In the Hot Seat – Shroomwell
We welcome Shroomwell CEO Silver Laus to the Hot Seat for a look back at 2022 and forward to 2023.
How did the year 2022 turn out for your company?
2022 can be summarized as a year of big changes. In terms of sales and consumer behaviour, the year started excellently but became more challenging as the year progressed. This meant we consistently had to reinvent our strategies to be ahead of the curve. This theme will transfer to 2023 as well. We have been very transparent in our communication with investors about what has caused the challenges and hurdles. As much as we’d like to point toward the economic uncertainty, that’s probably not the full truth. A lot of the challenge was caused internally and by being late in launching new products, therefore offering freshness and variety to our loyal customers.
In the second half of the year, it was clear that inflation would eventually hit the cost, and finding sustainable purchase channels to keep the product price under control became one of the highest priorities.
On the bright side, we had 2 massive news in 2022. Firstly, the new CEO of Shroomwell (former Chaga Health) was appointed at the beginning of July. The objective is to advance Shroomwell’s wellness department to a new phase. This means product portfolio development both vertically and horizontally, expanding brand and products to new export markets, and having a clear strategy for the growth and the activities required to achieve this objective.
Secondly, we started off with our re-branding activities. Building an international premium feel brand, which has no restrictions in terms of market or products. With these activities, Chaga will be more than just chaga mushroom in 2023. Lots of new products and functionality will be added moving forward.
What was the main challenge of the year?
As the company grew significantly last year, one of the main challenges was to get the company and its operations and strategies into the new growth stage. A more systematic approach was needed, and with that, a mental shift of the people and organization is required. Some weight was shed off and a few new people were added. Systematic approaches were generated for each and every department and the KPI reporting system was put into practice. This has taken a lot of energy from the entire team as enforcing new systems always comes with some backlash or hurdles.
By the end of the year (within 6 months) it was clear that the new system is in place, working, and accepted by the entire team.
Did the events in the world significantly impact your company, and how?
It has. When the war in Ukraine broke out, we lost some big and very significant potential investors outside of this region. For them, this war is right at our doorstep, therefore bear the significant risk for their investments.
A bigger and longer negative impact has been (and continues to be) this raging inflation here in Estonia and the EU. With increasing energy prices, labour costs, etc, it becomes harder to operate a business in a production industry. We have had to invent and re-invent ourselves a couple of times now to keep our noses above the water. On the other side, inflation and uncertainty also bite into consumer behaviour, where spending on premium products becomes more challenging.
Regardless of the challenges, we fulfilled the quota for convertible notes and applied our agility to develop mid-range cost-range products for home and export markets.
Did your company manage to receive the expected results?
Not all of them. Mainly because we did not see the year to roll out this way (the war, inflation, and the ripples it created). Revenue wise we were short of the goals we set for ourselves.
On the other hand, it’s not as dark as it sounds. In the second half of the year, we managed to slowly turn this boat around. Export started to pick up, there was quite of progress in preparations for a new brand and products, and some positive unexpected happened as well:
- We established a joint venture in Maine, US for chaga farming. By the end of the year, we had the company established and the first sales done. We did not anticipate this or planned this at the beginning of the year.
- New innovation projects, such as Mycomat (to restore topsoil or clean soil contamination using mycelium mix).
What is the outlook for your sector for this year?
In terms of the outlook, we are continually positive. Health products made from mushrooms are trending. Even booming. Their value and potency have broken into the mainstream and expected growth for the functional mushroom sector is expected to continue at 11,6% CAGR for the next 8 years. There’s also a surge in scientific research published on functional mushrooms which helps to popularise mushrooms as a supplement (Lions Mane being the latest example – https://shroomwell.ee/toode/lions-mane-ekstrakt-toidulisand-30ml/).
What is the main “New Year’s promise” to shareholders?
Shroomwell (former Chaga Health) is turning its main focus to export.
New indoor growth facility (1200m2) by summer. Commercial output for new medicinal mushrooms.
Large growth in the US in chaga farming (the goal is to contract 500K dowels in 2023)
What companies or leaders have been your “personal heroes” this year?
I don’t have one strong leader I follow or admire. For a while now, I try to have a mix of great leaders from whom I try to learn and study their strong suits. Each person has their strong skills and weaknesses. Last year has not been much different as it was quite a ride and hectic for everyone. 3 leaders I follow are Elon Musk (his boldness to get unrealistic goals achieved), Tim Cook (his calmness and well-centered personality that allows him to stay focused and emotionally balanced even most difficult situations), and Ben Horowitz (who continuously teaches me how to create, implement and measure systems that will make everyone’s life easier).
My latest find is Andrew Grove (founder of Intel, who unfortunately is deceased by now), who left behind a mountain of knowledge on how to grow build a company, grow as a CEO, implement systems and KPI’s and how to keep your sanity intact amidst everything that’s going on around you.
What are 3 most used applications on your mobile phone and which one you “couldn’t live without”?
1. Audible. I’m an avid reader (both physical books as well as audiobooks whenever traveling or commuting). I usually go through ca 12 audiobooks in a single year.
2. Oura – this is a smart ring (and app on your phone) that measures and reads your body’s data. The most complex wearable device + app I’ve encountered so far.
3. Apple Podcast – I listen to a lot of international podcasts (daily I would say). This is where I absorb 70% of my knowledge in biohacking, human health, and obviously the wonderful world of fungi (more at https://shroomwell.ee/seened/).