Pod Insights How I Built This with Guy Raz Chesapeake Bay Candle: Mei Xu (2017) About this episode Twenty-five years ago, after Mei Xu emigrated from China to the U. S., she loved going to Bloomingdale's to gaze at their housewares. She eventually started making candles in her basement with Campbell's Soup cans, an experiment that led to the multi-million dollar company Chesapeake Bay Candle. PLUS in our postscript "How You Built That," we check back with Dan Kurzrock and Jordan Schwartz, who turned up-cycled beer grain into a snack bar called ReGrained.
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0:00 Guy Raz? Hey, everyone. It's Guy here. So a few years ago, I sat down with an incredible entrepreneur. Her name is Mei Shi. And Mei arrived in the US basically not knowing a soul. And about 20 years later, she wound up sitting next to President Barack Obama at the White House advising him on how to create jobs in America, because creating jobs was exactly what Mei Shi was doing with the candle company she built from the ground up. This episode first aired in March of 2017. It's a super amazing story, and I hope you enjoy it.
0:37 Speaker 01 We registered for the New York Gift Show, which is the holy grail of trade shows. And we thought that this is going to be the ticket to our success. But we were wrong. It was a complete disaster.
0:58 Guy Raz? From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
1:10 Guy Raz? I'm Guy Raz. And on today's show, the story of how Mei Shi left China for America, used Campbell's soup cans to make candles, and turned that into a multimillion-dollar company.
1:25 Guy Raz? So almost everything about the way Mei Shi's life turned out is improbable. The fact that she started a business, that she makes candles, that she even lives in America, none of this was supposed to happen. And as she describes it, growing up in China in the 1970s was kind of like living in a movie without much color.
1:47 Speaker 01 When we grew up, there was absolutely nothing. Everyone wore the same thing. Everyone would be eating the same food. Everyone had the same small apartment. Life was very happy in the sense that you don't have to be jealous of each other. You don't have to be wanting things you could not have.
2:03 Guy Raz? In the 1970s, China was still a black box, closed off too much of the world. But about Essentially, the government realized it needed better diplomats, people who spoke foreign languages well. So around the time Mei turned 12, this is 1979, the government decided to open up some boarding schools to train that next generation of diplomats. And Mei Shi was one of the lucky few who got in.
2:30 Speaker 01 So we learned Western culture, American studies, Renaissance art, all in English. And I knew more about Smithsonian and the locations of each art than many Americans. And this was the thing about learning a language. A language is really living it. I remember it was very funny that I was watching Godfather at 14, which has a lot of violence, a lot of sex, and a lot of murders. But we were enjoying it. We thought it was, you know, something that everyone in the United States do on every given day.
3:05 Guy Raz? It was a pretty charmed life, especially compared to other Chinese kids. Mei was on the fast track to becoming a diplomat. But there was one problem. In the spring of 1989, Chinese students started to organize demonstrations calling for more reforms, what we now know as the Tiananmen Square protests. And after six weeks, the Chinese government cracked down. Now, Mei Shi wasn't an activist at the time, but that didn't matter. The government decided that educated young people like her were a threat, so they were sent out of Beijing.
3:39 Speaker 01 They assigned me to a northern city, very cold, not even a city, a suburb. My job for the whole year is going to be watching a warehouse for minerals that are going to be for export. So I have a clipboard. I have two highlights of a day. When the truck comes to pick up one load, I put a check. And then it came again in the afternoon. I check. That will be the day for me, for a whole year.
4:09 Guy Raz? You must have been miserable.
4:10 Speaker 01 I was beyond miserable. At that time, I was already dating my first husband. His name is David. So we were very close and being far away was obviously not a good arrangement. On top of that, what I worried the most is that for 10 years, I was practicing and speaking English. And language is very easily forgotten. And I barely speak Chinese, let alone English, because my boss does not like to talk to me. He's a man with few words. He smoked most of the time. And that's my life for a year.
4:47 Guy Raz? So May, she decided to quit. She and David thought about what to do. He was a trained geophysicist and she spoke great English. So they decided to apply for temporary visas to come to the US. And after two years of waiting, they got him.
5:03 Speaker 01 So I flew to Washington DC. When we arrived at Dallas Airport, I was very sleepy because of the jet lag. And I saw two signs. One is American citizen.
5:14 Guy Raz? Yeah.
5:15 Speaker 01 And the other is aliens.
5:16 Guy Raz? This just as you arrive at immigration?
5:18 Speaker 01 Yes. And the word aliens was kind of confusing to me because I remember aliens from Star Wars or from, you know, those science movies. And I was so excited. I said, wow, they actually have a section for aliens. And so I got very excited. I said, let me see. I'm certainly not American citizen, so I guess I'm going to have to go to the alien part. And that's great because I can see them. I never knew that the word alien means the non-American, non-green cardholders. I guess they realized that, too. They changed the name now.
5:52 Guy Raz? Yeah.
5:52 Speaker 01 To something a little bit more human.
5:55 Guy Raz? What was it like to adjust to the US? I mean, you had sort of immersed yourself in American culture your entire childhood, but then you finally arrive here. Did it surprise you? Did it disappoint you? Was it lonely?
6:09 Speaker 01 Well, I don't find it particularly difficult to adapt. What I find interesting is that in Washington DC, people kind of avoid eye contact. That's something I still think was my first impression of the city. I was riding the subway and I found it very interesting that as quickly as I look at someone, they immediately change their eyes and they try to focus on reading. And I said to myself, I said, wow, this is a really deep city because everybody's always reading very big volumes.
6:39 Guy Raz? So were you able to find a job?
6:42 Speaker 01 Yes, so I found a job in New York. It was a job for American medical device companies to export equipment to Chinese hospitals.
6:52 Guy Raz? And was it interesting work? Did you enjoy it?
6:54 Speaker 01 It was boring. I have to be honest with you. It was a lot of paperwork pushing, a lot of import-export documentations, working with, you know, different factories about SKU numbers and pushing line of credit through the banks. But what's interesting out of all these not-so-interesting things is that they put me in a hotel next to Bloomingdale's.
7:17 Guy Raz? Why was that interesting?
7:19 Speaker 01 Well, imagine a bird out of cage.
7:21 Guy Raz? Okay.
7:22 Speaker 01 I have always been interested in fashion. Many people wonder, you know, if you grow up in a country without any fashion, how can you really have an eye for it?
7:31 Guy Raz? Right.
7:32 Speaker 01 And when I was growing up in the foreign language middle school, China at that time already started exporting fashion and they would have those rejected fashion and they put them on sale near the, you know, bus stations. So we would be jumping from one place to another looking for cheap fashion, you know. So that was always something I'm very interested in. And when you're put next to a Bloomingdale's, that was the best thing that can possibly happen.
8:02 Guy Raz? So you would just go and hang out at Bloomingdale's?
8:04 Speaker 01 Every day I would go, starting from the first floor, which, you know, all these sales ladies that they spray
8:11 Guy Raz? Yeah.
8:12 Speaker 01 fragrances and everybody hate them, not me. I love them, so they spray on me. I like being sort of in the middle of something they're launching and be able to tell what's in the fragrance that I like and dislike. And then look at the packaging. Packaging is always fascinating to me because I grew up in a country with no packaging at all. But what interests me the most is the fashion floor and it's usually the second floor and just... Being amazed.
8:40 Speaker 01 And I love the women in New York, the way they are so confident and they dress in those colors, in those shapes, and they look great. And then I would always end in a home department. And it would always give me a lot of question because it would look like it's in the 1920s.
8:58 Guy Raz? So what would it look like?
9:01 Speaker 01 Furnitures were very ornate. It has a lot of very, you know, gilded finish. And then the plates are like Laura Ashley prints, you know, very small grandma's wallpaper floral. And I'm just wondering, the person who is so confident walking on the street would go home to see this? It's so disconnected. So I keep saying that to David.
9:25 Guy Raz? Yeah.
9:26 Speaker 01 When we talk on the phone.
9:28 Guy Raz? He was living in DC?
9:29 Speaker 01 He's in DC. I was in New York and I would get up at five on Monday and took the first train. And I would get home at nine o'clock on Friday. So it's not really a very good quality of life. And I was calling him about what I discovered was very exciting. And then I continually bring up how disconnected the fashion and the home departments are. Finally, he said, May, you seem to be really upset about this commute.
9:56 Guy Raz? Yeah.
9:56 Speaker 01 So he said, maybe we should start something.
10:00 Guy Raz? So you quit and you, and then what was the plan? What was the business you guys were gonna do?
10:06 Speaker 01 So we knew it's gonna be home because we know.
10:08 Guy Raz? Homewares, home goods.
10:09 Speaker 01 Home goods because the fashion business is dominated by brands. And we feel the home business is left without brands. And that's where we see the opportunities. So it closed the gap between home and fashion. So that's our idea. We don't know what product.
10:24 Guy Raz? Yeah.
10:24 Speaker 01 We just quit, both of us, at the same time.
10:27 Guy Raz? And you just like started brainstorming in your apartment or your house at the time? Like trying to figure out what to do?
10:32 Speaker 01 Not only with each other, but we really reached out to our friends. So we brainstormed with our friends. And as a result of that, when we started the business in the middle of 1994, we quickly got a lot of feedbacks. People sent me samples, sent me pictures, and we zoned in on about four categories.
10:53 Guy Raz? And what were they?
10:55 Speaker 01 The first you would be surprised is silk flowers.
10:57 Guy Raz? Silk flowers.
10:58 Speaker 01 They're fake flowers that never die. The second category is accessories for your car. So seat cushions, something to make you feel comfortable when you drive for a long distance. And the third category, because I noticed American Doll was so popular, is a kind of doll that can rotate with music. And the last, something that I didn't even think is interesting, but I think it might have an opportunity, is a candle.
11:24 Guy Raz? Candles.
11:25 Speaker 01 Every category I mentioned is a huge business in this country. There are billions of dollars that are in each of those categories.
11:32 Guy Raz? But you didn't have access to massive amounts of data and research then?
11:35 Speaker 01 No.
11:36 Guy Raz? Because the Internet wasn't available?
11:37 Speaker 01 No, it wasn't. And I don't really know what difference we will make, other than, you know, making it designed better. But I didn't even know how hard it was. It's actually good that you don't know everything, that you don't know how hard it is, that you just have a gut that something can be done to make it better. There's no amount of research that can prove an idea. But there's one thing you can always do, which is to take your product to the market. So that's what we did.
12:07 Guy Raz? How did you get the products, by the way?
12:09 Speaker 01 They sampled us. They sent by FedEx or DHL.
12:13 Guy Raz? From China?
12:14 Speaker 01 From China, yes.
12:15 Guy Raz? So you got Chinese-made products and you imported them to the US?
12:17 Speaker 01 We haven't imported them, we just sampled them.
12:19 Guy Raz? Samples, okay.
12:20 Speaker 01 So they sent by DHL, FedEx, whatever it is at that time is available.
12:24 Guy Raz? Silk flowers, seat cushions?
12:25 Speaker 01 Silk flowers. I think David brought some of those back by breaking his back also.
12:30 Guy Raz? Oh, just in the suitcase?
12:30 Speaker 01 Just in the suitcases, yes. And by that time, it was September 1994. All the major wholesale trade shows take place twice a year. In January, when people replenish their goods after holiday, and in summer, when they are buying more for Christmas.
12:46 Guy Raz? Right.
12:47 Speaker 01 But it was September, so the only show we can possibly go to is in Charlotte, North Carolina.
12:52 Guy Raz? And what happened?
12:55 Speaker 01 Ninety percent of the business came from the candles.
12:58 Guy Raz? And what did the candles look like? Were they just... Candles?
13:02 Speaker 01 They're, you don't see them anymore. They're called glow candles. They're round and they look like stained glass. And when you burn them, they're glowing from within.
13:12 Guy Raz? So people came up to your booth and they were not interested in anything else? The silk flowers or the car seats? It was the, it was that stained glass looking candle?
13:20 Speaker 01 Because it's holiday and it was gift giving season and it's a great gift.
13:25 Guy Raz? Okay, so then after the show, you know, you've got all these orders. How did you, how did you deliver them? How did you get them to customers?
13:32 Speaker 01 We rent a very inexpensive warehouse with an office in the front. And we couldn't afford many people for time. So we just have one part time to help us. And we were able to use our savings and our family and friends helped us. So the first container was a 20 foot container, not even a 40 foot container. And then we shipped them very fast and we got reorders.
13:55 Guy Raz? From the, from the clients at the trade show?
13:57 Speaker 01 Yes.
13:58 Guy Raz? Wow, so what was the candle retailing for?
14:01 Speaker 01 $15 the most.
14:02 Guy Raz? And how much did it cost you guys?
14:04 Speaker 01 We probably will take 50% margin on them. So it was almost half a million dollars of business we did in four months.
14:13 Guy Raz? That's insane. I mean, were you and David just like shocked by the candle thing?
14:18 Speaker 01 We were, we were taken surprised by that. We were not expected to do so well for the first four months of our business. And we were shipping every day. I'm, I was a sales manager. I was assistant. I was accounting. I was taking products out of the containers. I was everything.
14:38 Guy Raz? Okay, so you shipped this container from China and then you deliver all the stuff to your clients. And then what did you guys do after? Like what was, what was the next move for the company?
14:47 Speaker 01 The second year, I decided since the trade show, it's so important. We registered for the New York Gift Show, which is the, the holy grail of trade shows. So we went to the New York Gift Show and we thought that this is going to be the ticket to our success. But the show, which is 10 times bigger with an international audience, told us that we were wrong. It was a complete disaster.
15:14 Guy Raz? You are trying to sell these same candles that you're importing from China, and they're not selling.
15:20 Speaker 01 They're not selling, and I was devastated because it's a very expensive trade show.
15:25 Guy Raz? I'm assuming at this point, I mean, you must have sort of thoughts in your mind that maybe this candle business, maybe it was a fluke. Maybe the fact that we did so well that first four months just had to do with Christmas.
15:37 Speaker 01 Exactly, that was the thought. But I wasn't giving up. I was always more international minded. I was already scheduled to go to visit Frankfurt, Germany, because every year in February, there is a big home product show called Ambiente. And in my very depressed moment, I needed to go there to see what could potentially be the next thing. Because what I envisioned for home is already there. The design is very streamlined.
16:08 Guy Raz? Of candles?
16:09 Speaker 01 Of everything from home furniture to lighting and tabletop. The colors are very bold. They have oranges, lavenders, and they have those beautiful contrasts with white. And I was so happy that I went there because it confirmed that home and fashion could be in sync.
16:33 Guy Raz? So how did it change your trajectory? I mean, you still have a candle business where you're bringing these stained glass window candles in from China. You're in Frankfurt, you see these beautiful streamlined designs, and you think, what?
16:46 Speaker 01 So I could use that design elements in candle design.
16:50 Guy Raz? That you would design your own candles?
16:52 Speaker 01 That was always my thought.
16:54 Guy Raz? Even though you were trained as a diplomat?
16:57 Speaker 01 I know. I think not many people end up doing what they're trained to do. But that training is very helpful because I was exposed to a lot of art education when I was a very young kid. So it started from a very high level of art, and then it trickles down to fashion, and finally it goes to home.
17:14 Guy Raz? So after you got back from the Frankfurt Trade Show, how did it change your approach to what you were doing?
17:19 Speaker 01 So I came back very refreshed and invigorated from what I see. And really, I was determined that I'm going to really start to do something. And another thing I discovered by starting to pay more attention now to candles is that my competitor in the US, they sell candles in the millions and probably billions. And I asked myself, why do they buy it all year round? It's not because they have a patent, it's because of the fragrance. The power of fragrance has been written. Men and women over the years have been wearing fragrances for many reasons. But for home, it takes on a very new meaning.
17:59 Guy Raz? So that was that you basically decided to, at that point, to start making scented candles?
18:05 Speaker 01 Yes. At that time, we were, for the first time, joined by a permanent employee, which is a friend of David's. His name is Richard. And he and I went to visit one of the fragrance vendors in New Jersey to learn how to make candles with fragrance. So he and I went in his speed-up hunchback. And for four hours, we learned everything that one need to learn about making frozen candles. So many people think about candles and they say, how hot can it be? I can make it with my eyes closed.
18:37 Guy Raz? But you just pour some wax and some perfume and you got a fragrant candle.
18:40 Speaker 01 And then you put a wick there and then it's going to be a candle. But if you want to make it a business and you want to make sure it doesn't burn someone's house down, you actually have to study how to make it. Because a candle is both a piece of art and a lot of science. It's five things that are interacting with each other. It's the fragrance, it's the base, which is the wax, it's the color, the pigment, it's the wick. And finally, it's the vessel, which is the glass or a container.
19:12 Guy Raz? And if you don't do all those five things perfectly, what like, what could go wrong?
19:16 Speaker 01 Well, have you ever seen candles that has a lot of black soot?
19:20 Guy Raz? Yeah.
19:20 Speaker 01 That's because the wick is too big. Or you could have a candle that simply tunnel burn into the middle.
19:27 Guy Raz? Right.
19:27 Speaker 01 And you don't smell anything. That's because the formula and the wick is not optimized.
19:34 Guy Raz? So half a day you visit there and what? You drive back to Maryland and you start to experiment?
19:38 Speaker 01 We were bursting out of excitement. We said, wow, we're gonna start making fragrance candles for the first time. And we decided to experiment what we learned. But we didn't have the molds when we went home. So instead, we were always eating a lot of Campbell's soup.
19:55 Guy Raz? You were a startup? You were eating a lot of Campbell's soup?
19:57 Speaker 01 Exactly, a lot of Campbell's soup, noodle soup. So we said, these are great sizes, so let's use them.
20:02 Guy Raz? For molds?
20:03 Speaker 01 For molds. So we started mixing in our kitchen with our regular pots, oils with wax, with colors. But one thing we forgot in our excitement is a chemical that blend the oil really well with the wax. So that when you take it out of the molds, it looks very smooth.
20:22 Guy Raz? Yeah.
20:22 Speaker 01 We forgot that chemical. But what happened is a random harvest. Because when we took the candle out of the mold, the candle looked fossilized.
20:32 Guy Raz? Fossilized?
20:32 Speaker 01 Because of the oil not blending very well.
20:35 Guy Raz? So it kind of had this aged look around it?
20:37 Speaker 01 It has a snowflake on it.
20:39 Guy Raz? Wow.
20:40 Speaker 01 And no candles are like. So the snowflake would be on different part of the candle. Everything looks handmade. And on top of that, I blended fragrance differently. I put vanilla with lavender. I put watermelon with mint, where many people just have a straight vanilla or a straight watermelon.
21:01 Guy Raz? And is that the secret sauce, the fragrance?
21:04 Speaker 01 Yes. And many people say the reason why they burn fragrance is the finishing touch to cleaning their home.
21:13 Speaker 01 When they want to finish and sense that their home is ready for their, you know, friends and family to come for entertaining, or when their husband and children come back to home, they want to put something to mark that it's a clean house. So they put a candle. It smells like a cookie. It smells like a fresh cotton. And that's why people continually buy the candles because they need the fragrance.
21:40 Guy Raz? So I mean, so as you are sort of really kind of honing in on what what this product is going to be, is that when you came up with the name?
21:47 Speaker 01 Yes. So think about those colors. Beautiful cobalt blue with a lavender, with a honeydew green, not hunter green, which everybody use. Sunflower yellow, white. Think about what it means. It means energy. It means fresh. And this is where we gave the name because we were living in Annapolis at that time.
22:07 Guy Raz? Annapolis, Maryland.
22:07 Speaker 01 Annapolis, Maryland. And many times I would take my dog for a walk. I like how Annapolis really still today is still very quiet. It's not the Hamptons or any other, you know, fufu shishi place.
22:22 Guy Raz? Yeah.
22:22 Speaker 01 It's very down to earth.
22:23 Guy Raz? Yeah, it's very real.
22:24 Speaker 01 It's very pristine in a sense that to me, coming from China, it is very untouched. And it stands for natural beauty. And I want to communicate that because our candles are not touched by a lot of chemicals. It has that natural finish on our texture. So we just called it Chesapeake Bay Candle.
22:49 Guy Raz? When we come back, how may she wound up making an enemy out of the one person she needed to get her candles into Target? And how eventually she recovered? Stay with us. It's How I Built This from NPR.
23:16 Guy Raz? It's How I Built This from NPR. I'm Guy Raz. So thanks to an experiment in her basement with Campbell's soup cans, Mei Shi has stumbled across a new kind of candle with bold colors and mixed fragrances. And now she just needs to convince someone to buy it.
23:35 Speaker 01 So I called Bloomingdale's. And I was working with the secretaries, begging and pleading that I have a great product. So finally, she gave me the name of the buyer. The buyer is really important. They are the eyes and ears for any company, and particularly for Bloomingdale's. You can imagine the standard's really high. But when I described the candles, the texture, the fragrances, and the colors, she was very intrigued. So I got an appointment right away. And you know, when I went there, they didn't even sit down. They started taking the candles and show everybody around in the office.
24:13 Guy Raz? Hmm.
24:14 Speaker 01 And you knew you got them.
24:16 Guy Raz? So I take it Bloomingdale's made an order?
24:20 Speaker 01 They loved it. They just showed it to their bosses. And we got the first order to ship to the stores that I have been going so many times.
24:31 Guy Raz? Wow. How did you produce enough candles to fill that order?
24:34 Speaker 01 So here comes the best part. I was frustrated because at that time, China did not have a home fragrance industry. To produce that kind of oil, you need a chemical compounding facility. And they were not used to that. They used to sell their cinnamons and their jasmine's overseas. The French and the US will then turn them into oils for fine fragrance or for food flavors. But they don't have industry themselves.
25:03 Guy Raz? So if the Chinese weren't making fragrances like this, how were you able to even start that?
25:09 Speaker 01 So I talked to a few factories in China. They looked at me like I have, you know, some problem because they certainly wouldn't take on a project like that. I was frustrated, and I told my sister about this. And she too was very determined to help me. So she said, I'm going to quit. And she said, I'm going to start a factory for you.
25:30 Guy Raz? Wow.
25:30 Speaker 01 In 1995.
25:33 Speaker 01 So that was the year when we started to have our own factory. We changed everything for me.
25:38 Guy Raz? Put up a fact like is that you can do that? You could just build a factory?
25:41 Speaker 01 That's already ninety five. So you can, particularly in that part of China, which is very entrepreneurial. There are villages that make nothing but buttons or a village that make nothing but candlestick. So having a factory is possible, but we have borrowed very heavily from friends and family to build that from scratch.
26:02 Guy Raz? So your sister builds this factory and starts manufacturing the candles? And were you working like crazy? Were you always working?
26:09 Speaker 01 I'm always thinking because I was always thinking about the next color, the next fragrance that can mix or the next packaging that we can put together. So I was always doing a lot of things at the same time.
26:22 Guy Raz? What were the things at that time that kept you up at night? What were the sort of anxieties you had?
26:28 Speaker 01 I was never have time to worry. I'm a very optimistic person, but I was always wondering who's our next customer. So we sold to Nordstrom right after Bloomingdale. They're very similar companies. But in nineteen ninety five and ninety six, my eyes started to search for who's the sort of company that's trending. They represent some demographic changes or style of shopping that's different.
26:54 Guy Raz? Yeah.
26:55 Speaker 01 And my eyes started to focus on Target.
26:58 Guy Raz? Why Target?
27:00 Speaker 01 They stand for style and design versus Walmart, which stands for value. And it really inspired me because I really subscribe to design for all that philosophy because I came from a country with a lot of people that are very poor.
27:16 Guy Raz? Yeah.
27:17 Speaker 01 And I know a lot of teachers of mine who have great taste, who would never be able to buy things that are so expensive at Bloomingdale's. So how can we make it more affordable? How can we make it so we can sell it for twenty dollars versus? Eighty dollars. So I knew it's gonna be the big growth for us if we can get in because it's already seven hundred and fifty stores nationally. And they have two dedicated aisles with forty eight feet of candle space.
27:50 Guy Raz? So who do you, who do you call there?
27:52 Speaker 01 So it was pretty straightforward. You can find the name of the buyer. There's a telephone extension and you can leave messages.
27:59 Guy Raz? And you call that person?
28:02 Speaker 01 So this is the time when I always say you, you cannot give up, even if you call for a whole year, which I did.
28:08 Guy Raz? A whole year?
28:09 Speaker 01 Every month at the same time I call and I left messages.
28:13 Guy Raz? And you said what?
28:14 Speaker 01 I said, hi, I'm the same thing I did with Nordstrom and the same thing I did with Bloomingdale's.
28:19 Guy Raz? What was your pitch? What'd you say on the phone?
28:20 Speaker 01 My pitch was that I have a great candle and now I can even say it's sold at Bloomingdale, which usually Target buyers would listen in and they would say, wow, they're already at those stores. We wanna be those stores. So they would usually return your, your phone, but not the buyer.
28:35 Guy Raz? And, and nothing, silence?
28:36 Speaker 01 Nothing, silence.
28:37 Guy Raz? So how did you, how did you finally break through? What happened?
28:41 Speaker 01 So I have to say, this is probably one of my biggest failures is that I started to get frustrated and I said to the receptionist, she's not returning my call. So she said, I think you could call her boss and make a complaint, which I did. I basically say, well, you're, one of your buyers have not make any return phone calls. Two minutes later, the buyer called and she said, this is so and so. And just so you know, it is not the way to start a relationship. And she hung up.
29:11 Guy Raz? And she hung up on you? Wow, so you were finished at Target?
29:16 Speaker 01 I'm done. So every time I called again, if it's her voice, I didn't even leave my voice message again.
29:22 Guy Raz? But you kept calling even though?
29:23 Speaker 01 But I kept calling, I kept calling.
29:25 Guy Raz? But you were shut out at that point?
29:26 Speaker 01 I basically was, yes. So I waited until the next year in April. And it was a very different voice. It was a very cheerful voice.
29:36 Guy Raz? It was a new buyer.
29:37 Speaker 01 It was a new buyer. And I left my message and I got it back in two days.
29:41 Guy Raz? Wow, two days.
29:42 Speaker 01 A new day has finally come because as you can imagine, every new buyer wants to make a difference. They want to make their mark. And she heard me, so she said, why don't you come? And I did, but I knew.
29:56 Guy Raz? Where's their headquarters?
29:57 Speaker 01 They're based in Minneapolis.
29:58 Guy Raz? Right, oh, of course.
29:59 Speaker 01 So I flew there and she was very young. She was probably in her late twenties. And she came in and she was sitting down, listening to my pitch. But halfway through, she has to get up and smell the candles from the bottom. Candle buyers usually want to smell the candles from the bottom. That's when the oil settle into the bottom and you smell the most from the bottom.
30:22 Guy Raz? And so what she say? Did she, did she put an order in?
30:25 Speaker 01 She, basically in a big store, it's a lot process involved.
30:30 Guy Raz? Right, right.
30:30 Speaker 01 They ask you capability questions, pricing questions, they cherry pick what they want. So I didn't expect anything to happen. But she asked me, if I put it in my store, how soon can you ship? That was the moment when I froze because I said, what do you mean? Are you gonna test? Because I heard they test a lot. So do you test in fifty stores or a hundred stores? She said, no, ma'am, I wanna put it in seven hundred fifty stores.
30:58 Guy Raz? Wow.
30:59 Speaker 01 And I said, oh, in that case. And I started to calculate in my head how fast my sister's company can produce with seven hundred fifty stores. And I said, six months. And she said, perfect, that will land us in October and you can ship it so it arrives in December. And that's when we set for spring.
31:20 Guy Raz? And, and how big was that order?
31:22 Speaker 01 That order end up being. Over a million dollars. And the forecast for the year ended up being over three million dollars.
31:31 Guy Raz? How did you, I mean, so, so basically, I mean, when you called your sister and you said, we have this order from Target, we have to make how many, do you even remember how many candles you had to make?
31:39 Speaker 01 It's probably half a million candles.
31:41 Guy Raz? And how, how many candles was the factory able to produce a day at that time?
31:47 Speaker 01 That was gonna stretch them. They were gonna have three shifts a day, every day of the week.
31:51 Guy Raz? Just like 24/7?
31:53 Speaker 01 Yes. They will have to hire people to work seven days a week. And the thing about the, the Target shipment is that it's really daunting. When you think about people scaling their business, one of the things people always think about is finance, how to finance a big order, a million dollar order. The second thing they ask is logistics. Physically, how do you turn over 20 containers of candles in two days? And we don't even have the physical space to turn 20 containers in two days, right? So we rented a very big, empty warehouse in Laurel.
32:29 Guy Raz? In Laurel, Maryland.
32:30 Speaker 01 In Laurel, Maryland, where our other warehouse is. But there's no electricity. So we parked our two cars, used the headlight to light up the warehouse in the evening. And we literally packed and unpacked using, of course, booklets.
32:46 Guy Raz? All of you, you, David, your husband.
32:48 Speaker 01 Richard and two or three of our warehouse workers, five of us altogether, we turned over 20 containers.
32:54 Guy Raz? So your company was five people in the US at that time?
32:57 Speaker 01 Five to six full-time people. And we went into holiday season somewhat absent-minded, waiting to see when the products would show up on the shelves. And sure enough, right after Christmas, our products were there. But it was radio silence. There was nothing coming from the buyer.
33:15 Guy Raz? From Target?
33:16 Speaker 01 From Target.
33:16 Guy Raz? Until when?
33:17 Speaker 01 Until two weeks after it was set. And I get a panic order call from the buyer. She said, May, we're in big trouble. So I said, oh, no, they didn't get all the products or they're not moving at all? She said, no, we are under forecast.
33:34 Speaker 01 We could have sold eight million dollars of your candles this year. And you need to go back to China and build a bigger factory. And we need to catch up because I don't want to be empty shelves in April or March.
33:46 Guy Raz? So is that what you did?
33:47 Speaker 01 That's what we did. And we found a much bigger facility. And we outfitted so that by March, we started shipping out of the new facility.
33:56 Guy Raz? So how many factories do you have today?
33:58 Speaker 01 So we have one in Hanzhou, China, as the first factory. Then we have one in Haiphong in Vietnam, and now in Glen Burn, Maryland.
34:08 Guy Raz? Wow, so presumably, I mean, it's a lot more expensive to manufacture candles in the US. So why are you doing it here?
34:16 Speaker 01 I came to this country, and I'm a citizen for many, many years. I always want to find product that said "Made in USA" when I go back to China. And I couldn't find them. Everything is always made in China, made in Indonesia, made in India. I think "Made in USA" stand for something. We may have not realized that. People believe that there's integrity and there is a cool factor with products that made in USA. And we haven't explored that as a country.
34:47 Guy Raz? Do you think you had a competitive advantage? In part because you were an immigrant and in part because everything in America was new to you and you were kind of naive?
34:57 Speaker 01 I think that's precisely. I think immigrants are self-selected group. They are self-selected group that is very big on taking risks. In some ways, they have the same traits as entrepreneurs already. Instead of taking what's easy, what's already familiar, they choose the unfamiliar, the uncharted, because they have more confidence and they have more curiosity. So in selecting themselves as immigrants, they are already facing big risks.
35:29 Guy Raz? So from a company that you started, you know, like as an afterthought with silk flowers and car seat covers, to a company that I've seen does reportedly like 60 to 70 million dollars a year in revenue. It's a pretty amazing. I mean, could you have imagined that when you came to the US on a temporary visa, that you would be running a company that's so big?
35:56 Speaker 01 So remember the alien story?
35:58 Guy Raz? Yeah.
35:58 Speaker 01 Remember, I thought I was, you know, going to meet an alien and discover that I was actually the alien.
36:06 Speaker 01 How cool is it that an alien can sit next to the President of the United States and talk about how to create jobs in America? That was me in 2012. I was creating jobs in the United States because of our factory and the President's office took note. And he invited 13 of the biggest manufacturers, such as Ford, Intel. And I was invited because I was a small business. And I was giving advice as to why it makes sense to revitalize manufacturing in this country, but why that we have not done enough for those companies to bring jobs back. So I feel very fortunate.
36:49 Speaker 01 Not only was I accepted, not just as a foreigner. You know, I was able to giving a path to realize what I want to do and more.
37:03 Guy Raz? That's May Shi, founder of Chesapeake Bay Candle. About a year after we spoke, in the fall of 2017, May actually decided to sell the company. She wound up making a pretty good deal with Newell Brands. It's a New Jersey-based business that also owns Yankee Candle. The purchase price, $75 million. As for May, this year she started a new venture, a website, mayshi.com, which tells the stories of women entrepreneurs all across the country.
37:38 Guy Raz? Hey, thanks so much for sticking around because it's time now for how you built that. And today, we're updating a story that we ran about a year ago, and it has to do with beer, which if you've ever brewed it yourself, you know it takes just four ingredients.
37:54 Speaker 02 You've got your water, you've got your hops, which everyone knows about, and you've got your yeast, which is kind of where the magic happens.
38:01 Guy Raz? This is Dan Kurzrock, and Dan used to brew his own beer in college.
38:05 Speaker 02 The most important ingredient is actually grain, like malted barley. And you take water and you mix it in with the grain, kind of like making a batch of oatmeal.
38:13 Guy Raz? And oatmeal is the key word here, because when Dan and his friends were making their own beer, they noticed that all the leftover piles of wet barley, well, it smelled kind of like breakfast.
38:25 Speaker 02 It smelled like bread. It was very fragrant. But none of the brewing books told us what to do with this grain, so we would put it in the dumpster.
38:34 Guy Raz? All of this is happening around 2009, 2010. And a few years later, Dan was in the Bay Area, where craft breweries were booming. And he started to notice that a lot of those breweries, just like him, were churning out huge mounds of leftover spent grain.
38:52 Speaker 02 It smelled like food. It looked like food. And so it was really a pretty low-hanging fruit to think, okay, well, maybe we can make food products out of this.
38:59 Guy Raz? Now, luckily for Dan, he had a friend named Jordan, who had worked in the food business. And so they teamed up and called a bunch of small breweries in the Bay Area. And they started to drive around with these big, plastic tubs to pick up all of this used grain.
39:14 Speaker 02 Yeah, I threw out my back a few times doing this. And then we got dollies. And yeah, it was heavy.
39:20 Guy Raz? So anyway, they take those heavy tubs of barley to Jordan's parents' house and just experiment.
39:26 Speaker 02 I took my now mother-in-law's recipe for loose granola. It had oats in it. It had lax, honey, cinnamon.
39:35 Guy Raz? So they went back and forth with the recipe, and eventually, they decided to turn the granola into snack bars.
39:42 Speaker 02 Low sugar, high fiber, with a great eating experience. It's not a mush bar. It kind of eats like a Rice Krispie treat.
39:48 Guy Raz? Dan and Jordan, of course, tested the snack bars on friends and at farmers' markets. And some of the feedback was not so great.
39:56 Speaker 02 People found the bars to be a bit dry and to be a bit pokey.
40:01 Guy Raz? Wait, pokey?
40:02 Speaker 02 Pokey, yeah. So the grain is quite sharp. And so it would get stuck in people's teeth. And one of the mouthfeel descriptors that we got pretty consistently was pokey.
40:14 Guy Raz? So to eliminate the pokeyness, Dan and Jordan decided to grind the beer grain into more of a flower.
40:21 Speaker 02 And then from there, that really solved the texture issue. So we did launch, you know, now we have a great product that's selling really well. We've got another one on the way.
40:28 Guy Raz? And snack bars are now on sale in regional chains in many parts of the US and on Amazon. Since we last spoke with Dan, he and Jordan have managed to get their bars into Whole Foods in eight different states. And when we first ran the story, both Dan and Jordan had just quit their day jobs to run the company. Now, more than a year later, they're finally able to pay themselves a salary.
40:53 Speaker 02 You know, I'm not buying a house anytime soon, unless I take a down payment. And then, you know, nutrition bars. Let me know if you know any realtors that'll do that.
41:01 Guy Raz? Dan and Jordan's company is called Regrained. And by the way, Regrained snack bars do not taste like beer, but they do have beery names like Chocolate Coffee Stout and Honey Cinnamon IPA.
41:16 Guy Raz? If you want to find out more about Regrained or hear previous episodes of our show, head to our new podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're up to. And thanks so much for listening to the show this week. You can subscribe to our program at Apple Podcasts or wherever you get your podcasts. And while you're there, please do give us a review. You can also write us at [email protected] . And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by Rund Abdelfatah with original music composed by Ramtin Arablouei. The two of them have left the show to start their own podcast called Throughline. You should check it out.
42:00 Guy Raz? Thanks also to Julia Carney, Sanaz Meshkhanpour, Neva Grant, and Jeff Rogers. Our intern is David Ja. I'm Guy Raz, and you've been listening to How I Built This.
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