October 17, 2024

Finding Fortunato With Adam Pearson

By: Gary Schoeniger
The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

 

In this episode, we speak with Adam Pearson, co-founder of Fortunato No.4, a family-owned business producing some of the world’s finest chocolate. Their journey—from the streets of San Diego to the jungles of Peru—is an adventure you won’t want to miss.

After losing their family business, Adam, along with his father and brother, had to start over. Selling parts for mining equipment led them to a successful chocolate business serving global customers. Through perseverance, they discovered a rare cacao breed thought extinct. Today, their company produces premium chocolate and supports hundreds of cacao farmers in Peru.

Learn more in Adam’s book, Finding Fortunato. We hope you enjoy our conversation with Adam Pearson.

Listen to the podcast here

 

Finding Fortunato With Adam Pearson

Introduction

Welcome to another episode of the show, where I tease out the hidden logic that enables ordinary people to accomplish extraordinary things. In this episode, I’m speaking with Adam Pearson, who’s the co-founder of Fortunato No. 4. A small family-owned business that produces some of the finest chocolate in the world. How they got there is one heck of an adventure. From the streets of San Diego to the jungles of Peru, this is one story you won’t want to miss. 

After the loss of a thriving family business, Adam, along with his father and brother, was forced to start over. What began as selling filters for mining equipment led to the creation of a successful chocolate business that now serves customers around the world. Through sheer perseverance and determination, Adam and his brother eventually stumbled into a rare breed of cacao that was thought to have gone extinct.

Today their company not only produces some of the finest chocolate in the world but also helps improve the lives of hundreds of cacao farmers in Peru. You can learn more about Adam’s story in his new book, Finding Fortunato. Without any further ado, I hope you enjoy my conversation with Adam Pearson.

Adam, welcome to the show.

Thank you, my friend. Thank you so much for having me. I appreciate it. 

I’m so excited to have this conversation. We spoke briefly a couple of weeks ago. I’ve been reading your book or listening to it on Audible. What an amazing story. An entrepreneurial adventure extraordinaire. I usually lead with this question, how did you get on this entrepreneurial journey, but this is a family journey. It’s led by your dad. As you have said to me, you and your brother Brian got sucked into the vortex of your dad’s entrepreneurial endeavors. Can you start by what’s the origin story here? Let’s start with your dad’s origins.

Grandfather’s Entrepreneurial Journey

The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

Finding Fortunato

To get the real origin story, and this is where I start in the book as well, you have to go back to the township of Salina, Ohio circa 1915 when my grandfather was born. My grandfather on my dad’s side was one of eight children born to a derelict alcoholic father and they lived in destitution out on a corn farm. I hear stories about my grandpa where he and his brothers used to soak kernels of corn in water so they would plump up so it would make them feel like they were more full when they were eating because they were so poor that they barely had enough to eat. My grandfather who was a middle child was dead set on pulling him and all of his siblings out of poverty.

I’ve said this numerous times on this show, but I want the audience to understand almost to a person that the entrepreneurial journey begins with adversity. That adversity is defined by the individual but I want to point that out. 

There’s some big why. That’s almost cliche because it’s in so many books, but it’s true. There’s some big why. As to why out of eight children, this one guy, Victor Wick, who’s my grandfather, was the chosen one is more mysterious. You’ve immersed yourself more in the literature on how entrepreneurs become entrepreneurs. Why of the eight, he was the one to pull everybody else up? I don’t know.

The simple answer might be, and of course, I don’t know, but what my research is bringing to the fore is it’s our individual construal of the circumstances. It’s not what happens to us that matters. It’s the way in which we construe it.

Somehow he probably looked at himself. He did some self-reflection and said, “I think I can do it.” Maybe something that made him think, “I think I can do something here.” He probably had this moment of insight where he said, “I think I know what I can do.” He went ahead and started doing it. At age 13, my grandpa dropped out of school. He started working in restaurants. He moved from Ohio to Albany because some restaurant owner came to some little podunk restaurant in Salina, Ohio, and liked him and said, “If you want to come work at a real restaurant in Albany, New York, you can come work for me.”

He started off as a dishwasher, then he went to school and became trained as a pastry chef. He had a girlfriend back home, a hometown girlfriend, who was my grandma. She said, “If you don’t come back and marry me, then I’m going to find somebody else.” He moved from Albany, New York, back to Fort Wayne, Indiana, which is the closest big city to Salina, Ohio. He opened up a chain of restaurants called Vicks Diners. He owned four restaurants and he started making money hand over fist. He built an eleven-room house for his wife and his kids. He bought an airplane and then he started giving all of his siblings seed money to start businesses. 

Did any of those siblings?

He funded all of it. He was the leader of the family. Almost everybody opened either restaurants or lumberyards. They continued running restaurants and lumberyards into their old age. 

It started like you said, it was the seed. 

Father’s Struggles And Success

What happened was here’s this family hero who pulled his entire family line out of destitution. When my dad was four, my grandpa got Hodgkin’s disease and died at age 33. The hero fell. Everybody starts looking around, “Who’s going to be the next hero here?” They started looking at my dad because my dad was Vic Wick’s only son. From age four, there’s all this pressure on my dad. He’s putting pressure on himself. “Boy, are you going to grow up and be the next Vic Wick or what? Are you going to build an empire like your dad?” 

He had that idea that he had to grow up and get rich and he set a goal that he was going to grow up and get rich and build a business empire by the time he was 33 because that’s when Vic Wick passed away. He thought he might die by age 33 too. He figured he had to achieve whatever he was going to achieve by age 33. That’s my dad. That’s how my dad started his journey at age four in Fort Wayne, Indiana. He went to high school. He graduated college. After college, he got drafted to go to the Vietnam War. He served on an aircraft carrier, the Ticonderoga, in Vietnam.

When he got back from Vietnam, he used the GI Bill to go back and try to get a master’s degree. While he was getting an MBA, he had a professor who was starting this big cattle investment fund. This is the 1970s. They’re going to buy calves, they’re going to raise them up, and then they’re going to sell them off to meat processors and they’re going to pool investment capital to do this. That’s the project that my dad got involved in when he was 28. This is his first real entrepreneurial venture and it took off. My dad was getting rich from age 28 to age 23. 

He and a bunch of buddies were getting rich and then the inflation hit. Richard Nixon froze the price of beef without freezing the price of feed and the fund started losing $1 million a month. That happened right before they were about to have an IPO and go public. My dad lost five years of work, spun out, and ended up broken at age 33. This all happened at the exact age when he was supposed to be getting rich. It didn’t happen. This long-term dream that he’d been chasing completely fell apart and he ended up washed out. 

It’s good, but it seems like your dad was on a pretty traditional trajectory: go into school, go into college, GI Bill, MBA. Do you know what he was thinking? Was he thinking the MBA was going to help me start a business? 

What he told me was when he was getting his MBA, the true goal that he had was to try to get rich. That’s how he conceived the success of his father, Rick Wick, eleven-room house, airplane, empire. 

Like in a material way. 

That’s how he was conceiving it because his dad wasn’t around to tell him what it was. Ultimately, what we came around to was it’s about taking care of people. It’s about right. 

That’s deep stuff right there. You’re saying some things and I agree with those things. I don’t want to skim over that. 

Please, come on. Let’s dig in. 

I’ve heard this from entrepreneurs so many times. It sounds like this, “I set out to get rich. I knew what the car or the house was all going to look like” At some point, that shifted. It became a purpose-driven thing, not just profit-driven. There’s a lot to unpack there. I want to at least pause in the story. 

Here we have a situation where you have a four-year-old kid who doesn’t ever get to know his dad. All he’s hearing is secondhand how his father was this magnate. It’s a small-town magnate. A chain of four restaurants, popular restaurants, doesn’t make you a big-time hotshot. In that time and place, it was important but what he gleaned from the stories he heard about his father was that it was the money that made him a hero.

That’s such a powerful point. A lot of the work we do is training educators about cultivating entrepreneurial thinking in young people. There’s sometimes casual, sometimes outright contempt for entrepreneurs, specifically in higher education, because of this perception of the entrepreneur as someone who’s driven by greed.

From my experience, there are some out there. There are some Gordon Gekko-style market manipulators who are taking money off the table. Most of the people who bootstrap a startup like in our case. Even if you take outside equity, most people who do a bootstrap startup like Jeff Bezos in a garage, shipping books, you’re doing it for some bigger reason.

Most people who do a bootstrap startup are doing it for some bigger reason. Share on X

There’s a purpose-driven component. I’ll add to this and we can move on. I don’t want people to lose sight of this. The intrinsic motivation, the purpose-driven component is what puts the fuel in the tank. The literature is very clear on this. If you’re extrinsically motivated by money or things, you’re not going to tap into that deeper level of motivation. You’re not going to stick with it. You’re less likely to. 

That’s what the literature says, and it’s scientifically true. What I’m presented with is anecdotal. My dad had this misconception, and he started a cattle farm. After working in cattle for five years, he stopped eating red meat. He hasn’t eaten red meat for however long it’s been. He’s 85 now. He hasn’t eaten red meat in over 55 years because he didn’t even like cattle. He did it because he had a professor who was putting together this project and as part of his MBA, he was looking at the numbers and saw it was lucrative. He took the idea and got a bunch of buddies together and they went out and did some fundraising and raised the pool of capital and they started buying steers. 

He didn’t even like what he was doing or care. I mean he was going for money and to get rich. I guess the universe taught him a lesson. At age 33, after working on that for five years, he was washed out and he was broke. He and another buddy, because they’re hustlers, they started buying and selling some cattle equipment that was in short supply in the inflationary economy. They got a little nest egg and my dad used that nest egg to travel around the world because he had a big failure and he had some soul-searching to do and he didn’t know what was next. 

Did you ever see the movie, The Princess Bride? There’s this guy who is chasing a man who killed his father in a sword fight and he almost catches him but then the guy gets away and he feels like his whole life journey is up in smoke. That’s how my dad felt. He says, “I’m going to travel around the world and try to cope.” In India, he came across this guru in the street who taught him how to do transcendental meditation. My dad’s been doing transcendental meditation for all these years. 

He learned something about the Hindu religion. This is in the book, but he came away from that experience with this idea of karma and reincarnation. This is my dad’s philosophy. This is what has helped him to cope with entrepreneurial failures. That we’re all souls in a sense. What we do in this life will determine the type of life we’re going to have in our next incarnation. At that time in his life, he said, “No matter what, I’m going to chase my goal nobly with courage.”

The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

Finding Fortunato: What we do in this life will determine the type of life we will have in our next incarnation.

 

“No matter what happens, this is my journey. This is the life that I’m living. I’m supposed to start a successful business. That’s why I’m here. No matter how it goes down, I’m going to keep trying to do that until I achieve it. If I succeed or fail, that’s not the point of this journey. The point of my journey is to adventure bravely forward.” That’s what he learned through meditation and through a little bit of study of the Hindu religion.

As far as I can tell, I don’t think that’s a unique experience. I said in my new book that non-entrepreneurial behavior is learned. We’re all born curious and creative with an inherent desire to contribute. 

Risk-taking. You’re willing to take some risks and fail. 

We could talk about risk-taking in a minute, but one of the points I want to draw out of what you’ve said is that your dad developed some entrepreneurial efficacy in the rise and fall of his first failed business. There’s something in his unconscious mind that’s like, “I’ve done it once yet failed, but I believe in myself enough to try again”. Number one. Number two, there’s an expression of freedom. The need for autonomy is very powerful. Once you’ve tasted that as your father did, it’s hard to stuff that genie back in the bottle. 

In his case, it wasn’t that the business was an outright failure. The business was doing well. The fundamentals of the business were doing well. It was a timing issue. 

Circumstances beyond his control. 

It was beyond his control. He felt that he had failed in achieving this goal by the age of 33, which was some arbitrary goal that he set for himself but it’s not like he sucked at entrepreneurship. It’s not that he sucked at business. He chose a venture in which there was a demand for the product, he could produce the product profitably, and it was scaling. This is also a pattern. There were a lot of positives. It just didn’t work out all the way but it wasn’t a complete failure. There were a lot of things that he could feel good about in his performance. That’s good looking at the bright side. It wasn’t a total fiasco or anything like that. He knew he had some ability on which he could build, which is a learning process. 

Whether he’s even aware of that or not is inconsequential.

I know from talking to him. At that point in his life, it was more spiritual for him at that point. It was, “No matter what, now I failed, now what am I going to do? Am I going to go be a consultant in the cattle industry or am I going to try to start another business because that’s what my destiny and my calling is.” Probably in the literature, even though this is a fuzzy thing to measure, I bet you will also find a lot of people saying, “This is a hero’s journey. This is what I was called on.” I bet you get a lot of people saying that. This is what I was put on this earth to do. If I don’t do it, I’m going to be miserable. This is how I’m going to live. I have to live this way. 

That goes back to my earlier assertion that non-entrepreneurial behavior is learned. When you zoom out and look at an entrepreneur, all you see is an organism trying to self-actualize. 

Probably people get trained out of self-actualization or they get trained to ignore their call, whatever the call is and wherever it comes from. 

Part of that is people think entrepreneurship is all about inventing something new and access to venture capital. They don’t see it as a viable alternative. They tether themselves to unsatisfying jobs or careers. In circumstances in which they are not likely to self-actualize. 

The Hotel Venture

The self-actualization thing is a very good point. At that point, my dad is 100% like, “I’m going to self-actualize. I’m going to be who I think I’m supposed to be and we’re going to develop it and see what happens.” In the Navy, my dad had been stationed in San Diego. After traveling to India, he moved to San Diego and he only had a little bit of money in the bank. He was living in a studio apartment near the beach in San Diego. He had a lunch get-together with a friend. After the lunch meeting, he was driving back home. He took a wrong turn and he ended up in the Gaslamp Quarter in downtown San Diego. I do know San Diego very well. 

Not well, but that’s like the Tenderloin of San Francisco. 

The Gaslamp was like the Tenderloin, but now it’s been gentrified and it is the upscale trendy hit part of downtown San Diego. You have great bars and high-end restaurants. At the time when my dad drove through there, that was the beginning. That movement was beginning. It was the Tenderloin. It was a slum. Real estate developers were starting to tear down old buildings and put up new buildings and there was a plan to build a big mall in downtown San Diego, but the Historical Society was blocking the removal of two old buildings that were sitting on the planned mall site. 

My dad was driving around, he came to this big construction area where everything was leveled to the ground. It’s all flat and empty and there are cranes out there. It’s this huge gigantic dusty field. In the middle of this dusty field, there are two old hotels that were built in 1886 that used to be owned by Wyatt Earp. They’re sitting out in the middle of this field. My dad looked at it and he said, “What in the hell is going on out here? How come these old buildings cannot be torn down?” He started researching and he found that the Historical Society had put a designation on these hotels so that they couldn’t be pulled down.

For whatever reason, he saw an opportunity in that, “Maybe I could be the one to figure out how to get these hotels torn down so that construction can move forward and maybe there’s a business opportunity for me in that.” He started to pursue it. As he was meeting with the city of San Diego and talking to the Historical Society, he came up with this idea and he proposed it, He was like “What if I, Dan Pearson, were to disassemble these hotels brick by brick and then rebuild them somewhere else, would that be suitable for the Historical Society?” Because they are not getting rid of these buildings?” They said, “If you can do that, then we will allow you to do that.”

He’s solving a problem for the developers.

It’s a multi-billion dollar problem because they’re going to build a huge mall that’s going to bring all of this traffic to downtown San Diego. It’s the first leg of redeveloping this entire district. It’s a big problem that he’s trying to solve. It’s a very weird and novel solution. Now we’re getting back into what I think about the nature of entrepreneurs. Most people go, “That’s a neat idea,” then they go home and never think about it again.

My dad had an idea, and instead of sitting on his idea and going “That’s too far-fetched,” he started calling meetings and telling people about this idea, and the people thought it was a good idea. You have to take a chance on your ideas. You might as well float them out there and see what happens. If you’re trying to be entrepreneurial, have the meetings. You might get a thumbs up or a thumbs down, but you should have the meetings and at least put your ideas out there and see what happens.

The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

Finding Fortunato: You’ve got to take a chance on your ideas. You might as well just float them out there and see what happens.

 

I was trying to relay your story to my youngest son, Owen, who’s about to turn 32 years old, and he’s in the very early stages of an entrepreneurial journey. That’s what I keep telling him. The curiosity or the radar has got to be open, first of all. If that radar isn’t open, you’re going to trip over opportunities five times a day, number one. You have to be willing to start to do some preliminary investigation. It might be a dead end. I’ll get to the punchline maybe prematurely, but it seems to me after interviewing hundreds and hundreds of these everyday entrepreneurs, the people that are looking for answers generally find them. 

He wanted to start a business. He just didn’t know what. 

He starts having these conversations. The idea is validated. That’s what he’s doing as what we call in the business, customer discovery. 

All these people agree, “If you’re crazy enough to take the lead on disassembling two old hotels and rebuilding them somewhere else, we’ll let you do that.” The real estate developers were very pleased and also the city of San Diego was very happy. My dad, based on that momentum, was able to get funding and loans. There were federal loans for rehabilitating old historical buildings. 

He lined up all the financing and he took apart these two hotels and then he put them back together on a different site and opened up this beautiful Victorian-style hotel in the heart of a slum, which was the Gaslamp Quarter in downtown San Diego. That hotel is still there today. It’s the Horton Grand Hotel. If anybody’s ever in San Diego, it’s still there. My dad opened that hotel when I was three. 

He worked on it for five years and then it opened when I was three in 1986, 100 years to the day after those hotels were originally built. I’m three and we own a hotel. This is where I get into becoming an entrepreneur. I’m three years old and now my dad’s the big boss man of this cool hotel. We had a hundred employees. I’m eating breakfast, lunch, and dinner in the hotel restaurant. I’m the son of this boss and I’m going into the kitchen to talk to the chef. 

Not like your dad though at four years old.

Now my dad is older. He didn’t get it done by 33. He was the hero of this community. He was on the vanguard of developing this rundown area and breathing life back into this neighborhood. It was a meaningful project at its time. I guess I’m the son of a boss. You couldn’t get me to do schoolwork. You guys like, I’m going to sit, I’m eating lunch. I’m going into my dad’s kitchen that we own. I’m asking the executive chef to make me a BLT for lunch.

I’m drinking Roy Rogers and Shirley Temples and Swiss Miss Hot Chocolate sitting at a bar that I own. I’m staying the night in a suite because my parents are working late, running the hotel, and I’m watching movies and TV in the presidential suite. On Monday morning, I go to school, and they’re asking me to sit still at my desk and do paperwork. I’m like, “School ain’t for me. I’m supposed to be a boss like my dad.” That’s how I grew up. I was terrible in school. My parents tried to fight me and get me to be good at school, but I was constitutionally unprepared to be a good student.

That’s a twisted version of Home Alone. That’s great imagery of this young kid walking around this big hotel getting everything he wants handed to him.

That’s one part of it. While I was in the hotel, I loved to hang out and talk to our guests because my dad was doing that. My dad would be walking the floor of the hotel talking to guests. “How is everything going? How’s your room? What can I do for you? How can I help you? Did you try the food in the restaurant? Just so you know, on Friday nights, we’re doing jazz concerts in the bar so make sure you come check us out.” He’s walking around. He’s taking care of customers and that’s what I was doing.

You’re emulating your dad. 

On the other hand, I loved working in the hotel. I love the idea of being in the hospitality business, which is in our blood because my grandfather also owned these Vicks diners. I wasn’t lazy or spoiled necessarily. I liked the idea of being a proprietor. I saw how my dad was treating our guests. I’m an eight-year-old kid. I’m in the restaurant eating a steak, but in the middle of my meal, I get up and I start to circulate the restaurant like how you sometimes see general managers doing, “How are you doing? How’s your meal?” They’re like, “Hey kid, who are you?” “I’m the owner’s son. I want to make sure you’re enjoying yourself.”

I was doing hospitality work at a young age and I found that work to be extremely satisfying versus doing a fake commerce fair where we’re all pretending to sell stuff for plastic coins and paper bills. They teach kids about how commerce works. I was in the real world working in our hotel and I loved it. That happened. My dad had this crooked investor in the business. When I was twelve, one night my dad came home totally long-faced. I said, “Dad, what’s wrong?” He said, “I think we’re going to lose the hotel.”

After twelve years of living in this paradise wonderland, this crooked investor went behind our back and bought out all the mortgages from the bank. It was a complete breach of fiduciary duty because the guy was on the board and he was privy to internal financial dealings of the hotel. He had a fiduciary duty to act in the best interest of the investors at large. He went behind everybody’s back. He bought the mortgage from the bank. There was a covenant in the bank contract that he could demand immediate repayment. If the hotel didn’t come up with immediate repayment, he could foreclose on the hotel.

Banks wouldn’t want to foreclose on the hotel because it’s not their job to own and operate hotels. It was to collect interest on deposits but this guy wanted to take the hotel from my dad and he did. My dad took him to court and won about 50 court cases, but the guy was already rich. He owned a chain of car dealerships in San Diego and my dad kept appealing. We kept winning appeals, but eventually, my dad ran out of money and the lawyers weren’t willing to work on contingency.

One day, it was over. My dad had used his equity in the hotel to secure a bunch of business loans. He had to declare personal bankruptcy. My dad pursued court cases for two years. When I was 14, it was over. My dad was 55. He had worked on that project for 16 years. Now he was dead broke with a son and went into personal bankruptcy. I lived through it all. I saw it all happen firsthand. 

You went from this Home Alone thing with this idealistic almost fairy tale life prince to like the pauper. 

My dad was the king. Now, instead of living and staying in the presidential suite, my dad had an entrepreneurial insurance policy that if for some reason his whole business fell apart, he would get a little stipend to live on. Also at that time, my parents got divorced. Simultaneously, while all that was happening, my dad’s best friend’s son was murdered by a gang member. 

It was an interesting case because, at that time, it was a 14-year-old kid who murdered our friend’s son. It was the youngest person to ever be tried as an adult for murder in the state of California. What was so interesting was our family’s best friend went to court to testify on behalf of his son’s murderer. He said, “Don’t try him as an adult. He’s a kid. He made a bad mistake, but I already lost my son. We’re going to ruin another life if you put this kid in jail for life.” 

He ended up being found guilty as an adult and he served a 40-year prison term or something. He got out recently and reunited with our best friend’s family. They started a foundation together to try to stop youth violence. That all happened at the same time. My parents got divorced because the heartache of everything was too much. Me and my dad are living in this one-bedroom apartment. Back to square one.

My dad had seven years of personal bankruptcy before he would be able to borrow money or before someone pulled a credit check on him or did a Dun & Bradstreet check on him before it would say that he wasn’t in bankruptcy. For the next seven years, me and my dad lived together and we survived off this insurance policy. I developed it and we talked about this on our original call. 

Seeing your hero fail is one of the most rough things and going from being a prince to a pauper is a rough thing. Around that time, I started developing a terrible substance abuse problem as well. It all fell apart on us. Me and my dad are living in a one-bedroom apartment. I became an alcoholic and an abuser of all kinds of drugs. I did terrible in school. My dad was in a bad place and we lived like that during my teenage years for the next seven years. 

Seeing your hero fail is one of the most difficult things. Share on X

That’s another thing we have in common. I don’t know if we talked about that or if I mentioned that on another call, but I stopped drinking and drugging in 1985. There’s an important point to be made here. I’ll use this quote from Carl, I think it was Maslow. “When the essence of a person is either suppressed or denied, he gets sick.” 

That’s good. 

He goes on to say, “Sometimes in obvious ways, sometimes in non-obvious ways, sometimes immediately, and sometimes later.” Speaking for myself, I was adrift. I was aimless. Like you, I was a horrible student at school. I barely graduated from high school. By the time I got out of high school, learning to me was tantamount to intellectual waterboarding. College was not in my future and I was aimless. 

I was so drunk and high all the time that I was out of my mind anyway. I got I got high every day before school throughout middle school and high school on the way. Show up at school, smoke a joint, then go to class. When I was 13, I was binge drinking all the time. I was totally out of it. My dad was not in a great place. My parents are loving parents, but a 13-year-old is not equipped to deal with that trauma. Also, there’s a leadership principle, that if the leader is totally in a shell and not able to exude confidence and optimism for the future, then the people who are under their authority will tend to assume the bearing of the leader. My dad was in a depression, I was in a depression. 

The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

Finding Fortunato: If the leader is entirely in a shell and unable to exude confidence and optimism for the future, then the people who are under their authority will tend to assume the bearing of the leader.

 

It’s also similar to the Mazlovian thing idea. I think this is in the Bible somewhere. I’m not a religious person in the traditional sense, but where there is no vision, the people perish. 

When my dad’s the king and I’m the prince, then we’re riding high, but my dad’s in the depression. He doesn’t know what he’s going to do. He’s got a kid who’s off the rails, but he doesn’t necessarily have the strength to even pull himself up. That’s how we lived. From my skills at hobnobbing and networking in the hotel, I managed to talk to a bunch of good kids and to let me copy their homework. I somehow graduated college. I took the SATs and got an all-right score on the SATs. 

Somehow I had some of the stuff that I copied lingering in my head. I went off to college. A small private liberal arts college accepted me and I got financial aid and I went there. Still partying, still going crazy. I got kicked out of college in my junior year for disturbing the peace, and for not having any self-control. About a year before I got kicked out of college, I came back home on winter break and my dad’s seven years of bankruptcy was up. He said, “Adam, I want to let you know, I’m out of bankruptcy. I’m going to go for it again.” I could cry telling you this. He’s 62 and broke. He was like, “I’m going forward again.”

At this time, my brother, Brian, who I haven’t talked about, we have the same mom and different dads. He’s 14 years older than me, but our mom married my dad when Brian was 10 and my dad was a stepfather for him. Brian grew up in the hotel too. Also worked as a valet and was traumatized by the loss of the hotel. He took a corporate job. He had a girlfriend.

He and my dad got talking and my brother got pulled into the idea of starting a business with my dad. He quit his corporate job to work as a bartender and he worked nights. During the day, those two guys were for nine months researching any opportunity they could come across, trying to find a way to start a business together. I came home from college before I got kicked out. My dad and my brother said, “We’re starting this business.” I said, “What are we doing?”

This is so interesting to me. How did the energy change? Did you see your dad? Was there a noticeable change in your dad’s disposition? 

The thing my dad was always saying during these seven years was he was crossing the bankruptcy desert. That’s how he referred to it. It’s like he knew it no matter what, “When I get to the other side of this thing,” whatever is happening. Seven years is a long time to be on the hole. He helped his friend to start this charitable foundation for the son who got murdered. He was involved in that as a board member. 

He was doing something. He wasn’t at home with the blinds pulled. 

Air Filter Cleaners

No, but he wasn’t doing what he wanted to be doing. He was trying to keep his head above water and buy his time so he could come back and have clean credit so he could feel comfortable doing business. Age 62, he said, “My name is cleared. Spiritually I feel good.” He was all the way up. Brian quit his job. He’s working as a bartender. We’re starting a business. I came home after a while and he and my brother pulled me aside and said, “Adam come in here, sit down on the couch.” They put a VHS in the VCR. This is how long ago this was. They showed me this promotional video for air filter cleaners. 

It’s back to what I said earlier. If you’re looking for opportunities, you’re going to find them. If you’re not, you’re not. It’s that simple. That’s my set. It’s an underlying assumption of which we’re not necessarily aware. 

They spent nine months looking for a project. They were going to Chamber of Commerce meetings. They were reading lists of recently granted patents. They were in all kinds of networking groups. They were networking with the World Trade Organization. They were doing everything they could to find a business and my dad wanted a couple of things in a business. One, he wanted a business that couldn’t be stolen from him by an investor. He needed some exclusivity. He needed to feel that he wouldn’t be cut out and he wanted something that he felt had what he referred to as a sustainable competitive advantage. 

He wanted something that he could keep doing forever pretty much where he felt that nobody could come in and take it from him. He ended up completely abandoning both of those as I will get to but that’s how we got into the air filter cleaners. It was a brand-new technology. It was patented. The thing with the air filter cleaners was it was this small attachment that you could put on to the air filters that big mining trucks use. The way industrial mining works is you have these gigantic trucks that are three stories tall. They haul a hundred tons of ore at a time. For every ton of ore, you might get one ounce of precious metal like gold. 

I grew up in Euclid, Ohio. The Caterpillar plant was there. They had one of those trucks parked in the corner. I went by it on my way to high school every day. 

It’s a dusty business. These air filters are huge. They’re what keep the dust from going into the cylinders and blowing out the cylinders on the engine. They are expensive and labor-intensive to replace or to maintain. This air filter cleaner was this attachment that would go up and down an air filter and clean it. We said, “Holy crap.” This would solve a huge problem. This is my dad and my brother. They showed me a promotional video about this technology. 

I’d never started a business before. I go, “What in the hell are you guys talking about? Air filters? We don’t know anything about this. Maybe do real estate.” That’s what I told my dad. “At least you know about real estate. Why don’t you guys do some real estate development or something?” He said, “There’s too much competition. We want to be where nobody else is doing this.” They got all gung-ho about this air filter cleaner concept. They got an exclusive distribution deal with the manufacturer.

When there's too much competition, you want to be where nobody else is doing what you want to do. Share on X

Was that a startup?

It was a new company. It was a venture-backed startup.

That’s an important little detail. They’re open to opportunities if people like you and your dad and your brother come along and it’s like, “We see an application of this here. Let us do that.” A more mature company wouldn’t probably give you the time of day.

They would have their own sales channels and their own distribution. They were a startup. We got a deal with them that said, “Any mine you bring on board is your mine forever. Go out and start bringing on some mines and we’ll pay you a commission and get on out there.” The first thing that we had to confront was we knew nothing about selling stuff to mines at all. I told my dad, “Do you know anybody who worked at a mine? Brian? Does anybody here know anything?” I cannot think of the word I’m sure, but I was an unbeliever.

That is an important voice. You’re asking stupid questions. 

Why? How would you sell this to a mine? My dad said, “You know what we’re going to do? We’re going to tell everybody what we know, what we’re into.” Here’s entrepreneurship 101. Tell everybody you know what you’re doing. Do that please. Ask if anybody has somebody with a contact who can help you. I’ve seen this with my eyes. I’ve seen this before. People get embarrassed about telling people what they’re up to. 

It’s worse than that. They’re like, “Somebody’s going to steal my idea.” 

Anybody will want to distribute air filter cleaners to mines. 

I see that as a hallmark of an amateur. I won’t tell anybody about my idea because they’re going to steal it. 

They’re going to steal it or you think people are going to judge you and go, “What?” Others are going to have the same reaction I had, “What the hell are you talking about you selling air filter cleaners?” 

This guy who was at Harvard at the time, I think he’s an economist, Amar Bhide, looked at 200, Inc. 500 companies, the fastest growing companies in the United States. The companies he looked at included Walmart, Waste Management, Hewlett-Packard, and Calvin Klein. These are big well-known names. The profile of the founder is, number one, they don’t invent anything new. There’s no invention. There’s no breakthrough idea. 

Walmart is a retailer. 

They’re not inventing anything new. They don’t have access to capital. The average of these companies, it was like $10,000, was the initial investment. Credit cards, friends, fools, and family, cobbled together. No business plan, no market research, or no formal market research in any case. The most interesting thing that came out of that study to me was the founders themselves had little or no experience in the field as they went in. I think that naivete is an important factor. 

It’s the same thing that we talked about with my dad in the hotel. It’s like, “Let me get this idea out here. Let me get out here with this idea and see where it’s going to take us. I have a tentative idea. I’m getting out here with it. Let’s start the process of getting this idea out into the world.”

It’s micro-experimentation.

My dad started telling everybody he knew, “Do you know anybody in the mining business? We’re starting a business. I need a contact at a mine. Does anybody have a contact at a mine? I want to go pitch this idea to a mine.” It turned out that my dad’s best friend, the guy whose son had been murdered, had a contact at the world’s biggest gold mine, which is in a little city called Cajamarca, Peru. Both my brother and I have married women from Cajamarca, Peru. My dad gets a contact. He tells the guy at the mine about the air filter cleaner idea. 

The guy said, “I’ll put you in touch with the head of maintenance at this mine called Minera Yanacocha, which was owned by Newmont Mining Corporation based out of Colorado, which is a publicly traded mining company. That was the world’s biggest gold mine by production. My dad ends up on a call with the head of maintenance at the mine and the guy says, “The idea sounds interesting. Come meet me here at the mine.” My dad gets on an airplane and flies to Peru to give a sales presentation. 

At this point in my life, I’m certain I could not have pointed out Peru on a map. I knew nothing about Peru. I had never thought of Peru. I had never desired to go to Peru. I’m coming out of these alcoholic days. I got kicked out of college and went to rehab and that helped me. All of a sudden, now my dad’s getting on an airplane to go to Peru. Cajamarca is not a touristy city. It’s a small little city up in the mountains near a gold mine, way off the beaten path. He goes out there, he has his meeting with the head of maintenance at the mine, and in about 15 minutes, the guy said, “We’re not doing this. It’s too big for a pilot, but it’s too resource-intensive for us to try to roll it out.” There goes nine months of work, research, and enthusiasm down the drain. 

As an offhand comment, the guy said, “But we’re buying all these repair parts from Caterpillar. I know they’re price-gouging us. I know there are comparable parts for sale by other companies that are 30% to 40% lower. If somebody would get those parts here to the mine, we’d buy them and I know there are no distributors for those companies here in Peru because we’ve tried to the source vendors and they’re not out there. If you’re looking for a business, you’re starting a business, here’s a list of parts. Bring those to me. If you bring them at the right price, we’ll buy them from you.”

This is so much more common than you think though. 

People will tell you what they want. 

I have another podcast episode, I interviewed a young guy who did amazing things, but I titled the episode The Idea Doesn’t Matter. Just go out there and try to look for problems to solve. I’ve heard that so many times. You’re talking to somebody and they’ll listen to your idea. “That doesn’t solve my problem but if you could make that thing, or if you could adapt to solve this other problem.”

I have a buddy here who opened a barbecue restaurant. He’s a Mexican guy. He worked in a barbecue restaurant and he said, “I’m going to open up a barbecue food truck because I know how to make barbecue but there was already a barbecue restaurant in town.” People were trickling into his food truck. They said, “Why don’t you make Mexican food? There’s not a Mexican food place in town.” He said, “Would you come by?” We love Mexican food. He completely rebranded his food truck to Mexican food. People lined up down the block because he’s the only Mexican food place in town. 

That’s interesting because we were at a food truck. We’re at a festival, my wife and I, a couple of weeks ago. There’s a bunch of food trucks in this park in Cleveland where we live. We’re going around to the food trucks and I see one of them had this big sign that says, “No special orders.” I’m thinking, “You flunked Entrepreneurship 101.” 

People want to tell you what they want. 

Finding Fortunato: People tell you what they want.

 

You’re not listening. 

The Mining Business Venture

The guy says, “We’re not going to do the air filters, but here’s an opportunity.” The problem with this opportunity was it didn’t meet the criteria that my dad had set. There was not an exclusive on these parts, and we also didn’t have a competitive advantage because we were going to be competing against Caterpillar. My dad was hard up for a deal and he told my brother and my brother said, “Let’s go for it.” They didn’t have any money. My brother was working as a bartender. They used their credit cards to fly around the country to talk to these manufacturers. 

They were American manufacturers at that time. It wasn’t all outsourced to China yet. They put together these deals and went back to the mine with a proposal and the mine signed a contract with us to buy $6 million worth of parts over three years. My brother moved from San Diego to Cajamarca, Peru and we were in the business of distributing hydraulic hoses and nuts and bolts to the mine maintenance department of the world’s biggest gold mine from that point on. I moved down to Peru to administer that project to help with the administration. 

We were in the mining business in Northern Peru. We did that for five years and built up a little nest egg. The problem we had was in Peru, Caterpillar bribes managers. We had the better price. We had the same products at 30% to 40% cheaper. We should have been crushing. The contract was to buy up to $6 million worth of products, but we had to convince the managers. It was hand-to-hand combat against Caterpillar. We had to convince the managers to buy our parts instead of Caterpillar’s parts. 

Caterpillar had a graft operation that we couldn’t compete with. We did fine. We made money. Our original plan was to get established at this one mine and then start taking these parts to other minds because Caterpillar was at every mine. We figured we could compete against Caterpillar all over the place. After 4 or 5 years in business, we saw that the future was extremely limited. We didn’t want to be a company that sold a couple million bucks a year of hydraulic hoses and nuts and bolts to this one mine for the rest of our lives. 

It didn’t have that appeal. We talked about it at the beginning. There was no purpose point to it. 

There was no future in it. Also, the city of Cajamarca is at 9,000 feet. The mine itself is at 12,000 feet above sea level. High altitude, cold, windy. It was my brother who had to go up to the mine 4 or 5 times a week and hobnob with these managers and try to convince them. He was burnt out on it. He said, “There was no purpose to keep that could get us over the hump of becoming disillusioned.” We shut down the mining business after five years. We had some savings, but now my dad was 67, and another business shut down and my brother didn’t have a job. He moved back to San Diego and moved back in with my mom at that point. 

I’m 65. To lose everything and start over is hard to fathom.

He was 67 and he had made some money from this project. The choice was to take his savings and retire because he had enough savings plus social security to retire or to put it all on the line and try to start something else again. My brother moved back to San Diego. He had broken up with his girlfriend when he moved to Peru. He had a ten-year relationship that he gave up to pursue this business in Peru. 

Five years later, he moves back home with his mom. Here’s a little lesson on identity. In Peru, he’s a successful entrepreneur working this contract with the gold mine, which was a prestigious position in town. He’s American. He was very popular with Peruvian women. He had a beautiful girlfriend. He was a big shot in Peru. The business closes, he’s back in San Diego, he’s 45, and he’s moving back in with his mom. 

He’s a loser. 

Same guy, same everything. In one place, he’s a big shot. In another place, he’s a loser. He had some soul-searching to do, and it shows you also how, in a lot of cases, your identity is tied to the action that you’re taking in the environment that you’re living in. You could be the same person in one place, be the world’s biggest winner, and be a jet-setting international entrepreneur by getting on a plane and going to Peru to pursue a business opportunity. By taking that action, you’re a big shot. Same with my dad with the hotel. By lining up the meetings, he’s working on a deal. The same guy sitting in your house, you’re a loser. 

Finding Fortunato: Your identity is tied to the actions you take in the environment you live in. You could be the same person in one place and be the world’s biggest winner.

 

What you’re talking about here is the story of resilience. It’s unbelievable resilience. We know that resilience comes from our internal interpretation of circumstances. It’s either optimistic or pessimistic. 

That was the spiritual foundation that my dad had. It influenced his outlook on life. He interpreted this whole thing as “This is my soul’s journey. How I live in this world will determine the evolution of my soul, which means I don’t get to stop. I have to keep going until the end.” There’s a scene in the Bhagavad Gita. I don’t know if you ever got around to reading the Bhagavad Gita. 

I’ve got it. I haven’t completed it, but I do have it.

It’s my dad’s favorite spiritual book. The guy I think is Arjuna. He’s this warrior and he’s going to be fighting this big terrible civil war against his brother or his cousin or something. He says, “I don’t want to fight this fight.” An angel, God, or Krishna comes down and says, “You don’t get to choose the fights. As a king, your duty in the position that you’re in is to pursue the interests of your kingdom. It’s not your choice. You’ve chosen a path and now you have to act according to the path that you’ve chosen.” 

That’s where my dad i coming from. He chose this path. “Someday I’m going to build a business that will last. That’s my path. That’s what I’ve been chasing my whole life. I’m going to keep chasing it. I don’t care.” He and my brother got together and said, “What do we know? What do we know from the last five years?” They said, “The only thing we know is how to do business in Peru. That’s our only advantage in this world. We’re white guys who know about doing business in Peru. We’re going to go back to Peru and we’re going to use our savings. Brian is going to move back to Peru and we’re going to try to do something.” 

They ended up pursuing a project to buy farm trout, which they were going to freeze and sell to China, but that fell through. We’re going to try to plant sugar cane. There was a tax credit at that time that would allow refineries in the United States who mixed their gas with ethanol to get a tax credit. We were going to try to grow sugar cane on the northern Peruvian coast where sugarcane grows well and turn that into ethanol. 

We were far down the line on setting up sugarcane farms and ethanol production factories. We had investors lined up. We’re far. My brother got back together with his girlfriend. Right when we were about to start, and this is all in the book too, it’s a lot more sad than I have time to make it. We had talked to all of these poor communities into leasing us their land to grow sugar cane. We were going to do revenue shares with them. It was going to be this awesome thing. Right at the last minute, the tax credit was revoked. 

We had to go back and tell all these poor communities, “Sorry, this plan that was going to lift you out of poverty is not going to happen.” It’s sad. Right at the time when all that happened, my brother found out that his girlfriend was pregnant. Now he doesn’t have a job. He moved back to Cajamarca, where his girlfriend was from. After a year and a half of trying to start another new business in Peru, we still had nothing. We’d been living off my dad’s savings. We had absolutely nothing. 

The Transition To Cacao

Maybe seven years into trying to start a business with my dad, my brother began to teach English at the local university to make ends meet and we had nothing. We didn’t have an idea. We didn’t have any leads. We had no prospects. We had nothing at all. My brother was going to the Chamber of Commerce meetings, trying to find an idea. At one of these chambers of commerce meetings, there was a presenter who was talking about cocoa beans. Who the hell knows why my brother was interested in this? He liked the idea of learning more about cocoa beans because it’s the base ingredient for chocolate. 

Simultaneously, the mine had a contract. Their cafeteria wanted to buy bananas for the mine cafeteria because miners stay on site when they’re working at the mine. It’s so remote and they got to have food. There was a contract to buy bananas in the agricultural zone, bring them to the mine and sell them to the mine, and bananas and cocoa beans always grow together. There were two opportunities at once. My brother said, “I’m going to take a trip to the jungle.” He called my dad and said, “Do you want to go to the jungle with me and look at bananas and cocoa beans?” My dad’s 68 and he said, “All right. We’re looking for a deal. We have this money and we want to start a business. If you think we might be able to buy bananas and sell them to a gold mine and look at cocoa beans, then I’ll go.”

At that time there was no airplane that flew from where they were to where the bananas and the cocoa beans grew. They got on a seventeen-hour bus ride over the Andes mountains down into the jungle, winding back into the agricultural zone where it’s 110 degrees and it rains all the time. Part of the reason why nobody else had bid on this contract is because people in the mountains are cold, austere, conservative, and reserved, whereas people in the jungle are wild. 

It’s a hot weather country. It’s a wild scene and also that area of Peru was known to be dominated by the mafia. This area where bananas grew was dominated by organized crime. Going out to where these farms are, there are these single roads that it’s easy for gunmen to block the road and rob the trucks. Nobody wanted to bid on this contract to sell bananas to the mine, but we were going to bid on it. 

Little desperation is always helpful. 

At least in Cajamarca, there was a mine where international people came frequently. In this part of Peru, no White guys would ever go out there. They’re the only two White guys in this hundred thousand-person ag city, surrounded by farm country. They ended up getting an introduction to the person in charge of agricultural exports with the government. While they were in town, they attended a meeting of a cacao growers association. 

All of these little ag hamlets formed these associations to do political lobbying. My dad and my brother ended up in this meeting in a room with no air conditioning where like 100 guys from little small cities were talking or standing up to talk to this government representative about what they want the government to do, which is always building better water and electricity infrastructure and paving roads. They’re trying to lobby her. She’s sitting there and she has these two white guys sitting next to her. 

In the middle of that meeting, there’s this guy named Noe Vasquez. He comes over and meets my dad and my brother. He’s a mysterious guy. He said, “If you’re interested in cacao, which I think you are because you’re at this Cacao Growers Association meeting, we have this special cacao growing out in our little part of the jungle where we live. It is called the district of Huarango. If you’re interested in cacao, you should come visit us.” My dad and my brother said, “We’ll come visit you.” 

At that point, cacao was on the radar. 

It’s one of two things we were considering, but what we learned about that zone was that bananas weren’t the cash crop out there. We went to the wrong place for bananas. We were never going to be able to buy bananas. The cash crops out there are cocoa beans, coffee, and rice. The district of Huarango is two hours from the main city. You have to cross this big river called the Chinchipe, which at that time didn’t have a bridge over it. It’s this terrible rushing river with no bridge. The only way to cross is they have these floating platform barges. 

It’s these concrete and wood barges that are strung up to a wire, and the current of the river pulls you across the river on these floating barges. All of the agriculture exports that come out of this canyon that’s on the other side of the river float across this platform barge. My dad and my brother are in a taxi. The taxi drives onto the platform barge. They float across the river, and they’re in the district of Huarango. This guy, Noe Vasquez, meets them there, and they go back out into the jungle to look at cacao. 

The thing about the cacao that was interesting out there was that when you cut it open, half of the cacao was white on the inside. Usually, cacao seeds are purple. In this case, out in the district of Huarango, they were white and Noe told us, “This is not normal. Usually, cacao is purple, but we don’t know exactly why, but we have white cacao out here.” It turns out that white cacao is a genetic defect. When a bunch of cacao trees grow in isolation and breed with each other, it’s like albinism. The cacao turns white. The purple of cacao is like the tannins in red wine. It’s acidic. It’s bitter and acidic. The white cacao is in the absence of that purpleness, which means you have all of the delicious chocolate flavor without the acidity. 

We didn’t know all that at the time. We knew that white cacao seemed cool. My dad his little entrepreneur radar, a 68-year-old man sitting in the jungle, getting bit by mosquitoes, hanging out on this remote cacao farm, goes, “White cacao. I don’t know, there’s something magical in this.” Cutting forward, my dad ended up calling the USDA Cacao Genetics Testing Lab here in Beltsville, Maryland and he got on the phone with the lead geneticist at the USDA genetics testing lab. He started telling him, my dad’s a good storyteller, way out in this remote jungle canyon on the wrong side of a river, on these small cacao farms, there’s white cacao growing. 

The guy thought that that was interesting. The USDA agreed to fund a small genetics testing project for us. My brother worked with the cacao farmers in the area to take leaf samples off of all of these farms. We sent it all to the USDA for genetics testing and when the results came back, we found that we had rediscovered a thought to be extinct variety of cacao growing out of the middle of the jungle. 

Cacao has genetics like grapes. I don’t know that much about wine, but all the different grapes have their own flavor profiles and it’s the same with cacao. This particular genetic variety of cacao was thought to have been wiped out by disease at the beginning of the 1900s. Before that, it was the main cacao that was used in all the high-end chocolate in Europe. 

It was very highly esteemed for its natural flavor. 

The fact that there was white cacao in this “thought to be an extinct” genetic variety had all kinds of provocative implications. 

I’m always listening to these stories and trying to point out the common. What I want people to understand is what’s happening here is this intense self-directed desire to learn. What I hear very often from people is, “I hate school, but I love to learn.” There’s this inquiry or this curiosity. I’m not afraid to pick up the phone and call somebody at the Department of Agriculture or the mining guy or whatever. There’s something that happens in our brains, which is called an affect heuristic. 

The affect heuristic is like, in this case, what happens is the idea of calling somebody at the mine like a manager at the mine or somebody you’re unfamiliar with, somebody at the Department of Agriculture, whatever, that evokes so much fear and anxiety in our brains that we stop thinking about it. Our minds make this heuristic decision without allowing ourselves to think about what’s the worst that can happen. The guy is going to hang up on me. 

That’s pretty much at the beginning before you put any money on the line, the worst thing that can happen is they will say no or hang up on you. 

Rejection therapy is a superpower. 

Over the years, as we have done a lot of different businesses, I’ve realized no one is out there waiting to stop you.

That’s my whole jam. It’s like the underlying assumption is that there are all kinds of difficulties out there. Granted but your own unconscious beliefs are going to stop you before you ever get out the front door. 

Right now, if people are tuning in to this, you could buy a plane ticket to Peru. It’s $500 to $600. You could take a $60 bus ride out to one of the most remote parts of Peru and start poking around. No one would stop you. You could go do that. You could do that right now. The world’s a wide open place and to a very large extent, do almost anything you want if you’ll decide to go ahead and do it. There’s no bogeyman out there waiting to stop anybody from doing anything. 

Finding Fortunato: The world’s a wide-open place, and you can do almost anything you want if you just decide to go ahead and do it.

 

It’s in your brain. What I’ve advocated in my new book is like, “Don’t quit your day job. Don’t drop out of school, but use some of your discretionary thought, time, and resources to explore.” Take a freaking lawnmower and figure out how to earn $500 a week in your spare time just to develop that entrepreneurial muscle, knock on doors, or whatever. 

I agree with you. That’s a skill that my dad started developing from a very young age. I’ll go for this thing. It also turned out that the number one skill we had, I guess the number one value add we had developed and we didn’t realize it was we knew how to associate with Peruvian people. 

Let’s call that empathy. 

It’s empathy but we had learned how to do business in this one particular market. 

Intelligence, maybe. 

Specifically for Peru, usually, if you could go out to where we buy cacao, they don’t trust outsiders. We’re White guys, but they don’t trust Peruvians from other parts of the country on site because they’re small towns, we had learned how to show up in a small town and behave ourselves in a way that people felt they could trust us. From being in Peru for nine years and marrying Peruvian women, we had that advantage. Also, there are some non-intuitive advantages that people might have that add value that is not so clear on the surface. 

If you think about when you produce good results, you may have some very valuable traits that are not immediately obvious. We had developed that particular skill. When we found out that we had rediscovered a thought to be extinct variety of cacao, that’s what we decided to go all in on. My dad and my brother decided to open up a bank account and build a cacao processing facility out in the middle of the jungle, out where the cocoa beans grew. 

I got to read this to you. I sent this to my son, the one I mentioned earlier, who’s in the entrepreneurial early stage. This came from Tim Ferriss. “The superheroes you have in your mind are nearly all walking flaws who’ve maximized one or two strengths. Humans are imperfect creatures. You don’t succeed, air quotes, because you have no weaknesses. You succeed because you find your unique strengths and focus on developing habits around them.” That’s what you’re describing. 

The only two things we had going for us were we were willing to go ahead and try something. 

That’s what you’re describing. There’s a very band of misfits, completely naive, more or less cash-strapped. 

We knew we wanted a family business. We’ve been trying for a long time. We wanted to do a business together. We didn’t know what it was going to be. The two advantages we had in this world were that we were adventurers who were willing to go for it. We know we know how to ingratiate ourselves with the Peruvian people. That gives us access to markets and products that other people wouldn’t have access to.

Let me summarize quickly for the audience. You go back to Peru. You’re thinking maybe it’s bananas, you wind up in the wrong town, and circumstances nudge you towards cacao. Let’s check this out. You find this guy who introduces you to what turns out to be an extinct breed of cacao. That was the highest-end cacao in the world. 

It was mystical because everybody knew that it used to be great, but it wasn’t around anymore. These cacao farmers, because they don’t know how to do genetic testing and they would have no reason to try to call the USDA, they were selling all of this cacao into an industrial chocolate supply chain. It’s getting mixed in with everything else. Nobody’s doing anything to maximize the potential of this ingredient. 

We started researching and we put together a plan to build a cacao processing facility out in the middle of the jungle. Cacao has to be there. There are certain post-hards. A lot of this is in the book. I don’t know that we’ll have enough time for me to go into too much detail, but there’s processing that needs to be done on cacao to maximize its flavor potential which would therefore help you to get a higher price. 

I also want to point out something that you said in the book. 

We knew nothing about any of that either. 

That’s what I’m saying. It’s what I said before. You don’t have any money. You’re not business planning. You’re on this discovery. You cobbled together with duct tape and bailing wire in the beginning. It doesn’t work. It’s rickety. It’s not getting the right results. 

My dad started spending savings. For Americans who maybe live in a city, there’s no stuff for rent out there. You cannot just move in there. There’s not a place to build a cacao processing facility. What they had out there was an abandoned rice mill. There was a government project from the ‘60s in Peru where they built all these rice mills. Rice comes in a husk. They built all these rice mills with the idea that rice farmer cooperatives could mill their own rice instead of selling the rice to big multinational companies who would mill the rice and get all the profits. 

They built too many of them. We rented this abandoned rice mill that was totally decrepit and filled with vermin. Also, there was this huge rice husk mountain that was 100 feet tall and 100 feet wide behind us. It’s dangerous, as we learned later, to do business next to a big rice husk mountain because they smolder on the inside and can catch fire. We didn’t know that, but we ended up paying the price for that, which I suppose I’ll get to. We rented an abandoned rice mill. My brother moved out to the jungle, also into this weird abandoned house. 

On my brother’s first night in town, he had a bed frame, but it didn’t show up on time. He had to sleep on a mattress on the floor with a mosquito. You have to sleep under a mosquito net out there because the mosquitoes eat you alive. He’s lying on the bed, he’s laying on this little mattress on the floor inside a mosquito net and he starts to hear the noises of small footsteps gathering all around him. He realizes it could only be one thing. There’s a roach infestation, but he had no idea how bad it was. He turned on his headlamp and the entire floor was covered in a sea of cockroaches. 

Big cockroaches. 

Small cockroaches were on the floor and they were starting to crawl up the side of his mosquito net. He had a couple of cans of roach spray in there and he started spraying it, but that made them mad. He didn’t have enough to do anything. He looked up at the ceiling and there were six-inch cockroaches on the ceiling and they fell off the ceiling. He lived through that. That’s where food comes from. For everybody, food comes from remote places where there is wildlife.

This story is going to discourage hundreds of thousands of people from ever becoming entrepreneurs.

For food entrepreneurs, food is only fancy at the end, as a general rule. We built this rice. My brother took the lead using my dad’s savings to build this cacao processing facility in this defunct rice mill. We cleaned it up. He cleaned up the apartment he was living in. We had to figure out how to get cacao farmers to sell their cacao to us. We only had a very superficial idea of what this would all entail. If we knew what it would entail, we wouldn’t have done it. 

There’s also, like you said, the naivety of getting started and barely figuring it out. We didn’t know how to process cacao. We thought we did, but we didn’t. My brother, after a year of testing and doing test lots, we hired an independent consultant to come test our cacao, and he told us it was not good. It was bad. We almost gave up then. My brother said, “I’ve been working on this for a year and it still sucks.” We also had to figure out how to get cacao farmers to sell us their cacao.

This is an important factor in the story that I also want to point out. The lack of alternatives is sometimes the only thing that keeps you going forward. 

There was a sunk cost. We’d already spent $50,000 of my dad’s life savings and he’s a 68-year-old man. 

You’re obligated to get it back.

We had to get it back. Also, at this time, my brother gave up teaching English and had a newborn daughter and he’s traveling back and forth 17 hours on buses every two weeks. He did that for 10 years. Saying goodbye to his wife his wife and his newborn daughter. He has to make this thing work because he’s living on my dad’s life savings, but eventually, the life savings will run out. He has to make it pay so he can support his family too as quickly as possible. We’re a year in and we still don’t know how to process cacao well. 

What we didn’t have a full comprehension of was all of these cacao farmers were already selling their cacao to somebody. It was mostly friends and family. There were these long-running familial and paternal ties that we had to try to persuade away. To do that, we had to pay much higher prices for the cacao. It wasn’t immediate like, we’re going to go out, we’re going to pay. This is what we’re thinking. Somehow or another, we have to pay a lot more enough to persuade them. 

Also, we had to overcome the fact that we’re outsiders who might give up and quit. If they give up their existing relationships and start selling to us, what if we go out of business and then they’ve burned these bridges and they have to try to reestablish them? They have perishable food products that they have to sell when it’s ripe. Someone has to come and buy that stuff. If they mess up the buying relationship, will they be able to reestablish it? That’s part of doing business with farms. That’s why farmers are in such a vulnerable position. 

It’s why cacao producers are in a vulnerable position. They’re in a remote location selling a perishable product. When somebody shows up to buy it, they have to take the price that somebody gives them. Anyways, we have to learn this dynamic. We’re trying to figure out how can we pay them more for their cacao and then process it and then sell it to somebody. We didn’t know who we were going to sell the chocolate to, and we didn’t know how we were going to make chocolate. We’re trying to figure out how to process cacao. 

At that time, did you guys know that it was this premium cacao? 

We knew that it had the potential to be a premium cacao based on this mythical story. We hoped there would be a market for it but we didn’t know if there would be. We thought that the strength of the story and the reputation might get us some sales opportunities but no. 

You’re flying blind at this point. 

The whole thing is blind. It was a crazy thing to do with my dad’s life savings in retrospect but it’s also why the book is called Finding Fortunato, because we kept going for it and getting lucky. After a year, my brothers found out that he was doing a bad job. 

I have to call you out on something. To say we’re getting lucky is such a gross mischaracterization. 

You’re right. We were learning. 

That’s what I’m saying but people will look at you from afar now successful and say, “They’re the Pearsons. They’re just lucky.” What happens is they completely overlook all the dead ends, all the failures, all the missteps.

That happens with all entrepreneurs too. The lucky thing was we came across this thought to be an extinct variety of cacao. That part of it was lucky. The rest of it was pure gumption.

It’s a probabilistic thing. You’re trying lots of things, most of which aren’t working.

I think it was Mark Cuban who said, “In baseball, if you bat 300, you’re on top of the game. In entrepreneurship, you only need to make one thing work ever and you’re successful for the rest of your life.” You’re looking for one thing that ends up working out and then you can do that forever. We had to put our thinking caps on and come up with a plan. We had to come up with a strategy. Even though we didn’t know how to execute the strategy, we needed some strategy. The strategy was we’re going to start buying cacao at a much higher price than what these people are currently paying. There are philanthropic things about it that satisfy us because these are poor people in a remote area and they can do a lot with this money.

The Entrepreneurial Mindset Project | Adam Pearson | Finding Fortunato

Finding Fortunato: In entrepreneurship, you only need to make one thing work, and you’re successful for the rest of your life.

 

Can I double-click on that for a second? Something you mentioned either in our previous conversation or in the book, and I cannot tell which because you read your own audiobook. You told me that your father took pride in taking care of people. There was a purpose component to your dad’s ethos, let’s say. 

My dad’s philosophy of entrepreneurship is that the entrepreneur is the one who’s taking care of people. To the extent that your business is growing and profitable, it allows you to take care of more and more people. That’s his philosophy of entrepreneurship. That’s the philosophical transition he made from a young man to an old man. When he was 33, he wanted to get rich but as he reflected on my grandfather, the purpose of those restaurants was to lift his family up out of destitution and fund the future of it. Use the profits to fund the future of his family. 

Our model right now, our whole ethos, in addition to trying to make the world’s best chocolate is we want our customers to be happy. Our investments are in providing a great product, great world-class products, and world-class customer experience so we can take care of people and bring light to their lives. Also internally, to use our profits to create jobs and take care of as many people as we can. 

That came through in the book also, like in your exposure to the mining industry, you became disillusioned. You talked a little bit about that.

I didn’t get into it here, but that’s right. 

I want to point that out. For any people who might think entrepreneurs are all just selfish, greedy profit-seeking. 

When you’re competing against an industrial supply chain that is established for the benefit of the big players, that’s who it’s established. The whole chocolate supply chain, the way chocolate is manufactured and distributed, it’s for the benefit of big, highly capitalized, publicly traded companies. They sell a crap product. Customers get a crap product. They don’t know they’re eating a crap product because they don’t know that there are comparatively much better options available, which is our job to let them know about that. It doesn’t serve the customers. They grind down the raw materials producers. 

This whole supply chain was created to serve certain big players at the expense of everybody else in the supply chain because they have monopoly power. It turns out that in a market situation of that configuration, philanthropy is what gives you a competitive advantage. Redoing the supply chain so that it benefits the important people in the supply chain, namely your raw materials producers and your customers, is what squares the circle and allows you to beat bigger competitors. That’s a business model for people to understand. 

Finding Fortunato: Philanthropy gives you a competitive advantage.

 

We have to unpack that. Your choice of the word philanthropy is interesting. I don’t know how to reconcile that but I’ve always believed that by solving problems for other people, we benefit ourselves. 

That’s correct. That’s a good way to put it. 

It’s just a simple philosophical thing and that’s everywhere in nature. That’s not just some moral aligning. It’s a natural thing. I love what you said. It’d take me a minute to process it. 

If you read books like Guns, Germs, and Steel, which is a book I like, it talks about the development of human societies and hunter-gatherer societies. I don’t remember the exact statistics, but the leading cause of death is murder. People come across scarce resources. They fight each other and kill each other to get their hands on these scarce resources. I think maybe 40% of adult males died of murder in hunter-gatherer societies. You come across a rival and you fight to the death and whoever wins gets the thing. 

That doesn’t lead to very satisfactory population growth if everybody is killing each other all the time. Modern societies learned how to work together as teams, which means we all have to talk. You have chiefs who are looking not after the good of themselves, but they’re looking at the good of the tribe of the tribe as a whole. It’s the teamwork. It’s like “How do we all get together with our different abilities, our different skill sets?” Farmers are going to farm. We’re going to process cacao. We’re going to get with chocolate makers to make the best chocolate. We’re all going to meld our individual abilities together for the best possible outcome for the good of all of us. 

It’s that ability of people to cooperate in teamwork that produces the biggest results that benefit everybody. You might get a small piece of the pie, but the pie is so much bigger. It’s more sustainable. The pie is so much bigger that 1% of a huge pie ends up being much more lucrative than 100% of a very tiny pie.

Finding Fortunato: It’s teamwork that produces the biggest results.

 

In the research for my newer book, The Entrepreneurial Mindset Advantage, I came across this concept called Pareto Efficiency. 

I’m familiar with that. 

It’s what you’re talking about. Pareto Efficiency is when you maximize the efficiency of something. You cannot go beyond Pareto efficiency. You’re going to harm some component of the system. It’s maximum efficiency without harming. I think that’s what gets lost in the industry. 

The chocolate supply chain is from another time. It’s from a time of imperialism as well. It’s sort of a relic. It’s what we had to think about. We’re having brainstorming sessions and we’re trying to put together a strategy. We go, “We’re going to pay these cacao farmers more. How are we going to do that?” We start to look at the supply chain and we realize between a cacao farmer and the retailer, there are eight people in the supply chain.

There’s a guy in a pickup truck who goes out to farms. He takes the stuff to the next big city. There’s an aggregator. They aggregate a bunch of cacao, then they sell it, then they put it on trucks, and send it to the capital. In the capital, there’s another aggregator who’s aggregating cacao from all of these small mid to mid-size ag towns. There are international commodities brokers who buy stuff at a port. They sell it to a big chocolate manufacturer. The big chocolate manufacturer sells it to an international distributor. The international distributor sells it to a domestic distributor. 

This is a common supply chain in all of the food that we eat. The domestic distributor sells it to a retailer and then the retailer finally sells it to you. There’s price competition everywhere so that low price at the store wins unless you make a case for why there’s a value proposition that deserves a higher price, which is a premium product. We’re going to cut out everybody else in the supply chain and we’re going to keep the profits. 

That’s how you’re going to make up for paying higher prices for it because everybody gets a standard business profit, between 20% and 30%, and it compounds. It’s like a compound interest thing. It’s like 20% gets marked up on top of 20% gets marked up on top of 20%. We go, “There’s all this money in the supply chain. We’re going to cut it all out. We’re never going to do any distribution. We’re going to buy this cacao. We’re going to process it ourselves.” 

After a year, my brother realized he sucked at processing cacao and we went out and started asking for help. We brought in some people from the chocolate industry who gave us tips and so we were able to do that. In the end, we said, “We’re going to make a premium product. We’re going to have more money coming into the supply chain and we’re going to keep a higher percentage of the money and that’s going to be how we finance this whole thing.” That ended up working. It’s a real grit and going back and forth on seventeen-hour bus rides every two weeks, my brother learned how to process cacao. 

We built up a team of people. We went out to cacao farms. We built all these relationships into the community. We convinced them that we weren’t going to leave. We were going to stay and they could count on us. It took us 4 or 5 years to get enough cacao farmers into the project where we were doing enough volume of chocolate to become a sustainable business. This is 4 or 5 years of learning how to produce the highest quality product, have a supply chain, and have foreign partners who are going to stick with us. 

Any reasonable person would look at you, your father, and your brother and think you guys are crazy. 

There’s something fair about that. 

I think it was George Bernard Shaw who said that the reasonable man conforms himself to the world and the unreasonable man expects the world to conform to him. Therefore, all progress relies on unreasonable men.

Not everybody who’s an entrepreneur has to go this crazy. What we realized is the supply chain does serve an important financing function because if you buy a cacao and then sell it in two weeks, you only have your capital tied up for two weeks. Whereas if you own the entire supply chain, which we do, you float a dollar out into the world and you don’t get it back with your profit for eight months. 

To the extent that you’re growing your business, you need a greater and greater amount of capital upfront. That meant we were going to be settling for. Since we didn’t want to take on too much debt and we didn’t want to bring in outside investors, which we never have, we knew we were going to have to settle in for the long run, reinvest our profits, and grow incrementally. We’re sixteen years in now. 

You started producing chocolate. Take us through that. 

We mastered everything in Peru. There’s a lot more to it than that. That rice husk that was behind our first processing facility, after our first successful cacao harvest, caught fire. All of the ashes blew into our processing facility. In the middle of a cacao harvest, we had to build a new facility on the fly, which almost put us out of business because it cost us another $50,000 to build a new facility. 

There are all kinds of resiliency stuff like that that we had to deal with. Now we have good cacao, the base ingredient for a good chocolate. Me and my dad, who are not engineering types at all, were going to a sales rep from this German company called Netzsch, which had a machine called the ChocoEasy, which was this all-in-one chocolate-making machine. Usually, you need 6 or 7 machines to make chocolate. You need to roast it and grind it. 

Maybe it’s not the Germans. 

It’s all right. It was a bad machine. We were trying to find out how to make chocolate and how to sell it to people. We didn’t know anything about that. We started going to these industry networking events and we’re trying to learn the market. What are we going to do here? Brian is in Peru doing his part. What are we going to do? Through some networkers, we met this rep who had this machine called the ChocoEasy. It was this all-in-one chocolate-making machine where you put cacao into one end and in theory, chocolate would come out the other end. 

He had a demonstration set up in Las Vegas. We went to Las Vegas with some of our cacao and that was the first time we ever made chocolate with our cacao. There were a bunch of industry professionals there. That was the first time we ever tasted chocolate made with our cacao. We pour cacao into one end of this chocolate easy machine and the guy Harry was there giving his sales pitch. The machine kept breaking down during his sales pitch. It was not a smooth day, but we were still going to buy the machine anyway. We were still going to buy one of these things.

It was like seven hours. He had a toolbox and he kept wrenching on the machine. At the end of that day, we started smelling the aromas of our chocolate. All these industry people around there had shown up to also see the machine and who knew nothing about us. We did a tasting of the chocolate and everybody said, “What is this chocolate? This is the most delicious chocolate we’ve ever tasted.” We knew there was a market here. We’re going to have a market. It’s just a matter of how to service the market.

You have a whole bunch of experts telling you going like, “What is this?”

We told them the story and they’re like, “That’s an amazing story. We want in. When can we buy the chocolate?” We said, “We don’t know. We think we’re going to buy one of these ChocoEasy machines.” “Call us when it’s ready.” We got all set to buy a used ChocoEasy machine that was already installed in a warehouse in Miami. We lived in San Diego at the time. We were going to fly across the country and figure out how to make chocolate because we got a good deal on this machine in Miami. 

We know nothing about how to use the machine. We had already seen that the machine was finicky and you need a toolbox to work it. My dad and I are not mechanical engineering types. This was a bad idea. We got lucky here. This was lucky. We were going to fly to Miami and try to make chocolate and sell it to all these people who said they would buy it. We tell my brother, the first shipment of cacao that he’s going to be floating across the river on this platform barge, “Get it on a boat, send it to Miami and we’re going to make chocolate.” 

We’ve been spending money this whole time. We’re two years in. We’ve been spending all this money. We’re running on fumes. We need a product to sell. We’re going to make chocolate in Miami. About five days before our first-ever shipment of cacao is going to arrive in Miami, we get a call from the guy who’s going to sell this machine. He’s backing out of the deal. “We’re going to take this machine somewhere else and we’re keeping the machine.” Now we have a container of cacao in a warehouse in Miami and no way to make a product. 

We started calling people like, “How can we make chocolate?” The guy who owned the warehouse in Las Vegas where the ChocoEasy Machine was set up said, “That chocolate was some of the best chocolate I ever tasted. Do you know what you should do? We should take a trip to Switzerland. I want to introduce you to some of my friends over at this company called Max Felchlin, AG.” 

It’s this 120-year-old Swiss chocolate-making company up in the Swiss Alps. That’s known to be one of the best 2 or 3 chocolate-making companies hands down in the world. They have all these vintage machines that they use to make old-world-style chocolate. They only accept 1 or 2 new origins of cacao a year. We said, “Let’s go meet with them.” My dad got on a plane to go to Switzerland with his buddy. We sent a sample of cacao ahead of us from Miami to Switzerland. 

They’re in a little city called Schwyz, Switzerland, which looks like the sound of music out there. There are white cows with golden bells and people yodeling. They got the horns from the commercial. In the middle of that, there’s this beautiful, meticulous chocolate-making factory. They had already made samples of chocolate from our cacao before my dad arrived because we airmailed it to them. These were big-league chocolate people. 

These are very plus players.

They’re very exacting. They will not accept the origin of cacao. That’s not up to snuff. When my dad showed up, they said, “This is some of the best cacao we’ve seen in over a decade.” Whoever is processing this stuff in the jungle is doing a great job. It’s my brother. He learned how to do that. He said, “The genetic components of this cacao are miraculous. We want to work with you. What can we do?” We told them, “We don’t want to sell you cacao. We want you to make chocolate for us on a contract basis.” We needed that for us, for our strategy to work. We don’t do that. We said, “That’s what we want to do.” They kicked it up to the CEO and the CEO said, “This is such a cool project. We’re going to do it. We’re going to make an exception.”

They will white-label it, essentially.

They’re still the people who make bulk chocolate for us to this day. We came up with recipes.

You didn’t eliminate everyone from the supply chain, all but one.

We contract it with them. It’s still us. This wasn’t our plan, but because we were making chocolate in Switzerland, we started leveraging their contacts to sell chocolate to high-end restaurants and chocolatiers throughout Europe and that became the market that we sold to. With all of that in place, we were in business. We knew what we knew, how to sell. We knew who to sell it to. We knew how to do the supply chain. We knew the economics of the whole thing. At the age of 71, we were in business and we were on Parts Unknown with Anthony Bourdain. I don’t know if you remember Anthony Bourdain. 

We knew what we knew: how to sell and who to sell it to. Share on X

Of course, I do.

We got featured on Parts Unknown with Anthony Bourdain in 2013. From 2010 to 2020, we grew and we ended up selling chocolate to high-end restaurants and pastry chefs in 40 countries. We had a real business. We were doing a lot of good work in the community where we were buying cacao. It was great. We found success finally. That was good, but our tribulations weren’t done.

They never are. 

I only wrote the book because we felt like we finally did have our destiny in our own hands, which is a knock on wood. In 2020, when COVID hit, restaurants and chocolatiers were shut down. We still had made these long-term promises to buy the cacao harvest. In 2020, overnight, our entire market disappeared. We were doing our biggest-ever cacao harvest. Mind you, we finance our growth through the previous year’s profits. If we’re not getting purchase orders in any given year and we start to do the biggest cacao harvest yet, a lot of our capital bleeds. We weren’t getting purchase orders. We were bleeding. 

We started to look for a way out. We almost went out of business in 2020 because of the shutdowns. We started thinking about it. We said, “What if we were to go the next step, and instead of selling this to restaurants and pastry chefs, we start an e-commerce business and we’ll sell our cacao directly to chocolate lovers.” In a hurry, we created an e-commerce website, which is our website, www.FortunatoChocolate.Com. Now we had this world-class chocolate that had only been available to high-end pastry chefs and restaurants, mostly in Europe. 

We’re bringing it onto the market for regular everyday chocolate customers to consume. Because our entire financial model was built on wholesaling it to these people, we’ve got a wholesale chocolate price, which ends up an ounce for ounce being cheaper than a regular bar of chocolate at the grocery store. We come into the market with this value proposition, world-class chocolate at grocery store prices, buy it directly from us at FortunatoChocolate.com.

When we were on the verge of going out of business, our online e-commerce business took off. In the course of several months, we ended up getting 20,000 new customers. The word amount took off like crazy. The economics of it were so good because now we get the full retail price instead of this wholesale price. Now we’ve got these economic models that are awesome. We’re never dependent on other people buying chocolate from us. We have a direct relationship with our customers. 

That’s what I say about it. You’re an employee, and you have one customer. The more customers you have, we trade the tyranny of one for the tyranny of the many, but it’s a safer bet. 

In this environment here, before we had to worry about making a great product. The chocolatiers and the restaurants had to provide the experience, but now we have to do the product and the experience.

Did you lose the commercial customers?

We lost all of them. 

Did they come back? 

When everything rebounded a year and a half later, by the time it came back, we had pretty much in a year and a half had replaced our entire wholesale business with direct-to-customer business. The economics of it were better. We did go back and start doing some wholesaling in Europe to a select few clients, especially the ones who had been with us a long time. They took a chance on us in the beginning. Mostly we’ve completely changed our model. It’s great because now it’s in our own hands. Even if COVID hits again or there are shutdowns, we have our customers. 

God knows, chocolate is like cocaine. 

Many people haven’t tasted what good chocolate tastes like. They grow up eating Hershey’s or Mars bars. They don’t realize that really good chocolate is a whole other thing. For almost the same price or a little bit more, you can experience that. 

Future Plans

As we wind down, I would like to turn this show into a two-hour-long infomercial for Fortunato Chocolate. It’s such a great story. Where are you guys going next? Is your dad still involved in this? 

Yeah. He’s 85 now. He works full-time. He manages all of our logistics and accounting for our company. He says, “I’ll work. When I cannot do this anymore, when my mind isn’t strong enough, give me a broom and I’ll sweep the floor.” At the end of 2021, we realized that it’s hard to ship chocolate during the summer. We opened up retail stores and also we built a factory. We went from selling chocolate to now manufacturing caramels. We manufacture a whole bunch of stuff that we sell in our retail stores. We have built a factory. Now we manufacture end products.

You built a chocolate empire. 

We’re one of the only fully integrated companies that buy cacao wet, directly off of trees, and owns the cacao through the entire supply chain, all the way through to manufacturing and final products. Were vertically integrated. This lets us produce premium products at great prices. I’m not trying to say this as an infomercial, For any entrepreneurs out there, this is a business model. Finding convoluted supply chains and cutting out players is a business model. It’s a food business model in particular. 

That leads me to you asking about the future. I’ll point out, now we own a chain of food retail stores and we make food products, which goes all the way back to my grandfather who owned a chain of restaurants. It comes all the way full circle. My dad finally achieves this goal in a way very similar to how his father built his empire. It’s pretty crazy how it all turned out. Our goal, we’ve given a lot of thought. We were going to start to open up a chain of retail stores, but what we want to do is continue to build out our factory, increase the size of our factory, and expand our online because to have a chain of retail stores means you have to drive around and keep an eye on a lot of different locations. 

We’d much rather have our team and our culture concentrated in one place, which is our factory so we can focus on innovating our products. We still have our team in Peru. We want to have our team and our cultures concentrated where we can make the best products and focus on making the best products at the best prices. That’s what we’re going to do. We have a great kitchen staff. We hired a chocolatier who oversees our kitchen staff. 

We’ve given him carte blanche to have fun and make any product he wants, as long as it’s high quality and delicious and uses the best ingredients. We’re going to be creative. We’re going to keep working with our cacao farmers and helping them improve their lives. We’re going to keep doing this and hopefully one of my kids will take over the business someday, but I’m only 41. If my dad’s any model, I still have another 50 years running this thing. I’ll do that until I run out of steam and then hopefully, one of my kids will take it over. 

What a great story. What a fantastic story. Thank you for sharing this. As we wind down, where can people get their hands on this chocolate? For God’s sake, please.

www.FortunatoChocolate.Com. During the summer, which it is right now, our chocolate melts in transit. We don’t have our full catalog of products online, but the products we have online that do ship well in the summer are our chocolate nut butter. If it’s still summer, check out our dark chocolate, milk chocolate, peanut butter, and almond butter. The cleanest ingredient in chocolate nut butter on the market. High in protein, delicious. We dial back the sugar. You can ship them in 120-degree heat. They show up perfectly. FortunatoChocolate.com. In the fall, as the weather starts to cool down, we’ll have our full catalog available and you can check it out and try chocolate made with a “thought to be extinct” variety of cacao that’s some of the most delicious chocolate you’ll ever taste. 

I got to get my hands on some of this. It’s not just for my wife.

I’ll send you some. I’ll send you a package. 

This is so good. 

When you taste the chocolate, it makes the whole story even better. 

When you taste the chocolate, it makes the whole story even better. Share on X

That’s what I was about to tell you. Send me a piece of that chocolate because I’m going to be eating the chocolate while I’m recording the introduction so I can legitimately testify. I think you and I talked about this, but my dad emigrated from Europe after the Second World War. 

What country?

He was born and raised in Prague, ethnic German. My dad was like a cook. He was an artist, but in the evenings and weekends, he would cook. I’m not the greatest cook in the world, but I’m somewhat of a foodie. I have a little bit of intrigue for this story from that perspective as well. I cannot thank you enough. I’m also going to put a link to your book. It’s Finding Fortunato. You can buy that wherever books are sold. We share the same publisher which is fun.

We do. That’s how we met. Finding Fortunato out of the blue was selected for the 2024 JP Morgan summer reading list. Eleven titles out of thousands of submissions. We got lucky again. Somehow the book got selected. It has been stamped by whoever chooses the books for that list as being a good book so people could take a risk on it and feel certain they’ll enjoy it. 

That’s awesome.

Thank you.

Adam, thanks so much for sharing your story with our audience. 

Thank you for having me, Gary. Our chat before we got on was so enjoyable and I love the work you’re doing. I’m looking forward to reading your book too. I’m going to get it very soon.

Thank you.

 

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