The Exchanges

Q Wow. So, cause this, and you were, were you working like overnight?

A It would typically be like a Friday afternoon. I'd drive out there and then work until like two or three in the morning making product. And I would source the, the ingredients from either online, like I'd buy like 50 pounds of almond flour, or I would go to my local, no joke, Trader Joe's, and buy like 30 bags of almond flour, which was always perplexing to the cashier. And then, yeah, I would, I would make product there. I couldn't afford a mixer, which, It costs 2000 dollars, so I had defined this idea to put all of the powders into these food grade barrels, and then I would roll them back and forth across the countertop to mix them together.

AI assessment note: “work until like two or three in the morning making product.”

Q How did you, I mean, how many ideas did you have before you landed on, on what would become Simple Mills?

A I probably had 10 different ideas on that list, uh, and Simple Mills partly came out of this idea of almost like a meal kit company that would make it easier to eat real food, and so one of the meal kits could be like a sauce that goes on salmon, so then it's a lot easier to buy salmon and figure out how to cook it. Another one of the meal kits would be maybe like a focaccia bread, uh, so that got me playing And the baking space, I'm playing with, with breads and muffins. And I realized that that was a space where it would be, I guess, a lower barrier to start. Like when you're working with sauces, that's pretty hard to make them shelf stable.

AI assessment note: “I probably had 10 different ideas on that list”

Q It's interesting that the investors saw you as, like, the grain-free Betty Crocker brand, right, initially. Betty Crocker, I think, is mainly mixes. I don't think they make, um, like, crackers and cookies, but eventually, you guys went into cookies and crackers, you know, things that were not mixes, things that were already made. Was that part of the vision back then, too?

A Back when they first invested in us, we hadn't built out a longer term pipeline, so we didn't know where we were going to go from there. I knew that I always wanted to get into things that were more convenient because that makes it easier for people to eat better, but I didn't know where we were going to go yet, and so we were like thinking about all these different categories. We thought about cereal, but we ended up going into crackers actually after I took our Cake mix home, and for whatever reason, decided to make crackers out of it and put it in my oven. And I brought them in the next day, and all of us sat around and said, hmm, that's really good. Maybe we should go into crackers.

AI assessment note: “we hadn't built out a longer term pipeline, so we didn't know”

Q is the issue, not the upcycled side of it? Because I know, Caitlin, you guys are doing some upcycled work as well, work with upcycled grains. Is there a world where Scott maybe want to consider a different product? I mean, I just want to throw it out there. I don't want to, I don't want to ran your parade here, Scott, but I just want to test this here.

A I mean, I think personally, I, I really love the idea of an upcycled pretzel, particularly one made with beer grains, because there's something about beer and pretzels that goes together. And, and one of the things that we think about, for example, when, when we develop innovation is do consumers naturally go there? And so does that sound delicious? And I'm just like, oh yeah, it's gonna, it's gonna pair so well with beer. Like I could almost even picture like a, Uh, a beer tasting where you've got like several different types of beer and several different types of your pretzel, and it just all works really well together. But then again, there's probably also other things that are, uh, in that avenue too, where, I mean, cracker is obviously near and dear to my heart, but, uh, but, but I go down that same path.

AI assessment note: “I really love the idea of an upcycled pretzel, particularly one made with beer grains”

Q So how did you kind of come to the realization that you, you needed to kind of figure that out?

A I had really fortunately hired a, a leadership coach and it was really because I found that she was really smart with the people stuff. I'll call it. And I realized that I wasn't really smart with the people stuff. And so I thought I needed her help. And so I had her working with, with me and also with our, um, with our key leaders. And so I think she started to hear some of the sprinklings of this. And both worked with those leaders to figure out how to have the crucial conversation with me, but also set the groundwork in me to be able to hear that conversation. And so that was, it was, I believe it was our head of marketing who's still with us today, who sat down with me and, like, basically told me, like, you gotta trust me on these things. You gotta let me run these things. Like, this is what I'm good at. I've got 20 years of experience here. Let me use it.

AI assessment note: “our head of marketing who's still with us today, who sat down with me”

Q You know, I'm, I'm listening to all this, and I'm, I'm wondering, Caitlin, like, how are you doing all these things? And going to business school, like, how are you juggling everything?

A I think it came down to the clarity of what comes first. I watch a lot of other students who try to start companies while they're in business school not succeed, and I think part of it is they try to do everything well, and you just kind of have to choose at some point and say, this is going to be my number one, and it's perfectly fine to say my number one is I want to build social relationships with people during business school, or I want to become really good at finance, but for me, it was I want my business to And so anytime there was a conflict between a course or a social function and the business, the business won. I mean, I didn't even date. Like, I did nothing.

AI assessment note: “anytime there was a conflict between a course or a social function and the business, the business won”

Q of them, including you, struggled at some point to fund the production, right, especially when you're first kind of getting things off the ground. I remember You almost had to sell like a lot of equity in the company for that reason. So from your perspective, when founders are thinking about like finances, how to finance, especially early on, um, what should they be, what should they be thinking about?

A Oh my goodness. The funding journey is just grueling. And I think today it's probably even harder than it was back when I was founding the company. I definitely had to do some very creative things on my own side to fund the business. So selling my car and maxing out credit cards and, and crazy things like that. But, but then I think when you go out to look for investors, it's really talking to anyone and everyone. I mean, I just talked to so many people that At 1.1 woman who was interested in investing in us was in a whole food store and a guy next to her turned to her and said, what do you think of this brand? And she said, well, I'm thinking of investing in it. Well, that guy turned out to be our lead investor. So I had talked to so many people that, um, two of them happen to be in the same whole food store in Charlotte, North Carolina at the same time talking to each other. So I think resilience is probably one of the largest things Things you gotta have to get funded.

AI assessment note: “resilience is probably one of the largest things Things you gotta have to get funded.”

Q And cookies. Um, and I'm sure there's a lot more sort of in the pipeline. How do you guys identify and then prioritize what products to bring to market? Like, what do you sort of measure? And when do you know that the thing that you're introducing doesn't work? You know, because there must be things that you introduce that just, you know, you kind of phase out after time.

A Yeah. I mean, innovation, part of innovating, part of being an entrepreneur, all of it is, is failure is part of the game too. And knowing when to, when to move forward with something or when to not do something is also super important. I mean, I think for us, we, we really think first of all, we have to be able to solve a problem for people. So it can't just be something that's nice to have, or it really has to solve a real consumer need. And then the second thing that we think about is, can we do this with Our ingredient tenants, more nutrient dense ingredients. And then the third thing is, look, it has to taste great. This is a food product and, and no one's going to eat it if it doesn't taste great. And so that a lot of times is one of the bars that's toughest to hit. So we really consumer test these products and understand is this measuring up to conventional standards and making sure that consumers will love it when it hits the shelf.

AI assessment note: “first of all, we have to be able to solve a problem for people.”

Q Yeah. I also have to assume you're not profitable yet, but I have to imagine at this point the savings that you have are not enough to fund the company. I mean, did you go out, did you try to raise money from people? Did you do like a friends and family round?

A Yeah. So around this point, I had totally underestimated the impacts of working capital. I kept needing to make more product. We kept selling more than we made in the run before. Uh, a lot of times when you're working with grocery stores, it's like 30 or 60 days after you sell the product to them that you actually get paid. And really, like, the second that I get paid from Whole Foods, I would immediately call up The contract manufacturer and say, we got to make more product, and I would immediately place an order for, uh, for more ingredients, but it was just like this constant nail biting cycle of we need more product, and I don't have money in my bank account.

AI assessment note: “it was just like this constant nail biting cycle... and I don't have money”