In the latest podcast episode of The CashFlow series from Bizzi Vietnam, “Running a business with professional fire or passion fire?”, guest Michael Phan, CEO and Co-founder of Love & Spice shared his very different entrepreneurial journey: from a personal passion for super spicy flavor to the ambition to build a Vietnamese spice brand with a place on the international map.
At first glance, this may seem like a pretty interesting startup story. But when you dig deeper, what Love & Spice is doing is a case study in the unique combination of financial thinking, high personal discipline, never-ending creative fire and passion never dies.
The Origin of Passion – Growing Super Spicy Chili Peppers Among Hundreds of… Experiments
Starting point of Love & Spice very “personal” – Michael Phan and his wife wanted to create the “spiciest chili sauce in Vietnam” to satisfy their love of spicy food. In Vietnam, he could not find any chili that was spicy, natural and safe for his stomach, especially when he was sensitive to preservatives. This was the initial inspiration for him to build Love & Spice.
Michael Phan and Love & Spice’s journey to grow super hot chili seeds in Vietnam is a long series of trials and failures. To equip himself with knowledge, he spent hundreds of hours watching videos from chili growers around the world, learning every little experience. There was a period when, in a 30m² apartment in the city, he tried roasting up to 20kg of soil on the advice of an Indian farmer – a testament to his meticulousness and desire to learn.
From the initial testing step, the journey of "home" for chili plants went through many rounds of selection. Initially, they chose Da Lat - where the cool climate helps the chili to be bigger and more beautiful, but reduces the spiciness that is the soul of the product. Next, they moved to Dak Lak, but encountered a logistics problem. Finally, Dong Nai was chosen as the "golden land" - both ensuring natural conditions for chili to grow, and convenient for a closed transportation model from farm to table.
But the road has not been smooth. A heavy rain once caused more than 10,000 chili plants to be waterlogged and had to be thrown away. He also tested dozens of recipes before creating the final product. His willingness to throw away an entire batch of substandard product shows his absolute commitment to quality. This is not just a cost sacrifice but also a branding strategy based on trust.
Or when COVID-19 hit, they were left without support workers, forced to manage everything from transportation, fermentation to loading and unloading. However, it was this harsh period that helped them focus on perfecting the formula and promoting online commercialization - the foundation for Love & Spice's later acceleration.
I believe in philosophy “Just do it” – take action instead of over-analyzing. According to Michael, the risk of doing nothing is unclear, while the risk of action is more clearly defined. This is a bold but necessary mindset for every entrepreneur, especially in a volatile market. Naming the product “Cay nhu de” is also a testament to Michael’s determination and willingness to be different.
When passion meets financial reality
To turn a “fun” product into a real brand and business, Michael Phan soon realized that passion alone was not enough. He was forced to face two harsh financial problems – challenges that any CEO or CFO would understand.
The first, long production cycle: Many super spicy lines have to be naturally fermented for up to 6 months. During that time, capital is "locked up" in inventory, inventory days are unusually long. For a startup with limited capital, this puts a lot of pressure on cash flow, especially in a context where market demand can change in just a few months.
Monday, Demand is new and unpredictable.: The “extremely spicy” chili sauce market in Vietnam is almost untapped. The appeal of the product comes from its uniqueness, but also comes with great risks in terms of market size. If you only follow your passion, without a strategy for cash flow management and reasonable capital allocation, your business may fall into a state of illiquidity before it has time to expand its market share.
It was from these "learning by doing" experiences that Michael gradually formed a very clear management philosophy: Passion is the starting fuel, but the profession - the ability to manage capital, manage production cycles and grasp the market - is the factor that keeps the business alive and growing.. It was also an important mindset shift that helped Love & Spice transform from a personal project into a strategically-oriented business.
Watch the podcast now Run a business with passion or skill?
Cash Flow Management: Keeping Your Business Alive
For a manufacturing business, cash flow management is always a vital factor.
He is not only interested in traditional indicators but also uses unique tools such as Fibonacci formula To predict growth, understand that growth is not always exponential.
Michael Phan likens Love & Spice's cash flow to a "quiet river" – stable and sustainable, instead of “a small stream that dries up quickly” or “big waves that fluctuate”. This perspective reflects a strategic choice: not chasing hot growth, but prioritizing maintaining a steady financial flow to sustain the business in the long term.
- Prioritize speed and liquidity: In exporting, Michael values speed and cash flow over immediate profits. He emphasizes the principle of “Fastest is best” – meaning that in exporting, Speed and liquidity are more important than lowest costHe prioritizes partners who pack and ship quickly, because "finish line is cash flow into the account".
- D2C Strategy Shortens DSO: By selling direct, Love & Spice significantly reduces its payback period, ensuring positive cash flow even when sales are not yet very large.
- Invest in Efficiency & Lean: He advises focusing on profitable projects and running lean, avoiding spreading yourself too thin on ineffective products or events.
- Combining intuition and data: When making difficult financial decisions, Michael combines senses (noise filtering), statistics and intuition to make decisions based on the most realistic information.
This is a practical lesson for SMEs, especially new businesses that want to expand into international markets: passion and opportunity are necessary, but The art of cash flow management determines survival and sustainable growth.
Market and Product Strategy: Balancing Identity and Mass
Love & Spice did not follow the short-term “spicy challenge” path that is easy to create a trend but difficult to retain customers. Instead, Michael Phan and his team built a clearly structured market strategy according to funnel – both attractive and sustainable, supported by a product development strategy that is both deep and broad.
Top of Funnel: “Super Spicy” Product Line – Creating Identity and Depth
At the top of the funnel are the super spicy strains like Habanero, Ghost or Vietnam Reaper. These are not just products, but also marketing tools strong. They create a clear difference, help the brand stand out in the media, and at the same time arouse curiosity from the community who loves to explore new things. This strategy fully exploits depth In product development: Love & Spice focuses on the strength of naturally fermented chili, divided into many levels of spiciness from 1 to 6.
Each chili variety not only brings different levels of spiciness but also tells its own “flavor story”. This product line plays a “premium” role, bringing high profit margins and affirming the brand positioning of “the spiciest in Vietnam” of Love & Spice.
Middle of the Funnel: “Keychain” Products – Bridge and Accelerate Sales
In the middle of the funnel are “keychain” products with small capacity and reasonable price. This is an important stepping stone for new customers to easily try the product, reducing the initial spending barrier. With the characteristic of “easy to try – easy to buy again”, this product group plays a role in increasing velocity and rapidly expand your customer base.
In terms of packaging/size, diversifying from mini packs to bottles, and even gift sets, is also a cash flow strategy. Mini packs help increase velocity, while gift sets help increase AOV (average order value) and seasonal revenue.
Bottom of the Funnel: “Mass” Product Line – Ensures Stable Cash Flow and Expands Market Breadth
Finally, at the bottom of the funnel is the trio of “less spicy, more delicious” – Saigon, Hanoi and Hue Sauce. This is the “heart” of the strategy: turning Love & Spice into a familiar spice on the daily dining table. In terms of product development, this is an expansion width of the brand, not allowing itself to be limited to the “super spicy world” that is only suitable for a small group.
Love & Spice develops more "less spicy, more delicious" lines, closely associated with Vietnamese cuisine, bringing products from niche (customers who like spicy challenges) go out mass (daily spice for every family). This ensures a steady cash flow thanks to the constant recurring demand from mass consumers and fast capital turnover.
Advice from a “rebel”
Michael Phan affirms that Keeping the management team and investors motivated is harder and more tiring. vs. keeping money in your wallet. He is fortunate to have a co-founder/life partner who has a “we do it” spirit and angel investors who support him both intellectually and spiritually.
For those who are just starting out, he gives a practical and “harsh” advice: “If you need advice, I advise you not to start.” This advice is only for those who are “shocked” enough to turn it into energy for action, because starting a business requires a lot of patience and endurance. In the end, the core is still the product must unique, different, creative and “out of the box”“If I feel strange and different and my product is also different, then it must be 50%,” he said.
Michael Phan has not only built a brand but also created a unique business philosophy, where the courage of an artist is combined with the discipline and analysis of a financier. His story is a living proof that, to achieve sustainable success, it is necessary to have both. "passion fire" to start and "Passion" to keep the business alive.
Check out more stories from our podcast series The CashFlow at: The CashFlow season 01
