Welcome to the 2X eCommerce podcast. On the podcast, we hardly talk about sustainability and it’s a topic we’ve neglected. It’s something we’re going to be doubling down on for the rest of the season and that’s why we have our guest. Our guest is Maxim Gelmann, the Chief Stroodle at Stroodles Eco-Tableware, and is dedicated to changing the perception of sustainability by making it fun and easy.

With over fourteen years of experience in international consulting strategy and operational and interim management across various industries, Maxim has also mentored and invested in ventures across fashion and CPG. He is the founder of Stroodles and we’re going to talk more about Stroodles. Without further ado, I’d like to welcome, Max, to the show. Welcome, Max.

Thanks for having me. I’m grateful.

I’ve been looking forward to speaking with you. In a sentence, what is Stroodles?

At Stroodles, we’re trying to reshape, as you said earlier, the nature of sustainability with a range of Eco-tableware that’s fun, sustainable, and easy to use to inspire more people that sustainability doesn’t have to be this big doom and gloom type concept. It’s a little bit more than a sentence.

It’s an Eco-tableware. Your flagship product was spaghetti or pasta straws.

Correct. It’s pasta drinking straws. That’s my flagship product and that’s the one that got me all the viral press. That’s the one I was Dragons Den with back then. For the first 2.5 years, that’s the only product I had. The internet coined me as the man who invented pasta straws playing on all the punts.

For some context to our US readers, Dragons Den is equivalent to Shark Tank. We’re going to unpack that in the show. Were you the first to market pasta straws? It was your idea.

Yeah.

Do you have a patent on it?

No. I want to get to that. At the end of the day, it’s pasta. The patents, you can probably assign to the Romans in the 1700s in that sense. The inspiration came from Italians using it for fun for generations if you ask the older generation so that’s why. That’s partly my business strategy straight away there because I knew that from day one or from minus day one, it was all about the brand. I would’ve done it anyway, focus on the brand. That was another reason to go for marketing and brand, that’s a priority over maybe focusing on sales as most companies start.

That’s fair because the products can always be replicated but the brand is unique itself that people should remember and learn to love and like.

We get to speak about it later but it’s everything I’m building is towards a brand rather than a product business.

I would like us to distinguish between the two. Before we jump into Stroodles, let’s learn more about Max. What is your backstory? What’s your background? How do you think that backstory led you to build out Stroodle?

I went to Union Manchester, Hong Kong. I grew up in Germany before that. I jumped into consulting, partly. Most people go into consulting because they don’t know what they want to do. It gives you the diversity. In the States, it’s called liberal arts where you do whatever you like. Consulting is a little bit the counterpart of that in real life. If you look at my CV, it would still say freelance consultant. I have over fourteen years of background so that gave me quite a lot of exposure.

In the beginning, I was with a proper firm where you do the usual stereotype. I’m watching House of Lies, an amazing show on that note. Unfortunately, it’s quite close to reality although exaggerated. You deliver a theory but then it gives you quite a lot of exposure to various industries. A year or two into it, I switched to more interim management consultancy with quite a big gap in terms of age and experience and stuff. There were older guys who were like ex-board of directors, 50-plus at that point, and there were two of us young, 20 or 25.

What I’m trying to say is the exposure was great because we were doing interim management. You restructure companies, you get thrown in the deep, and there is no time for PowerPoint presentations and things like that. It’s just implementation. For 4 or 5 years of that time, I had a strong exposure, and a lot of hands-on, which is quite a unique experience in the consulting world. Fast forward, I then went freelance, much more industry.

I’ve done anything from diapers for the elderly, fashion, and a little bit more sexy industries. It’s how that shaped my experience and it gave me the confidence or it gave me the ability to wear every single hat in my business. Up until today, if I wanted to, I could even do most of the accounting functions, and the question is whether I want to. I have quite enough confidence to have a qualified and educated opinion in all areas from operations to finance. Setting up a business in my case makes it a little bit easier because you don’t need to hire subject matter expertise.

Up until now, and we’re getting to growth, 4.5 years into it, it’s still enough but I’m reaching those stages where you do want to outsource some of the functions, especially the operational side because it’s not worth my time so to say. The consulting bit gave me that experience. Also, I’m quite fortunate to have a fallback. In the first two years, I could safely do my startup and invest money in it. To be honest, psychologically, I’m still on all the mailing lists of all the agencies. To pay back my debts, I can go do some borrowing projects in the middle of nowhere. That’s almost like that fallback.

A lot of people are afraid to do their own business but you can always get a job again. For me, it’s a little bit easier in the freelance world, and you can always get a gig. It’s the combination of the fact that consulting gave me the diversity in my background to start a startup from scratch and save costs so to say because I can do most of them but also, It gives me almost a buffer that I can always fall back on, which allows you to run the startup with less worries.

Good point on diversity in consulting, particularly in industries, and specific functions within the industries, which is giving you that versatility towards running Stroodles as lean as possible, which is what you need. You need that top-line margin to soak it into other bits or other operational expenses you need to run the business. You did mention functions within operations that you are considering dedicating. What comes to mind?

It’s a general COO role. Over 4.5 years into it, it’s still fine. In a typical startup, you put band-aids on things like processes that are not optimized. At the moment, there are days. Chasing logistics, ordering supplies, and things like that are like the basic things but partly, that’s due to non-existent processes in some form or another.

My time now, especially where it’s all about growth, is best spent in meetings, conversations, and events. Unfortunately, probably 40% or 50% of my time is spent on tasks that shouldn’t be with me. It starts with bookkeeping, which already saves up for whatever like 2 or 3 days. It’s almost like you get to that stage where it’s like, “When is it worth starting to pay for a service that you could do yourself?” However, it’s not even about the money but it’s the time, it frees you up, and also the mundanity of the task.

I get excited by a challenge but is it worth my time solving a logistical challenge? It’s tasks like that. It’s recognizing, “How is my time best spent?” With growth, the task list increases so it’s being true and honest and taking some of my plate. The risk is like micromanagement. I’m used to doing it to a specific standard. I don’t have the funds to hire someone at my level to take over some of those tasks to the same level. It’s all those aspects that are in someone’s head when the whole outsourcing journey starts but it’s always a trade-off.

That’s an interesting point there. It reminds me of a quote I read, which was more around the sole function of a startup CEO is “sales”. This was in the SaaS space where in SaaS, you need that growth to fund all other things. Let’s get into Stroodles. Who is your customer?

It’s diverse. Some people say, “Everyone’s my customer.” In my case, that’s unfortunately and fortunately the case. There is the B2B angle so it’s anything in catering space for restaurants, bars, cruise ships, prisons, and hospitals, anyone that does use tableware like spoons, straws, cups, and plates. There’s the usual catering sector like office catering. There’s the direct-to-consumer eCommerce. You need something for your party as a present. There are the retail stores that then sell to those customers in that way. It is fortunate and unfortunate on purpose. Let’s say you sell cell phone cases, it’s a narrow market, and easy to market to.

With us, it’s diverse. Every day, someone finds a new sector almost. Once a week or once a month, something new pops up. We are branching out into further products. We launched kids’ products. Under the logic, let’s say I have the distribution, let’s say I have the ear of a sustainable person within a hotel group so I might as well pitch them other products. To the bigger picture, I’m trying to build a brand and the products underneath are more my brand touchpoint. The idea is to be known as you come to Mr. Stroodles for all your sustainable needs, whether it’s sustainable balloon sticks to sustainable tableware in my case.

Are they all pasta-based?

No. Everyone assumes that but other products have nothing to do with pasta. It’s only the straws that are from pasta. All the other products are like gluten. We have biscuit spoons and chocolate spoons. There are edible cups from wafers. There are edible bowls. It’s all basic gluten. The kid’s products are like flowers that change the color of lemonade. There’s a cake and a mug mix. I’m more and more getting away. There will be hardly any new products added on the food side.

Everything else I will be doing now is more going to be non-food and always under my brand premise of being fun and easy to use to inspire and change the sustainability perception. We offer sustainability immersion and that’s the big difference. You can have a nice piece of paper, which talks about carbon footprint and some shocking images but we’re all sick of it. If we’re honest, it goes above your head.

People in the UK, there’s the Alchemist bar chain. They serve a cocktail in my cup. Let’s say you eat your cup after you drink. You’re going to remember and you’re going to talk about it no matter how much you don’t care about sustainability. Probably, the more drunk you are, the more you’re going to talk about it. It’s that touch point that it creates, which is much more powerful than any literature or digital campaign can ever do because you are experiencing it in yourself. On top of that, there is scientific research. There’s research that by eating things, different synopsis closes. It’s a double whammy. It’s fun and quirky, and you’re eating it. You’re going to remember it more.

You also remember the venue speaking of marketing. For some of your customers, it’s a win-win. There’s that brand memorability and they link it to yourselves. Speaking to your customer base, they also have to make that decision because you are almost industry agnostic in that sense because you’re discovering new industries every now and then. They have to make that conscious decision, “We want to do better for the planet and how do we do it?” How do you get into that conversation? How do you know the conversations? Is every opportunity inbound or are you outbounding too?

Now, there’s a lot of inbound. Now, because we’ve been around, people now come to us. You hear it and you see it somewhere. You Google and you end up with us anyway. With me, that’s where I need to be in more of those conversations, based on consulting, and this out-of-the-box thinking. There’s quite a good book, Blue Ocean Strategy. I didn’t realize at that time how inspired I would be by it years later.

Blue Ocean Strategy is almost like how Cirque du Soleil was founded. They’ve taken a boring industry, I don’t want to offend anyone, and then taken entertainment and almost taken film and things like that, two of both worlds and created a new industry. The beauty with me is you can put me in the room with anyone, whether you own a small fish or a charity, I’ll find a way to work with you. I go beyond the product.

Whether even if it’s just going to be some project on the marketing side, or whether you’re going to use my product, if it’s going to be service, I’ll find a way. That’s the beauty of what I’m doing. In that sense, there’s always an angle, especially after over 4.5 years. Partly on purpose, broadly, we’re putting out our information and that’s why we always get a diversity of people coming to us from waste management companies.

Because the messaging is now done in a way where you interpret what you want to interpret into it, which makes it also difficult. If I had let’s say the same use case as an iPhone case, I have a targeted market, and I could play a shotgun approach. I have to unfortunately do a targeted phishing approach if you want it like that and then hope that whoever needs to see it, sees it.

It makes sense, the Blue Ocean Strategy. You are always thinking quite differently. Another quote I remember was more outlier thinking in order to place yourself in a place where there’s less competition and you get attention and more inbound. Going back to the backstory, you mentioned Dragons Den. From ideation to Dragons Den, do you want to paint us or give us what that journey looked like and how you got to the Dragons Den from how you came up with your prototypes and the traction it made before Dragons Den?

Dragons Den reached out to us. I knew it was too early but then all my friends were like, “Go. It’s definitely worth it and it’s once in a lifetime opportunity.” That’s what we almost did. That’s why they have scouts out there looking for companies. Luckily, we did that before COVID. If I had pushed it almost by a year, the likelihood is it wouldn’t have happened in that sense. In terms of publicity because that’s what you’re asking, you get website spikes and you do get more orders. It’s almost the same.

I had all the amazing press from Union and LADbible and a lot of the bigger names in the media space. It’s the same. Because you’re talking to such a wide audience, at the moment, I try to go to specific trade events where I know I’m going to get a high conversion. It’s a proper phishing piece but, in the early days, that’s what you want because it’s about that awareness. Now, we were fast. We’re talking 2 or 3 years later fast forward. You are living off the fruits of it because that sets the foundation and gets your name out of it.

The big preconception, I remember there was a big realization when the first wave of big press from BBC Good Food having the post or whatever, it doesn’t result in sales. There is no correlation. Most of my friends say that. Because of the audience who reads let’s say Huffington Post or whatever, it’s not normally the audience that needs or wants and needs to buy your product.

That’s why I get a lot of, “I’ve seen you. I’ve heard of you. I’ve recognized you.” It helps when someone has a physical touchpoint with the product somewhere. That’s why I’m saying it builds the foundation but you can only live off the fruit of it at the later stage when you have almost a 2nd or 3rd contact. Even from a COO perspective, my SEO guy says, “You don’t even benefit enough.” I don’t benefit from all my coverage from years ago anymore, that’s all evaporated for Google purposes.

Strong points you made in your model, which is to get that exposure upfront as much as you can. Don’t stop there, don’t say, “We’ve got that exposure. We’re done. We’ve reached El Dorado.” You then start to put your feet on the ground, go to the right conferences, go to the right exhibitions, and speak to the right people.

Because they’ve seen and heard about you before, there’s a track record there. People need to get exposed there. You’re not having to explain what the brand is. You’re having different-level conversations with them, which is interesting. From a gross merchant value standpoint, where are you guys now in terms of revenue and in terms of order processing? You mentioned the fact that most of your sales are B2B. What’s the breakdown of B2B versus D2C?

At the moment, because of the nature of it, the volume comes from B2B. Let’s say a restaurant goes to as many straws as I probably need to spend whatever, X weeks of selling. A box of this is 40 and then the trade box is 900, which they probably can go through in three days. We are available for international audiences but our biggest retailers are all of a bonus in that sense.

In the context of things, that’s still only 80-odd stores. The retail side is the brand-building. Now I almost have the luxury to focus back on it. From a business perspective, B2B is where the money is to pay for all the business growth, business development, and brand building so to speak. It’s almost the same effort to hunt after a deal in B2B with a much bigger outcome later on versus direct-to-consumer or whatever, five-point purchase.

What does your financial stack look like? By that, I mean what financial tools or services do you have in place to shore up your cashflow?

For a lot of product businesses, SaaS people don’t have that problem so much. You buy a product today let’s say, by the time it’s with you, we’re talking already 2 or 3 weeks, and then you need to sell it over a period of X. In the worst case, up to 90-day payment terms. We’re talking about a big cashflow gap. I was fortunate to have found the aspects of invoice and stock finance. It comes at a cost like everything in life but it gives you cashflow. For those who don’t know, let’s say I write an invoice for £1,000, they pay X percent of the invoice today and then whenever the customer pays, I’ll get the difference.

For stock finance, let’s say I’ve ordered our product for hypothetically £10,000. They pay the invoice on my behalf, the same with a loan over a period of 1 to 4 months, you then pay interest on that. In layman’s terms, it’s almost a loan but specifically tied to a specific invoice. For a startup, that’s a big relief and saving because if I don’t have any stock, I have nothing to sell. It’s almost like a chicken and egg type of thing. Being able to benefit from those tools has been a big game changer.

It’s important to understand good versus bad debt. To me, this sounds similar to good debt in the sense that you have an invoice that’s going to be paid in 90 days and an organization is paying it for you. Because they’re paying it for you, it’s guaranteed. You’re buying time at a cost. You’re trading time and then you’re freeing up capital. Which of the services have you used and do you have any other financial services in your stack besides stock financing or invoice?

I’m sure there are many other things that can be done. Probably those are the two big categories that also, as a startup, you have access to. At the end of the, during COVID, there were all those loans but there was a special situation where you wouldn’t get ahold of those loans. Anyone can do a business loan, that’s probably the only other financial instrument/element.

In terms of proper tools that solve a problem, stock finance and invoice finance are quite out there. Probably the big perception and takeaway is I thought for quite a long time that it’s not accessible to small companies and this is only something you get when you are some old-school twenty-year-old business. The realization that it is possible and accessible for startups as well was a big thing. I go about shouting to my founder friends that instruments like that exist.

I have heard of invoice and stock finance but as I said, there was almost a preconception that it’s not going to be doable for me. The same with the big preconception, I will never do it again with a new business. I had my own stock storage unit and a lot of problems, time, and everything. I had a preconception that outsourcing your logistics is expensive. As soon as I outsourced it, I realized I was saving money on top of time and everything even if it’s the same cost. It’s one of those things that you have preconceptions about like you’ll never do those things again because you learn.

What do you use for invoice financing?

For invoice finance, it’s BB Finance. For stock finance, Treyd.

It’s the first time I’ve heard about BB Financing. We’re customers of Treyd, which is interesting. What is the key difference between invoice financing and stock financing?

For invoice finance, it’s ongoing. Not everyone has access to stock finance because they only finance like, finished products. I can’t finance my boxes, I tried, believe me. I wish I could. I can finance the full assembled box of this to then resell. It’s just stock bought somewhere, brought into your warehouse, and sell. Invoice finance is like me writing an invoice to someone. That’s more than the ongoing. At least in my industry, people push you onto those big payment terms because hardly anyone pays pro forma.

Top line question, a top-level question. What do you think has been the single most important lever point for growing Stroodles over these past few years?

There are two, persistence. Never give up and just continue. Until it’s a written no, it’s not a no. The other thing is probably partnerships. Most of my business and relationships are not sales in that sense, it’s strategic partnerships. You can go far alone but you can go further together.

You can go fast on your own.

The big success of my journey was because I partnered with someone with a win-win situation for someone. At the end of the day, it’s all about having fun. Especially in hospitality, it’s a big people’s business. You can have as much of a good deal on the table and you can have the better price but at the end of the day, it’s a people’s business. It’s probably those strategic partnerships, even with so-called competitors, that are probably more powerful. It’s persistence and resilience, especially through things like COVID and things like that, and partnerships.

Where are your favorite places for forging strategic partnerships?

I’m a big believer in serendipity so it’s random events. I stopped going to industry events, especially around sustainability. I’ve decided there’s no point. I normally try to go to random events as much as possible. In my case, there’s always a win-win because everyone always has a friend or knows someone. It’s those areas where you don’t talk about business. Let’s say if I’m the only one at a lawyer-only event, I get much more out of it because I’m the only different person in that room and they are sick of talking shop all the time.

The big thing now, over four years into, I’m fortunate enough to go to invite-only events. That’s part of the journey, you need to go and kiss all the frogs in the beginning and hustle and go to all the events. The big thing is I try to avoid very industry-focused events. It’s as random as possible because then there is more room for serendipity, weird, and out-of-the-box type things to happen.

This leads to your Blue Ocean strategy value. It reminds me of a few months ago when my partner and I were invited to a wine marketing event In Knightsbridge. What attracted me was Knightsbridge, “I like to go to an event in Knightsbridge.” I had interesting conversations with wine connoisseurs, and people running nice wine stores, and nice wine websites. Also, what was quite interesting was that the person who sat two seats away from me was running a coffee machine business. Along with his wine business, they sell to businesses coffee machines. We have a coffee brand called Lean Caffeine.

That sparked conversations with him to see, when he’s having conversations with businesses, how we could forge a partnership where they recommend our coffee to them, which speaks to you. That was completely random. We didn’t know where that was going to take us. It’s super interesting. What about America? There’s something I wanted to talk about. When you were first to market Blue Ocean with the pasta straws, did you see that takeoff also in the United States? You said you focused on the UK and EU.  What’s happening in the United States in your space? Do you know any brands who have taken the opportunity?

In the early days, pre-Brexit, I used to sell to the US via Etsy and places like that. I would love to be doing more there, especially because there is a much higher brand loyalty angle in the US. I have people buying for $200 to put stuff in their car, office, and house. I have too much respect for the market. I don’t want to do it from here. With such a vast country with such diversity, I don’t want to build it from the ground up like I’ve done in the UK.

Once entering the US, it needs to be with a big retail client or B2B client. UNILAD press or UNILAD Bible, that’s all North American press. I had a lot of angry emails, it’s almost like, “Why are you not selling here?” We’re constantly having conversations but the strategy just needs to be thought out. It’s quite a big distraction in the sense that it requires a lot of time and there’s still enough to do here. If someone comes along with a big bank, that definitely will be there. I don’t want to do the same ground-up building as from here. I don’t have the energy or bandwidth for that.

Before I let you go, a final question on your top tips for sales given the fact that you are very B2B skewed. Many readers might be D2C exclusively and have been thinking about B2B. What piece of advice would you give to get them started and going?

It’s a lot about the value add. When you’re direct-to-consumer, the value add is more around the functional use of the product, let’s call it that. In a B2B scenario, everyone’s always looking for that extra value. Nowadays, let’s say in a contract, let’s say school caterers, it’s not just about anymore providing school meals, it’s about what you are doing in education. If people want to move to B2B, it’s about thinking what extra value add can be provided to the purchasing company.

Also, at the end of the day, that person in B2B, everyone’s keen for their promotions, and everyone has their egos. At the end of the day, you don’t have that problem in direct-to-consumer whereas suddenly there you need to take all those things into account. The pitch is a little bit different because the variables and the benefits and value adds for the business, for the individual you’re dealing with are different considerations. Obviously, the outcome is much greater and can be much more life-changing than direct-to-consumer sale.

You couldn’t have said it any better. Max, for those who want to follow you and want to know more about Stroodles, Stroodles.co.uk. Are you active on any social media platforms?

Yes, Instagram especially, @Stroodles, and LinkedIn. It’s B2B content again, back to that point. We’re doing the usual, Facebook is a copy of Instagram and then the new Twitter X, we start neglecting.

I’ll connect with you on LinkedIn. It’s been an absolute pleasure having you on the 2X eCommerce podcast. Thank you for sharing Stroodles’ success. I wish you very much more moving ahead.

Thanks for having me. It’s a pleasure. Cheers.

Cheers.