“>GRP PartnersVenture capitalist Mark Suster loves a good story of an entrepreneur driven by the desire to provide a great product.
Suster recently wrote a post describing his favourite entrepreneur story in a while. It’s the tale of Sriracha hot sauce creator David Tran, who fled Vietnam in the 1970s when the North’s communists took power.
Tran actually named his company, Huy Fong Foods, after the ship that took him from Vietnam to the U.S. He named the hot sauce after Si Racha, a small village in Thailand.
When Tran moved to Los Angeles to start his business, he hand-made batches of hot sauce in a bucket and drove it to customers in his van.
“But his goal wasn’t to make a billion dollars,” Suster writes. “He wasn’t driven by quick riches. He was driven by wanting to provide a great product. How much could the new generation of entrepreneurs learn from that? I know it’s what I look for when I want to back companies.”
Today, Huy Fong Foods does $60 million in annual sales. And what’s especially notable is that he didn’t get any outside funding and never sold out.
Here’s what touched Suster, in his words:
- Extreme product passion. When his packaging suppliers tried to get him to change his product to make it less hot or more sweet for American customers he refused, “”Hot sauce must be hot. If you don’t like it hot, use less,” he said. “We don’t make mayonnaise here.”
- Uncompromising product quality (he processes his chillies the same day they are harvested)
- He had a guiding principle for the company.
- Focus on the customer and provide value – “We just do our own thing and try to keep the price low. If our product is still welcomed by the customer, then we will keep growing.” He said this in response to the fact that several other companies are now stealing the Sriracha brand name. He can’t trademark it since it’s the name of a city. By the way, he has never spent a dollar on advertising
- Provide something distinctive. What will you be known for? Given the brand dilution going on with the name Sriracha how can he still grow his business? The distinctive design of his packaging. That crazy rooster. All those freaking languages on the bottle – the mystery of it all! And the green caps.
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