Ray Palermo is a foodie who loves to cook and enjoys outdoor entertaining. When his real estate business took a hit in 2008, he decided to focus his efforts on an idea he had for a new and better way to cook with fire at home. Palermo created the Quad Cooker, the first naturally fired home cooker that reaches temperatures beyond 900°F, just like the cooking surfaces in professional restaurants. The Quad comes outfitted with attachments for grilling and wok frying, among others. Palermo’s company, Cooking with Fire, also offers a similar product in a smaller size, called the Hex cooker.
The Start
How did you get started with your business?
I had been a restaurateur early in my career. I basically got pushed off a cliff in 2008 because I was in the real estate business, getting close to retirement, and things went south in a hurry like they did for everyone else, but particularly for real estate people.
I love everything about food. I grew up in the restaurant business and my wife’s family had an Italian food market, so it’s definitely in our genes. I had been messing around with this idea. It was kind of a collaborative affair between my wife, our friends and me. Rather than making a better mousetrap, we made a completely different device. It worked very, very well, so we decided to sell it.
How did you fund your business in the beginning? Have you taken on any additional funding since?
In the beginning, I funded it with my own cash. The Kickstarter was counter-productive with regard to funding. We sold $50,000 worth of product on Kickstarter, but those initial units cost us many, many times more to put out.
Without Kickstarter, we wouldn’t be where we’re at today. But if I hadn’t been able to fund things initially, we would have been one of those Kickstarter campaigns that you hear about that never produced anything.
I’ve done a second Kickstarter since then. We’ve also borrowed money from friends, family and vendors and used credit cards. Most traditional lenders are not interested in a startup situation like this.
Running the Business
How did you learn to run your business?
I’m 67 years old and I’ve been an entrepreneur since I was 17 years old. I’ve never sold a consumer product before, though. I was always a B2B person in other businesses. I have been in the restaurant business, which is somewhat product-oriented, but it’s not like manufacturing a product. The manufacturing experience I did have was B2B.
Who was your first customer?
My first customer was myself. Then I tried it out with a couple of friends, and they liked it. Then we did the Kickstarter.
What was the biggest mistake you made in your first year?
I made about a million mistakes. The good news is that none of those mistakes put us out of business!
The biggest mistake that could have been detrimental to the business was not having enough capital to deliver the product. We had to scramble. We underestimated the cost of getting the product out and the time it was going to take. Once the product did get out, it was well received in the marketplace.
Another mistake I made is to not have raised more money initially rather than trying to play catch-up. We waited until we fulfilled the Kickstarter pledges to get started on our marketing. In doing that, we ended up missing the buying season for grills.
What’s the smartest thing you did in the first year?
I don’t know that anything was done deliberately, but the Kickstarter was a good idea because it ended up giving us a huge test market right out of the door. We went from two or three units to 200+ units in a matter of a month. We were able to make adjustments based on the feedback from those customers before we went out there and started marketing in a big way.
What’s the most rewarding thing about running your own business?
There’s a tremendous self-satisfaction in it. I don’t know any different. I’ve worked for large corporations a couple of times in my life, but even then I worked for startup divisions. I’ve never not been in a startup situation.
It’s extremely hard work, but it’s very rewarding to create the business and make it what it is. The experience and gratification or the failure happens very quickly. Every day is a new experience; every day is a new challenge. You’re not sitting there day after day doing the same thing. I talk to people who’ve been working at the same company for 20 years. They’re basically getting one year of experience 20 times, because they just do the same thing over and over again. I don’t know how they do that; it’s just not my personality. With owning your own business, you’ll experience highs like you’ve never experienced, but you’ll also experience lows.
What’s the most difficult/challenging thing about running your own business?
Changing hats. You just never have enough people when you’re starting a business. Even if you have the money to hire the people – which I never have – you still wouldn’t be able to train them to be in a position to help you quickly enough.
This company is my wife, one part-time person and me right now. If we were to give job titles, there are probably eight or nine positions in the company that need to be filled, but we have two and a half people filling them.
I start my day by going down and talking to the guy who’s doing the shipping (our part-time guy), then I come up and do a little social media, then maybe a little bit of accounting, then maybe going out to talk to a supplier, then dealing with a legal matter … That’s the most difficult.
The second-most difficult part is just chasing money. I’ve never met anyone who had enough capital when they started a business.
What’s the most surprising thing about running your own business?
There aren’t many surprises left out there for me! But it has surprised me just how quickly you can bring a product to market now. And just how powerful social media is.
Also, it’s been a surprise how challenging it is to ship the product in one piece from our assembly and packaging point to a customer 3,000 miles away in California. Finding a shipping company that gives a damn has been a bit of a challenge.
What business owner or entrepreneur do you admire most? Who is your role model?
Steve Jobs. I love this quote of his, “You have to start with the customer experience and work back toward the technology – not the other way around.” That is so true. That’s why there will always be a place for the “lean and hungry” entrepreneurs. They understand that big companies make a product and then try to shove it down your throat. They can do all the market research they want to do, but their chances of being a success are 10 percent of what an entrepreneur’s chance of success is. And entrepreneurs probably have a 10 percent chance of being successful. The only difference is the amount of money a big company can throw at things.
Entrepreneurs really understand the finite nature of capital.
What I’ve Learned
What advice do you have for others starting their own business?
Nothing, other than do it! You’ve got to get up there and take a swing. The chances of you succeeding are very, very small, but you’ve got to keep trying.
But, then again, not everyone has that personality. You need to recognize what your personality is. If it doesn’t excite you, don’t do it. Don’t try to be an entrepreneur because you think it’s cool or it seems like a good way to make a lot of money.
About the Author — Ashley Sweren is a freelance marketing writer and editor. She owns her own small business, Firework Writing, located in San Jose, California.
This article was originally written on April 13, 2015 and updated on July 28, 2016.
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