An Interview with Jeff Russell, CEO of Teton Waters Ranch

Chris Schwalbach  ·  October 24, 2016  ·  17.6 min

When the real estate market crashed in 2008, Jeff Russell didn’t know what to do. He’d just left his job to help manage a new real estate venture in Idaho; a working potato and grain farm destined to become a place for fishing, biking, farming, and picturesque second homes. The downturn changed everything and sent Jeff and his partners scrambling to find a way to weather the market implosion. But when life hands you economic downturns, you make sausage.

And thus Teton Waters Ranch was born. Using a single, natural asset—beautiful, native Idaho grasses—Jeff took relatively undeveloped farmland and turned it into home base for a market-leading supplier of grass-fed meats. From their first purchase of 40 cattle, to deals with Safeway, Kroger, and CostCo, Teton’ (and Jeff’s) story is a great example of correctly pivoting your business and turning your greatest obstacles into your greatest successes.

 

What led you to this business? What was it in your gut?

 

It was an accident. We invested in the land, which became the Teton Waters Ranch in Idaho as real estate investors. I was working for a fund in Connecticut in 2005-2006 and part of the strategy of this fund was to invest in land assets that we thought would remain steady over the long haul because we knew some kind of market correction was coming. This guy we worked with on the residential home development told us about this property in Idaho that was across the pass from Jackson Hole but still near all of the scenery people move out west for.  At the time, this land was a working potato and grain farm. We ended up buying it and planning this conservation-based real estate project on it. The plan was to take some land and restore native grasses and wildlife habitats with a small farming component. The rest of the land would be allocated for second homes, fly-fishing, and mountain biking. We started planning in 2006 and 2007. I then left the fund as an employee and became a joint venture partner of the fund in Idaho. Along the way the real estate market crashed. We didn’t know what else to do. No part of the plan could sustain the real estate implosion except we had these native grasses. One of the guys working for us on the property, Dusty Shifflett, was a fourth generation cattle rancher and said since we have beautiful native grasses, we should buy some cattle. I didn’t know anything about cattle but he did. We ended up buying 40 cattle and letting them graze that summer. We then took them to slaughter. We didn’t know anything about grass fed. It was just a hobby. Then people started asking if they could buy more, and if they could buy year round. We decided to stay at it because real estate wasn’t getting any better.

 

What’s the journey been like for you? How would you summarize?

 

Mostly painful with a few bright spots that kept us going. We started getting into the beef business more. We sketched out Teton Waters Ranch name on the back of an envelope and filed registration for the entity. We started selling beef and thought maybe we can scale this up and this can be what we can do. Selling beef as a small producer is really hard. We tried everything. We tried e-commerce, selling to restaurants, farmers markets, and we even tried dropping off product at cross fit gyms. We tried everything to make a living. We bought a beat up refrigerated van and took the cattle to the plant ourselves. We did everything ourselves and it was really hard. The demand was growing, but we couldn’t figure out a way to pay ourselves a decent wage. That was 5 years of trying to figure it out and barely making it/surviving before we started to make hot dogs and sausages. Got to the point in fall of 2013 when we got down to the last few dollars in our bank account and we said we are going to do this trade show Expo East week in Baltimore. We took hot dogs and sausages and sampled them. It was either going to work there, or we were going to call it a day and close up. We had a great reception at Expo East. We had a line of people asking where they can buy it. Natural Grocers brought us in and we decided to stick with it to see if we could make a go of the sausage business because the beef business was hard. Then we got Safeway, then Costco then Kroger.

 

What are some of the important lessons? What would you do again? What would you not do?

 

We would start in the branded food business right away. That was one of the hard parts of selling fresh beef is that it was hard to brand. It’s a commodity and it’s hard to sell. You’re relying on restaurants and staff and grocers to sell your story. When you are selling something at a higher price point and there’s a reason for it, that’s the hard part is making sure the consumer knows the story. Therefore it’s hard to get the price you need to make a living. I would say if I could go back I would cut through a lot of the pain and go right to that.

 

The other thing is I saw an article with a graph and it shows an entrepreneurs life line with highs and lows and downturns and right after that the business starts to feel stable and become viable. But it wasn’t until the last major bad trough and that I understood how accurate that was. We were ready to close the doors. After that things started to work out. That chart was very accurate for our evolution.

 

What types of things did you learn about yourself and the team in that difficult time and even in the past 6-9 months during this fundraising process?

 

First of all I have great teammates in Matt Landis, Christa Newton and Dusty Shifflett. I was continuously surprised that they were not quitting and doing something else. I couldn’t’ believe that they were sticking with it and not doing anything else. They took a job and signed on and I continued to be surprised that they stuck around. There were a lot of reasons for them to move on along the way. If people believe in something they will stick with it.

 

What did you learn about yourself?

 

I learned to not get too excited about the highs or the lows. The highs can be followed by a low and the low can be followed by a high. Every disaster you just get ready for the other one and how do we figure this out. We get a good wind but it’s tough to enjoy it because something else could come along that throws you off course. I don’t get as excited about the good or the bad.

 

What has this raise process been like for you over the last 6-9 months?

 

Every time you raise capital you learn more about the business and get better at managing the business. It’s a hard process. You measure everything and you get as many daggers thrown at you and people try to poke holes in your business practices. It makes you better at everything. As hard as it is, it definitely makes you better.

 

How have things changed for you as a professional CEO since the raise? What are some of the things you are looking forward to or concerned about in the future?

 

The immediate change was having more time to spend on the business and less need to be in fundraising mode and less stress (at least about the cash in the bank). I am looking forward to executing on the business plan. We’ve been holding off on things we want to do and opportunities because we were managing cash week to week. I’m really looking forward to implementing exciting stuff. Now we can actually get after it. I’m not really terrified about anything at this point. There’s always a concern to be the best vendor/supplier you can be but you can’t worry about that every day.

 

For folks looking to get in or jump in to the natural foods space or starting business, what are the nuggets of wisdom?

 

Pay attention to margin earlier rather than later. It’s a lot harder than you think it is. You come up with a good idea and you get in this excited honeymoon phase when you get some people interested but you are so far from a functioning business and you don’t really realize how hard that will be. Anything you do is going to be a lot harder than you think. And there are a lot of other people with a lot of good ideas out there so pay attention.

 

When you say “pay attention to margin” are you refereeing to fresh beef?

 

With anything. You hear stories about companies that price right and keep expenses low from day one. That might have been hard to make ends meet during the beginning, but that’s the right approach. We got out ahead of the space and tried to price ourselves to grow instead of price ourselves where we should be. We got business up front but it wasn’t profitable business. I wouldn’t do that again. Just focus on getting your pricing right from the get-go.

 

Thinking back to your fundraising process, what do you think you could have done better?

 

I was a bit reluctant to ask the investors too many questions. That felt like the wrong initial approach to our relationship but in insight you have every right to ask a lot of questions and make sure you do your diligence on them as well because they are and will be partners and if you don’t pick good ones it can be pretty miserable. I am really happy with my partners but in hindsight I would ask more questions.

 

Knowing what you know now, would you do it all again?

 

Yes. In a second. I believe what we are doing matters. I’ve had some different jobs around the way that I didn’t feel that great about. It wasn’t something I was going to look back on and be proud of. It was just a job. Now the more I learn about the natural foods market, the more I felt was important and for all of the bumps.

Lead in:

 

Click here to read our interview with Teton Waters Ranch CEO, Jeff Russell. Jeff tells us about how his company came to be, lessons learned, and what it was like raising funds in the natural food market.

 

What led you to this business? What was it in your gut?

 

It was an accident. We invested in the land, which became the Teton Waters Ranch in Idaho as real estate investors. I was working for a fund in Connecticut in 2005-2006 and part of the strategy of this fund was to invest in land assets that we thought would remain steady over the long haul because we knew some kind of market correction was coming. This guy we worked with on the residential home development told us about this property in Idaho that was across the pass from Jackson Hole but still near all of the scenery people move out west for.  At the time, this land was a working potato and grain farm. We ended up buying it and planning this conservation-based real estate project on it. The plan was to take some land and restore native grasses and wildlife habitats with a small farming component. The rest of the land would be allocated for second homes, fly-fishing, and mountain biking. We started planning in 2006 and 2007. I then left the fund as an employee and became a joint venture partner of the fund in Idaho. Along the way the real estate market crashed. We didn’t know what else to do. No part of the plan could sustain the real estate implosion except we had these native grasses. One of the guys working for us on the property, Dusty Shifflett, was a fourth generation cattle rancher and said since we have beautiful native grasses, we should buy some cattle. I didn’t know anything about cattle but he did. We ended up buying 40 cattle and letting them graze that summer. We then took them to slaughter. We didn’t know anything about grass fed. It was just a hobby. Then people started asking if they could buy more, and if they could buy year round. We decided to stay at it because real estate wasn’t getting any better.

 

What’s the journey been like for you? How would you summarize?

 

Mostly painful with a few bright spots that kept us going. We started getting into the beef business more. We sketched out Teton Waters Ranch name on the back of an envelope and filed registration for the entity. We started selling beef and thought maybe we can scale this up and this can be what we can do. Selling beef as a small producer is really hard. We tried everything. We tried e-commerce, selling to restaurants, farmers markets, and we even tried dropping off product at cross fit gyms. We tried everything to make a living. We bought a beat up refrigerated van and took the cattle to the plant ourselves. We did everything ourselves and it was really hard. The demand was growing, but we couldn’t figure out a way to pay ourselves a decent wage. That was 5 years of trying to figure it out and barely making it/surviving before we started to make hot dogs and sausages. Got to the point in fall of 2013 when we got down to the last few dollars in our bank account and we said we are going to do this trade show Expo East week in Baltimore. We took hot dogs and sausages and sampled them. It was either going to work there, or we were going to call it a day and close up. We had a great reception at Expo East. We had a line of people asking where they can buy it. Natural Grocers brought us in and we decided to stick with it to see if we could make a go of the sausage business because the beef business was hard. Then we got Safeway, then Costco then Kroger.

 

What are some of the important lessons? What would you do again? What would you not do?

 

We would start in the branded food business right away. That was one of the hard parts of selling fresh beef is that it was hard to brand. It’s a commodity and it’s hard to sell. You’re relying on restaurants and staff and grocers to sell your story. When you are selling something at a higher price point and there’s a reason for it, that’s the hard part is making sure the consumer knows the story. Therefore it’s hard to get the price you need to make a living. I would say if I could go back I would cut through a lot of the pain and go right to that.

 

The other thing is I saw an article with a graph and it shows an entrepreneurs life line with highs and lows and downturns and right after that the business starts to feel stable and become viable. But it wasn’t until the last major bad trough and that I understood how accurate that was. We were ready to close the doors. After that things started to work out. That chart was very accurate for our evolution.

 

What types of things did you learn about yourself and the team in that difficult time and even in the past 6-9 months during this fundraising process?

 

First of all I have great teammates in Matt Landis, Christa Newton and Dusty Shifflett. I was continuously surprised that they were not quitting and doing something else. I couldn’t’ believe that they were sticking with it and not doing anything else. They took a job and signed on and I continued to be surprised that they stuck around. There were a lot of reasons for them to move on along the way. If people believe in something they will stick with it.

 

What did you learn about yourself?

 

I learned to not get too excited about the highs or the lows. The highs can be followed by a low and the low can be followed by a high. Every disaster you just get ready for the other one and how do we figure this out. We get a good wind but it’s tough to enjoy it because something else could come along that throws you off course. I don’t get as excited about the good or the bad.

 

What has this raise process been like for you over the last 6-9 months?

 

Every time you raise capital you learn more about the business and get better at managing the business. It’s a hard process. You measure everything and you get as many daggers thrown at you and people try to poke holes in your business practices. It makes you better at everything. As hard as it is, it definitely makes you better.

 

How have things changed for you as a professional CEO since the raise? What are some of the things you are looking forward to or concerned about in the future?

 

The immediate change was having more time to spend on the business and less need to be in fundraising mode and less stress (at least about the cash in the bank). I am looking forward to executing on the business plan. We’ve been holding off on things we want to do and opportunities because we were managing cash week to week. I’m really looking forward to implementing exciting stuff. Now we can actually get after it. I’m not really terrified about anything at this point. There’s always a concern to be the best vendor/supplier you can be but you can’t worry about that every day.

 

For folks looking to get in or jump in to the natural foods space or starting business, what are the nuggets of wisdom?

 

Pay attention to margin earlier rather than later. It’s a lot harder than you think it is. You come up with a good idea and you get in this excited honeymoon phase when you get some people interested but you are so far from a functioning business and you don’t really realize how hard that will be. Anything you do is going to be a lot harder than you think. And there are a lot of other people with a lot of good ideas out there so pay attention.

 

When you say “pay attention to margin” are you refereeing to fresh beef?

 

With anything. You hear stories about companies that price right and keep expenses low from day one. That might have been hard to make ends meet during the beginning, but that’s the right approach. We got out ahead of the space and tried to price ourselves to grow instead of price ourselves where we should be. We got business up front but it wasn’t profitable business. I wouldn’t do that again. Just focus on getting your pricing right from the get-go.

 

Thinking back to your fundraising process, what do you think you could have done better?

 

I was a bit reluctant to ask the investors too many questions. That felt like the wrong initial approach to our relationship but in insight you have every right to ask a lot of questions and make sure you do your diligence on them as well because they are and will be partners and if you don’t pick good ones it can be pretty miserable. I am really happy with my partners but in hindsight I would ask more questions.

 

Knowing what you know now, would you do it all again?

 

Yes. In a second. I believe what we are doing matters. I’ve had some different jobs around the way that I didn’t feel that great about. It wasn’t something I was going to look back on and be proud of. It was just a job. Now the more I learn about the natural foods market, the more I felt was important and for all of the bumps.