Tate's Bake Shop: Kathleen King

Kathleen King was 11 years old when she started baking cookies to sell at her family's farm stand on Long Island. After college, she opened a small bake shop, and eventually started selling her cookies to gourmet grocery stores in Manhattan. But after twenty years of running a small business, she wanted more time for herself. She brought in two partners to grow sales, but the partnership was a disaster – and after bitter lawsuits, Kathleen was forced to start over from scratch. 18 years later, Tate's Bake Shop – the second cookie brand that she built out of the crumbs of the first – sold for $500 million. PLUS in our post-script "How You Built That," Thomas Althaus made his wife a bracelet and earrings out of a tin can for their tenth wedding anniversary. What began as a lighthearted gift became Canned Goods—a recycled jewelry company that donates one can of food to charity for each piece sold. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  They had driven my business $600,000 into debt. I realized, even though I was fired and had no job, I was responsible for 1/3 of that debt. And all the money that the company had was gone. And I had to fight them. I had to get free of them. I had to get my business back.

• 0:28Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 0:42Guy Raz?

  I'm Guy Raz, and on today's show, how Kathleen King started out selling cookies from her family's farm stand for $0.59 a bag, then spent the next four decades building a brand that eventually sold for half a billion dollars.

• 1:01Guy Raz?

  It's hard for me to think of a more simple and elegant enterprise than a lemonade stand. It's kind of like a laboratory, where you can test out a whole bunch of hypotheses around marketing, and price structure, and human psychology. Take, for example, the experience of my own children. Their first lemonade stand was just lemonade. A dollar a glass, and it did fine. They made about $40. The second lemonade stand sold lemonade and freshly baked cookies. $2 for a lemonade and a cookie. And that did better. They cleared about $75. But the third stand had the lemonade and the cookies, but also a hand-drawn sign hanging

• 1:46Guy Raz?

  from the table that read, "Organic Handmade Lemonade."

• 1:51Guy Raz?

  They added an additional sign that said 20% of all profits go to the Humane Society of the United States. Now, that lemonade stand totally crushed it. Passersby would literally hand them $5 and $10 bills and tell them to keep the change. In a span of just two hours, my then-eight-and-six-year-old cleared $150 in profit and donated $30 to the Humane Society. That's 275% growth between Lemonade Stand 1 and 3. Now imagine doing this every day for an entire summer. Depending on how many hours and weeks you work, you could, at this rate, realistically

• 2:33Guy Raz?

  clear about $5,000 by Labor Day, which is kind of what Kathleen King discovered as an 11-year-old girl. Except, her cookie hustle turned into a business called Tate's Bake Shop that Kathleen would eventually sell for half a billion dollars. Tate's Cookies is a brand now owned by Mondelez, the huge food company that also owns Oreos, Chips Ahoy, and Ritz crackers. But long before any of this happened, Kathleen started a small bakery in Southampton, on the eastern end of Long Island in New York. For 20 years, she grew her little bakery into a sustainable business, until, as you

• 3:14Guy Raz?

  will hear, she lost almost everything in a bad partnership deal. And so, at the age of 42, Kathleen had to start all over again. And even though she grew up in the Hamptons, Kathleen did not exactly cross paths with the glamorous celebrities and rich financiers who go there in the summertime. Her mom was a nurse, and her dad ran the family farm where he raised chickens and cows.

• 3:40Speaker 00

  When I was growing up, it was about 30 acres. And my dad used to sell the milk to Schwenck Dairy, which was a local dairy. And on the cows, we had maybe, I don't know, 30 or 40. So, everything was small. Chickens, maybe a thousand, you know, nothing, nothing big.

• 4:00Guy Raz?

  How many, how many kids in the family?

• 4:02Speaker 00

  I'm the youngest of four, two brothers and one sister. We had a lot of responsibility. We were nurtured emotionally, but we grew up in the 60s. You know, you fall down, you know, you get up, you cry, I'll give you something to cry about.

• 4:17Guy Raz?

  And you all worked on the farm. That was just expected?

• 4:20Speaker 00

  We did. It, it was just expected, it was a given. There was, there weren't options, though. Occasionally, a brother or sister would escape from time to time to go do something fun. But I had to collect eggs and pick vegetables and wait on the customers. We did everything. The, the interesting part of my growing up was we didn't have any role playing, because my mother was ahead of her time. So, we had to work outside and inside the girls, and the guys, the boys, had to do the same thing.

• 4:51Guy Raz?

  Was, was your dad's business sustainable? Was it enough to support the whole family? Or were there, were there times when, you know, it was a struggle?

• 5:00Speaker 00

  No, they, it was a struggle, yeah. My mom, she worked and she brought a consistent paycheck into the house.

• 5:06Guy Raz?

  As a nurse?

• 5:07Speaker 00

  Uh huh. Like, my, my father used to barter, like, you know, a half a steer to the dentist to get our teeth done. And we had everything we needed. We just didn't, we didn't go to restaurants and go on vacation.

• 5:21Guy Raz?

  Yeah. Tell me about baking at your house. I mean, you're on the farm. You've got responsibilities and chores that you have to do. Was baking just something that was going on at the house all the time?

• 5:35Speaker 00

  My sister and her friend were baking brownies and bread and cookies and selling them at the farm stand. But then when they turned 14, they wanted to get a real job so they could be boys. So, they wanted, went to a local ice cream parlor. And I was the youngest. So, my dad said, "Okay, Kathleen, you're gonna start doing these cookies." You're gonna start making cookies and selling them at the farm. So you can buy your own clothes for school next year and blah, blah, blah. So I was just like, okay. And I just started baking them. Like, we, you know, nobody was coddled then. Nobody taught us, you know?

• 6:08Guy Raz?

  And what was the recipe you were using?

• 6:10Speaker 00

  On the back of the Nestle chocolate chip bag.

• 6:12Guy Raz?

  The Toll House chocolate chip cookies, right.

• 6:14Speaker 00

  Yeah.

• 6:15Guy Raz?

  And did you sell directly to people passing by in their cars or anything like that?

• 6:19Speaker 00

  Yes, we had a farm stand in the yard. And a matter of fact, when I was baking cookies, I would look out the window and see a customer pull up and then I'd run outside, wait on the customer. And then sometimes I'd have to say to the customer, I'll be right back. I gotta run in because I knew my cookies were gonna be done around that time. And I just baked them and I put them in a plastic bag and put them on the counter.

• 6:41Guy Raz?

  So did you get to keep the earnings from the cookies?

• 6:44Speaker 00

  Well, yeah, in the beginning. My dad said he would buy all the ingredients and everything. I just made the cookies and made all the money.

• 6:51Guy Raz?

  Yeah.

• 6:52Speaker 00

  And then as I started selling a lot of cookies, he said, we need to discuss our arrangement and you have to start buying your own ingredients now.

• 7:01Guy Raz?

  Of course.

• 7:01Speaker 00

  And, but I always got, I always got the eggs for free.

• 7:04Guy Raz?

  By the way, I make my kids pay me for the ingredients for the lemonade stand. Is that horrible?

• 7:09Speaker 00

  No, that's what you should do. Unfortunately, people don't do that anymore. I mean, I wanna go up to lemonade stands sometimes where I see kids and I'm like, why are you selling Newman's Own? We should be making your own. You get a niche. You get a niche. Get one step above the others.

• 7:22Guy Raz?

  All right, so you are, so you're making cookies at the farm stand.

• 7:27Speaker 00

  Yeah.

• 7:27Guy Raz?

  But what accounts for the fact that you were increasing, like the demand for them was increasing?

• 7:32Speaker 00

  Because they were really good and it just started to spread.

• 7:36Guy Raz?

  But what was so special about them? Did you change the recipe?

• 7:40Speaker 00

  Well, when I was 11, I was probably measuring a little haphazardly and created the cookie the way I liked it. I don't like cakey cookies at all or thick cookies. And I made them, they were like five inch diameter at least because back then, that was before supersizing. So I wanted to do something that, you know, drew attention to them. So I made them very large and they were thin. They weren't crisp like tates are today, but they were they were thin with a little crisp chewy. And people would drive there sometimes just for the cookies. So as I got older, the the amount of sales grew.

• 8:19Speaker 00

  So by the time I got into high school, I was baking in the summertime, seven days a week, 10 hours a day in my mom's kitchen. And she just allowed me to sprawl all over.

• 8:31Guy Raz?

  So by the time you were in high school, baking cookies at the stand, like, were you making significant pocket money or even more than pocket money?

• 8:39Speaker 00

  Oh, yeah. Yes, I bought my own car, you know, like a secondhand car, like kind of car you'd buy for $1,000 or $2,000.

• 8:47Guy Raz?

  Yeah.

• 8:47Speaker 00

  And, you know, in the summer, I could earn like five grand.

• 8:51Guy Raz?

  Wow.

• 8:52Speaker 00

  And, yeah, I would just stand there all day. And, you know, that kind of like fueled my loner side a little bit because I never had like a real summer job where, you know, there were lots of kids and people did things and they went out and all those things. I just stood there in the kitchen making cookies.

• 9:11Guy Raz?

  All right. So you're so you're actually making some serious dough. People coming by, buying cookies, just, you know, and I'm assuming that when you were 18, when it was time for you to go to college, you didn't think that your life was going to be the life of a cookie baker, that you were going to go to college and figure out what you're going to do and get sort of get a quote unquote real job, right?

• 9:31Speaker 00

  Yeah, you know, I went to two-year SUNY College, Cobleskill. I started in restaurant management and just kind of went to school and, I don't know, I had ideas in my head, oh, maybe I'll work on a cruise ship, you know, because I thought I might like to travel. I hadn't. And then I graduated in 1979 and went home to make cookies again for the summer because that's where I could make the most money.

• 9:57Guy Raz?

  Sure.

• 9:58Speaker 00

  And my mom said that summer, so what are your plans? And I was like, I don't know. And she said, well, this is your last summer making cookies here.

• 10:11Guy Raz?

  Why did she say that?

• 10:12Speaker 00

  Because my mother was also like my father. Independence and standing on your own feet, that was everything. And

• 10:21Speaker 00

  And then she said, you know, there's a bakery for rent in town. So I went to the bake shop and it was a fully equipped bake shop. Two bakeries had been there prior to me, both had, both failed. And so I looked at it and I was like, oh, this is perfect. This will work for me. So I just rented it. I needed to work and my goal when I opened this shop was, you know, really to just to rent an apartment and get a car.

• 10:48Guy Raz?

  And by the way, how, I mean, how much money did you need to, to start this bakery? Did you, yeah, did you have any money, I mean, did you have some savings?

• 10:56Speaker 00

  Yeah, I, I had 5,000 or so that I saved before I rented. And I had to borrow some money and of course I couldn't get it from the bank. So my brother lent me a little bit of money because I had to buy, um, my chocolate chips was $2,000. And the store wasn't pretty. I, I took old barrels from the farm and I painted them and turned them upside down and put plywood on top and I made a tablecloth and put that on top. And then my labels, I, I wrote by hand.

• 11:28Guy Raz?

  And what, what did you call the shop?

• 11:29Speaker 00

  Started out as Kathleen's Cookie. But then to expand, I changed the name to Kathleen's Bake Shop because I sold more things than just cookies.

• 11:38Guy Raz?

  And how long before you actually opened it to the public?

• 11:43Speaker 00

  Well, I, I would think I rented it in like November and then I opened in May. So what I did that winter was just get things prepared as much as I could and develop the recipes on a larger scale. So I did blueberry muffins, carrot cake, apple pie, like all like the top 10 typical American baked goods.

• 12:05Guy Raz?

  All right, so May of 1980, you're like 21, 22 years old, something like that.

• 12:10Speaker 00

  Yes, 21.

• 12:11Guy Raz?

  And it's just you and you opened the shop.

• 12:15Speaker 00

  I opened the shop, my sister-in-law, Robin King, she helped because she was working on the pie. She had a baby at the time and my niece Christina, we used to just put her in a box on the floor, had a blanket in it. And, you know, my father was my PR guy, so anyone that went to the farm, he would say, you know, my daughter's opened a big shop, buh, buh, buh, buh. And I had an ad back then, print ads. And, you know, the community was always very supportive of me.

• 12:45Speaker 00

  So people came.

• 12:47Guy Raz?

  So that summer of 1980, right? All of a sudden, you get the summer crowds into the Hamptons. How was business?

• 12:54Speaker 00

  It was good. I did really well. And right before Memorial Weekend, Florence Fabricant came in from the New York Times.

• 13:01Guy Raz?

  The famous food writer Florence Fabricant?

• 13:03Speaker 00

  Yes.

• 13:04Guy Raz?

  She just happened to come in randomly?

• 13:06Speaker 00

  Yeah, because she lives out there. She may have been shopping there prior to coming in and requesting an interview.

• 13:12Guy Raz?

  Did you even know who she was?

• 13:13Speaker 00

  No, I didn't. The New York Times was like what city people read.

• 13:18Guy Raz?

  So a couple of weeks later, this article gets published in the New York Times.

• 13:21Speaker 00

  Yeah.

• 13:22Guy Raz?

  Did people start to clamor to come try your cookies?

• 13:26Speaker 00

  They did, they did. And that was not expected because I didn't know the power of the Times. And people would tell me like, what do you mean? You're going to be in the New York Times. You need to blah, blah, blah. And I would be like, really? Oh, OK. You know, I was so naive.

• 13:41Guy Raz?

  So that was, so you've got this pretty good summer, great summer, first summer of 1980. But then the summer ends and, you know, a lot of those people go home and people come for summer jobs leave. What happens in the fall? Does your business start to kind of slow down significantly?

• 13:57Speaker 00

  Oh, yeah, the business slows down tremendously. And then weekends are OK. And, you know, for a while, you're really grateful for the rest. And then things get progressively slower. And I thought I needed to change that. So I went into the city, because that's where most of my customers were from, and just had my cookies in a shopping bag and just went door to door to places. You know, some customers would tell me, oh, go to Balducci, go to Zabar, go to Dean and DeLuca.

• 14:26Guy Raz?

  Oh, your customers who were coming out to the Hamptons were saying, you know, you really should make these available in the city.

• 14:30Speaker 00

  Yeah. And I remember walking into Balducci cold calling. And I'd be like, hi, I have cookies. Maybe you want to sell some? And they were like, yeah, let's see what you've got. And they would try them. And they were like, yeah, bring me 100 bags next week. And then I'd go into another store and someone would not be so nice. And he would say, you know, my mother can make cookies like this, or I made better, blah, blah, blah. You know, so I would just walk out. I've always had confidence with my cookies. Not so much myself all the time when I was younger, but with my cookies, I was like, you're just wrong.

• 14:59Guy Raz?

  So you, so you're going to Manhattan pitching the cookies. You're getting some, some places that say, sure, we'll, we'll, we'll take them.

• 15:07Speaker 00

  Yeah.

• 15:08Guy Raz?

  So what do you do? You go back to Southampton and you start just cranking out the cookies and just packaging them up in like bags?

• 15:17Speaker 00

  Yeah, with my, my hand printed label, which now I got printed. It was all handwritten, but then I got it printed. I thought that was major because now I didn't have to sit at night and write them all.

• 15:27Guy Raz?

  But, but how, how would customers know to buy your cookies? Like they had a choice?

• 15:32Speaker 00

  Well, because remember, this was the early 80s. There wasn't competition like there is now. You know, finding like a homemade cookie product in the stores was a great find. You know, people recognized them from the Hamptons and, and knew them then. And then, you know, word of mouth just spreads. And that's how most of my whole career was established.

• 15:56Guy Raz?

  So was it at this time where the recipe for the chocolate chip cookies started to resemble what we know of Tate's Cookies today?

• 16:06Speaker 00

  Yeah, because after a couple of years with Kathleen's Cookie, I, people, I feel didn't want everything as big. And so I, I just started making them smaller. And when I started making them smaller, that's how they came out.

• 16:19Guy Raz?

  They just came out crispy?

• 16:20Speaker 00

  Yeah, and I was like, oh, these are good.

• 16:22Guy Raz?

  Yeah.

• 16:23Speaker 00

  You know, when I used to create new products at the bake shop, I used to watch my staff taste the product. If they tasted it and they would be like, oh, this is good. And they walked away and didn't turn around and come back for another bite. I said it wasn't good enough.

• 16:40Guy Raz?

  But what were, what were you doing differently? I mean, were you adjusting the butter? Were you making brown butter? Were you using more brown sugar? What was it that you were doing?

• 16:48Speaker 00

  Um, you know, I, I can't really tell you everything, but um, there's no, you know, there's, there's one little trick. Nothing major, but I can't tell you what that is.

• 16:59Guy Raz?

  Yeah, fair enough. Listen, it's a half a billion dollar brand. You gotta protect that product.

• 17:04Speaker 00

  I know, I know.

• 17:07Guy Raz?

  All right, so you started selling these cookies to these shops in New York City. And is that like, does that become a significant generator of revenue for you?

• 17:17Speaker 00

  Yeah, because off-season is long, you know. Hampton season is so short and people think, oh, everybody's making money hand over fist. I'm like, well, now take that two months' worth of money and you've got to survive.

• 17:30Guy Raz?

  For the rest of the year.

• 17:30Speaker 00

  The next 10.

• 17:31Guy Raz?

  Yeah.

• 17:31Speaker 00

  So I started building my brand more in the city and was selling, that's when it was busy. So I would be selling there all winter long. And then, of course, in the summer, I had to maintain it. So I got another van or so and then I hired drivers and they would deliver.

• 17:50Guy Raz?

  Tell me what your days, your average days were like when you were 22, 23?

• 17:57Speaker 00

  When I first opened my first bake shop, I would go to work at like 2 o'clock in the morning and then bake and then open the store and then get home at like 8 at night. Then I changed my hours because that wasn't very healthy. I would drive to work at like 2:00 in the morning wanting to like hit a tree so I'd go to the hospital and rest. Because, you know, it's very depressing driving to work at 2 o'clock in the morning and everybody's light is off and you know they're in their bed. So then I changed my schedule. But I worked like 18-hour days, six days a week.

• 18:30Guy Raz?

  Wow.

• 18:31Speaker 00

  It was not easy. It was, you know, I gave up my youth, really.

• 18:37Guy Raz?

  Was it overwhelming for you? I mean, you were baking and if you weren't baking, I'm assuming you were like doing the business stuff.

• 18:44Speaker 00

  Yeah, yeah. It was really hard. Yeah, it was really hard. But I was always kind of like, well, just, you just keep working harder. You know, that's how you just try to figure it out, stay afloat.

• 18:58Guy Raz?

  What was the thing that kept you going?

• 19:01Speaker 00

  Pride. I didn't know how to say I can't do this.

• 19:04Guy Raz?

  Pride and the other side of that coin is the fear of failure?

• 19:08Speaker 00

  I didn't have a fear of failure. I just had more of the fear of saying, I can't do this.

• 19:13Guy Raz?

  But you just told me that there were times where you wanted to hit a tree so you could go to the hospital and sleep.

• 19:17Speaker 00

  Right, right, right.

• 19:19Guy Raz?

  So, I mean, a part of you felt like you couldn't do this, that this was not sustainable.

• 19:24Speaker 00

  Right, but I just kept working because that's how, kind of like how I was raised. You just keep going.

• 19:31Guy Raz?

  Yeah.

• 19:32Speaker 00

  You just keep, you just keep pushing.

• 19:34Guy Raz?

  So as you kind of, this business was kind of growing, I guess there is a building in Southampton that becomes available for purchase.

• 19:44Speaker 00

  Yes.

• 19:44Guy Raz?

  And you decide to purchase this to kind of bring your bake shop into that new building.

• 19:50Speaker 00

  Right.

• 19:51Guy Raz?

  Was that because you had to expand? You were, you needed more space or?

• 19:56Speaker 00

  Yeah, I was outgrowing my current location. I didn't like having a landlord. And so can my mom says, well, you know, there's a building for sale up the road. And I was like, oh, right. And she said, well, it doesn't hurt to call. So I met with the owner. It was $350,000 for the building and he wanted $50,000 down payment and he would, he himself would hold the mortgage for 300,000 at like nine and a half percent interest back then.

• 20:24Guy Raz?

  Right.

• 20:25Speaker 00

  And I had $40,000 saved.

• 20:27Guy Raz?

  From the business, from sales from the business?

• 20:29Speaker 00

  Mm-hmm. And I had to somehow find a 10 and my family didn't have any money.

• 20:36Guy Raz?

  Yeah.

• 20:37Speaker 00

  And then my father used to help this older woman with her chickens. She had chickens in her yard, I guess. So he helped her from time to time. And when I was looking for the $10,000, she died and she left my father $10,000.

• 20:55Guy Raz?

  Wow.

• 20:56Speaker 00

  And he lent it to me.

• 20:57Guy Raz?

  Talk about luck, right?

• 20:58Speaker 00

  Yeah.

• 20:59Guy Raz?

  All right. So you have now a pretty significant mortgage to pay down, right? On this business?

• 21:05Speaker 00

  Yeah.

• 21:06Guy Raz?

  So what did that mean for the, for your business? Did you have to really ramp up sales to cover your costs?

• 21:12Speaker 00

  I did. I had to, I knew I had to double my business in order to pay for the mortgage.

• 21:17Guy Raz?

  Yeah.

• 21:18Speaker 00

  And my business plan back then was, okay, I can do that. That was my plan.

• 21:25Guy Raz?

  All right, so you start out sort of early to mid 80s, right? Mrs. Fields is exploding all over shopping malls in America.

• 21:32Speaker 00

  Mm-hmm.

• 21:34Guy Raz?

  There's Famous Amis, there are a couple other national brands that are starting to come about. What do you think it was, I mean, about your cookies? Was it that it was in the Hamptons and people were on vacation and it was sort of a go-to place or what?

• 21:49Speaker 00

  Well, you know, it was kind of like a go-to place because it was something that was part of their, part of people's weekends. I mean, I have kids that are fully grown and married now that come in and say, "Oh, man, I got it," you know, and I remember them. They were raised on my cookies. The cookies, you know, were thin and crisp and delicious. They were different from Mrs. Fields and David's cookies, which was a nice concept but more of a fad. You know, they were hot, served off the tray type of cookies. And I always used to think, how can they grow? Because you can't eat their cookies cold.

• 22:24Guy Raz?

  Yeah.

• 22:25Speaker 00

  They're only good warm, and now you're really stuck.

• 22:27Guy Raz?

  So, all right, so you are kind of, it sounds like, like the business was growing, but it wasn't really your, you didn't have a really a plan for it to grow. It was just kind of an organic-

• 22:40Speaker 00

  Yeah.

• 22:41Guy Raz?

  -slow growth. This was your business?

• 22:43Speaker 00

  Mm-hmm.

• 22:44Guy Raz?

  This was a lifestyle business?

• 22:45Speaker 00

  Yeah.

• 22:46Guy Raz?

  It was a, you were able to pay your rent and even save some money and put it back into the business?

• 22:49Speaker 00

  Right.

• 22:50Guy Raz?

  And did you start to actually, was there a point where, in those days, in the 80s, where you started to actually earn even more money for yourself than even your parents earned?

• 22:59Speaker 00

  Oh, yeah, but that wasn't hard.

• 23:00Guy Raz?

  Right, because they weren't making a whole lot of money.

• 23:03Speaker 00

  Right.

• 23:04Guy Raz?

  And so with, with your kind of growing, the growth of the business, were you able to buy a house and, and all those things?

• 23:11Speaker 00

  Yes, I bought, I bought a little tiny house in the village. I paid the mortgage off for my family's farm and-

• 23:21Speaker 00

  You know, I started getting time off. I'd get like a day off and then I had two days off. And then I had weekends off and could go on vacation.

• 23:32Guy Raz?

  So basically, Kathleen, for almost 20 years.

• 23:37Speaker 00

  Yes.

• 23:37Guy Raz?

  You were running the bake shop. You were distributing the cookies mainly to Manhattan or a little bit beyond there?

• 23:44Speaker 00

  No, beyond, also to Manhattan and Long Island. And then we also shipped cookies to Texas. We did some cookies in California. We did like spottings all over.

• 23:53Guy Raz?

  You were still a small business, pretty much.

• 23:55Speaker 00

  Oh, yeah.

• 23:56Guy Raz?

  And how did you feel about it? Did you, I mean, you're now in your, starting to approach your 40s.

• 24:01Speaker 00

  Right.

• 24:02Guy Raz?

  Did you feel like you needed a change or you wanted a break? Or, or did you?

• 24:08Speaker 00

  Yeah. I, you know, I was like 40 years old and had made good money. You know, I had gotten married and divorced. I had no kids. Now I was 40, so like the kid thing was over. And so I was like just me. So I said, well, I want to have, you know, more of a life. I want to have less responsibility and, and more time.

• 24:34Guy Raz?

  So how were you going to do that?

• 24:36Speaker 00

  Well, I decided I would, if I could sell my company, that would be great. But I wasn't really fully prepared to retire.

• 24:44Guy Raz?

  Yeah.

• 24:45Speaker 00

  So I took on two partners. I had a bookkeeper. He didn't have any money, but he was interested in becoming a part owner of the company and, and paying me off along the way. And, but he insisted along the way that his brother also become involved, which I wasn't 100% comfortable with. I didn't really know his brother. But I don't know what happened, why. I just went along with it.

• 25:17Guy Raz?

  Wait, let me try and understand this. He says, I want to buy into this.

• 25:21Speaker 00

  Right.

• 25:22Guy Raz?

  And, okay, and so, okay, so he brings his brother in and they agree to pay you. And I, I read it was about like $900,000 total. But they were not going to give you any of this money upfront. They were going to pay you in installments over time, right?

• 25:38Speaker 00

  Yes. And so if he and his brother. Took over running the business and I still was part of it, but I had more time. And then I was part of the profit system and then they would pay me for the business over time. I was like, OK, that's OK, because I don't need, I don't need anymore. I don't need a lump sum of anything. I'm cool.

• 26:03Guy Raz?

  So basically, you kind of brought them in as partners and did they have a?

• 26:07Speaker 00

  Yes.

• 26:07Guy Raz?

  What was the share? How did you divide it up?

• 26:09Speaker 00

  We each had one-third.

• 26:11Guy Raz?

  So you said, yeah, I'll give you a third. I'll take a third. Your brother will have a third.

• 26:16Speaker 00

  Right.

• 26:16Guy Raz?

  You guys run the business. But that meant that you gave up two-thirds of your business.

• 26:22Speaker 00

  I always thought one-third, one-third, one-third was equal. I know it's ridiculously naive.

• 26:28Guy Raz?

  What, did anybody, did you go to a lawyer? Did anybody say, Kathleen, I don't know if you want to do this? Or did it seem totally like a great idea?

• 26:35Speaker 00

  No, I went to a lawyer and everything and I did have like a second guessing and, you know, and I just said, well, you know, I gave my word. I, you know, I can't back out now. I had no idea how horrible the deal really was.

• 26:54Guy Raz?

  What is it that they promised you that they wanted to do with the business? Because you're in the Hamptons.

• 26:58Speaker 00

  Well, grow the business, obviously, because it definitely had the potential.

• 27:02Guy Raz?

  Do they have any experience doing this? Were they marketers? Were they, did they have any of that?

• 27:05Speaker 00

  No.

• 27:06Guy Raz?

  No. And what was their plan? What was the first thing that they did?

• 27:09Speaker 00

  Well, first they started, you know, at the bake shop. And then they went to Virginia to put together a cookie plant, production down there.

• 27:20Guy Raz?

  So they said, hey, Kathleen, we want to open up a production facility, a bakery in Virginia.

• 27:26Speaker 00

  Mm-hmm.

• 27:27Guy Raz?

  And you thought, OK, great. You were fine with that?

• 27:30Speaker 00

  Yeah, I thought, I thought it would be OK, because the cookie business was what really was the value and to expand on that.

• 27:38Guy Raz?

  So what happened? They moved down there and you stayed up in Southampton?

• 27:41Speaker 00

  And I stayed in Southampton.

• 27:42Guy Raz?

  And you just communicate by phone a couple of times a day?

• 27:45Speaker 00

  Yes.

• 27:46Guy Raz?

  When did you, when did the tensions start to arise?

• 27:49Speaker 00

  Very early on, because. Anything that they made or sent from the factory in Virginia was horrible. Like, was terrible.

• 27:59Guy Raz?

  The cookies were not good.

• 28:00Speaker 00

  The cookies weren't good. The pies were terrible, and I wouldn't sell it.

• 28:03Guy Raz?

  But what was the issue? Were they using-- I mean, they had the recipes.

• 28:07Speaker 00

  They had the recipes, but that's like anything. Nobody was trained properly. Nobody was making anything correctly. Like, an apple pie, I remember finding with a whole apple inside. Then I'm supposed to be running the Southampton store and depositing the money, which I'm doing. But they were meeting payroll, but they weren't paying any local vendors. So I got frustrated. And so the money that the bake shop made, I started paying the local vendors because that they were the ones that were making the money from the bake shop.

• 28:43Guy Raz?

  You mean vendors would call you and say, Kathleen, we're not getting paid. What's going on?

• 28:46Speaker 00

  Yeah, and I was like, what? Because I always paid my bills, and they weren't paying people. And then that's when I put my foot down, and I started to pay the local people with the money that I was making.

• 29:01Guy Raz?

  So when you started to pay the vendors yourself, what did your partner say?

• 29:06Speaker 00

  Oh, they had a fit. They were really angry, and I was like, well, you know, this is what I have to do. And then they-- I was supposed to go away for the month of January.

• 29:21Guy Raz?

  This is 2000?

• 29:22Speaker 00

  Yeah, on a cycling trip. And a guy that worked down there, that moved down there, to work down there, that I knew, he called me and he said, Kathleen, they're planning on coming up when you're not there and taking over and getting rid of you. So I didn't go on my trip, and I waited. And one day I came to work. They were there. I walked into the office, and they handed me papers saying that I was fired.

• 29:55Guy Raz?

  When we come back in just a moment, how Kathleen watched everything she built over 20 years collapse, and how that turned out to be the best thing that ever happened to her. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 30:30Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's early 2000, and Kathleen and her business partners, the Webers, have basically had a total meltdown. They disagree on just about every aspect of how the business is being run. And so the brothers, they fire her. And of course, they can do that because they control 2/3 of the company. Anyway, according to the records and media reports from the time, Kathleen basically thought the brothers were running the business into the ground. And she was devastated.

• 31:03Speaker 00

  You know, I would just hold my breath all the time. I think that was the only thing I could control. And so I started holding my breath, and I was like a doe in headlights. And, you know, there were moments that were really hard. And then there were moments that were great, you know, because I was just so grateful for waking up in a house, you know? Just the simple things of really going down to like the bare bones of gratitude, because it can always get worse. You know, you try to go, you get to that place. When you get down that far, you're not getting up.

• 31:42Guy Raz?

  And what about your business partners? What was the plan?

• 31:46Speaker 00

  I had to fight them. I had to get my business back. And I wanted to get out of the contract because they, at that point, had driven my business $600,000 into debt. I realized, even though I was fired and had no job, I was responsible for 1/3 of that debt. And all the money that the company had was gone.

• 32:12Guy Raz?

  So, OK, so at this point, the lawsuits start. And this is a super complicated story, as these things usually are. But sort of, long story short, you sue them, they sue you back.

• 32:25Speaker 00

  Right.

• 32:25Guy Raz?

  And this goes back and forth. And this is just over, like, over 2 years after you first formed this partnership with the Webers.

• 32:31Speaker 00

  Yes.

• 32:32Guy Raz?

  I mean, wow. I mean, that's how quickly that became a nightmare.

• 32:37Speaker 00

  Yeah. But the community was incredible. People would call me. People sent me cards of encouragement.

• 32:48Speaker 00

  The community really rallied for me. It became like a hallmark made for TV movie. And I said, I can spend my days in focusing on the evil of two people. Or I can spend my days in focusing on all this kindness and support that I had no idea was there for me.

• 33:11Guy Raz?

  Meanwhile, what's going on to the bake shop? Are people still coming into work?

• 33:16Speaker 00

  People are still coming to work, but you know, a lot of people were not shopping there any longer. So the business was going down.

• 33:26Guy Raz?

  Suffering.

• 33:27Speaker 00

  And what 100% was going on there, I really don't know. You know, like some of the employees, they would gather at my house. They were very supportive.

• 33:36Guy Raz?

  Yeah. Yeah. So I mean, obviously, this is a super stressful situation and everyone knows that like, that, you know, litigation can take years.

• 33:45Speaker 00

  Mm-hmm.

• 33:46Guy Raz?

  And of course, lawyers are expensive. So, so I guess in the middle of 2000, you guys decide to settle. You decide to settle with the brothers.

• 33:54Speaker 00

  Yes, right.

• 33:55Guy Raz?

  And, and as part of that settlement, you dropped, you gave them the name. The name Kathleen's Bake Shop became theirs.

• 34:02Speaker 00

  Mm-hmm.

• 34:03Guy Raz?

  You got to keep the location in Southampton, the building.

• 34:08Speaker 00

  Well, yeah, I always owned the location, but unfortunately, they were the tenants of the location.

• 34:14Guy Raz?

  Hmm.

• 34:15Speaker 00

  So I had to get them to release the lease, to get them out.

• 34:20Guy Raz?

  And then, as you mentioned, the business had like $600,000 of debt at this point.

• 34:26Speaker 00

  Yeah.

• 34:27Guy Raz?

  So another part of the settlement I read about was, was an agreement to divide up that debt three ways. So that means of that total, you owed around $200,000.

• 34:36Speaker 00

  Mm-hmm.

• 34:37Guy Raz?

  And, and you lose your name, your name, your own name.

• 34:41Speaker 00

  Mm-hmm.

• 34:42Guy Raz?

  You cannot use Kathleen's Bake Shop, or presumably Kathleen's Cookies or anything like that.

• 34:47Speaker 00

  Mm-mm.

• 34:48Guy Raz?

  First of all, that, that must have been, how did you get to a point where you were able to let that go?

• 34:53Speaker 00

  I don't know. It's kind of like how I opened the first bake shop. You just do.

• 34:59Guy Raz?

  Yeah.

• 35:00Speaker 00

  You know, you just, you just do because what's your choice?

• 35:03Guy Raz?

  Were you bitter? Were you just, I mean, because I can imagine I would be, right? Were you just like seething?

• 35:09Speaker 00

  I don't know. I, I can't say bitter. I don't, that's not, that's not my nature either. Um.

• 35:18Speaker 00

  I was angry, but which, you know, helped me to recreate a new brand.

• 35:24Guy Raz?

  But the whole point of starting this partnership with these two people was to give yourself some freedom and space to kind of, you know, enjoy life. You'd worked really hard for 20 years.

• 35:37Speaker 00

  I know. Got way more than I bargained for.

• 35:39Guy Raz?

  And so now you find yourself, you're like 42, you're back in the situation where you have to, if you want to keep going, you've got to completely start from scratch. You've got to be a startup all over again.

• 35:53Speaker 00

  Yeah, it was, um, it was very draining. I would say, opposed to like rage and bitterness and all of that, I was really kind of more, I walked around kind of a little bit in shock. I had felt that, you know, every emotion that I could have ever had was stripped down to the bone. And I don't know what I had left in me, truthfully. And I didn't have any choices. Like, I couldn't go get a job anywhere else because I didn't know how to do anything else. I just had two years of college, and the things that I didn't know

• 36:35Speaker 00

  how to do, I used to hire people to do. So really, I didn't have a choice but to start again and do what I knew. That's how I did it.

• 36:46Guy Raz?

  So you decide that you are going to, you're going to reconstitute this business, and by the way, keep your old employees?

• 36:53Speaker 00

  Yes.

• 36:53Guy Raz?

  And so what were you going to call it?

• 36:56Speaker 00

  Tate's Bake Shop.

• 36:57Guy Raz?

  And how did that, where did that name come from?

• 36:59Speaker 00

  Tate's was my dad's name. It was just a nickname, but everybody called him that. So I wanted a name that was like a local name, that was genuine and integrity and kind, and that was like my dad. So I thought that that would fit nicely for the bake shop. And I ended up, I had to get open for August because it was the season, and in August, at least I could make some money.

• 37:28Guy Raz?

  And you'd been out of the kitchen and the business since February. You were locked out, right?

• 37:32Speaker 00

  Yes.

• 37:33Guy Raz?

  Wow.

• 37:34Speaker 00

  You know, my employees, they all rallied to work hard, and I ended up remortgaging the bake shop because I had it paid off. Because it was a 15-year mortgage, so thank God for that. I remortgaged the bake shop, so I got some money, so I could have some cash flow to make more money.

• 37:53Guy Raz?

  Yeah.

• 37:54Speaker 00

  And then I ended up hiring a business manager. Because I was in such financial trouble, I needed to have a business creating income.

• 38:03Guy Raz?

  And this, the business manager, who was he and how'd you find him?

• 38:08Speaker 00

  His name was Michael Namie. He was in the city and he became my business advisor, which really was a godsend for me. Because I am very instinctual, but of course, I make mistakes from time to time.

• 38:24Guy Raz?

  And when you hired Michael to help you launch Tate's, were you, I mean, I have to imagine a part of you was still kind of standoffish, right? Because you've just gotten burned really bad. I mean, were there like, trust issues there?

• 38:38Speaker 00

  No, he was great. I felt to me like a lifeline. But it was safe, because I could walk away anytime I wanted. You know, I wasn't bound by any contract, or money, or anything. I find not trusting people way too exhausting. And it's not the way I want to live my life. So I was very, very naive. And I used to trust blindly. Now I still trust everybody, but I trust with my eyes open.

• 39:11Guy Raz?

  All right, but now you have to reestablish your brand, right? As Tate. It's the same cookie, but you got to reestablish a brand-new brand.

• 39:20Speaker 00

  Well, I had to actually make a better cookie, because I had to compete against Kathleen's Bake Shop.

• 39:24Guy Raz?

  Yeah, so there meantime, those guys are down in Virginia, with plans presumably to take your brand that you'd spent 20 years building up and really expanding that. Did that cause anxiety for you? Did you think, oh my God, they're going to take my name, my brand, and they're going to go all over the country and people are going to think it's me?

• 39:43Speaker 00

  No, because I don't think about what others...

• 39:49Speaker 00

  Are doing and I just had to think about what I had to do. And of course, my goal was to take them down.

• 39:56Guy Raz?

  Your goal was to beat them.

• 39:57Speaker 00

  Yes, to be better.

• 39:58Guy Raz?

  So, did you continue on with your previous strategy of baking in the retail shop and baking for wholesale and mainly kind of gourmet shops in major cities in the US?

• 40:12Speaker 00

  Yes, and when Michael came on board, we went through all the products and the products that had the highest margins is the ones we focused on selling. So, we just kind of really zeroed in on the cookies. You know, starting Tates was about surviving. So, you know, when you're in a survival mode, those things, those kind of decisions weren't hard, they just had to be executed, they just had to be done.

• 40:40Guy Raz?

  So, where were you guys, I mean, did you start to expand your distribution?

• 40:44Speaker 00

  Yeah, first of all, I had to get, I had to get all of Long Island and New York City back because my whole story was so public. Some stores welcomed me with open arms, some stores stuck with the Kathleen's brand. A lot of stores carried both.

• 41:00Guy Raz?

  Right.

• 41:00Speaker 00

  And that's how it shook out. And then even when I was, some vendors I had for 20 years and when I opened up Tates, they treated me like I was a brand new customer. Others were just so helpful and just said, okay, I know you owe us this $40,000, you know, you pay that off when you can and we're stand by you. You know, it was amazing, you know, just the difference of people, just amazing.

• 41:27Guy Raz?

  So, when you relaunched the company as Tates, you had wanted to take a break in your life. You knew that was not going to happen anytime soon because all of a sudden, you got to start up again.

• 41:38Speaker 00

  Right.

• 41:40Guy Raz?

  And so, were you back to that hamster wheel, back to those crazy long hours?

• 41:44Speaker 00

  Only for a short time because when I opened Tates,

• 41:49Speaker 00

  Then I had a plan and I had a goal.

• 41:51Guy Raz?

  And what was your plan? What was the goal?

• 41:54Speaker 00

  I had to have an exit strategy. My goal was to sell when I was 55.

• 41:58Guy Raz?

  So you knew when you reconstituted this thing, you relaunched it, there was a time horizon?

• 42:03Speaker 00

  Yes.

• 42:04Guy Raz?

  And you were thinking maybe some local business would buy it or something like that?

• 42:08Speaker 00

  No, I thought, I did think bigger than that.

• 42:10Guy Raz?

  You did.

• 42:10Speaker 00

  I didn't think as big as I went.

• 42:11Guy Raz?

  Right.

• 42:12Speaker 00

  But, you know, I was gonna sell at 55 so I could retire.

• 42:14Guy Raz?

  I mean, you're still a pretty small shop at this point, right? It's still 40 or so employees?

• 42:20Speaker 00

  Uh, when I first opened Tates, yeah.

• 42:23Guy Raz?

  And in those first few years of Tates, like, what was your annual revenue?

• 42:27Speaker 00

  I mean, I would say we maybe started out a couple million. But as we started to expand, I, a couple of years down the road, I rented a 5,000 square foot additional kitchen. And, and then I needed to, we outgrew that, and so then we needed something bigger. So I purchased a school in East Mariches.

• 42:49Guy Raz?

  And you turned that into a bakery to start to bake more cookies?

• 42:53Speaker 00

  Yes, we turned that into a commercial kitchen. First making it 15,000 square feet and then adding on, because we had space to add on, and we added on as, as we needed.

• 43:05Guy Raz?

  And by the way, your former business partners who have the name Kathleen's Bake Shop, I mean, they were still trying to compete with you, right? But, but then, I guess, just a few years after the lawsuit and then the settlement, they actually go out of business?

• 43:21Speaker 00

  Yeah. I don't even know what happened to them.

• 43:23Guy Raz?

  You have no idea what happened to them?

• 43:25Speaker 00

  No. I don't know what happened with the name, with the brand, nothing. It just doesn't exist, as far as I know.

• 43:31Guy Raz?

  Wow. So was it pretty clear to you, pretty soon after you launched Tates, that, you know, this wasn't just about survival mode, that this could actually grow? This could actually get bigger than, than Kathleen's?

• 43:44Speaker 00

  Uh, yes, because that was my plan.

• 43:46Guy Raz?

  But how are you gonna do that? Because, you know, food companies, the big guys, right? The General Mills and the Kellogg's and they, I mean, they, you know, they have huge distribution networks. They decide what goes on the supermarket shelves where. How are you guys negotiating and getting big companies to pay attention to you and to agree to distribute and put your stuff on their shelves?

• 44:09Speaker 00

  Well, that took time. I mean, first of all, we started, first we had our own trucks. And we went for small guys with like 10 to 12 SKUs. And then we would strategically pick areas of the United States that we were going to go sell, to start to build our foundation with upscale gourmet shops. That's kind of like the first tier when we were building our brand. And then as we started to get bigger, we went into the second tier, which was like the Whole Foods, the Fresh Markets, the, you know, Cinderella.

• 44:40Guy Raz?

  And how would you get, how would you get those meetings? You would, I mean, I'm assuming some buyers from Whole Foods may have seen your products at some of these smaller stores?

• 44:47Speaker 00

  Yeah, I mean, some, some buyers, you know, would contact us. You know, Michael was also a great salesperson. So he helped negotiate some of those deals to get into various locations. And because Michael was such a great numbers guy and forecaster, we did then do, every year, he would say, okay, this, here's the plan. I drew up three forecasts for you. We can do A, B, or C. If you do this route, you'll make this. If you do this route, you'll make this. And if you do this route, you'll make this. And then he would say, which, which route do you want to take? And I would say, okay, this, this one works for me. And then we would do it.

• 45:29Guy Raz?

  So as you were kind of rebranding and growing again, I mean, you started to get attention again. I mean, I think. Rachael Ray, you wrote like it was on her show. She said, this is the best cookie in America. And then.

• 45:42Speaker 00

  The Consumer Reports voted Tate's Bake Shop the best cookie in America.

• 45:46Guy Raz?

  Consumer Reports?

• 45:47Speaker 00

  Yes.

• 45:47Guy Raz?

  Did that, you know, 2011, when Consumer Reports called you the best cookie in America, and after Gwyneth Paltrow and Rachael Ray and all these people are saying that about your cookies, were the lines starting to go out the shop?

• 45:58Speaker 00

  Um, you know, we were always busy. Like, I can't say, you know, the lines out the door, but we were always increasing. You know, Tate's, you know, had like a 30% or more increase per year.

• 46:09Guy Raz?

  Wow.

• 46:09Speaker 00

  Yeah, which is amazing.

• 46:11Guy Raz?

  When, I guess, when you started to get closer to age 55, you were serious. This really was your plan. You were sticking to this plan.

• 46:19Speaker 00

  Yes.

• 46:20Guy Raz?

  I am going to, I want an exit.

• 46:23Speaker 00

  Yep.

• 46:23Guy Raz?

  And so how did you even begin that process? Who, how do you, what do you do? What do you tell? How do you put your business up for sale?

• 46:30Speaker 00

  Well, you know, my business manager and I, we would discuss it a lot. And a lot of, you know, investment bankers, they're all watching. But this time around, I was going to do everything right. And I wasn't going to leave a penny on the table. So I interviewed a couple bankers and I settled with TM Capital in New York City.

• 46:54Guy Raz?

  And they were basically going to take your company and say, all right, it's available.

• 46:58Speaker 00

  And market it to sell it.

• 47:00Guy Raz?

  Right. And this is 2014, I think, around 2013.

• 47:04Speaker 00

  Yeah.

• 47:05Guy Raz?

  So they started to do that. And because this was already a pretty strong brand, it had name recognition, it had value. I mean, were there lots of bidders?

• 47:14Speaker 00

  Yes. Well, there was, it started off with like, something like 50 people.

• 47:19Guy Raz?

  Wow.

• 47:19Speaker 00

  That showed an interest. We narrowed it down to like 12. You know, they put in another bid and then it came down to like five.

• 47:29Guy Raz?

  I think that, I think eventually a private equity or investment from Riverside bought a majority stake.

• 47:38Speaker 00

  Yes. In the end, we settled on Riverside and I ended up selling 80% of the company because I was really ready to retire.

• 47:50Guy Raz?

  They paid $100 million for it in 2014.

• 47:53Speaker 00

  Yes.

• 47:55Guy Raz?

  Was that just insane to you? I mean, wow. You started this out of a farm stand in 1970. I mean, $100 million. Did you even imagine that that's what it would go for?

• 48:05Speaker 00

  No. You know, it went for like twice for what I originally thought.

• 48:11Guy Raz?

  Yeah.

• 48:11Speaker 00

  And I remember the closing over the telephone. I was in my own office. Everybody's on the phone. And then it was over. It was done. And everyone's like, OK, yay, thanks, bye. And I walked out of my office. And I think I went home and made dinner. I don't know. It was so, you know, kind of another deer in headlights moment.

• 48:33Guy Raz?

  I mean, I wonder, given the fact that you grew up in a pretty modest environment, right?

• 48:39Speaker 00

  Mm-hmm.

• 48:39Guy Raz?

  Watching the sort of the rich and famous come to the Hamptons, you know, when you were a kid. I mean, suddenly you had a lot of money. Like, you sort of become one of those rich people in the Hamptons, right?

• 48:54Speaker 00

  Well, I didn't become that, but other people thought I became that. I thought I lived great before. Really haven't changed the way I live because I like the way I live. Like, I'm all about freedom and time.

• 49:09Guy Raz?

  Yeah.

• 49:10Speaker 00

  You know, I can donate more and I can be more generous, which is great. The one nice thing is, you know, I was able to buy my dream property of childhood that I never thought would have ever been an opportunity in my lifetime. But other than that, everything else is the same. I like to ride my bike. I like to wear jeans and a T-shirt. I like to watch movies on my own TV. A lot of stuff, you know, it creates a burden. I don't want anything I can't use. I don't want anything I have to guard. It just doesn't interest me.

• 49:44Guy Raz?

  I mean, Kathleen, think about this for a moment. You sold this company, Majority Stake, in 2014 for $100 million. Riverside, four years later, sold it to Mondelez. They make Oreos and Chips Oi for half a billion dollars. Your brand, Tate's, this brand that you kind of reconstituted from the ashes of this terrible venture, this disaster.

• 50:07Speaker 00

  Yeah.

• 50:07Guy Raz?

  I mean, the irony of the crisis that you went through in 2000 is that Without it, you would have never built Tates. And you, you may not have become the kind of person who could build a company like Tates, right?

• 50:22Speaker 00

  Yes, that, that, that is true. I, you know, the, the biggest disaster of my life was, really became the greatest gift of my life. And like, when I started Tates, I said, I'm not giving blood for this company because I did that already for Kathleen's. And I ended up standing there with nothing. And the thing I regretted losing the most was my youth. I worked my youth away. You can't get that back. You can't buy that back. It was quite an eye opener to realize we are a society of feeling like we have to give up everything and sacrifice everything and work day and night in order to achieve and get ahead.

• 51:05Speaker 00

  But in the big picture, it's really not true. You have to do it for a period of time. But the key point is knowing when to let it go. Yes, to create something from nothing requires that kind of dedication of day and night. But a lot of it is, is self-driven of, nobody's as good as I am, nobody can do it as good as I can. And that keeps you trapped.

• 51:29Guy Raz?

  Yeah.

• 51:30Speaker 00

  Because you're too focused on all that emotional attachment that comes with creating something from nothing.

• 51:38Guy Raz?

  And you were able to shed that emotional attachment with the disaster of the first business, I guess?

• 51:46Speaker 00

  Yes, because I was basically stripped of everything.

• 51:49Guy Raz?

  Yeah. When you think about all of the work you put in, the sacrifice that you made, and, you know, you talk about kind of giving up your youth, like you, you had to kind of give that time up.

• 52:00Speaker 00

  Mm-hmm.

• 52:01Guy Raz?

  Given what happened and, and the exit and the incredible success that you, that you saw, do you regret it? Do you regret any of that? Because I think a lot of people listening would say, no, it was all worth it. Would you say that's the case?

• 52:16Speaker 00

  No. I've asked myself that several times. And sometimes when I see young people working like really, really hard, like in the, in the corporate circle, going round and round, I say to them, you know, try to always keep the balance. Because if I had to ask myself if I would do it all over again, would I? I still don't really have an answer.

• 52:41Guy Raz?

  Do you feel Kathleen, like what happened to you and the success of this company is due to the work you put into it, your relentless, hard work? Or do you think that it had more to do with luck?

• 52:52Speaker 00

  No, it's not luck. I think it was more, I worked really hard putting it together. I never gave up. I never let its success get the best of me. If anything, and not luck, I think sometimes it was my destiny.

• 53:11Guy Raz?

  I know Kathleen, that your folks passed away recently. But they did get to see you achieve incredible success from this cookie stand.

• 53:26Speaker 00

  Yes, they didn't see the Mondelez sale, but they saw the Riverside sale.

• 53:32Guy Raz?

  What did they think? I mean, what did your parents think? I mean, you were selling these cookies in a farm stand outside the-- I mean, your dad was a dairy farmer. Like, what did they think about this?

• 53:42Speaker 00

  It's very funny, you know, because, you know, I sold it, it was in the paper, and they never said a word about money.

• 53:53Guy Raz?

  Wow.

• 53:54Speaker 00

  Not a word. They just were like, "Oh, congratulations, I'm proud of you to..." Because that's who they were. They never once mentioned the money. My father always told me, as I was becoming successful, "Never forget where you came from."

• 54:12Guy Raz?

  They must have been so proud of you.

• 54:15Speaker 00

  They were. They really were.

• 54:21Guy Raz?

  That's Kathleen King, the founder of Kathleen's Bake Shop and Tate's Bake Shop. By the way, Kathleen still likes to bake cookies at home, and she loves spotting Tate's cookies out in the wild. In fact, a while back, she was on a bike tour of the Natchez Trace Parkway. And at one point, her guide stopped to take a break. He reached into his backpack, pulled out a bag of Tate's, handed one to Kathleen, and asked, "Have you ever tried these cookies? They're amazing."

• 54:58Guy Raz?

  And please do stick around because in just a moment, we're going to hear from you about the things you're building.

• 55:08Guy Raz?

  Hey, thanks so much for sticking around because it's time now for how you built that. And this week's story starts at a restaurant in Denver, where Thomas Alt House was giving his wife a gift for their 10-year wedding anniversary.

• 55:19Speaker 02

  And I gave her the bag and she opened it up and she goes, "Where did you buy these?"

• 55:25Guy Raz?

  And at this point, Thomas wasn't quite sure he got her the right gift.

• 55:29Speaker 02

  And I said, "Do you like them?"

• 55:32Guy Raz?

  It was a bracelet and a pair of earrings.

• 55:34Speaker 02

  And she goes, "Yeah, they're really cool."

• 55:36Guy Raz?

  Phew, so far, so good.

• 55:38Speaker 02

  And she goes, "So where'd you buy them?" I said, "I made them."

• 55:43Guy Raz?

  He made them?

• 55:44Speaker 02

  Out of a tin can.

• 55:46Guy Raz?

  A bracelet and a pair of earrings that Thomas made for his wife of a tin can. And to be fair, Thomas really meant this more as a gag gift. But his wife Emily actually liked the look of the earrings. And she appreciated that Thomas made them in his garage, just using a hammer and pliers and some tin snips.

• 56:05Speaker 02

  Out of the lid, I cut it in half, so there were two half-circles. I folded in the edges again, so they wouldn't be sharp, folded them in on each other, so they created kind of a prism shape.

• 56:18Guy Raz?

  Anyway, Emily liked them so much that she wore them all the time. And she started getting so many compliments that she encouraged Thomas to try selling them.

• 56:26Speaker 02

  So we said, "How about we make a go of this canned goods thing?" And that's what we called it. That's what Emily mentioned right away. She said, "I think you're going to call your company Canned Goods."

• 56:39Guy Raz?

  At this point, Emily had a full-time job and Thomas was a stay-at-home dad. So in his spare time, he worked on designs for more jewelry, and he started to gather more raw materials.

• 56:50Speaker 02

  I'd walk through the alleys and kind of dig through people's recycling and find different cans that might be of value.

• 56:57Guy Raz?

  Thomas didn't want to buy anything new. He was really into this idea of repurposing used cans. And so after After he hauled his neighbor's cans back to his garage, he began to realize that on the inside, they didn't all look the same.

• 57:11Speaker 02

  Like tomato cans has a brilliant copper color. There is a white color that is from coconut milk. And there's a gold color.

• 57:21Guy Raz?

  And all these different colors inspired Thomas. So he hammered out some bracelets and earrings in different styles and shapes. One was a ribbon loop, another was kind of like a fan. And when he had about 10 of them, he pitched them to a boutique owner in Denver.

• 57:35Speaker 02

  I said, OK, for each piece we sell, we give a can of food back to charity. And he said, I'll take 100 pieces.

• 57:44Guy Raz?

  The earrings and bracelets started to sell, word spread. And then Thomas began selling more jewelry in local stores and then online. And this year, he and his wife expect to make about $100,000 and to donate 4,000 cans of food to charity. And since Thomas started canned goods about six years ago, he's made over 10,000 pieces.

• 58:06Speaker 02

  To this point, I've touched every piece that we've sold.

• 58:09Guy Raz?

  Thomas is still working out of the garage, but he's hired four people to help him, and he hopes to hire even more soon.

• 58:16Speaker 02

  Well, a year from now, we want to be in every major market around the country. And we're knocking on some national stores as upscale as Nordstrom's.

• 58:29Guy Raz?

  If you want to hear more about canned goods or hear previous episodes, head to our podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there, please do give us a review. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis or at guy raz. Our show was produced this week by Casey Herman, with music composed by Ramtin Arablouei. Thanks also to Candice Lim, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Sequoia Carrillo. And before you go, I just want to remind you to please consider donating to your

• 59:13Guy Raz?

  Local public radio station by December 31st because your gift helps bring public radio to listeners like you. Donate to your public radio station at donate.npr.org/built. I'm Guy Raz, and you've been listening to How I Built This.

• 59:43Guy Raz?

  Thank you.