The Exchanges

Q And Bountiful was going to be your third location?

A Yeah, Bountiful was going to be your third location. It was our first franchise location, and the reason we franchised that first location was Sawyer's mom was going to be a part of the business early on, and Sawyer's dad was like, ah, you're going to spend a lot of time in this bakery, it's not going to make a lot of money, you're going to be away from the grandkids, I'm not sure is this going to be really worth it to you? So she decided to bow out and not do it, but, um, they came back and Sawyer's dad's like, she's going to kill me. She sees the success of the business, Is there any way she can buy a portion of the business or is there anything that we can do? And so that's when I started kind of, you know, researching and like, well, franchising, that's like, we already invested the money and the business was self-sustaining. It was already making money and paying for itself. Um, so there was no need for capital at the time. And we wanted to try to build this without outside capital. And so we started franchising. So we went to a franchise attorney and learned how to about the franchising and So we franchised our first location in Bountiful. And I will tell you, I have never been more nervous about spending someone else's money in my entire life. You know, it was, it was one thing to waste my own money if it didn't work out, but to now have somebody else's money in there, I…

AI assessment note: “Yeah, Bountiful was going to be your third location. It was our first franchise location”

Q You know, you're thinking, okay, well, let's figure out how we're going to Sell these later, but now let's just kind of work on a recipe and let's, let's just make cookies. And so you guys go down a rabbit hole of cookie making for several months. And what, I mean, what were you trying to do? I mean, what were you trying to figure out during that time?

A We were literally just trying to figure out what tasted the best. What we would do is we would literally take a chocolate chip cookie. We'd change out an ingredient and And we would go to friends and family, and even we started going to a local gas station, like just random people. People looked at us like we were crazy. We're like, hey, here's, here's two chocolate chip cookies. Can you take a bite of each of these and tell me which one you think is best? And so then we were trying to decide between milk, chocolate chip, or semi-sweet. We're like, this is a big decision. Like for us, it was like the world depended upon whether the chips were going to be milk or whether they were going to be semi-sweet. And so we put a survey out on Twitter and the survey results came back and And it was 70% milk chocolate chip, 30% semi-sweet. And that's how we decided that we were going to go with milk chocolate chips instead of semi-sweet.

AI assessment note: “We were literally just trying to figure out what tasted the best.”

Q But how was that sustainable? I mean, delivering is really expensive, right? From what I understand, it really only works on a large scale. I mean, you got, you had drivers being paid hourly to drive to deliver cookies, and How did that work in terms of not, not losing all you?

A Well, what we did early on is we made sure that all the cookies were warm. We had these, these cases, and we had these warmers, these gel packs that we'd microwave. Well, what we learned we could do was, is we wouldn't send out drivers with the exact order, because remember, there's only one flavor. We would send them out with way more cookies than they already had current orders for. And so as a new order would pop up, if it was close to them, I would just slot it in. And so all of a sudden, the logistics became a lot, you know, lower cost because we were optimizing routes so much. It worked really, really well for logistics.

AI assessment note: “we wouldn't send out drivers with the exact order... we were optimizing routes”

Q Idaho border, population, 50,000 people. I mean, we're not talking about, like, even Salt Lake City. This is not a huge number of people there, right? And so, to me, the idea of putting all this time and effort into building out, like, a delivery network of drivers and how to keep it warm for a population of 50,000 people seems nuts. I mean, right? I mean, I don't know.

A It does. Well, when you put it like that, guy, it does seem a little bit more nuts, even when you say it. Yes, it's, In my mind, you know, I often listen to, you know, Paul Graham, and he talks a lot about, you know, focusing on a few customers and making a product or experience really well for them, and then it will scale eventually. And so my whole thinking was, okay, how do I build something that will make these people extremely happy? And we were going to build it along the way, and I was as much fascinated with scratching that itch of just doing something that could be Different and physical and not in the technology world. And it was so, like, going from, like, pixels to actual physical things was so, like, alive. Like, like, all of a sudden my career, what I was doing was like, all of a sudden there was color to it. You know, I was like, oh, this is so exciting. Like, I was as much fascinated by the learning experience of what we were doing as much as, like, the business or making money or any of those kinds of things.

AI assessment note: “he talks a lot about, you know, focusing on a few customers and making a product”

Q So what do you, what did you do on TikTok that worked and that was able, like, was it just images of cookies breaking? Was it just crazy cookies with wild frosting, like weird flavors? What were you putting out there that caught fire?

A Well, I think it's first and foremost, the one of the most important decisions we made was to go on the platform early on. And you see the engagement numbers, you see everything else. And you're like, this is going to be huge. Go all in on TikTok. So we had a first early movers advantage over a lot of brands. And the second thing that we did is I think a lot of brands and companies, they try to take their, their content and they try to just disperse it across all the social networks. And just like, it's all the same, right? It's like the same video. Let's drop it on all five platforms. Well, the problem is, is the customers on X are different than the customers on Tik Tok and are different than the customers on Instagram and what they're going for and their motives and their desires are different. So how our photos look in the photography and Instagram, really big deal. Tik Tok, nobody cares, right? So, so what the second thing that we did other than just the early, you know, movers advantage is we try to find out what the customers were already doing and leverage that. So one thing that we did was the customers were really excited about, you know, sharing their reviews. This is kind of where reviews started really taking off on TikTok. And so a couple of things started happening like, wow, how do we champion these reviewers? And so we started, you know, putting their videos in…

AI assessment note: “we try to find out what the customers were already doing and leverage that.”

Q Alright, so you guys had the lease, and what about the store? Did you do a build-out? I mean, did you, it was gonna be demolished, so, but you still had to make it look nice enough, right? Because people were gonna go into the store.

A Oh, we, we totally did, and I was so nervous about it at the time. I mean, I built the first counter, um, just to show you how, you know, frugal I was. Like, you know, we went in there and tore things out and started doing things, and even at the time, I didn't even, this, I didn't even know that you were supposed to get, like, permits and all those kinds of things to do a lot of these things. So we were doing some of these things without permits, and of course, we were on social media. We were just sharing on social media behind the scenes what we were building and pictures of the build-out, and At the time, that was like, whoa, you can kind of get a live peek into, you know, a store, a local store getting built out, and we started building a following that way.

AI assessment note: “Oh, we, we totally did, and I was so nervous about it at the time.”

Q million dollars in revenue. Do you think being in Utah at the beginning is a major reason why it was able to scale? That, that, because culturally it was the right fit, and there was a fan base, and it's baking, and it's, you're closed on Sunday, and all these things, like, do you think, had you started it, I don't know, in Los Angeles, maybe it wouldn't have worked.

A I think you're probably right. I read, I remember reading the book about Sam Walton and made in America and how he went to the outskirts of Walmart. It's almost like the Walmart strategy and where you go to all these smaller towns and, you know, populations of 60,000, a 100,000. So yeah, I do think that it also created this energy excitement. You know, when you go to North Dakota and you, and there haven't been a lot of other brands that have gone to North Dakota, man, you should see sales go crazy in North Dakota, right? Because People are talking about it. Like there's a thousand other concepts in, in let's say LA or New York, and you're just one of many, but when you're in these towns and you're taking care of these customers that maybe don't have a lot of options, it's also really exciting for them.

AI assessment note: “I think you're probably right. I read, I remember reading the book about Sam Walton”

Q you came from this background, like you had all of this experience with social media. Tell me a little bit about how you started to think about Leveraging social media to turn what was a basically cookie, a good cookie, but there are lots of good cookies available in America. But how do you then use social media to really differentiate it? How did you start to think about that?

A Well, you know, I think one thing that we had done really early on, which sounds very simple, but lots of brands don't do it is we actually engage with our customers. It surprises me today that so many brands and businesses spend so many dollars trying to attract new customers. And then when they come talk to them on social media, they're just like, ignore them. They don't answer their DMS and they just are constantly trying to grind and find new audiences or create new splashes. And so for us, We carefully over long periods of time have built relationships with our customers and people are like, well, you have a cult like following. We have a, we call them cult like relationships here, which we respond back to our customers. We respond to their feedback. If they have ideas for cookies, guess what? We actually implement them when they have complaints or frustrations about a product. If it tasted a certain way, they didn't like, we take that feedback. We actually fix our products and it gets harder and harder over time. But even today we have over 30 people that are just dedicated to responding to people. So I think as you build a social presence, you cannot underestimate the compounding effects of constantly talking to your customers that compounds exponentially over time.

AI assessment note: “one thing that we had done really early on... is we actually engage with our customers.”

Q 16 stores were doing the same things, right? That they were making the dough exactly the same way, that they were frosting the cookies. Maybe you weren't frosting them quite yet, but, and then when you had a new cookie, uh, you had to unroll, you had to roll that out to all those stores. Like, in that first year, how did you manage teaching people how to do that?

A A lot of it was sending over the recipes to them and doing just content videos of just sharing with them, like how, how they should make this, how this should be done, um, and how the recipe should look. And the second thing that we did is we had everyone send their, their pictures in, so they'd have to take pictures of the product. And we had people here that would critique and say, that doesn't look right. Let's see what you're doing here. Are you mixing wrong or you're over mixing or what happened? And so we were constantly like, Gathering data digitally. And we were really relentless. And so a lot of it was manual. The processes were manual, but that, that couldn't last forever. I mean, so I couldn't even open every store physically, but for the first hundred locations, for example, I did the real estate. So I went out and I met with the entrepreneurs and the franchisees and I'd watch, I'd go tour the locations and we'd look at them and we would talk about them and we'd, You know, eventually I couldn't do that anymore, but I was there. We were boots on the ground. We were in it.

AI assessment note: “A lot of it was sending over the recipes to them and doing just content videos”

Q Um, franchising, the franchising model is complex, right? Because, and usually people who do it have experience in franchising. First of all, how did you even start? So once this one and bountiful becomes successful, And you know that people want to start and open them up. Did you hire like consultants to help you understand how to do this? Who, who, who helped you figure this out?

A You know, so a lot of it, we just looked up online and a lot of the people were our friends and family. So it was like, they were very forgiving and patient with us because we would give them recipes, you know, at that time we started having more recipes and we started giving them recipes like two or three days before they're supposed to be made. And there was a lot of scaling pains and problems early on of us trying, trying to just grow it. And so after we got like, you know, six, seven, eight stores open, that's when things actually really changed because everyone kept saying, well, Well, only people in Utah like sugar, you know, sounds crazy when you just say it like that, but that was kind of the thinking and it's not going to succeed outside of Utah. It's hot cookies. They're not going to succeed outside of, you know, in, in warm climates. But then when it started working in Vegas and a couple other places, we really got to this moment that was, okay, sorry, this has been fun side business, but we're now going to take over the nation. We're going to go from a franchise business with our friends and family and trying to do something fun and cool to, you Let's create a real business, and let's take over the United States with this concept.

AI assessment note: “a lot of it, we just looked up online and a lot of the people”

Q Alright, so now you've got this, and, and you're going back and forth between Logan and Provo, like, every couple of days, or once a week, or?

A Yeah, oh, like, yes, I, there was times where I was slowly driving all the way around Utah, looking for pink boxes, and then delivering them. It was really one of those things behind the scenes where we were everything. I was on the phone with customer service, and at the time, we had a delivery technology that allowed us to do routing for the deliveries, and deliveries was really big early on, Cause people are so excited. You could get something warm delivered to your door and word of mouth started spreading. Um, but I was behind the scenes on the weekends, literally just moving around the routes. I had a big map and I had all the deliveries on a map and I was rerouting to try to make sure that the drivers would be optimally driving. And so a new driver would come show up and all of a sudden they'd pop up online. I'm like, okay, I got to reroute all these. So we didn't have any of the technology beginning to route everything perfectly. We were doing it by hand.

AI assessment note: “there was times where I was slowly driving all the way around Utah”