David Tran: Three Lessons from Sriracha King

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He came to the U.S. as a refugee with nothing, and built an empire that posted $60 million in sales without ever taking outside money. Today, you see his product in every building where there is his food – his signature green capped red bottles are as much a staple to 21st century dining as ketchup and mustard. His name is David Tran, and he is the founder of Sriracha. We tell the story of this extraordinary entrepreneur and discern three lessons global investors can learn from his experience.

Aim for More than Yourself


Tran moved to Los Angeles as a Vietnamese refugee when the Northern Communist party came to power. His first batches of hot sauce were packaged in hand-drawn bottles and delivered by bicycle. He named his sauce “Sriracha” after the small village in Thailand that provided him safe passage when he left Vietnam.

Eventually, his business expanded and he founded Huy Fong Foods, which now produces more than 20 million Sriracha bottles every year. However, what surprises many is that Tran never took outside funding, and has not raised the wholesale price of his bottles in 30 years. The reason, Tran states, is because his dream was “never to become a billionaire,” but rather to “make enough fresh chili sauce so that everyone who wants Huy Fong can have it – nothing more.”

With Tran, Sriracha was never about money. It was about dignity. It was about love. It was about making a difference when everybody else wanted to make a dollar. If entrepreneurs can execute a greater mission while keeping their companies moving forward, they will deliver the unique class of product that not only makes money but also improves the world.

Such products tend to develop strong brands and find special places in culture even if they do not command the largest margins. Tran’s low prices kept his product affordable for almost everyone, producing an easy avenue for scale. Other companies who have found success by placing customer value first include shoemaker TOMS, and eyewear designer Warby Parker.

A Devil in the Details


While most hot sauces are made from dried chilies because they are easier to scale, Tran only uses fresh chilies. This forces him to work around many hurdles, but it keeps his hot sauce extremely delicious. Sriracha was named “Ingredient of the Year” by Bon Appétit, and remains the only hot sauce to have received the honor.

Too many entrepreneurs dedicate most of their time to the big ideas. But if you ask some of the most successful figures in business, many will tell you that it’s the little details that matter most. VietJet CEO Nguyen Thi Phuong often accredits her airline’s success to precise “research and timing.” Soledad Investment Management’s Chief Investment Officer Louie Nguyen states “the key to success is in execution.” We can see the applicability of this lesson in all areas of business. In social media, Facebook, Myspace, and Friendster all appeared the same on the outside, but the reason Facebook rocketed while the other two failed is because of little tweaks in its architecture that accelerated user engagement – such as the symbolic “Like” button.

Beauty in Simplicity

While Tran meticulously perfects the production of his sauce, the final products that consumers interact with is strikingly simple. To use Sriracha, you grab the bottle and spray it over your food. You can vary between a light dose and an extreme spice simply by squeezing the bottle harder. And that is all. There is no complex interface and overwhelming multitude of options. This makes it incredibly easy for anyone to both use and sample the product – resulting in mass adoption.

We see far too many startups suffering from feature overload. But as the Pareto Principle suggests, 80% of the value in most events lie in 20% of their content. In many cases, Entrepreneurs will discover that delivering only 20% of their original vision leads to little drop in user experience. At the same time, it removes many of the hurdles that could push customers away from their products. Entrepreneurs should revisit their own offerings and see if they can unlock mass adoption by simply removing a few features.

The Future of Spice


Sriracha is now as much of a cultural empire as it is a culinary one – Los Angeles now hosts an annual Sriracha festival, and hundreds of people dress up as Sriracha bottles every year on Halloween. When Tran decided to sell his first batch of bottles on his bike decades ago, he launched a culinary revolution that millions today have fallen in love with. We wonder if he ever imagined his hot sauce coming so far.

Today, he keeps the same goal today as he did when he first started: to make “a rich man’s sauce at a poor man’s price,” and to create a world where “everybody could hold a Sriracha bottle in their hands.” His family runs the company now. It’s still about love.

Liked this article about Sriracha’s David Tran?

If you like learning business lessons from world-class innovators, be sure to also check out our 3 lessons from VietJet CEO Nguyen Thi Phuong Thao and billionaire entrepreneur Kieu Hoang.

If the rising business climate in Vietnam excites you, perhaps you would also enjoy exploring how to invest in Vietnam, or reading a premium guide on how to do business in Vietnam.


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