The Exchanges

Q So what happened when you got on the phone with one of the partners? It was like a venture capital firm?

A Yeah. So when we got on the phone with him, he, um, told us that some of their other portfolio companies hadn't been performing well. So they were the money that backed them got cold feet and just decided to stop any deals that were in the works. They were going to stop them all and, uh, kind of regroup for a minute. So we were like furthest down. There were three other businesses that were impacted. We were furthest down. And, uh, what it did was it put us in July of 2018 with no deal. We ran out of cash because we were banking on this deal, and it, the deal itself went a little bit longer than we thought.

AI assessment note: “told us that some of their other portfolio companies hadn't been performing well”

Q And by the way, where were you popping the popcorn?

A So we were popping out of a really small food incubator up in East Harlem called Hot Bread Kitchen. It was, um, like a non-profit where they would work with immigrant women and provide them an opportunity and a, and a facility to bake items from their culture, essentially, and sell them. And then the other side of it was this They would rent kitchen space by the hour. So we, we asked them to just rent the space for, like, six hours, and, uh, like, we really needed to start making product, or else we thought Smorgasburg was gonna say, like, alright, we gotta give your spot up to somebody else. So we convinced them on April 26th, twenty-twelve, was the first day in the kitchen. We popped for hours, six hours, and we made, like, a hundred bags. Like, nothing.

AI assessment note: “we were popping out of a really small food incubator up in East Harlem”

Q And what was that, what was the roadblock?

A So if you've ever been to the Whole Foods and Columbus Circle, or if you haven't been, to separate the express checkout from the normal checkout, they usually have like a partition. And in, in, when we launched into the store, they said, we're going to use you guys, your cases, to essentially build the partition between the checkout lines. So we're used to selling maybe between 10 and 20 cases to a store. And they were like, we want 300 cases. We're going to go big with Pipcorn. So we popped it for a week. Bagged it. Rented a U-Haul. Delivered it. And the next day we get an order for another 300 cases. And like, we couldn't do it. We, we were overnighting, you know, pallets of corn. 2000 pounds of corn. We were like scrambling. We were producing it as fast as possible at a loss. Delivering it ourselves. It was like one store was all of our business. We would just kept getting these huge orders and we never said no. So we were always like, yeah, we'll, we'll make it work. So it was like, We would get any friend to come and help. The Columbus Circle Whole Foods, like, legitimately almost put us out of business early on because the volume was so huge.

AI assessment note: “almost put us out of business early on because the volume was so huge.”

Q And now that you've got Barbara Corcoran on your side, and even more visibility, did it make it easier for you to, to find more, more distribution? Like did, was it easier to get into, into stores at this point?

A Yeah, definitely. Within a couple, so we aired on Shark Tank in November of 2014, and within the following five or six months, we were able to get into, you know, three more regions of Whole Foods, and with those relationships opened up some opportunities to sell to other retailers too, so we were really able to leverage the exposure, and really kind of growing up in the process too. We had a bigger facility at this point, we had more employees, we had Just a process built around this whole thing. So, I mean, Shark Tank gave us a ton of opportunities, and behind the scenes, we were, like, aggressively pivoting towards, like, a much larger wholesale distribution strategy.

AI assessment note: “Yeah, definitely. Within a couple, so we aired on Shark Tank in November of 2014”

Q All right, so you are in Chicago at Loyola University. Meantime, Jeff, you had, this is, you've been laid off from your, your job at, at UBS, the investment bank, during the recession, right?

A Yeah, um, so we were, obviously, started in, which was an interesting time to start in the industry, and, you know, I worked in the consumer products and retail group, and specifically on the retail side of things, so once the recession hit, you know, retail was impacted very quickly, and, uh, I, I vividly remember the, the couple rounds of layoffs, a round of layoffs goes by and I was in the clear and then, you know, round two goes by and I'm in the clear. Okay. Yeah, we're done with layoffs. We're, you know, we're, we're fine. Round three comes and you know, okay, geez, that was crazy, but you know, I'm still in the clear and you know, you see friends packing up their desks and it was, it was hard. And I remember it was the fourth or whatever round of layoffs and I'm sitting at my desk eating lunch and on my, my phone rings and it says ninth floor HR.

AI assessment note: “Yeah, um, so we were, obviously, started in, which was an interesting time”

Q And, and Jeff, you were, you were living in New York at the time, but I guess you were around this time when, when Jennifer, when Jennifer had gotten these, it sounds like Jack and the Beanstalk, like these magic popcorn kernels. You were, like, you happened to be visiting her at the time, right?

A Yeah. I just happened to be visiting and helping her move apartments. She found a different place where it was moving, but you know, she was busy and I was, I had some time. So I said, you know, I'll come out, spend the weekend, help you pack up and, and, and it'll be fun. We can hang out for a little bit. So we, we literally, that's what we did. And we were left with nothing, uh, but pots, pans, you know, and some stuff from the kitchen. So Jen pulled out this bag of kernels and had some olive oil on the counter, some salt and threw it in a pot and popped it up and sat on the floor. There was no furniture. With a pot of popcorn, and just ate the entire thing. Like, didn't stop, didn't talk, didn't, like, communicate in any way. We just ate the entire thing, and then stood up and popped another pot, and did the same thing. And the first thing I said in the second pot was, we gotta sell this stuff. Like, this is so special. We have to sell this.

AI assessment note: “Yeah. I just happened to be visiting and helping her move apartments.”

Q People just went on to order your popcorn?

A Yeah. You know, we had prepped. We actually, so we aired on a Friday, and we We went to go hire one person to help with production, and she brought a friend to the interview. At the end, we were like, okay, Joanna, you have the job. And she asked about her friend, who wasn't a part of the interview at all. We were like, okay, yeah, you can both, please come back on Monday. So, uh, the airing comes on. Again, our website just crashes. We were refreshing over and over on the phone with people trying to figure out what had happened. We actually did get it back up during the segment. But we missed that first wave of, of traffic.

AI assessment note: “Yeah. You know, we had prepped... our website just crashes.”

Q Like, if you're at a farmer's market, it's different, because, or the smorgasburg, because you can go up to, people can go up to you, and you can say, oh, this is heirloom corn, and it's, we're using interesting flavors, and you can tell the story. But if you're just on a shelf of Whole Foods, how is somebody gonna know that this is unusual or different or worth trying?

A Well, this was a really interesting time for the brand for a number of reasons, but one of them was just this opportunity with Whole Foods was really unique. Because we got in through the snack bar, and we didn't have to go to the grocery department. They brought us in through specialty. So we were being purchased by the same department that purchases, like, beer and cheese and, like, these high-end crackers. So we were able to have these big displays in the entryway and buy the cheese department. We had all these amazing opportunities to be visible elsewhere because we weren't in grocery. And What made it even better was that the specialty department in New York never had a product they could stack up. It was always like these cheeses and these like specialty items that were small. So this was the first time that they had like boxes of a snack food that they could stack on top of each other and display in the store and kind of compete with grocery a little bit. And that was a massive opportunity for us to be that snack for them and to sell a story to Other stores within the Whole Foods network, even, like, the store down the road, saying, hey, have you seen what's happening at Bowery? Because you should go check it out. We could do the same thing in your store.

AI assessment note: “we were able to have these big displays in the entryway and buy the cheese department”

Q remember, I'm just, I'm curious, as, as kids, like, sort of, sometimes going to church or sometimes going to, to the synagogue and having, you know, parents from, from different backgrounds and cultures and being biracial, did, as kids, did you ever feel Left out or shut out, or did you always generally feel welcomed in, in the different environments and communities that you would go in and out of?

A I mean, there was definitely an adjustment, I would say. You know, there were moments in time where an off-color, you know, comment would be made about our dad at temple, and it wasn't, like, something that was incredibly obvious, but if you're in that, if you're living in this scenario, you pick up on it, and potentially the same thing at church on Sunday. So just with those two as an example, and even outside of religion, you know, there was just, you just pick up on these things, but it also teaches you patience. It teaches you how to Communicate with people at a very, very young age, and how to carry yourself in a way that's different than other people would have to. You know, like I, I've been in many situations, I know Jen has as well, where people don't know what our background is, and they, they, they don't know based on how we look, you know, definitely not that we're biracial, but they kind of assume one thing or another, and that is a really interesting place to be.

AI assessment note: “there were moments in time where an off-color, you know, comment would be made”

Q heirloom, other heirloom grains. Like, where, what's the story? Because most corn that we eat in the United States, around the world, is genetically modified corn. It's, it's grown to withstand pests, and, and to not require that much water, and, and to be sweet, and crispy, and to be able to stand up to long distance transportation. This was like, Ancient corn? Like, it came from, from non-modified corn?

A Yeah, uh, sorry, I've gotten really deep into the agricultural side of things, but yeah, I mean, when you create a product, you're doing it to accomplish one or more of the goals you just mentioned, and generally it's, like, size and uniformity and aesthetics. So when you do that, you generally breed out or you modify out something, and one of the first things to go is Nutrient density and flavor. They're like out the window first. So the beauty of heirloom and what, you know, heirloom farming, you know, agricultural practices, what's so important is that we're like really preserving this bit of history that doesn't have a place in, you know, the commercial farming world. There's no, you know, before Jen found these kernels, there were like little, it was all farmer's market stuff. It was always like, Hey, here's a five pound bag of kernels. I'll see you next year when you need another five pounds. There was no commercial use for it, but the beauty of heirloom is it's open pollinated. All the work is done by insects, birds, which essentially like what we say is like, it's the oldest version. It's like what earth intended this product to be. That's just evolved over time with almost no human interaction.

AI assessment note: “the beauty of heirloom is it's open pollinated... it's the oldest version”

Q Frito-Lay, whoever, I don't know who it is. And, um, is that something you think you'd be open to down the road? I mean, I mean, it could be a life changing amount of money and could put you in a position where you could pretty much do whatever you wanted to do for the rest of your life. Does that prospect sound attractive to, to, to both of you?

A Yeah. You know, that was, um, we have a lot of ideas. I, I don't, I wouldn't say that I ever thought I'd be the popcorn guy followed by the heirloom snack guy. And, uh, you know, I know Jen feels a similar way and Teresa as well. And yeah, I mean, in terms of an acquisition, I think it's something that we would be, you know, to the right partner too. Like you can really start to see some amazing things happen. And sometimes the founders stay on and Sometimes they move on, but, um, you know, for the right partner that can really take Pipcorn to the next level, and maybe some, accomplish some things that we just might not be able to, like, that's a, that's an attractive thing, because we're, we're making something that we want to be around forever, and whether or not we're the ones, you know, running it, we, we, we want it to have, you know, staying power, and I think there's something really exciting there.

AI assessment note: “for the right partner that can really take Pipcorn to the next level... that's an attractive thing”

Q Because it wasn't going to be, it wasn't going to be profitable for a while, and that's how you make your money, right? When, when, when you own a share of a company, you get distribution at the end of the year if it's profitable.

A Yeah, yeah, and, and her whole thing was, like, I'm going to work for you, too. Like, I'm going to go do all of these things behind the scenes, so I'm not going to do that for free, let's say, you know, and she's a hundred percent right, like, the amount of work that she puts in, and she has a lot of entrepreneurs to manage at this point. There's a lot of people that she's invested in, So she also wants to be motivated, and this was kind of the way that the deals were structured at the time, so it's not like she was just taking money out of the company, but if we took some cash, then she would want to as well. It was kind of a fair way to structure it.

AI assessment note: “if we took some cash, then she would want to as well”