I like it all. And I couldn’t agree more. And that being said, I mean, you brought up mentorship, just kind of helping lead you mentioned, you’ve done consulting. mentorship has come up a lot recently on the podcast, especially as kind of the dark time in the last 9-10 months. I mean, it’s it’s forced a lot of people to navigate things differently. I mean, how big is mentorship and, and really pushing the business forward? I mean, are you a big proponent of people getting mentorship in order to help them navigate? As you mentioned, you’re big on, we’re here. I want to be here that seems to lack across a lot of business owners and whatnot. So I mean, is that mentorship important and really growing? I

34:34

think it’s, I think it’s a super critical piece. And you can get if you look at some basic tenets of the cut successful companies, and when you’re little, you’re small, remember, don’t pretend to be not what it used to be. Right? And but I know where we’re going. And I know what our brands capable of doing. And we’re big plans. So we’re building a structure and a lot of the work we’ve done the last few years is to build this platform that we could scale from in lots of ways. Not just some products, but with the brand and the tech and human equity and things like that. But I think mentorship is critical. And I was lucky enough to have been able to do a lot of really cool things in my life. And I’ve just been kind of lucky. But I was at a events where some gentlemen were enshrined into the world, humanity, Sports Hall of Fame, and it can be matumbo was there and I had a chance I was on sponsors a chance to meet them and, and back in my corporate life. And to give him a Tombow is seven foot one, and he is the size 23 foot. So I was sitting right in the front front of the stage, a couple 1000 people and he walked across the podium, I could just see these giant feet going by. And then he talks he almost talks like he had his thorax injured. He has a really scratchy, but deep I can’t do the deep voice like he did. And he’s from the People’s Republic of Congo. And he told the story about their humanitarians. They do all these cool stuff, Kyle petty Jr. was there and Edgar Martinez was there from the Seattle Mariners. He played his whole career there, right. And they all had amazing things they did in the personal TV, like, I didn’t know that. Why would you because they don’t walk around and do Instagram posts and all stuff to come in matumbo was building this hospital. He’s funding in the People’s Republic of Congo, you showed a picture of what a normal doctor’s place was, it looked like it was blue tarps over two by fours, you know, and mud and water. I mean, it’s just terrible. And they showed a picture of the partially built hospital that he put $40 million of his own money into, and had helped raise the rest. Because obviously, he’s know some people, right. And he, he said something that I’d never forgotten, he leaned over, of course, he’s twice the size of the podium, right? So even with the thing all the way up, he’s leaning over talking to the microphone. And in his scratchy, deep, resonating voice and he spoke slow. He said, no matter what size your foot is, always leave a bigger footprint. After you leave, I thought he said a little more eloquently. So over the years, I’ve forgotten it. But his point was this, you gotta leave a bigger Mark than yourself. And I was just like, he was guys just just a gym. And so he embodied that. And I just and I tell people that story whenever we get a chance to that, look, we just have to run a business. Yes, we have our families Yes, we have a personal life. Yes, we have our teammates or employees, whatever you want to call them. We have our customers with three basic pillars in our company, our suppliers are very very important as we have some coffee farms that go back 20 something years that we’ve been doing business with places we get our green and black teas from China, we have newer relationships because we’ve grown so they’re a key part of what we do and we we do our very very best have great relationships with them. Our people obviously we’ve got a tenure in our building that’s pretty impressive for a small business and then our clients and you know we’re very fortunate we lose some sometimes and sometimes we gain a lot more than we lose and they they’ll go and see four or five different places and because our brand going back a couple years be like yeah, we never heard you somebody said we should go see the Cult right Cult as they come in. And then they would be like I was so glad we came and a couple things they say is your place is really clean. Like you have a we get federally inspected because we have big clients that we serve and even then even that so that you don’t think we’re super cool when we do it. We do it because they kind of make us but we’re also we are we pay them to come in and audit us. And if we don’t pass the inspection then we can’t do this. You know it’s big business. So that’s one thing. The second thing is you guys aren’t like snobs. No, we’d like to be experts. We don’t want to ever be snob and we got people to know a lot. But they love what they do. And they want you to love it too. We don’t want you to feel like you don’t know we know because we’ll happily share knowledge with you and come spend as much time as you want and we’ll walk you through we’ll show you how we roast and pack and all this stuff. And then third thing they say is well some of the other guys said that you guys are just as big institutional but this is the best product we’ve had out of the five places we’ve gone to. So it just shows that what is the passion that the what we put into and the book people do that the process works. So we know that works so we can scale it and so if you’re you know like this cold brew, can you build a package to hopefully get someone’s attention of the product inside is not great? They probably they might get another one but they won’t get a third or fourth. So the product has to be great. They you you have to our goal is to get trial is in once we get trial the product has to stand on its own and people got to go hey this is awesome. And they become an evangelist and they want the cold sticker and hoodie and beanie and all that stuff.

39:31

Now couldn’t agree more. And that being said, I mean you guys, you’re working on a lot right now what is the next six to 12 months look like for you? I think, you know, working on something special.

39:42

Well, we we got a bunch of things going on. We we are in the process right now of launching a product that’s technology that we’ve licensed with the company that created it. It’s a coffee single, just like a hot tea comes in a little packet. You take it out, put it in hot water anywhere you are anyplace anywhere anytime you’ve got coffee, so people may go like, Oh yeah, well, that’s not new. Well, actually, it is new, the technology is amazing. First of all, all the packaging is compostable, the whole thing can go in your garden, including the sachet inside that holds the coffee. It’s got patents on it, it’s a very, very special process, which is why we agreed to partner with them. And they have other Coffee Roasters they deal with, but they wanted to work with us because they like our vision where we’re going. And the it’s our coffee. So we roast our coffee, they take it through their special process and package it. And I have to tell you that it’s a function of probably 100 x better than a pod or K-Cup really literally

40:39

says there are there any other competitors that have this type of basically you dunk it and

40:43

there are some other companies that make something similar. We totally completely feel like this technology is the absolute best. And so we’re running with it really hard. We’re showing it locally. Fry’s is gonna be bringing it in, which is a great client of ours as a coffee partner. But we’re showing it to like big outdoor sporting goods, places, we’re showing it to national mass grocery places, we’re showing it to national specialty grocery places we’ve got, I can’t give all the secrets away. But we’ve got some really, really neat things that we’re doing it is in play right now. But it’s a really fun product and it’s new technology for the coffee industry. So a little bit of adoption. You can see on the box, we know we put it we put it the first one we did we’re like I don’t think people are getting it. So we put a coffee on here and it you know, great for home and office roadtrips dorm rooms, hiking, hunting, fishing, camping, your RV hotels, anywhere, anytime. And then some of the cool things about ethically sourced is compostable all that then a quick easy little picture. So easy to make. All you need is hot water and a cup. So you think about it on your boat. I mean, anywhere a private pilot, I got two guys to work. Our owners fliess on plane our CFO has his own plane. They have a hard time with coffee right now you can just bring a thermos hot water. You got coffee anywhere you go in your backpack, and you’re good to go. So that’s really cool. We do some really interesting collabs to like I some people may be thinking What the heck is another road Brewing Company are doing on here? Yeah, well, the founder and CEO, Michael showed up at our place yesterday. We do some collaborative work with them with a bunch of people, but them in particular is one of them. And he show up because hey, we played around, made a beer, coffee beer with some of your coffee. And we thought we’d share something with you. And so I brought it in today. So yeah, we can try it. We actually have BJs Brew House big client of ours across the nation. And they won a bronze medal in the great American Beer Festival, making a coffee beer with one of our coffees. And they’re so enthusiastic about the can. And they’re putting our label on the can.

42:37

That is amazing. That’s huge brand awareness for us.

42:39

And they have a beer club they just launched they’ve got 1000s of members already. And then San Tan brewery, which is one of our, you know, local favorites in Arizona. They’re also a distillery. And so we have somebody come and said, Hey, can you guys make a coffee look where we’re like, No, we don’t do liquor. But we do coffee, but we know somebody that can Yeah, we brought them in and we’ve been working on it for a few months, well, they finally produced a test batch and it was freakishly good. So they’re going to go to production of SanTan’s kind of produce a coffee liqueur, and they’re gonna co brand with us on there, that they do a really cool old fashioned bottle with their label on it. And they’re gonna co branded with us on there. And so you know, we do, we have a lot of things like that going on. And then we’ve, we have a product that’s called a botanical infusion. It’s like a tea that we’ve been serving in a brewed format. As a matter of fact, I brought some today. And it’s this is just this is just a bottle out of this. We don’t serve it this way or sell it this way. But it’s for foodservice, they just like ice brew a big batch of iced tea and the server to your gas. They brew this and so it’s a long story I want to take your time to go through when a client asks, Can you make something that’s caffeine free? We did and they were like, yeah, we’re good. But we like this was really good. So about six years ago, we took it and ran with it and exploded. So botanical, and fusion is a product we make. It’s like a tea. There’s no tea in it, though. So it’s naturally caffeine free. It’s always chemical free. And it’s naturally sugar free. So you get this beautiful, clean, natural beverage, right? We do a whole bunch of them. So we’ve done a brew format and went crazy. We now put it in kegs. It went crazy. We did about five and kegs. And then people been telling us how you got a bottle that so we got a big project going on now. We’re gonna bottle it probably at the end of this year, mid mid late this year. We’ll roll it out and it’ll be a national launch. It’ll be a literally we’ll launch it across America.

44:28

How pumped are you guys?

44:30

Terrified. All right. But for all good. all the right reasons because when we think it’s a let’s just put it this way the total addressable market, taken out sodas and bottled water and all the rest of stuff in between enhanced waters, sports drinks, tea flavored teas, all that hint by all those kind of products is about 150 billion a year. Wow. That’s how big the market is better, better for you is healthier.

44:53

Yeah. And the labels clean. 100% clean the way we produce it. They don’t have to add anything to it. There’s no sore back. Nothing is 100% the real deal. And the kicker is it tastes good. So we’re, we’re super excited. And we know people love it, we’ve had it out for almost six years. And now we’re putting it in a format that will be a little new for us. But I think we’re gonna crush it. And I’m super proud of our company for having the guts to work on doing it. And I can’t wait to introduce it to the world and, and so we’re gonna do this next 6-12 months for us as most of my life, my learning curve has been vertical, it’s not changing anytime soon. So we’re, you know, we’re trying to keep everybody calm and focus on the day to day but at the same time working on some of these big projects, and, and we’re probably going to come up with another another flavor of flavored cold brew, but we don’t pasteurize ours, which a lot of companies do, and you can’t reheat coffee that tastes bland. And there’s a chemical process that goes through. And so we’re trying to figure out how can we do that, but still get a, you know, extended shelf life. So that so that can go through the supply chain. So it’s all those things that go into into production? They go into those decisions. And so that’s, that’s exciting. You guys are definitely working on some stuff.

46:06

Yeah. Yeah. So it’s, you know, long weeks, and yeah, six to eight weeks and nights and all that stuff. But that’s what you do. I mean, you know, you watch the movie, Rocky, did he just work out on Tuesdays and Thursdays? No, he was like, early, he was out late. And every day, and he did the right thing. And so this is silly metaphor, probably. But for comparison, but, you know, you got to work hard to be great.

46:28

Yep. No, I completely agree. And that’s why people like you on here. And then so I chose called Rise, Grind, Repeat. I mean, it takes hard work. And it takes, you know, good decision making. But I mean, ultimately, it’s it’s, it’s hard work to grow a big business. And so, you know, that that being said, You have so much wisdom when it comes to in small business Corporation just kind of leading a brand into kind of what what the vision is, knowing that most of the listeners are entrepreneurs or small business owners, what I guess is one big piece of advice they’d have to give them as, as they’re trying to grow their business and brand. I mean, what is something that you commonly see people get stuck in? That might help me get to the next level?

47:04

That’s a great question. I think people can get blind get blinded by their passion. So passion is a great thing. Buying flash blind passion is Jim Jones. And what does that mean? That you’re going to go get yours, you’re so focused and locked on that you can’t pivot, you can’t shift. And, again, go back to COVID. People had to to do this immediate evolution, or potentially risk going out of business, right. And then a lot of people did sadly, as against heart wrenching. So as a as a founder, owner, as a creator of something you got, you have to be really, really smart. But you also have to be willing to look at the brutal facts of the book Good to Great, I don’t mind this room is right. But I read it came out 2000, Jim Collins and a slew people wrote a great, great book, business premise book, I have a million notes in mind. But he said that people most companies are afraid to lift a rock and look at the squiggly things on the rocks, they just put it back down real quick and pretend like they didn’t see it, you have to be able to do that. And this stinks. When you see something in your business, whether you’re big business medium size, or small, as you know, person or process or something that’s not right, you have to address it, because it will take you down if you don’t, or it will, you may have success, but you’ll never reach your potential. And everything’s about reaching potential. Everything’s about maximizing what you’re able to do. And then as an owner, you got to say, you know, what I got? What is what do I want out of this? And that that will temper what you put into it. Right? Dude, I’ve got the friends in the insurance business or whatever, they work 30 hours a week, they make, you know, huge six figure income, they could double up like, yeah, we’re happy. Good for you. You know, God bless you, man. That’s a great place to be. And so now you don’t have to like charge Mount Kilimanjaro but if that’s what you want to do, if you want to create a brand that’s gonna be a national brand if you want to create a brand a company that’s good everybody in your in Phoenix say, we love Dustin’s place that says you got to work for it. You can and and be committed to the purpose be willing to to alter the your map you’re on here. We’re going to go there. Because the here their thing they both change a little bit. Yeah,

49:12

right. constantly evolving. I mean, running business is a living, breathing thing. And I think, to your point, it’s having that vision, keeping your head down accomplishing that, but continue moving that that that yardstick back, and I think

49:23

it’s hard for people in charge that owners and CEOs have to go and say Hey, what do you think, towards their leader that people in our building because they really don’t want to hear sometimes, it’s like, I’m just gonna make some of these decisions or like, boss, you’re you’re, you’re taking us over a cliff. So it’s hard to do. It’s hard for me to it’s hard for everybody to do and then you got to do then you can’t be run by committee either. So it’s like this really is it’s about really feathered approach, right?

49:48

Yeah. No, this has been great. It’s been awesome learning you know a bit about your history, what what you’re doing, but more importantly, what you guys are doing at Cult. Like I said, it’s it’s, I love Arizona native and anything that comes from Arizona. I was just I love it and so love seeing what you guys are doing I have no doubt that you guys are gonna crush you know the new products you guys are releasing especially the botanicals that’ll be really awesome. So I mean if someone is new to cold is the first time they’ve heard heard you know the brand, how can they find you or how can they find the product? What’s

50:17

a great question so our retail coffees, this is a wholesale food service bag not a retail bag but our retail coffees and our K Cups are in pretty much every fries store in Arizona has a few of their own and because they’re really small formatted stores. They’ll be able to purchase this deep this coffee singles from cold and fries period for which they do like in between month kind of period thing. fries a great partner we love fries they treated us really well we’ve done a really good job for them. So they’re allowing us you know, we’ll use them as a launchpad we’ll we’ll see this out and a lot of our retail partners our resort partners, you can go on our website, www.ilovecult.com just just like that. Super easy and and see you know some of our different clients in town and different people do different things they have different you know, businesses that they have and and but if you want a coffee you can get or you can get in the bulk of the big bulk bin or you can get it in a bag and get it you can get the K cups with three different re k cups. get to see the the coffee singles the steep technology. And if you want iced tea or keg of botanical, we’re all it’s all over the valley. So you just have to kind of go figure out what flatbread companies a great partner of ours, we do all their brewed beverages. Biscuits Cafe is a great partner of ours. I’m gonna leave a bunch of people out and I’m gonna be in trouble Albert projects, which is Postino’s is a brand most people know, we do call their custom stuff comes from our place, and they’re just a great group of people and a slew Barrio Cafe Barrio Queen SLU. Very proud to say that last spring, we brought on the Arizona Cardinals, as a client and their corporate offices and their training center use all of our products. And they when they were five, and to this year, we’re like a great group of people and their food service side. And they’re they brought 14 people into our building, when they were looking at us strength coaches, that the the health and wellness and food service and what an amazing group. And I think at that level, you have to be an amazing person to work in an organization like that, and clearly did was know what they’re doing. And we, you know, we love, we love what they do. And we love that they love our products. And so that’s leading to some other things, we got a bunch of stuff on the books I can’t really talk about just yet,

52:33

we’ll have to do a follow up like six to 12 months from now and just kind

52:36

of get some of the retail partners that are close to busting loose and that everybody that’s listening to this will know who they are,

52:42

and stuff like that. Awesome. Well, I appreciate it. Like I said, we’re all about rise, grinding and repeating. So we’ll have to get some kegs and put them in here. That’s for sure. Yeah, that’d be great. But I really thank you so much for your time and just sharing your your history.

52:54

I’m excited to see where you guys go. I’m very honored and I appreciate you and your your crew inviting us in and putting up with me for however long it’s probably longer than it’s supposed to be.

53:02

It’s always refreshing time to get to the point it’s it’s Yeah, yeah, the conversations are always great.

53:07

Now just pretend like you mean it. So we’ll leave it at that. Appreciate it.

53:11

You got it.


Where To Find Hans Schatz

LinkedIn: Hans Shatz

Instagram: @ilovecult

Website: ilovecult.com


On the previous episode of RGR, Dustin talked to Dallin Huso of Flamingo Pools and Local Hustlers podcast.

Watch the episode here!

A Taste Of What We've Done