Scrappy Entrepreneurship At Its Best: Fresh Diet CEO Zalmi Duchman (Part 3)

Sramana: How did you get your first clients?

Zalmi Duchman: Mostly through Google AdWords. I also put a $150 advertisement in the Miami Herald which ran only for a particular neighborhood. At that point I was focusing only on Miami, Ft. Lauderdale, and Boca. Our clients came primarily through Google AdWords. Without that, I would not have been able to get the business off the ground.

Sramana: Do you remember the keyword you focused on that made those conversions?

Zalmi Duchman: I remember that ‘Zone Diet Delivery’ was the phrase that delivered. That was what was already out there, and that is what people were looking for.

Sramana: What was the cost of that keyword phrase at the time?

Zalmi Duchman: At the time it was around $1.00. Today it is around $7.00.

Sramana: What was the conversion rate on those leads, and when those leads converted into business, what was the transaction value?

Zalmi Duchman: Back then I did not track the conversion rate, and a lot of the tools that we have now were not available then. I do know that the transaction rate was $1,300 because people bought 31 days of meals at a time. They would prepay for those meals, which came out to about $35 a day.

That is how I funded my business. I charged my first three clients for the service and that is what I used to shop, put gas in my car, and buy the coolers and ice bags. There was no initial investment to get this business off the ground. I did not spend more than $50 a day on Google AdWords.

Sramana: You said you had three customers the first month. How did the business progress from there?

Zalmi Duchman: By the end of the first month I had 13 customers and over $13,000 in sales. I convinced my friend, Yosef, who was a chef, to come down and join me. He convinced another friend to come down with him. I paid their expenses and paid for their apartment. By the end of the first year we had done $300,000 thousand in sales and we averaged between 30 and 50 clients a day.

Sramana: So you just called up a friend from high school and convinced him to move to Miami?

Zalmi Duchman: Yes. I was roommates with Yosef for three years, and we are best friends. Judah was from Israel and has become the chief operating officer today. He was a family friend of Yosef. Their parents had always been very close. Yosef told me right away that he was a trained chef and should be considered a culinary guy. He did not know about buying food in the best way or doing business operations. Yosef convinced me to bring in Judah to help with that piece. They came on primarily via equity, which was very easy to give away at that time. Even if you have only 30 or 40 clients, it takes a lot of work to cook all those meals for them. Getting them both to come down to Florida was very significant.

This segment is part 3 in the series : Scrappy Entrepreneurship At Its Best: Fresh Diet CEO Zalmi Duchman
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