Michael Jacobson wanted to help his uncle sell his flower shop, but now it is growing like a weed.

Dave Young:

Welcome to The Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I'm Stephen's sidekick in business partner, Dave Young. Before we get into today's episode, a word from our sponsor, which is, well, it's us, but we're highlighting ads we've written and produced for our clients, so here's one of those.

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Stephen Semple:

Hey, it's Stephen Semple here and we are without Dave Young today because we have an opportunity for a really, really special interview. I have with me Michael Jacobson from French Florist and we had a conversation, it was probably about a month and a half ago, and I just thought some of the things that you shared was amazing and I was like, "I got to get Michael onto the podcast." Now, the first question I asked Michael is, what's your title? "We don't believe in titles." I said, "Are you the founder?" "Well, sort of." That's where we'll start. That's where we'll start the story about French Florist in terms of how you came to be the owner and what's happened in the time that the business has been with you.

Michael Jacabson:

Awesome. Thanks Stephen. This is a generous introduction. I appreciate that. Thank you. When I say we don't believe in titles, we really don't. As we get to be a bigger organization, we brought on a chief operating officer who's a lot smarter in operations than I am. And that's become my job is hire people that are smarter than you and give them the reins, so maybe, I don't know what title that is, but whatever that job is, and she tells me we do need titles because it helps with accountability and that kind of important stuff. I thought it was a little boring, but she did convince me.

Stephen Semple:

Before we go on, what size are you at today? You're large enough that you brought in a chief operating officer, so how many employees do you have now?

Michael Jacabson:

We've got just over 100 employees now.

Stephen Semple:

How many locations?

Michael Jacabson:

We have 10 locations now and we'll have 17 open by the end of the year. We'll have 60 open by the end of next, so a lot of our employees-

Stephen Semple:

Awesome.

Michael Jacabson:

... right now aren't necessarily for the immediate now, but we're building the infrastructure to support tomorrow.

Stephen Semple:

That's cool. That's cool. That's amazing. That's amazing growth, so 100 people now, but you're really looking to go to that... You're at 17, going to 60 locations. That's awesome. Going back to the early days of how you found yourself owning French Florist.

Michael Jacabson:

Oh, gosh. Okay, so I don't know if this will resonate with the audience. Hopefully it does. I've graduated college... You hear the statistics of how many startups fail, whatever it is, 90, 95% of startups. I did-

Stephen Semple:

Most.

Michael Jacabson:

Most. And I actually joined a few startups in college that I didn't found but kind of joined their team. All of them, but one failed, so I saw firsthand too. And I took a job in super boring corporate consulting right out of college, paid super well, great opportunity. I could work alongside awesome executives at really awesome companies. That was the pitch. I didn't make it even a year. I made it about one year and it just didn't feed that fire in my belly. That was the wall that my ladder was leaned against and I could sit there and climb that ladder or if I'm not happy, do something about it.

And so I had my ear to the ground with different opportunities and I got a call from my uncle one day and he says, "Mike, I've been running my flower shop for 38 years. I'm working six days a week, 60 hours a week or more, and I'm losing money. I'm tired. I don't want to run the business anymore." I studied finance, so he said, "Can you help me sell the business?" I said, "Sure, happy to take a look at it." That's how I got in and it evolved. I originally joined French Florist to help my family out and sell the business.

Stephen Semple:

You're initially there to help with the exit?

Michael Jacabson:

That's right.

Stephen Semple:

Okay, cool.

Michael Jacabson:

From there I went around and did what any normal exit would look like, where you go and you look at comparables, what are other florists doing well, what are they not doing well? How much are they selling for? Looking inside the business, let's clean it up a little bit. Let's get some proper bookkeeping and accounting in place so we have some numbers that we can share with prospective buyers. You know what I realized really quickly though was there's such an incredible systemic issue in the floral industry. It wasn't just my uncle struggling, it was all florists are struggling with the same exact issues, if not the same exact, very, very similar issues. You have the dominant market player... And Stephen, I'll ask you, this'll be interesting, if I say french fries, what company do you think of?

Stephen Semple:

It's McDonald's. McDonald's, Wendy's.

Michael Jacabson:

And you're in Canada too, so I'd be curious to get your answers here. If I say coffee, what company do you think of?

Stephen Semple:

Starbucks would be top of that list.

Michael Jacabson:

Probably the top one for me too.

Stephen Semple:

Well, for us it would be Starbucks and Tim Hortons, those are the two.

Michael Jacabson:

That's what I was expecting. Every once in a while you'll get Dunkin' for somebody on the East Coast too, but generally there's a clear player that comes to mind.

Stephen Semple:

Yes.

Michael Jacabson:

If I say flowers, do you have a company that comes to mind?

Stephen Semple:

For me, it'd be like FTD or Teleflora or one of those, but certainly not anybody local.

Michael Jacabson:

You're right. The top three players in our market, 1-800-Flowers, FTD, Teleflora, those are the three players. All of them have the same exact model and what that model is, they take an order online and they syndicate it to a local florist, fine. The problem they take up to a 40% commission after all of their fees on that order, so you're paying $100 for the order, the florist is getting 60 or $65 on that. They're getting hit so hard and a lot of florists are super reliant on the order aggregators for their orders. And then obviously most importantly, more than anything, that bleeds into the client experience and the client experience, you order... That's where you get the memes on the internet where it's like what you ordered versus what you got. And it's just this massive discrepancy, that's how that happens. Go to your local florist, that's my pitch. That's one systemic issue, but also the lack of technology.

The downside of the supply chain, how we're importing from the farm is unbelievably antiquated as well. And there are tens of thousands of flower shops in the Americas and 99% of them are single unit owner operator, mom and pop, so it's terribly fragmented. Nobody has the economy of scales, nobody has a brand. Anyways, all of those amalgamation, lots of issues there. Where do you even start? But that was interesting to me because I was like, this is a very real problem where ultimately the consumer experience... People, they have such high expectations with Amazon and two-day delivery and now it's two hour delivery. But when it comes to the floral industry, I don't know how consumers have been so okay with how the flowers are getting delivered. They become complacent. And when I saw my uncle's business and I saw what a good delivery could and should look like and that was not the norm for our industry, that's a really cool opportunity to build a brand that's creating very real value in the world. And we'll get into why flowers as well.

Stephen Semple:

And you bring up something though very interesting, and this is ongoing theme from the podcast, it is amazing how we're over 200 episodes in, and I'm going to say that the vast majority, probably 200, almost all, I can only think of one or two exceptions, these businesses and these ideas have been started by outsiders. And I think the reason why often it works with outsiders, an outsider comes along and looks at it and says, "This makes no sense." But the industry goes, "But this is how we've always done it and there's these long list of reasons why we need to do it this way." Where an outsider says, "I know if we do this differently, consumers will love it and if consumers will love it, they will buy from me." And I think that complacency not from the consumer, I actually think the complacency comes from the industry because the consumer's not been given any other choice.

Michael Jacabson:

You're right. You're 100% right.

Stephen Semple:

And then when they're given that choice, they're like, "Oh, my God. This is amazing. Give me more." And that comes from that outside perspective, so good for you.

Michael Jacabson:

Nice. And I'll share one of the things that could be interesting too. The business's name was French Florist, and I said, "Why are we called French Florist?" And my uncle didn't have a good answer, but I was like, "We need to have some intentionality about the business. We're in flowers too. We're delivering emotions and really powerful emotions too." It's like we're not necessarily saving people's lives, but we are delivering love pretty much. That's it. I'm yet to be convinced that there's a more powerful emotion that exists than love, so we feel the weight of what we do and we value what we do and we don't want to mess it up. When somebody is telling somebody that they love them and we're the vehicle to help them do that,