Latest / Beyond Fulfillment Podcast / The Power of Persistence: How Sesh Disrupted the Nicotine Market with Max Cunningham

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The Power of Persistence: How Sesh Disrupted the Nicotine Market with Max Cunningham · Beyond Fulfillment Podcast

• 0:04
  The thing I always tell to entrepreneurs that are starting or founders is like, just be prepared for the most rejection you've ever had in your life.
• 0:13
  What does it actually take to build a company from nothing with maxed out credit cards, a stack of rejections, and everything on the line?
• 0:22
  In today's episode, we sit down with Max Cunningham, the founder and CEO of Sesh, a modern nicotine brand that went from a scrappy startup to national retail distribution in some of the country's biggest chains.
• 0:37
  Max pulls back the curtain on the raw, unfiltered reality of entrepreneurship.
• 0:43
  The moments he almost lost it all, the single road trip that changed everything, and the mindset that kept him moving forward when most people would have quit.
• 0:52
  If you're a founder, an aspiring entrepreneur, or anyone who's ever had to bet on themselves when the odds weren't in your favor, episode is for you.
• 1:02
  As always, if you found value from this content, please like and subscribe.
• 1:09
  All right, Max Cunningham, welcome to Beyond Fulfillment.
• 1:12
  Thank you so much for having me, Dave.
• 1:14
  Excited to be here?
• 1:15
  Yes, sir, we are excited to have you.
• 1:18
  So, Max, you are the founder and the CEO of Sesh, which is a nicotine pouch that's had some meteoric growth, to say the least, over the past several years.
• 1:31
  And we're just talking off camera and, you know, I mentioned how it seems like it's been a pretty quick, quick rise.
• 1:38
  And you mentioned, well, it's been seven years of a continuous grind.
• 1:41
  So it doesn't seem that quick to you.
• 1:44
  But if you could just for all our listeners to set the stage, can you tell us what is Sesh and how you got started creating this company?
• 1:53
  For sure, yeah.
• 1:54
  So we think about Sesh as more of a platform than necessarily a product like a nicotine pouch.
• 2:00
  You know, really, we're a modern nicotine company and we sell different types of nicotine products.
• 2:06
  None of them contain tobacco.
• 2:08
  So we actually sell a nicotine chewing gum across Canada and we sell a nicotine pouch product in the US and the pouch product, it's really, you know, there's 10 ingredients, it's nicotine and food grade ingredients, and it's in
• 2:19
  a permeable fleece, a little pouch, and you put it between your gum and your cheek and it slowly releases nicotine over about 30 minutes.
• 2:27
  And, you know, the genesis for the company was, you know, a bit of my background.
• 2:34
  You know, I played a lot of sports growing up and part of the locker room culture was chewing tobacco or snus.
• 2:40
  And so I was using snus at, you know, on My college hockey team.
• 2:44
  And then from that I switched to vaping, and there was really nowhere for me to go after that.
• 2:50
  I went to my local pharmacy.
• 2:52
  I tried Nicorette, which was the chewing gum.
• 2:55
  I tried a bunch of different options, and none of them really worked for me.
• 2:59
  You know, I didn't like the taste and, you know, came in this big bulk format and you really felt like a patient.
• 3:06
  And so I thought that, you know, there hasn't been any innovation in this category in two decades, but the way people are coming into this category is completely different than it was for our parents.
• 3:17
  And so that was really the genesis for the idea.
• 3:20
  And what started me on, on, you know, this journey, which has been.
• 3:23
  Yeah, probably about seven years now.
• 3:26
  Okay.
• 3:26
  All right.
• 3:27
  So you're.
• 3:29
  You're an athlete, you get kind of caught up in snoozing.
• 3:32
  I think we called it dipping where I grew up.
• 3:34
  Right.
• 3:35
  With the chewing, you switch to vaping, you're having a hard time quitting.
• 3:41
  And so you get the idea for creating this company after your experience with the nicotine.
• 3:50
  What was it like when you had that initial idea to actually creating a tangible product in an industry that's so heavily regulated and so competitive?
• 4:03
  Yeah, so I had a little bit of an advantage because I worked for a marketing agency, and one of the products, the portfolio, was a vape device from a big tobacco company.
• 4:15
  So our job was to help launch this next generation product category across Canada.
• 4:20
  And so doing that, I started to understand the ropes of, okay, what can we do?
• 4:25
  What can't we do?
• 4:26
  Talking to consumers every day, understanding what they wanted.
• 4:29
  So I had a bit of an advantage there.
• 4:31
  I also had a background in sales, so I was a sales rep for a long time.
• 4:35
  I'd started a couple of businesses.
• 4:38
  I owned a couple bars in Vancouver, where I grew up.
• 4:42
  So all of that being said, I kind of already knew enough about the category, and I knew that I could do it.
• 4:50
  And I had really strong conviction that this was the future of the category.
• 4:54
  I could just see it.
• 4:55
  It was crystal clear to me.
• 4:58
  And so I basically quit my job.
• 5:00
  I flew to Sweden, met with a bunch of different manufacturers.
• 5:04
  We ended up getting a prototype, and we had just enough money to buy our first purchase order.
• 5:11
  And I sold it in myself.
• 5:13
  I had a sell sheet.
• 5:14
  I went into some independent tobacco stores, and I sold it in myself.
• 5:18
  And we sold out in the first three weeks of launching the product, which gave me enough of a signal to keep going.
• 5:26
  That being said, I didn't know very much about the Regulatory framework, it's different country to country.
• 5:32
  And so needless to say, after about a month in market, we got a letter from health Canada saying you need to get these products off the market now, and you need to go through the regulatory framework.
• 5:42
  And so that was kind of the first real challenge we had.
• 5:46
  Okay.
• 5:47
  Wow.
• 5:47
  So love that.
• 5:48
  You know, classic entrepreneur just jumps into action.
• 5:52
  You mentioned your sales background, so you had the confidence that you could actually sell something, and you had conviction around this idea.
• 6:02
  You know, let me just ask you.
• 6:04
  So when you, like, you're saying you had just enough money to kind of get that first prototype and get it out there, right, and you quit your job to go do this at that time, like friends, family, people
• 6:15
  that know you, like, when you're telling them you're.
• 6:18
  You're doing this, are people telling you, like, you're crazy?
• 6:23
  Yes.
• 6:24
  And, and no.
• 6:26
  Like, the people that mattered told me to go and do it.
• 6:31
  But there was a lot of people that just kind of played it like, oh, okay, he's trying to go start his little thing.
• 6:36
  Like, you know, they didn't think that it was gonna get very, very big or what it would become.
• 6:42
  And frankly, I didn't really either.
• 6:44
  But I just, I just had a really strong conviction that this was the right direction to go into.
• 6:52
  And so, yeah, I mean, people, Lots of people thought I was crazy.
• 6:55
  The amount of rejection you get is just unbelievable.
• 6:58
  Like, that's the thing I always tell to entrepreneurs that are starting or founders is like, just be prepared for the most re rejection you've ever had in your life.
• 7:08
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• 7:55
  And I'm very fortunate that I was able to do that and that know they could, they could send me the money.
• 8:00
  But you know, it's just things like that that you really have to get rid of your ego and, and just like try to survive and, and slowly get signals to keep going.
• 8:13
  Like, that's the thing we always had just enough to just keep going.
• 8:17
  Like we were getting enough positive signals from the consumer, from the market, from the buyers that, that we, it gave us enough energy to go to the next step.
• 8:26
  And we just kept going and kind of kept our head, head down for a long time.
• 8:29
  And then eventually, you know, it became a pretty big, pretty big thing.
• 8:34
  Okay, wow.
• 8:35
  So you're able to just keep going.
• 8:37
  You have that grit, that determination.
• 8:39
  And like you said, credit cards maxed, having to borrow money just for a small payroll, all these things.
• 8:46
  Right.
• 8:46
  All this adversity.
• 8:47
  But like you said, just enough signal to keep going.
• 8:50
  Then what was the inflection point that really like kickstarted this massive growth that you' had?
• 8:57
  Yeah, so the inflection point was really, we were having a really hard time.
• 9:02
  One raising around, we were trying to raise, I think it was 500 grand at the time.
• 9:08
  And we were having a really hard time filling it.
• 9:11
  And the second was we were having a really hard time breaking into the US market.
• 9:15
  We just couldn't kind of figure it out.
• 9:16
  It's much more fragmented than Canada.
• 9:19
  You know, you have all these different chains and different states.
• 9:23
  And so what I did is I basically said, hey, you know, I'm just going to get on the ground.
• 9:28
  And so my, I drove my car with my wife and my dog from Vancouver to Austin, Texas.
• 9:36
  We had gotten a couple very kind of, you know, medium tepid responses from potential investors.
• 9:44
  And so I just said, I'm going to be in Austin.
• 9:46
  A lot of them were in Austin, if you guys are willing to meet for coffee.
• 9:50
  And so that's what we did.
• 9:51
  And I ended up meeting with the investors, we ended up closing that round with those investors that I met with.
• 9:57
  So we managed to close them by being on the ground.
• 9:59
  And we also got our first major retailer, which was BUC EE's.
• 10:03
  It just was total serendipity where we were there.
• 10:06
  The buyer reached out to one of our cold emails and said, hey, if you're in town, come by the store tomorrow and I'll let you pitch me.
• 10:14
  And that was our first major chain that we got in the year us.
• 10:16
  And we closed our round and it was over subscribed.
• 10:19
  And then that was the big inflection point and kind of led to us meeting a bigger VC who led our Series A.
• 10:26
  And the Buc EE's deal led to us getting AMPM and Circle K and quick trip and sheets.
• 10:32
  So just those kind of two things really, really changed the course of the company.
• 10:37
  Okay, wow.
• 10:39
  Big shout out to Buc EE's.
• 10:40
  I mean, who doesn't love Buc EE's?
• 10:43
  Love Bucky's.
• 10:44
  Great partner, great people.
• 10:46
  Wow.
• 10:46
  Okay.
• 10:47
  All right.
• 10:48
  So like you said, like you were.
• 10:51
  Sounds like you were in dire straits at that moment.
• 10:53
  So you said, you know what, I just have to be there and just talk about that.
• 10:58
  If you could, like, the power of that face to face interaction when you're pitching an idea, you're trying to get people to believe in you, to invest in you, to partner with you.
• 11:07
  I mean, how important is that for other entrepreneurs listening to actually be there and meet face to face?
• 11:14
  Incredibly important.
• 11:14
  Like, I think people will really underestimate the power of actually being in the place where stuff is happening.
• 11:20
  Like, anytime we talk to investors and you know, we said, oh yeah, we're in Vancouver, we would.
• 11:25
  They would kind of brush us off.
• 11:26
  But as soon as we said, hey, we're in Austin, you know, we're in the area, do you want to meet for coffee?
• 11:30
  Like, it just made us seem so much more credible and real and.
• 11:34
  And I didn't even realize at the time the power of it.
• 11:37
  But now just looking back, how that was such a.
• 11:40
  A big moment for the company and just taking the chance, like, if you.
• 11:44
  If you even think that it could be helpful, what.
• 11:47
  Why not?
• 11:47
  Like, what are you gonna lose?
• 11:49
  And especially in today's environment, you can work from anywhere.
• 11:53
  You know, you just have your laptop.
• 11:54
  So like, why not go to where the action is?
• 11:56
  Or if you.
• 11:57
  If you even have a gut feeling about some place, just go there and try it out.
• 12:03
  Love that.
• 12:04
  Love that.
• 12:04
  Okay, so you, like you said, you make this decision to go to Austin, you close that round, you're oversubscribed, you close the Buc EE's deal.
• 12:13
  And for some, for someone that started this, just really on a hunch of conviction and a belief, right?
• 12:19
  With.
• 12:20
  With just belief in himself and very little resources and just pure grit.
• 12:24
  And then you close this round, you close a partner like Buc EE's, which massive.
• 12:29
  Like, what was the process then, scaling up the company for given where you started from?
• 12:37
  Yeah, I mean, it was.
• 12:39
  It's really challenging for a founder.
• 12:42
  Like, the biggest challenge I found is, you know, there's a different Skill set from 0 to 1.
• 12:48
  And that's like a big part of it is just like the grit, battling through it, getting people to believe in you, having enough conviction and kind of slowly getting through it to then, okay, now you actually are starting
• 13:02
  to build a company and that requires a much different skill set.
• 13:05
  From a founder, CEO, where now you're managing people and it's actually like not.
• 13:11
  You shouldn't be in the weeds as much when you first start.
• 13:14
  When I first started the company, I was doing everything, you know, I was doing our finances, I was doing marketing, sales, everything.
• 13:20
  And I loved it.
• 13:20
  I loved doing that part of it.
• 13:22
  And then as the company scales and as you start hiring, you know, leaders in each different department, really your mindset has to change quite a bit.
• 13:32
  And that's a really hard thing to do.
• 13:34
  And something, you know, I still struggle with today and still working on every day.
• 13:39
  Okay, all right.
• 13:40
  So like you said, you have to kind of delegate a lot more.
• 13:43
  You have to work on higher level tasks, you have to empower your leaders, you know, to, to do the jobs that you used to do because you're, you're working on other stuff.
• 13:53
  And so how, how, like you said, that's still a challenge.
• 13:56
  How have you been able to kind of evolve into this new.
• 14:01
  I guess I, I'd call it like a CEO versus like a scrappy founder.
• 14:05
  Like how.
• 14:05
  How's that evolution process for you, Ben?
• 14:07
  Yeah, I think one thing that I've always been pretty good at is knowing what I don't know and being okay with it.
• 14:14
  Like asking for help if you don't know something.
• 14:16
  And I think a lot of people struggle with reaching out to people if it's an ego thing, if they just feel like they're bugging the other person.
• 14:23
  And I've been fortunate that, you know, we've had lots of good people in our network and advisors, and I'll just reach out to them if I have a question, I'll meet them for coffee and I'll get their advice.
• 14:35
  So I think things like that are really important regardless of what size you're at.
• 14:40
  Like, there's always a way to get better.
• 14:41
  There's always somebody who's done it before.
• 14:44
  And so find those people that have done it before and then just ask them how they did it and then you can take that and you can kind of make it your own.
• 14:52
  Or you get a bunch of different people giving you this advice and then that starts to give you kind of a framework and then you figure out what you like and, and there's lots of different ways to build
• 15:02
  a company.
• 15:02
  There's lots of different ways, and lots of them are good ways.
• 15:06
  So it's just kind of up to you to figure out what works for you and what works for your company and the category you're in.
• 15:14
  Okay, all right.
• 15:15
  And so to this date, you've raised a total of I believe it's 40 million.
• 15:20
  Yeah.
• 15:20
  Is that right?
• 15:21
  Yeah.
• 15:21
  Okay.
• 15:22
  All right.
• 15:22
  And given.
• 15:23
  Right, you've had some, some fantastic growth at several hundred percent year over year for numerous years in a row.
• 15:32
  Given how you've scaled up, like, where's the company headed next?
• 15:36
  Yeah.
• 15:37
  So for us, we really feel like we're just getting started.
• 15:40
  You know, a big thing last year was our supply chain.
• 15:44
  And, you know, I'm not a supply chain person, and you have to kind of figure out all these different parts of the business.
• 15:51
  But we built our supply chain in the US So we have a facility in Ohio.
• 15:56
  And the reason we did that is because we were constantly running out of inventory.
• 16:01
  Buc EE's was buying basically everything we could make.
• 16:04
  And so we actually had to shut down our e comm site at one point.
• 16:07
  And we said, okay, we need to really control our own destiny.
• 16:11
  We need to control our own supply chain.
• 16:12
  And so we went out and we bought all our own equipment.
• 16:15
  We set up shop in Ohio.
• 16:17
  And so that took us a big part of last year year.
• 16:21
  And now that's unlocked a ton of opportunity with a really strong, secure supply chain.
• 16:26
  And now we've been expanding distribution.
• 16:28
  So, you know, I think I mentioned this maybe on the pre call, but, you know, we, we just launched an ampm Quick trip sheets.
• 16:37
  We're now going into, you know, a bunch of other chains across the US and so we're really focused on growing distribution.
• 16:44
  We're focused on building the brand, on executing.
• 16:47
  And so that's really the next stage of the company is, you know, is national, national growth.
• 16:52
  And, you know, this market you're in with the, you know, for the nicotine, how big is that market?
• 17:00
  Yeah, so if you think about it, because there's 60 million nicotine consumers in the U.S.
• 17:07
  60 million people today that are using nicotine.
• 17:09
  The majority of them are cigarette smokers, and there's only 5% that are using nicotine pouches.
• 17:17
  So it's still a very small market relative to cigarettes and vaping, but it's growing incredibly fast because smokers and vapers are switching and they're coming into this category.
• 17:30
  So it's still very early days, I would say.
• 17:34
  We feel really strongly that nicotine pouches will be the dominant consumption form for nicotine over the next kind of five to 10 years.
• 17:42
  We're going to continue to see growth.
• 17:44
  And so, yeah, it's, it's, it's still very early.
• 17:47
  I think the market today is around 4 or 5 billion and growing.
• 17:53
  One of the fastest growing consumer categories that's out there.
• 17:56
  So.
• 17:57
  So, yeah, really, really interesting to kind of watch it closely.
• 18:02
  Okay.
• 18:02
  And when you think back of how you, you know, when you started this company, right, and you just had this really, this crazy idea, you went out on a limb, you took action, you gritted through all the early
• 18:13
  adversity, the mistakes.
• 18:14
  What you didn't know, you know, you had that serendipity with BUC EE's and closing the investors in person.
• 18:22
  And now to where you're at now and poised, you know, and like you said, building your own manufacturing facility and really increasing your ability to scale.
• 18:32
  When you look at this whole journey, what's been the best part of it for you?
• 18:38
  Usually people ask me what the worst part is.
• 18:43
  I mean, there's so many, so many best parts about it.
• 18:46
  I think it's just incredible.
• 18:49
  I've always found it very fulfilling to see something created from nothing, created from an idea and then to see it on the shelf.
• 18:59
  Like, to me, that was always the dream.
• 19:00
  I didn't have a dream to be.
• 19:01
  Build this big company.
• 19:02
  Like, I had a dream.
• 19:03
  I was like, oh, imagine if one day our product is on the shelf at one of these retailers.
• 19:08
  Like, that's when we know we've made it.
• 19:10
  And that day came and then it was like, oh, okay, what's the next.
• 19:14
  What's the next thing?
• 19:15
  So it's just a really.
• 19:18
  I'm very grateful that I get to do this, that I get to build something like this.
• 19:24
  And I think you just meet incredible people along the way.
• 19:28
  You know, you need a lot of, you know, you can call it luck, you can call it serendipity.
• 19:35
  You know, there's a lot of hard work involved, but just to kind of see it all come together and to take a step back, you know, is really, is really great and, you know, an experience that, you know,
• 19:47
  hopefully a lot of people, a lot of people are fortunate enough to get.
• 19:52
  Okay, another question too, because you mentioned when you made that trip to Austin, it was just you, your wife and your dog in the car.
• 19:59
  So, I mean, just.
• 20:00
  Just talk about the support, like from your wife.
• 20:02
  Like, it, like you said, you know, credit cards, Max, looking like it might not make it, borrowing money for payroll.
• 20:09
  I mean, how, how important has her support been throughout this entire journey?
• 20:13
  Oh, man.
• 20:14
  I mean, it just makes it so much easier.
• 20:17
  I mean, she was our third employee at one point, so she worked at the company.
• 20:21
  She was, she was in marketing.
• 20:23
  She.
• 20:23
  We just had Our first, first child about eight months ago.
• 20:28
  So she now she's focused on that.
• 20:31
  But yeah, I mean, it makes all the difference, I think, to have a supportive partner because you really have to go all in.
• 20:39
  And that's the sacrifice.
• 20:41
  There are lots of sacrifices.
• 20:43
  You know, it's not a nine to five thing.
• 20:45
  It's everything, you know, felt really like life or death to me.
• 20:51
  And to have somebody that you can confide in, that talks to you, that, you know, can cheer you up on days that are really difficult.
• 21:01
  And, you know, the truth is with a business, with any startup, it's not like a straight line up.
• 21:07
  It's.
• 21:07
  There are constant.
• 21:09
  I joke about it with my team because, you know, we come in on Monday and everybody's excited and we know exactly what we're doing and we're super excited, clear.
• 21:16
  And by Friday, you know, we're like, what the heck are we doing?
• 21:19
  We don't even belong here.
• 21:20
  And that still happens today.
• 21:22
  So it's like it never really leaves.
• 21:24
  And so you need that stability.
• 21:26
  You need the people that believe in you to really make it happen.
• 21:29
  So, yeah, very important.
• 21:31
  Yeah.
• 21:32
  And so I appreciate that context, too.
• 21:34
  Just, just about the journey, because this, this show is all about like the, the realities of entrepreneurship, not, not the Instagram highlight reel.
• 21:44
  So, like, as you just described it too, right, it's not a nine to five.
• 21:48
  There's constant uncertainty.
• 21:49
  You're getting, you're getting your ass kicked a lot of the time, but yet you love it.
• 21:56
  And like you said, those moments of seeing your, your, your product on the shelf, like, make it all worthwhile.
• 22:03
  So, I mean, I guess if final thoughts like, there's, there's a lot of other aspiring and then entrepreneurs that are in the trenches right now watching this, what would be your message to somebody that maybe is going through
• 22:15
  their own challenge and they haven't made it yet, or they're kind of in a down, down cycle and they're kind of in the trenches right now.
• 22:22
  Like, given where you've come from and what you've overcome, what would your message to them be?
• 22:27
  Yeah, I think, you know, it's tough to kind of when you have hindsight and to really give good advice and every success situation is different.
• 22:38
  But, you know, one thing I've been thinking about a lot recently that might be helpful is just a lot of times it's about surviving.
• 22:45
  Like, you just need to survive in a lot of situations and be able to get through just enough to the next stage and give yourself enough surface area to get A bit of that luck, like put yourself in
• 22:58
  the positions where you can get a bit of that luck.
• 23:00
  And if you're not here, if you're, if you're, if you haven't surface, then there's no chance, Right?
• 23:05
  So you just need enough time to get some of those breaks and you need to put yourself in the right places to increase the chances that you'll get that break.
• 23:14
  For example, going to Austin on a whim.
• 23:17
  Right, like going to Sweden where we first got our product on a whim.
• 23:21
  I didn't know anybody.
• 23:21
  I cold called manufacturers and just showed up at their doorstep hoping to get lucky.
• 23:26
  And so that's the advice I'd give is, you know, a lot of times it's not about this huge win or huge breakthrough.
• 23:35
  It's just about survival.
• 23:36
  It's about being in the right place at the right time.
• 23:38
  So give yourself as much chance to be able to do that.
• 23:42
  Love that.
• 23:43
  All right, and Max, if other people are listening this and they, they want to reach out to you, connect, what's the best way people can find you online?
• 23:52
  Yeah, the best way they can find me is just email me.
• 23:58
  I can, I can share that with you afterwards.
• 24:00
  I don't have social media, so.
• 24:02
  So really, that's the best way.
• 24:04
  Okay.
• 24:05
  All right.
• 24:05
  And we can, we'll link that in the show notes for everyone, for sure.
• 24:08
  All right, well, awesome.
• 24:09
  Well, Max, Max, thank you so much for taking this time to share all this incredible wisdom from your journey with our listeners.
• 24:16
  We greatly appreciate it.
• 24:17
  Yeah, thanks so much for having me.
• 24:18
  That was great.
• 24:19
  Thanks, Dave, Sam.