5 Things with David Scharfman Co-Owner & General Manager of Just the Cheese

I had the pleasure of interviewing David Scharfman reformed consultant, serial entrepreneur, and is currently the Co-Owner and General Manager of Just The Cheese®. Just The Cheese® launched it’s crunchy cheese snack bars in December of 2017, and has been ranked as high as 50th on Amazon Grocery. They sold over $3.5M of product in their first year in operations, and are the top selling cheese item anywhere online. They are know branching out into brick-and-mortar stores nationwide, and are looking to become the next big thing in snacking.

Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?

This being the family business, I grew up in small business, and was always much more comfortable in their chaotic, messy, craziness, than the color-inside-the-lines, corporate environment. As I was looking for jobs during my second year in business school, I was torn between joining a start up, or taking a job as a consultant. I did not see myself as a prototypical consultant (I don’t like suits, I swear a lot, and enjoy a good fart joke), but I felt like I needed to learn more about how larger business worked. Even though it was a struggle, I actually enjoyed my time as a consultant, and was able to learn a tremendous amount from the businesses I helped, but from my coworkers at the firm. That experience combined with what I learned getting my MBA was the best possible preparation to return to the family business and drive it forward successfully.

Can you share your story of Grit and Success? First can you tell us a story about the hard times that you faced when you first started your journey?

I guess it wasn’t really at the start of my career, but it was definitely a seminal moment in my life. I had been working on building a cheese company in the Philippines for almost three years, but was facing the grim reality that it might not work out. Construction budgets were soaring, well-funded competition was sprouting up, and I had to decide whether to shit, or get off the pot. If I was going to go through with the business, I needed to sign a commitment letter to the US Government for $1.1M. That would get my factory built and give me a sliver of working capital to get the business up and running. If I didn’t sign it, I’d still have half of the cash equity my investors put in (my own included) but would be flushing a lot of work down the toilet, as well as passing up an opportunity that I still believed could be successful. It was an agonizing decision, but ultimately the cold hard facts said that it was too risky of a decision, and the poker player in me knew that it was better to get up from the table with half your chips than none, even if you had been sitting there all night. Calling my investors was even harder, but I got through it. All of them were surprised, and a few were angry, but after their rage subsided and I walked them through the logic, they understood. Understanding is not the same as being happy, but I had to take what I could get. Six weeks later I was taking my GMAT, and 10 weeks after that I had gotten into Business School which set me up to succeed in ways I could not have imagined. While it was a brutal decision at the time, it paid off not only because it lead me to better educate myself, but proved to myself that I could make extremely difficult decisions calmly and objectively and still come out ahead.

Where did you get the drive to continue even though things were so hard?

No question, from my parents. My Dad works relentlessly to make sure his business succeeds. He has literally shoveled shit (wastewater sludge behind the factory), and really doesn’t do anything else with his spare time, for the family business. If you watch how bad he as at golf, you know it’s the truth! My Mom has always helped with the business and raised my sister and I, but has also been beset with health issues for the last 20+ years. She’s had more back surgeries than I can count, has rheumatoid arthritis, has had both hips replaced, and has had multiple foot surgeries. It defies belief that she is able to physically do anything at all, let alone be the most cheerful and positive person in the room at all times. Her mental strength is beyond words. With those two as role models, what excuse do I have not to work a few more hours, or push through a mental block?

So, how are things going today? How did Grit lead to your eventual success?

For a lot of people, I think, failure is terrifying. If you take a risk and fail, you are too scared to try anything like it again. The way I see it, if you try something and fail, you pick up a bit of grit and experience, and can try it again later but do better. I’m pretty proud of my failures, because those experiences have made me what I am today. When I tried to build a cheese company from scratch in the Philippines, I couldn’t read a balance sheet, had never designed or built anything, knew nothing about engineering, process flow, yada yada yada. Still tried doing it, got pretty far, but ultimately failed. Failing exposed my weaknesses, and I had the grit to go try to correct them. Here I am running a cheese business (to be fair, it is quite a bit different though), and being successful.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

There are a lot to choose from! What jumps to mind first was my second meeting with a US Government agency that was considering lending me money for the Philippines project. Remember, I was a Poli-Sci major, and had used google, youtube, and Investopedia to build my financial projections for the loan application. They had already accepted the application for consideration, and I flew to DC to meet with their team to talk about the projections, and the term sheet parameters for the loan. So I am sitting across the table from three people from their agency, and they are grilling me on my numbers. The numbers I at least made, so I could explain the logic. The problem were all the terms and words they were using: I didn’t know what the hell they meant! “I see here you are using straight line depreciation instead of double-declining, what was your rationale for that decision?” “How did you decide on this accrual strategy?” I couldn’t just say ask them what they were talking about, so I spent the entire 2 hour meeting googling the terms they would say, but to them, I was just very diligently taking notes on their comments and being thoughtful with my responses. They had no idea (and still won’t as long as they aren’t reading this…), and they eventually green-lit the loan!

What do you think makes your company stand out? Can you share a story?

Two things make us stand out, our people and our product. On the people side, we have some unbelievably talented folks working for us. Not only our cheese makers, but the office folks, the packaging team, customer service, all of them. It’s probably the only company I’ve been around where being here for 15 years isn’t considered a long time! We have more than a few that have been here for 15, 20, and even 30 years. Their hard work and dedication are keeping our business going, and keeps us coming up with more new and innovative products. Speaking of products, this will sound like a shameless product plug, but we are the only company that makes baked cheese bars out of 100% cheese. No grains, no eggs, no weird ingredients I can’t pronounce: nothing but cheese. I think our team takes great pride on keeping things simple, but executing well. Lots of companies and products like to come up with fancier and more intricate plans and products, but we stick to the basics, and just do them exceptionally well. We make the cheese, shred it, bake it, pack it, and ship it. That’s it. We don’t add extra stuff, we don’t have frivolous processes, we just do what we need to do to make a great product. The simple but exceptional product is a reflection of how we run our businesses.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Always keep the big picture in mind, and love what you do. Small Business owners, and people in general, often get too bogged down in the day-to-day grind of their work. If you do that too much, you lose sight of what the long term direction of your company is, or the long term direction of your life. In business, what are your strategic goals? One year from now, where do you want the business to be and how are you going to get there? Two years? Three, five? Same can be said about your life. Do you want to be at the same job or company a year from now? Where do you want your life/family in five years? If you don’t start thinking about it early, things get delayed or ignored entirely and can lead to big set backs in both areas. Plus, it gives you something more fun to think about than excel, power point, or financial statements.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

There are a ton of people who could be on this list, but I will keep it as brief as I can. My Dad for being a great father as well as a great businessman and showing me firsthand what it takes to be successful AND have a happy family. My wife for always challenging my ideas and making sure I prioritize our life AND the business, not just the business. Plus, she is a dynamo at Marketing, so she makes the company immeasurably better by being the Marketing Manager. Frank Genovese for believing that I could be a successful business operator despite my past failings and unusual path to business school. My Mom, my Sister, Derek Mortensen, Bryan Becker, Doug Lebda, my B-School classmates, and too many to list.

How have you used your success to bring goodness to the world?

Making cheese isn’t enough?! Well, in that care, there are a few initiatives that our company has undertaken that aim to make our community in rural Wisconsin a better place. About a year ago, my Father developed a ride sharing program to help people in rural areas get to work. He realized that there was an enormous number of people that wanted to work, but couldn’t because they didn’t have adequate transportation. Some people are too poor to own a car, and there is no public transportation, but some are part of families that only have one car, and need to work in different places at the same time. In order to try to fix this, our company began having one van, driven by a local Reeseville retiree, drive to and from another nearby city, picking up 10 of our employees for our first shift packaging department. As of now, our program won grants from Easter Seals, and has 9 drivers serving all 3 shifts, all of our departments, and getting around 70 employees to work at least once a week. We are trying to add other companies to the program so more people can get to work, even if it isn’t with us!

What are your “5 things I wish someone told me before I started my company” and why.

1. Your first instinct is almost always right. If you do your best to stay informed and knowledgeable about things, this holds true almost every time. People waste a lot of time and energy trying to convince themselves that the “other” choice is better. Trust your gut, trust yourself, and go. This only works if you are informed and knowledgeable. If you’re incompetent, find someone who isn’t and trust their gut instead!
2. Feelings matter. People always think business is about numbers, but the inconvenient fact is that even if you run a totally automated business, you still work with people, and people have feelings. Motivating different people requires different means, and how people feel about any and everything on any given day will impact their performance. As a manager, that means you must understand your people and how to get the best out of them.
3. Pick your battles. You don’t have to win every argument or debate, and it goes a long way to let someone else win from time to time. If you fight too and nail to win everything, you are inadvertently stifling other people from having good ideas. If you always “win,” they will just wait for you to tell them what to do instead of thinking for themselves or coming up with potentially better ways of doing things.
4. Always choose function over form. How much time to people spend trying to make spread sheets look nice? How about fiddling with the font sizes in power point? How long did it take to find that error in your super fancy excel formula? Worry about making it work first, then make it look nice if you have time (and nothing better to do with yours). If the idea is good, and the conclusion makes sense, that is what people will remember. No one will remember if you had three fonts on one slide, or you had a few extra columns in your spreadsheet, but they will remember if your ideas are stupid or the conclusions are impractical.
5. Remember to take brain breaks. If your brain isn’t working right, the business will suffer. Take 10 minutes to watch Youtube, read some ESPN articles, meditation, do anything that takes your mind off of whatever you were thinking about. Taking a few minutes to not think about anything important every 45 minutes or so has made me massively more productive, and less burnt out when things get intense.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

Assume positive intent, and take one deep breath before you respond to anything. Most of the conflicts I see and deal with come from people assuming the worst about someone else’s intentions. I make a suggestion to someone because I think I can help, not because I think they suck at their job. Most people aren’t trying to be jerks to you. They may word something poorly, or not know all the facts, but MOST of the time, people aren’t trying to be jerks. If you work off of that assumption, and that people do in fact have positive intent when they ask something, say something, or suggest something, it makes dealing with people much more pleasant. The deep breath part gives you a moment to think about what was just said and what a person may actually mean, and it stops you from being reflexing, or making a snarky or barbed response when it may not be warranted. Plus, it can force you into thinking about what you say before you say it, which is never a bad thing!

How can our readers follow you on social media?

Better to follow @crunchyjtc on Instagram, or find me on Linkedin.

This was very inspiring. Thank you so much for joining us!