Unemployed Polish Guy Launches Apple-Based Vodka Line

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Who wouldn't want their own vodka business? Or at least their own vodka side hustle? Well, today's story features a guy from Poland living in California who takes an involuntary sabbatical from work. That's what he calls it. In other words, he got laid off.

And he uses the time to go on a vodka quest back in his homeland. Upon returning to the US, he gets to work setting up this vodka brand. Welcome to Side Hustle School. My name is Chris Guillebeau. And in today's episode, you'll also learn a powerful strategy for experimenting based on a specific amount of money.

This can be a great way to reduce your risk in any fear or worries you have when undertaking a new venture. In other words, if you have a certain amount of money, $100, $1,000, $5, whatever it is, you can say this is the amount I'm willing to spend on my side hustle. And if it works, great. If not, this is the maximum amount I'm willing to lose. So after the story, I'll tell you a bit more about when this is a good idea and when it isn't.

Let's give a little shout out to today's sponsor and then on with that vodka story. Bottoms up. [Music]

For Daryusz Pachowski, it was an involuntary sabbatical that prompted him to start his side hustle. After four and a half years as the head of marketing for a California startup, Daryusz found himself leaving work due to a restructure in the company. This was the first time he'd been without a job for many years and he had a lot of time on his hands.

At first, he took advantage of that time to enjoy himself and work on projects that had fallen by the wayside due to his job. He spent time with his family, he went on skiing trips and he trained for a half Ironman. But as he began to reach the end of his to-do list, Daryusz had to answer an important question. What am I gonna do next? Although he was actively searching for jobs, he faced an indefinite amount of time without work and wanted to make the most of it.

This was when he decided to act upon a dream he'd been sitting on for many years. The dream was to start his own vodka business. Daryusz had long fantasized about finding an old school vodka maker in a rural town of his native Poland, bringing that vodka to the masses as a premium drink. So he began what he called his Polish vodka quest to see if he could find that person. He took a trip to Warsaw where his mother still lives and the two explored the vodkas of the region on tastings and tours.

They tried lots of different vodkas from many distilleries and talked with many crusty old makers. But the more vodka he drank, the more sober he became about the problems with his business idea. You see, the logistics of creating, distributing and selling the vodka this far from home would be tough, especially once he found full-time employment again. He came back to California from Poland and put the vodka dream on hold, especially once he did find a job in a new marketing position for Yahoo. His side hustle would have to be workable on evenings and weekends.

So if it was ever gonna happen, he'd need to find a way to make production more local. With these constraints in mind, he began exploring options closer to home in Northern California. One of the first major decisions he made was to switch from potato vodka to apple vodka. Darjosz felt this created a more premium flavor for the vodka and the apples were much fresher and easier to source. Now all he needed was a place to distill it.

This is one of the most significant problems spirit creators face. Oh, by spirits, I mean liquor, not like poltergeist. That's a whole other set of problems. Many people start off on the wrong foot because they invest anywhere between hundreds of thousands of dollars all the way through to the tens of millions of dollars creating their own distilleries. This means they're playing catch up on huge investments in loans before their first bottle is ever on the shelf.

Darjosz wanted to make sure he didn't succumb to the same fate. Much to his delight, he found the micro distilling industry in California was booming and there were 15 vodka creators throughout the state. It was in these micro distilleries that Darjosz saw his opportunity. Many of them suffered from what he called excess capacity. He rented space and services from them to create the vodka while avoiding a massive investment in a distillery of his own.

With that plan in place, it was time for Darjosz to finally put a name to his idea. He knew the power of branding and having a clear message and he wanted to get it right. The idea came while he was on another ski trip. One of his friends began giving everyone nicknames based on how they skied and Darjosz was branded the Polish rocket because he loved to go hard and fast down the slopes. He liked the word rocket and he felt it was clean, sharp and would be easy to put on a bottle.

He also thought about the deeper meaning of the word. What do you think of when you hear the word rocket? He thought of height, aspirations, going beyond and achieving great things. He wanted his brand to be premium and to attract high achievers. So he decided to call his product Rocket Vodka.

Now Darjosz didn't have millions of dollars or even hundreds of thousands of dollars, but still starting your own vodka brand does cost money. The reason for his scrappy mentality is that he had $10,000 he decided he was willing to lose on this side hustle. This was the limit he was allowed to reach before he assessed how the business was performing. If he hit this limit and was seeing growth, he'd continue. And if not, he'd call it a day.

Getting the distillery in place ate up the largest chunk of that $10,000. He put it in order for the smallest possible quantity to test his idea. This wasn't that small. It was a whole pallet or 1,248 bottles which got put into production immediately. He figured that if it worked, he was onto a great business idea.

If not, everyone he knew would get free vodka for Christmas. Now before he could finally sell Rocket Vodka to consumers, he had to cut through some legal red tape. Selling alcohol in America isn't straightforward. There are lots of leftover prohibition rules from long ago to contend with. And to get around these problems, he had to create three entities for the business, the maker, the distributor, and the seller.

All of his product had to go to a third-party warehouse after being made and then pass into the hands of the seller portion before they could go to the consumer. It was a complicated and time-consuming process, but necessary for Rocket Vodka to legally sell. Speaking of sales, how would he sell it? Well, the main sales channel has been in-person at events or in bars and restaurants. This is because people are reluctant to buy a new drink online without ever having tasted it, and even less likely when it has premium pricing.

Darjush was pricing his Rocket Vodka at $49.99 a bottle. So the first order of business was to get enough momentum off lines that people would be convinced to buy it elsewhere. It took him 21 months to get the product on the shelves of 80 different establishments, but momentum began to set in, and it only took him four months to add the next 80. Thanks to this method, Rocket Vodka can now be found on the shelves of 170 different locations, which he calls launch pads, and he's seen sales of over 10,000 bottles. In the end, he didn't have to give away that initial inventory to his 1,200 closest friends.

Darjush has also drawn on his experience in marketing to help grow an impressive online presence for the product with a following of over 42,000 fans. So what's next? Well, Darjush is following the motto, "If we keep growing, we'll keep going." This means as long as he sees continued growth in the business, he'll keep running it. He has no plans to leave his day job, and he's happy for Rocket Vodka to be a side hustle. When he wants to celebrate after hours, his favorite drink is close at hand.

All right, let's talk about this strategy of spending up to a certain amount of money. So in this story, Darjush set himself a maximum budget of $10,000. He said, "I've been dreaming of this vodka brand for years, but I don't want it to get out of hand. I can see that other people spend hundreds of thousands of dollars, often going into debt to start something like this. I know it's gonna take some money, but I definitely wanna bootstrap it.

So he chose this amount, $10,000, as an amount that he was comfortable losing in the worst case scenario. Not that he wanted to lose $10,000, but it wouldn't have been the end of the world if he did. So the reason why this can be a good strategy sometimes is because it lowers your risk, and perhaps it also gives you a bit more courage. If you've got a project in mind, you pick this amount of money, whatever it is, something that is usually substantial, but not enormous, then you might feel more comfortable moving forward. And it's also gonna help you bootstrap because you're like, "I've got this limited budget.

Like once I hit it, I've got to either stop doing the business or the business has to be working." So in cases like this, where it could be really easy to start investing a lot of money and the business is not taking off, but you're like, "Oh, I'm just gonna put in another $10,000 or another $5,000 or whatever it is." You can get into a situation of chasing good money after bad or thinking too much about your sunk costs. Like if at the $10,000 point, the vodka business was not working, it doesn't really matter that he's already spent $10,000. Like that $10,000 is gone. So this is the fallacy of sunk costs. Doesn't matter what you've already spent.

What matters is like what's happening now. If you spend $5,000 more, is that gonna make a difference? Maybe, but you could, again, just be throwing good money after bad. So it can give you that sense of security. Now here's when it doesn't work as well, I think.

I often hear a question about a certain amount of money and somebody says, "If you had $500 to spend on a business, what would you spend it on?" Or if you had $10,000, it doesn't really matter what the number is. Or they might ask like, "How much does it cost to start a business?" Like, "How much does it cost to start an online business?" It's a really difficult question. It's no straightforward way to answer it because it's like asking, "How much does it cost to live?" Like, "How much does it cost to live your life?" Living somewhere, wherever it is, can cost a lot of money or it can cost next to nothing depending on how you live. So if you don't have an idea for a specific project in mind, it's not usually that good to say, "Okay, I'm gonna take $2,000 "and I'm gonna spend $2,000 wherever I can "on starting online businesses." There's no connection there between the $2,000 and your idea. So it's much more important, I think, to come up with your idea and spend time considering different ideas, figuring out what it is you really want to do.

And then if you get in that situation where you think, "Wow, like this could get out of control. "I really want to invest in it, "but I wanna make sure I don't lose my life savings "or spend years pursuing something that doesn't work." Maybe that's when you set those limits or constraints for yourself. So I hope that is helpful advice for somebody out there, whether you are starting a vodka brand or something entirely different. We have so much more coming up in future episodes, but as I sign off for today, I'll just remind you that inspiration is good, but inspiration with action is so much better. Congrats to Darjush and his Rocket Vodka brand.

Take a look at that if you're into cocktail or spirits culture. And today's show notes, if you'd like to learn more about that or anything else, are at www.cytussleschool.com/529. That is for episode 529. I will be back tomorrow. Thanks so much for listening.

My name is Chris Guillebeau for Cydustle School.