A.J. MacQuarrie on Building a Million-Dollar Business By Transforming the Vending Industry With Healthy Food
A.J. MacQuarrie, Founder and CEO of KarmaBox, a San Diego-based company whose Internet-connected vending machines sell healthy snacks, drinks and care products joins Enterprise Radio to share his entrepreneurial journey.
Listen to interview with host Eric Dye & guest A.J. MacQuarrie discuss the following:
- Tell the story of your path to success. It wasn’t a simple or straightforward one but once you got to the right spot, things really took off.
- Explain what KarmaBox is. You’re also careful to say it’s built on a business-opportunity model rather than the very similar franchise model. What makes it unique and how do you make money from these partnerships with local entrepreneurs?
- What were three keys to your success, three things you started doing that have helped bring KarmaBox to its current level of growth and expansion?
- You’re a very young entrepreneur, a Millennial. We always hear complaints by executives at older, big companies that Millennials are very different employees and sometimes cause problems for the established ways that companies work. But you have argued that the traits some big companies’ executives don’t like in Millennials are exactly the traits that can make Millennials great entrepreneurs. What are some of those traits and why do they do work so well in a startup world?
- You’re also a board member of GSDBA (Greater San Diego Business Association), the second largest LGBT business chamber of commerce in the country. What attracted you to get involved with that group? And do you think LGBT entrepreneurs face particular challenges getting businesses up and going?
- You’re working on a book. What’s it about and why are you writing it?
- Do you have a tip or tool for entrepreneurs to help them be more successful?
Not everyone can turn a $20,000 investment into a $1 million business, never mind do it in just one year. That overnight success, of course, took years of work for A.J. MacQuarrie, the 28-year-old founder and CEO of KarmaBox, a fast-growing network of Internet-connected smart vending machines serving healthy snacks and drinks in dozens of U.S. cities.
For MacQuarrie, building businesses has been a passion since childhood.
At 10, he sold family videotapes, Flintstones toys and his sister’s makeup out of their family’s Stoughton, Mass., basement. At 12, he sold subscriptions door-to-door for a neighborhood newsletter he edited. At 17, he started his own community theater company, bringing together performers and backstage talent in a historic 900-seat theater and later the renowned Boston Center for the Arts.
When it was time for college, of course he set off for business school, at St. Francis Xavier University in Nova Scotia.
His junior year, entrepreneurial inspiration struck again. He’d already shed his Freshman 15 pounds with better diet and more exercise, but was routinely frustrated in his search for always-available healthy snacks to feed his metabolism. Campus vending machines featured the usual suspects: candy bars, potato chips, soda, but nothing fit his healthy lifestyle.
So A.J. dreamed up what eventually became KarmaBox, a line of environmentally friendly, Internet-connected vending machines serving up healthy snacks.
KarmaBox is now one of the world’s first healthy vending brands. And it comes with a forward-thinking business model, called Karmatunity, that helps other entrepreneurs take part as well, As a result, KarmaBox is the one of the nation’s fastest-growing businesses of its kind.
Back then, MacQuarrie sought a small-business loan from the Canadian government, knowing he needed a solid business plan to get it.
Working with a friend, they developed a concept called “refreshment centers” with nutritional information about each item on sale, all clad in eye-catching orange and blue. He took a year off from school, and began making deals to place the machines in Halifax hotels, schools, the airport and elsewhere.
After a year, MacQuarrie won a 2011 audition on “Dragon’s Den,” the Canadian version of “Shark Tank.” His company, then called Urban Vendor, “on trend,” but the Dragons said he needed to prove his business model with stronger sales, create a unique value proposition and build the infrastructure for a scalable business.
In a funk, MacQuarrie pulled his machines and put them in storage, moving back to Boston to consider next steps. He took a Starbucks barista job that soon turned into a manager’s position, learning how that company had created systems and routines essential to its successful franchising model.
He also met a customer who would become a key investor, putting up $20,000 into what by now had been reconfigured into KarmaBox. Using the cash, MacQuarrie hired employees to make cold calls that he would follow up, making his first deal in Mobile, Ala. As he did with that first partner, MacQuarrie still travels to each new operator’s business to help them get started.
By now, MacQuarrie had quit Starbucks and begun building a life with another man. His life partner’s encouragement gave MacQuarrie the strength and confidence to push his business to new levels of success, but then tragedy struck, with his partner’s sudden death in January, 2015.
Devastated, MacQuarrie was left casting about for direction when a cousin’s call led him back to the “Dragon’s Den,” where he was invited to tape a “second chance” episode. The Dragons were ready to deal, but MacQuarrie had just moved to San Diego, where the business really began to take off, and he ultimately turned down the deal offer. Within a year, that decision looked pretty smart: the company was already generating more than $1 million in annual sales.
Now, KarmaBoxes are in about 50 cities and will soon return to Canada. MacQuarrie is expanding KarmaBox’s in-house location team, and development is continuing on KarmaCloud, proprietary software that will provide operators real-time data on location sales and inventory. The KarmaCloud mobile app will give customers access to a loyalty program, coupons, nutrition information and a diet tracker.
MacQuarrie also is publishing “Pivot To Profits,” a book about his experiences, and is creating a platform for aspiring entrepreneurs called LaunchPad Nation.
A board member of the Greater San Diego Business Association, MacQuarrie particularly enjoys sharing his story and expertise in support of entrepreneurs from San Diego’s LGBT community. He’s also developing an entrepreneurship program for high school students.
The views and opinions expressed on any program are those of the persons appearing on the program and do not necessarily reflect the views and opinions of The Entrepreneur Podcast Network – EPN.