With no background in food or food service, Warrick Chu, SEP ’19 left his job as a senior financial analyst at Goldman Sachs in 2008 to start a chain of healthy frozen yogurt shops called Qoola. His simple idea — being the first in Canada to capitalize on health in a dessert sector dominated by powdered yogurt mixes — eventually was hamstrung by American competition and a consumer preference toward low-cost over paying more for a healthier alternative.
It began with a single store in Vancouver and eventually expanded to 18 stores and one food truck across Canada.
“Our core differentiator was that our yogurt was fresh, with a significant concentration of probiotics compared to our competitors,” says Chu, who sold the chain at a loss in 2017. “Powdered frozen yogurt has a million probiotic cultures per gram. Our yogurt was 100 million to one billion cultures per gram. We would use cane sugar instead of corn syrup, and we partnered with local Canadian dairies. I thought people would want healthy over everything.”
The former college tennis player and current diversified entrepreneur brought the lessons he learned during that experience to the Stanford Executive Program in 2019, and has moved on to other projects, including with a firm he and other SEP colleagues are building to market a proprietary range of superfood and super-fruit products. He hopes to launch that line during the postponed Tokyo summer Olympics in 2021.
“Starting any business requires relentless courage and unequivocal passion, but knowing when to pivot is important,” he says. “With Qoola, I pivoted two years too late. But the way I look at it is that you need to learn from failure in order to succeed. Most important to me now is prioritizing a regimented analytical mindset, as well as surrounding myself with the strongest team. You have to find the perfect balance of the quantitative brain and the passionate heart.”
We talked to Chu about the lessons he has learned and the passions that still drive him.
You left a good job at Goldman Sachs to launch Qoola. Walk us through the calculations you made at that time.
I was two years and a couple of months into my Goldman job before I left. Those two years were really one of the best experiences of my life. Goldman is a perfectionist culture. You had to be on time — in at 5:30 every morning, and every email, every communication, everything you put out to clients and your superiors had to be perfect in every sense. That taught me precision and strict discipline, but it was very tiring. I had the early stages of carpal tunnel, and staring at screens all day made my eyes unwell. I knew I didn’t want to do it forever, and I was struggling to figure out how to pivot out of that.
But frozen yogurt?
I’m a health buff, and at the time the Pinkberry craze was just starting out in the U.S. I was impressed by the crazy lines at the stores and very curious about the product, but then realized this was powdered yogurt. I thought, how could people be lining up for such a product? So during that last half of my time at Goldman, I used my evenings and weekends to research the frozen yogurt industry and eventually developed my own proprietary formula of fresh yogurt. There was a clear opportunity to do something different and better.
Did you ease into it, or jump?
I took the plunge. I took all my savings, everything I earned from Goldman and Ernst & Young, all the stock trading I had done, and put it into the first Qoola store in downtown Vancouver. It was definitely not rational. Sometimes you put your mind to something, and you just do it. I figured the time to do it was when I was in my mid-20s. So I did it, and the rest is history.
But it didn’t turn out the way you imagined.
When I started Qoola, the vision was to grow it into a global brand. I focused on conscientious profitability and success through sincerity, so we staged a lot of events where we gave back a percentage of our profits to the community even during the tough times. Our packaging costs were a lot higher because they were biodegradable, and our margins were lower as a result. I was idealistic and wanted to fix this food issue of people putting unhealthy things into their bodies. Unfortunately, when cheaper American competitors came into the market, we struggled to compete. By the time I was thinking of selling, it was a little too late and I sold at a loss. I’m proud that we managed to grow Qoola nationally in Canada, but the trends changed.
It was one of the best failures that I could experience. It was tough going through that roller coaster, but it allowed me to appreciate that relentless courage you need to keep pushing. I loved working across the different stores, but I didn’t have enough management around me. I didn’t build a board of directors around me to forecast and analyze from a bird’s-eye perspective. Today, from 18 stores, they’re down to four. Although I decided to sell Qoola, the current stores are doing their best and I’m proud of the brand 12 years and going.
What would you do differently now?
In addition to better cost control and scaling gradually, I would partner with a great management team alongside a board of advisors who could look at the business as a whole. Because I was the founder there was an inherent emotional connection despite the numbers not always looking optimal. Out of loyalty to my team members and partners, and a commitment to the Qoola vision, I chose to stick around for as long as I could. One of the biggest lessons was to have a more balanced approach to business — the right mix of passion and analytics.
What was it like to let go of a company you created?
Very humbling. I’ve always been used to the best in terms of success. Best companies. Best schools. I was always achieving what I put my mind to. Qoola was a mountain I climbed that had its highs, but I also went right down that mountain. Every entrepreneur needs to go through a down period, and appreciate what it’s like to make payroll or pay rent and suppliers during downturns. There were times when I got very down, and there was no clear solution. But it gave me the strength that I have now, and I wouldn’t trade it for the world. It gave me so much clarity and perspective.
What got you through those down times?
I have a group of people I refer to as my inner circle. We all have many people we interact with regularly, but as Qoola downsized, a lot of those people started to disappear. But it’s during the down times that you discover the true rocks in your life. In addition to my family, I’ve relied on my 10 closest friends who have kept me going.
Any professors, classes, experiences, or books that were particularly helpful to you during your time at SEP?
The best thing that came out of SEP were the 225 other classmates I got to know quite well. We constantly communicate, share insights, and support one another — we even started a Venture Capital fund together called Reaction. Stanford obviously chose the best and brightest to come together, and it made the whole experience. And the classes themselves were great. Every course I took was an ingredient that influenced the overall direction I’m focusing on today. It was a perfect mix of the theoretical, the practical, and how to execute. The cases we studied were particularly impactful. They were real-life examples of how leaders responded to certain issues. SEP gave me the tools to proceed with an aggressive entrepreneurial spirit paired with a sharp analytical mind.
You worked out a lot (weightlifting, tennis) during your time at Stanford. Why have you prioritized physical health in your life?
It makes me whole. I feel like physical fitness leads to mental fitness. It permeates every part of your life. When your heart is pumping and blood is flowing, it becomes addictive. Physical fitness leads to your brain operating at peak, which leads to helping others, and growing a business. It’s all linked, and physical fitness is the fire.
How did your itinerate childhood — 11 schools in six countries — affect the way you approach business?
Being the fifth of six kids, I was born in the Philippines and moved to Vancouver with my family when I was three years old. I’ve been extremely fortunate to have traveled to 45 different countries for both business and personal reasons. As a result, my exposure to many different cultures has paved the path toward a global mindset. Instead of concentrating solely on Canada, I want these superfood and super-fruit products to have more of a global scale.
Family is clearly an important part of your life. Why?
I’ve been on my own since tenth grade when I went to boarding school, and most of my family is still in the Philippines. When I see them once a year, it’s the best thing on earth. They gave me my life. They really built my core. My values came from them. My parents raised six kids, and they supported me through my education and encouraged me to learn and put myself out there. They taught me to always take the road less traveled, and to always believe in myself.