Pipcorn: Jennifer and Jeff Martin

While working at a farmers market in Chicago, Jennifer Martin had a Jack-in-the-Beanstalk moment—a chance encounter with some tiny kernels, which wound up growing into a small giant of a business: Pipcorn, snacks made of heirloom corn. Along with her brother Jeff and sister-in-law Teresa, Jennifer launched the brand in 2012, hand-popping mounds of popcorn and hand-stamping the packaging. Within a few months, the team was featured on Oprah, and within a few years, they were on Shark Tank, but each time the publicity nearly derailed them, forcing them to scramble to meet demand. Today, Pipcorn has expanded to include crackers, dippers, and cheese balls, and is sold in more than 10,000 stores across the country. How I Built This Summit - information and tickets at: http://summit.npr.orgSee 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.

• 0:00Guy Raz?

  We get support from US Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't. Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems.

• 0:45Guy Raz?

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• 1:30Guy Raz?

  based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2:00 AM kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one Hard question. How do we make sure AI goes well for people?

• 2:14Guy Raz?

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• 2:58Guy Raz?

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• 3:40Guy Raz?

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• 4:24Guy Raz?

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• 5:06Guy Raz?

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• 5:22Guy Raz?

  Hey, it's Guy here with an important reminder that our first-ever How I Built This virtual summit is right around the corner. From May 24th to the 27th, we're bringing you inspiring conversations with some incredible entrepreneurs. You can learn how to build and lead a team with Brené Brown, how to get the word out about your business with Gary Vee, channel your creativity with Adam Grant, and find power in community with Rashad Robinson. Also, each night, I'll be hosting conversations about innovation and marketing and how to make an impact with some of your favorite guests from the show, like St. Marshall, Sal Khan, Sadie Lincoln, Tristan Walker, and many, many more. If you're ready to build a better future

• 6:06Guy Raz?

  and make connections with other people who want to do the same, then this summit is for you. You can learn more about it and get tickets at summit.npr.org. Thank you to GoDaddy, the presenting sponsor of this year's summit, and to our supporting sponsors, Dell Technologies and Bulldog Online Yoga. And I cannot wait to see all of you there.

• 6:33Speaker 01

  So it was a ton of work and zero efficiencies. It was like, what's the most amount of work we can do? And that's what we did.

• 6:40Speaker 02

  And that first time, we like made all the bags and we seal them. We bring them to the market.

• 6:45Speaker 01

  Yeah, we were so excited. We had all of these.

• 6:48Speaker 02

  Our mom and dad were in lawn chairs behind us. We're like, we've arrived and we open them up and they're stale.

• 6:54Speaker 01

  Soft, yeah. It was really disappointing.

• 7:04Guy Raz?

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

• 7:15Guy Raz?

  I'm Guy Raz, and on the show today, how Jennifer Martin turned a tiny kernel of corn into a big idea and joined up with family to build Pipcorn, a brand of snacks made of heirloom corn and sold in thousands of stores across the country.

• 7:40Guy Raz?

  So you've probably heard the term unfair advantage. This is a term startup founders will use when pitching their idea to investors. They'll say something like, "Our unfair advantage is we hold the patent on this idea and no one else can legally copy it." Or, "Our unfair advantage is that we only hang out with A-list celebrities who will promote our skin cream on Instagram." You get the point here. But another advantage a startup can have is location, especially when you need to break out of the pack in a crowded marketplace. And when it comes to location, New York City can be a pretty good place to launch.

• 8:22Guy Raz?

  "But wait," you say, "New York is expensive and New York is full of a million brands and companies." All true, yes, but New York, especially New York media, happens to also be obsessed with New York and everything that happens there. And that outs- ...attention can help turn a smaller brand into a much, much bigger brand fast, which is how a snack food company called Pipcorn got its start. Pipcorn was originally conceived in Chicago, but weeks after they started, the founders, brother and sister Jennifer and Jeff Martin, got an opportunity to sell their heirloom popcorn at the hipster

• 9:06Guy Raz?

  outdoor New York food market, Smorgasberg, in the hipster capital of America, Williamsburg, Brooklyn. It's a market visited by some of the most influential journalists, TV executives, and food bloggers. And one day, one particularly influential visitor to the market would stop by the popcorn stand, a visit that would also prove transformational. But we'll get there, because the thing is, even with the early and outsized attention, and even with an eventual slot on Shark Tank, the rise and rise of Pipcorn was anything but smooth. In fact, at several points along the journey, the viability of the business was in doubt,

• 9:50Guy Raz?

  especially because the snack food industry is jam-packed with options. When it comes to popcorn alone, there are at least 100 different national brands. Aside from Angie's and Smart Food and Orville Redenbacher's, you can find popcorn popped in a solar powered factory, Sriracha popcorn, even a popcorn brand called Gary Poppins. But Jennifer and Jeff Martin, and their other co-founder, Teresa Zo, were trying to differentiate their brand by using a different ingredient, a strain of heirloom corn that they believed tasted much better than conventional corn used in popcorn. And with that corn, they would eventually go on to produce a line of corn-based

• 10:35Guy Raz?

  snacks, Frito-Like Corn Chips, Cheetos Like Crunchies, and Cheese Balls, comfort snacks, but a little fancier than the kind you might find at 7-Eleven. Jennifer and Jeff grew up in Madison, New Jersey, in a family of four kids. And from a very early age, their parents made it pretty clear that family was at the center of everything.

• 11:00Speaker 01

  Like, we used to walk through the grocery store chanting, like, "We are the Martins, the mighty, mighty Martins." They had this whole thing that we would do, and it was just fun. You know, we were kids, but it was really important to them, and it definitely is important to us.

• 11:13Guy Raz?

  And what did your parents do when you guys were growing up?

• 11:16Speaker 01

  So they actually met working at IBM, both in the sales department, and they bonded over being kind of able to lean on each other and kind of not other people.

• 11:25Guy Raz?

  Why?

• 11:26Speaker 01

  They were, at the time, you know, our dad was one of the only black men in the group, and our mom was one of the only women. And so they really leaned on each other for a ton of support. And they were really successful doing it because they really had each other. They had this really strong connection and bond. But after having four kids, all within a year, it was kind of a crazy house. Our mom retired, and our dad had moved at that point to Dunham Bradstreet, where he worked in sales, and was actually traveling a ton. So, growing up, it was really like, our mom, she was home with the four crazy kids.

• 12:02Guy Raz?

  So, it was four kids. Did you guys go to church? Was that part of growing up, or not really?

• 12:07Speaker 02

  Yeah. So, our dad is Baptist, and our mom is Jewish, actually. So, they took us to temple on Fridays and church on Sundays. And it was really more about community. And when somebody didn't want to go, they didn't have to go. There was not that push. Really, what they were trying to instill is like, you're part of a bigger community outside of this family also. And it's your responsibility to be part of something bigger than yourself. And so I think that's really what they instilled. And I looked forward to it every week. And I think it was really cool that it was never about somebody being right or wrong. It was just like, different perspectives.

• 12:42Guy Raz?

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

• 13:07Speaker 01

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

• 13:50Speaker 01

  know, definitely not that we're biracial, but they kind of assume one thing or another. And that is a really interesting place to be.

• 13:57Speaker 02

  Yeah, I think that for me, I think I did feel othered in certain situations. And I think, I think what I felt in a lot of situations as a kid and still was just like holding my breath, waiting for somebody to say something, just like sitting in temple and just waiting for somebody to say something that was going to be hurtful. And I think that is why for me, I always wanted to be so close to my family is because we didn't grow up in a very diverse town. And so I didn't feel part of the community necessarily that we grew up in. And so I think being with my family, I felt like it was like we were like a team. And so that we were always looking out for each other.

• 14:41Speaker 02

  So I, I definitely think that I felt that way.

• 14:43Guy Raz?

  Sounds like your parents were super supportive. I mean, imagine, you know, this probably wasn't a quote unquote issue when you were a kid, but, but you are gay, you're a gay woman. Were your parents pretty supportive? Did you feel comfortable talking about it with them when you were younger?

• 15:03Speaker 02

  Yeah, I remember like I, you know, I just remember telling my dad and him just like making like jokes because my dad's very funny and then was like, you know, I don't care at all and I love you no matter what. And yeah, they're really supportive and I think it's interesting because of their generation, a lot of people aren't supportive and even if they are like in an interracial relationship, like, you know, being gay is not the same thing, right? Like, that's like a complete, and they are super supportive. And even though I was nervous to come out, I feel like it was really easy. And then I called Jeff after I talked to them. He was the, he was the third call.

• 15:38Speaker 01

  Wait, who was number two?

• 15:39Speaker 02

  I called mom and dad separately. I called mom, then I called dad, and then I called Jeff.

• 15:44Guy Raz?

  You have, you are black, Jewish, and gay?

• 15:47Speaker 02

  Yes.

• 15:49Guy Raz?

  That's like-

• 15:49Speaker 02

  A lot of people don't like me.

• 15:55Guy Raz?

  Well, it sounds, it sounds like there was a lot of love in your, in your house, growing up.

• 16:00Speaker 02

  Yeah, 100%. And I think it was like, a lot of love and a lot of hard work. Like, that's, that's really what, what they, what my parents are all about.

• 16:10Guy Raz?

  Jeff, you went on to study business in college. I know after college, you went to go work at a bank at, at UBS, I think in 2007.

• 16:20Speaker 01

  Yeah.

• 16:21Guy Raz?

  And I think around that time, Jennifer, you left to go to college in Connecticut, but you, from, from what I read, you, you were only there for a year. You were, it wasn't the right fit for you and you essentially kind of dropped out from that school.

• 16:34Speaker 02

  Yeah, it just wasn't the fit.

• 16:36Guy Raz?

  So, so you, I guess, ended up going to college in Chicago, right, to Loyola University? And you were studying like-

• 16:46Speaker 02

  I was, it was like social work. So it was like human services and social work. And my plan was, I knew I wanted to help people. I didn't know how. And so that was definitely my plan to like, continue going into that field. And my job, when I was there, there was a health food store down the street of the campus. It was called True Nature Foods. There was like a teeny juice bar, which kind of got built out as soon as I started working there. And so it was great to go there and be able to work there and get a discount because it was all the food that I could eat because I also had to heal myself, right, of like, all the food stuff that was going on for me.

• 17:21Guy Raz?

  What were your food issues, if you don't mind?

• 17:24Speaker 02

  Well, I have, I'm celiac, and then I have like, I'm allergic to milk. I have like a bunch of like, random just allergies. And then I have ulcerative colitis.

• 17:32Guy Raz?

  Wow. So when you were a kid growing up, were you completely gluten free?

• 17:37Speaker 02

  Basically, yes. I had food allergies, but we didn't figure out it was gluten until I was about 12 and we eliminated gluten from my diet completely. And I started to feel better for the first time

• 17:49Guy Raz?

  Wow.

• 17:50Speaker 02

  in my life. And the thing is though, at that time, you know, 1990 something, the gluten free options were awful. Like they were so bad, but we had this little cabinet in our house that like, where all my food was that I could eat.

• 18:04Speaker 01

  Jen had the only snack cabinet in the world. Though you hear that, it's like, oh, I'm gonna go get like, she had the only one that like, no one wanted. So it was her snacks were always safe.

• 18:13Speaker 02

  They were so bad. They were so bad. Yeah, they were like, so upsetting.

• 18:17Guy Raz?

  Yeah, which is amazing because today gluten free snacks are great.

• 18:20Speaker 02

  Yeah.

• 18:20Guy Raz?

  And did you also give up grains?

• 18:23Speaker 02

  I didn't give up all grains, but I did give up corn, actually. That was a big one. And a lot of the reason I couldn't eat corn was because at that time, the gluten free products were all made with really, really bad corn, you know, like not corn that you're supposed to be eating. Like it's like feed corn that basically we're

• 18:39Guy Raz?

  Right.

• 18:40Speaker 02

  eating. And so I think that was a lot of the reason for the corn, what I thought was a corn allergy.

• 18:45Guy Raz?

  All right. So you are in Chicago at Loyola University. Meantime, Jeff, you had, this is 2009, you'd been laid off from your, your job at, at UBS, the investment bank during the recession, right?

• 19:00Speaker 01

  Yeah. So we were obviously started in 2007, which was an interesting time to start in the industry. And I worked in the consumer products and retail group and specifically on the retail side of things. So once the recession hit, you know, retail was impacted very quickly. And I vividly remember the, the couple rounds of layoffs. A round of layoffs goes by and I was in the clear. And then, you know, round two goes by and I'm in the clear. Okay, yeah, we're done with layoffs. You know, we're, we're fine. Round three comes and, you know, okay, geez, that was crazy. But, you know, I'm still in the clear and you know, you see friends packing up their desks and it was, it was hard and. I remember it was the fourth or whatever round of layoffs and I'm sitting at my desk

• 19:44Speaker 01

  eating lunch and on my, my phone rings and it says ninth floor HR. I, I mean, I knew instantly, right? I knew instantly. So I pick up the phone. Uh, it's the head of HR, calls me down to the ninth floor. I go to the ninth floor and um, you know, talked about, yeah, hey Jeff, like we appreciate everything you've done and all this good stuff. Here's this, you know, severance package, but we're going to have to let you go. We're, we're, we have to cut, cut costs and this is, this is how we're handling it. And it, you know, no one likes to do that. And um, that wasn't lost on me. So I went back up and I, I was so in it and I was so focused on work that I went back up and I was literally, yeah, I went to go finish what I was doing. Like I went to go finish the presentation. So I wouldn't let Brad down when he had to go to the meeting. So he comes over to my

• 20:29Speaker 01

  desk and kind of snaps me out of it. And it's like, hey Jeff, really appreciate it, but it's okay. Like we, we, we got this. It's, it's okay. And then it was real. Like, oh, I have to go now. Like I have to leave the building like immediately. Um, so I did. I went downstairs, called my mom and told her what happened and I was shocked. You know, I'd worked four years and I had a plan and a path. And then one day it's just like rug is ripped out from under you. So I called my mom and I told her and I was like, you know, in shock. And uh, she just didn't skip a beat and just said, Jeff, this is the best thing that's ever happened to you. Now go spread your wings.

• 21:07Guy Raz?

  So you are kind of figuring out your next move and Jennifer, you are in Chicago studying to get your, your bachelor's degree and working part-time jobs, including a job at a, at a health food store while you're a student. And I guess um, you met, like there was a regular customer who you got to know who had lost a lot of, like a lot of weight by going on a juice diet? What's, what's the story?

• 21:31Speaker 02

  So he, his name was Jay Michael and he was incredible. But he would come in once a day and we just really hit it off. Like it was just such a great friendship. And one day I really needed more money and I was doing some other like catering and working at a gym too. And I was just like, Jay, if you buy me a juicer, I'll privately juice for you. Like I got it.

• 21:55Guy Raz?

  But that you would, if he bought you a juicer that you'd put in your, in your apartment, you would just like fill mason jars?

• 22:01Speaker 02

  Yes.

• 22:02Guy Raz?

  With juice?

• 22:03Speaker 02

  Yeah. I mean, it's like only a, it's only a thing like a college kid who doesn't understand anything would offer. Cause when you say it like that, I'm like, that is a very weird thing to ask somebody. But I think I just, I always knew it could be bigger than that. And I sent him the juicer I needed. He bought it for me and he was like, just come juice at my house. And so basically what would happen was like, I'd go to his house, I would place a Peapod order. It would come to his house and I would just juice for him and I would make tons of juices and I would try all these different like recipes. And he had lots of friends. And so then I started juicing for them. And then I started like just making all these deliveries and he had a car. And so he would let me use his car and drive all around Chicago.

• 22:48Speaker 02

  It just was like such a funny time because I was like working non-stop. It was like 7:00 AM to like 1:00 AM at his house juicing. And I was just like, we should start a business. And he agreed. Um, maybe it was like his idea. I don't remember at this point who said it. We were just like, this is working. This is great. Um, and so then we started it and kind of like launched it. And then we did it for a while. Obviously he was the capital and I was doing all the work. And the plan was to like grow it into what we know of juice companies now. Having storefronts and being able to pick up a bottle when you want it or having a cleanse where they can send it to you.

• 23:25Guy Raz?

  Um, so you're doing the juicing business and working at the health food store?

• 23:29Speaker 02

  Mm-hmm.

• 23:29Guy Raz?

  And, and you were a student?

• 23:31Speaker 02

  Yeah.

• 23:32Guy Raz?

  And you come across a farmer? Who tells you about like some kind of heirloom corn that or popcorn that you yeah, what's what's the story?

• 23:42Speaker 02

  Yeah, so I was working at the health food store and on the weekends we had a farmer's market and this guy would come up and it was like a raw milk. It was like a raw milk co-op outside of the store during the farmer's market, but he also brought with him these mini popcorn kernels. And the store owner knew a lot of my like dietary restrictions and that I can't have corn. And so he was like, try these, you'll be able to eat them. It's half the size of ordinary popcorn and the popcorn itself is so tender, like the hull. He was like, you won't have issues because I think the thing that, you know, we don't really think about is like those big hard pieces from normal sized popcorn, they get stuck in your teeth and they're aggravating.

• 24:26Speaker 02

  But the same thing happens when you're trying to digest them, you know, like they're still that big and hard. And so that's really what was happening to me a lot of the time. And the quality of the heirloom corn was just so much better than any corn I've ever had.

• 24:38Guy Raz?

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

• 25:10Speaker 01

  Yeah, sorry, I've gotten really deep into the agricultural side of things, but yeah, I mean, when you create a product, you're doing it to accomplish one or more of the goals you just mentioned. And generally, it's like size and uniformity and aesthetics. So when you do that, you generally breed out or you modify out something. And one of the first things to go is nutrient density and flavor. They're like out the window first. So the beauty of heirloom and what, you know, heirloom farming, you know, agricultural practices, what's so important? Is that we're like really preserving this bit of history that doesn't have a place in, you know, the commercial farming world. There's no, you know, before Jen found these

• 25:55Speaker 01

  kernels, there were like little, it was all farmer's market stuff. It was always like, hey, here's a five pound bag of kernels. I'll see you next year when you need another five pounds. There was no commercial use for it. But the beauty of heirloom is it's open pollinated. All the work is done by insects, birds, which essentially like what we say is like, it's the oldest version. It's like what earth intended this product to be. That's just evolved over time with almost no human interaction.

• 26:21Guy Raz?

  All right. So Jennifer, you are introduced to this, like these heirloom popcorn kernels. And, uh, and what'd you do? You, did you go home and like pop them?

• 26:34Speaker 02

  Yeah, that's exactly it. I went home, put some oil in the pot, a little bit of like rosemary, I think, and salt and popped them. And, you know, it's the first time I'd ever seen popcorn that wasn't massive. Like it was just these mini kernels. It was also the first time that I like stove popped popcorn, you know, we grew up and we would have the microwave popcorn. And so I took it home really excited and I popped it and it was like half the size and really tender and, and it didn't hurt my stomach. That was the craziest part. Like I could eat it and I hadn't, as I said, like I hadn't had popcorn or corn in so long because as a kid it made me so sick and it was delicious. And it was like, I think for the next month, that's all I ate for dinner every single night.

• 27:16Guy Raz?

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

• 27:32Speaker 01

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

• 28:14Speaker 01

  another pot and did the same thing. And the first thing I said in the second pot was, we gotta sell this stuff. Like, this is so special. We have to sell this.

• 28:22Guy Raz?

  What was it? What did it taste like? I mean, what, how was it different when you tried it?

• 28:29Speaker 01

  It was just, so first of all, the initial like, oh, okay, I'm eating popcorn. I know what popcorn is, whatever. You put this popcorn in your mouth and you chew on it and they're like crispy, we say. It's not, it's not like this crunch you can hear from across the room, but you get the satisfying crispiness. And then what you're left with is this really flavorful corn that tastes kind of like corn. Like, it's incredible.

• 28:53Guy Raz?

  So you said, once you tried the popcorn, you said, we have to sell this. But were you kind of half joking? Was, or were you like really serious? Like, we need to stop what we're doing and sell this?

• 29:05Speaker 01

  A hundred percent serious.

• 29:06Guy Raz?

  Wow. And Jen, what did you think? Were you like, yeah, we gotta sell this?

• 29:10Speaker 02

  Yeah, I was definitely, I was like, so happy to be able to do something with my brother that I was like, a hundred percent. And also, one of the bigger things we kept saying was like, it's so good, but also if like, I can eat it, then a lot of other people who can't eat popcorn can eat it.

• 29:24Guy Raz?

  Yeah. All right. So this is like, 2011, 2011. Did you, did you call up that farmer and say, all right, hey, we gotta buy more, more of your popcorn kernels?

• 29:35Speaker 02

  Yeah, we did. And it's, we called him up and we were so young and didn't know things that at one point we like, had to ask him, are we doing something wrong by like, buying his corn just from him and then popping it and selling it? Like, we literally asked him and he was like, what? Like, this is exactly what I want to happen.

• 29:56Speaker 01

  Now, like, looking back, it's like, we're super appreciative that he saw the vision and understood. Cause he, you know, he was so, so familiar with this popcorn, but he was so supportive of us going out and doing this.

• 30:06Guy Raz?

  So what was the next step? I mean, if you were really serious about starting a business, did you first start by doing more research? Did you first start by like, trying to build a business plan? Did you first start by forming an LLC? Or did that come later?

• 30:21Speaker 01

  It kind of came later. We did a lot of testing in our parents' kitchen. We did a lot of like sharing with friends and family to just kind of get feedback. But you know, we definitely didn't go the path of like business plan and you know, the whole, the whole thing. It was like, we know we have something pretty special. So we kind of pivoted more to trying to find a place where we could sell this without going the path of raising a ton of money from day one. We kind of wanted to just prove it out and bootstrap it.

• 30:53Speaker 02

  I feel like there was a lot of conversations. There was emails. There was like both of us, you know, still testing popcorn and eating it. And then we went on a road trip. We actually like drove across the country.

• 31:06Guy Raz?

  Who, you and Jeff?

• 31:07Speaker 02

  Jeff and I did. And Teresa met us in Chicago.

• 31:10Guy Raz?

  Teresa is your, is your wife, Jeff?

• 31:12Speaker 01

  Yeah.

• 31:13Guy Raz?

  Right. And, and you kind of roped her into this?

• 31:16Speaker 01

  Yeah, yeah. She kind of didn't have a chance. I mean, I guess she didn't really have a choice. She was in.

• 31:21Speaker 02

  Yeah. So Jeff got the car in LA. I met him in Vegas and I remember being on that road trip and we spent the entire time trying to figure out a name, trying to talk about like what, what it would look like. Thinking of like the worst names for mini popcorn, like every version of like what mini popcorn could potentially be called, we came up with. And I feel like that was like a really pivotal moment where it was like a hundred percent like this is going to happen and going to happen soon.

• 31:48Speaker 01

  But we could not think of a name.

• 31:49Guy Raz?

  No kidding.

• 31:50Speaker 01

  We could not think of a name that did the product justice. And we, like Jen said, we tinkered with every version of mini and it was just like, this is corny. No pun intended. So I actually had a friend from college whose friend, growing up, started a company called The Naming Group. And they would literally name products and different things for kind of like large companies. They did a lot of like work with cars. So they were, they would name like a new car that was being launched by X brand. So she hooked us up with a guy that worked for her named Jake and he learned everything we wanted to do. We sent him some samples and it probably a Ziploc bag or something. A week later, he's like, I have a PDF. I have a presentation for you guys. And he had like 15 names in there.

• 32:35Speaker 01

  And right in the middle of that deck was Pipcorn. And as soon as we saw Pipcorn, it was like, that's it. We settled on it like on the call. Like that was the name. It's like, we're not popcorn, we're Pipcorn. It's something that we could say and people could, it would resonate without doing a ton of explaining.

• 32:51Guy Raz?

  So when you told your parents like, hey, we're gonna start this popcorn business, were they, were they really supportive or were they like, hmm, I don't know? I mean, cause, cause Jeff, you had a job on, on Wall Street as a banker. I mean, were they, were they thinking, maybe you should go and get like a job job? Or, or were they like, yeah, go for it?

• 33:11Speaker 01

  They definitely said, go for it and we support you a hundred percent. But I'm sure in the back of their minds, they're like, what are these kids talking about? Like, this is a lot.

• 33:22Speaker 02

  Yeah, my mom recently told me that she was like, because one of the things we did when we weren't together was we hired a student to help us with the logo and the packaging. And my mom said that she and my dad every day would be like, they just worked on a font for like hours. They just, all they did was worked on a font. And like, I think there was like moments of that. I think they were super supportive, like, go do this. But I think the amount of like attention to detail we put into every decision we made was like beyond what they were like, they were like, just go do it.

• 33:56Guy Raz?

  And I imagine like the startup costs were not that high because it's like corn kernels and bags to, to put it in, like it probably, probably didn't have to, I mean, I'm assuming with Jeff, you may have, have had some savings from your job or you had some money to, to finance it.

• 34:13Speaker 01

  Yeah, and I think this is why it didn't fizzle. So many of these, you know, startups fizzle for one reason or another. And one of those reasons it didn't fizzle, or a couple of them were, you know, there were like these little signs that we started noticing, like the old chip aisle that always said chips, pretzels, snacks, started saying popcorn, chips, pretzels, snacks. So it's like, okay, popcorn's growing, there's something happening here. And then incredibly low barriers to entry where we could start with $3,000 in a bank account and get the equipment we needed and at least start. I mean, it didn't get us that far, but we could start and we could prove it out in a pretty small targeted way.

• 34:52Guy Raz?

  Yeah.

• 34:54Guy Raz?

  Jennifer, you graduated, I guess, in 2012. Is that right?

• 34:59Speaker 02

  Yeah, I graduated in 2012.

• 35:01Guy Raz?

  And that spring, because I guess back in New York, your brother is kind of popping a lot of popcorn. And you are, you're kind of going back and forth, I guess, between Chicago, New York. And that spring, you guys managed to get a booth at Smorgasbord. Describe Smorgasbord. What is it for people who haven't heard of it?

• 35:22Speaker 02

  Smorgasbord is, it's like an outdoor food market with a bunch of small batch foodies who are like making one product, whether it's snacks, like we were doing chocolate, lobster rolls, burgers. It's just stands of people who are really passionate about food and are doing it in like smaller ways. And either like somewhere between launching and like a few years old.

• 35:45Guy Raz?

  And how'd you get in?

• 35:47Speaker 01

  So I actually had to go to their offices, they had an office in Brooklyn, and pitch them. They had a lot of like people who were actually cooking on site, like making food on site. And they didn't have a lot of packaged goods to round out the whole setting. So we kind of told the story, like, we can start to be one of these packaged food vendors that can be like a take home. So, you know, people who are gonna, you can only eat so many things at one time, but you can buy a bag of popcorn and take it home with you.

• 36:12Guy Raz?

  And take it home, yeah. And it sounds like they thought this was different and interesting because it was also a weird thing, like heirloom popcorn. Like who's, what's that?

• 36:21Speaker 01

  It was like perfect. Like they, they had already run a flea market.

• 36:24Guy Raz?

  Very Brooklyn.

• 36:25Speaker 01

  Yeah, super Brooklyn. It was perfect for what they were trying to do. Tiny popcorn and like really hipster like coffee bags was like right up their alley. So it worked out.

• 36:33Guy Raz?

  That's what you were selling it in? It was, it was like coffee, paper coffee bags?

• 36:37Speaker 01

  Yeah, and we couldn't afford a print job. So we, this was all happening, like all at the same time. It was like refining the packaging and the idea and where we're going to sell it. And it happened very quickly, but we couldn't afford a print job. So it was like, let's... Buy these coffee bags that are readily available. And Teresa had the idea like, why don't we just hand stamp them?

• 36:56Guy Raz?

  And what did your logo look like?

• 36:58Speaker 02

  Great.

• 36:59Speaker 01

  It was just, there were three words. It said pip corn. And then there was a little grain symbol above the pip corn. And it said natural on the left and hullis on the right.

• 37:07Guy Raz?

  And natural and what?

• 37:08Speaker 01

  Hullis. So like the popcorn, yeah, like was like virtually hullis. So it was like.

• 37:12Guy Raz?

  Hull less without a hull.

• 37:14Speaker 01

  Yeah.

• 37:14Guy Raz?

  Like, like a boat without a hull.

• 37:16Speaker 01

  Yeah.

• 37:16Guy Raz?

  Hull less.

• 37:17Speaker 01

  Yep.

• 37:18Guy Raz?

  Wow, that is a bold choice of words. Cause people are like hullis, what does that mean?

• 37:23Speaker 01

  Yeah.

• 37:24Guy Raz?

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

• 37:27Speaker 01

  So we were popping out of a really small food incubator up in East Harlem called Hot Bread Kitchen. It was like a nonprofit where they would work with immigrant women and provide them an opportunity and a, and a facility to bake items from their culture essentially and sell them. And then the other side of it was this, they would rent kitchen space by the hour. So we, we asked them to just rent the space for like six hours and like, we really needed to start making product or else we thought Smorgasbord was going to say like, all right, we got to give your spot up to somebody else. So we convinced them on April 26th, 2012 was the first day in the kitchen. We popped for hour, six hours and we made like a hundred bags, like nothing.

• 38:11Guy Raz?

  And, and how were you doing this? Were you like using cast iron Dutch ovens and just shaking it over, over burners?

• 38:20Speaker 01

  We were using these really big, we, so we had finally graduated from our mom's old spaghetti pot. And we just bought a bigger version of that. So we bought like a $50 pot, which was so expensive for us at the time with a lid that didn't fit on properly.

• 38:34Guy Raz?

  Yeah.

• 38:34Speaker 01

  And then we bought fry baskets. So part of the problem with popping popcorn, ready to eat in a bag, ready to go is the kernels. You don't, you, you gotta sift out those unpopped kernels so people don't break their teeth. So we bought a fry basket, which is like the basket that you literally put into a fryer to fry french fries.

• 38:50Guy Raz?

  Right.

• 38:51Speaker 01

  And just made the holes a little bit larger. We poked holes through them to make those holes a little bit larger. So we could pop the popcorn, take the pot when it was piping hot. Pour it into the fryer basket and then shake it like crazy to get all the kernels to the bottom and then fall out. And then we would put those into little bags and seal them up.

• 39:08Speaker 02

  Jeff had like burns on his arm because he would just, he would just be standing at the stove. I was the sifter, he was the popper for a lot. And he would just be shaking it the whole time.

• 39:19Speaker 01

  So it was a ton of work and zero efficiencies. It was like, what's the most amount of work we can do? And that's what we did.

• 39:25Speaker 02

  And that first time on the April 26, we like made all the bags and we seal them, we bring them to the market and all the bags were stale when we got to the market because we just hadn't thought about that. We hadn't been like-

• 39:38Guy Raz?

  Wait, they were stale because you, if you just directly put it in the coffee bags, the popcorn goes stale?

• 39:44Speaker 02

  Yeah. So for the ones we were using then, eventually we graduated to having ones that were lined so that we could just do it in the-

• 39:51Guy Raz?

  Like plastic lined?

• 39:51Speaker 02

  Yeah. But the first batch, we put them in, sealed it up, so excited, go to Smorgasbord. We're like, we've, we've arrived and we open them up and like they're stale. And everyone was such a good sport. They're not crispy.

• 40:05Guy Raz?

  They're just like soft.

• 40:07Speaker 02

  Yes.

• 40:07Speaker 01

  Soft. Yeah. It was really disappointing.

• 40:10Guy Raz?

  Crispy popcorn.

• 40:12Speaker 02

  But you only make that mistake once.

• 40:14Guy Raz?

  Yeah.

• 40:14Speaker 01

  Oh, yeah.

• 40:15Guy Raz?

  And by the way, how much, how much were you selling the bag for?

• 40:18Speaker 01

  Like eight dollars.

• 40:19Guy Raz?

  Eight bucks? So that's like-

• 40:21Speaker 01

  Yeah. We had to ask people like, hey, you know, we didn't know anything. So it's like, if, if this costs us four bucks to make, how much should we sell it for? And, um, you know, somebody gave us the advice of like, you should just be doubling it. So whatever it costs you to make it, sell it for double.

• 40:36Guy Raz?

  And it's heirloom popcorn. So people are like, well, maybe it, you know, eight bucks is expensive, but it must be pretty special if it's that expensive.

• 40:43Speaker 01

  Yeah. And, and for us, it was like, if we can't sell it for eight dollars, we don't have a viable business because we can't lose money doing this.

• 40:50Guy Raz?

  All right. So you debut at Smorgasbord in Brooklyn in April of 2012. And how'd you do? How, what was the reception to, to your popcorn on your day, at your debut?

• 41:02Speaker 01

  It, it was amazing. Like we, we had a lot of friends and family come support. So we were just jacked up. We were so excited. We had all of these-

• 41:08Speaker 02

  Our mom and dad were in lawn chairs behind us.

• 41:13Speaker 01

  It was amazing. People were just really excited to see what we were doing. And then someone put us on their Instagram, Jen. I can't remember who it was.

• 41:23Speaker 02

  Kate Spade.

• 41:24Speaker 01

  Kate Spade. Put us on her Instagram.

• 41:25Guy Raz?

  Wait, the Kate Spade?

• 41:27Speaker 02

  The Kate Spade. And it said, it was a picture of our bag and it said, @pipsnacks, "Welcome to the flea."

• 41:34Guy Raz?

  Wow.

• 41:35Speaker 02

  First day.

• 41:36Guy Raz?

  I'm assuming at this point, like, once you debut at this opener market, Jennifer, you're leaving Chicago. You're not gonna, I'm assuming you're thinking, "All right, this is gonna happen in New York."

• 41:48Speaker 02

  Yeah, 100%.

• 41:49Guy Raz?

  So, I guess in that summer, in July of that summer, it was a hot day. You guys were selling your popcorn. And there was somebody there, like, you saw a woman with a clipboard who was like, just kind of standing around. You invited her to stand under your tent for shade?

• 42:08Speaker 02

  Yeah, so we saw a woman and it was a super hot day and she was just kind of like standing there. And so we said to her, like, "Do you want to stand in the back of our tent so you can get some shade and finish working on what you're working on?"

• 42:18Guy Raz?

  She was not looking at your popcorn or anything?

• 42:20Speaker 02

  No, she wasn't looking at anything. She was just, you know, we just looked out in the crowd because that's like what you're doing the whole time. And we just saw her and we're like, "She needs a place to like, just hang for a second." Because she was just like, trying to do work, it was clear.

• 42:34Speaker 02

  And so we were like, "Do you want to hang in the back of our tent?" And she was like, "That would be great, thanks." So she goes to the back and we're in the front and we don't even talk to her. Like, we're not trying to really engage. We probably offered her a bag of popcorn and then just sort of like, hung out up front, joked around, tried to sell. And she walked out of the back of our tent and came to the front and she was like, "I'm actually a scout from Oprah's Favorite Things."

• 42:55Guy Raz?

  Wow.

• 42:56Speaker 02

  Yeah. And, you know, "You guys are on my list." Or, like, "Do you have any samples and what are your holiday flavors?" And so at that point, you know, this is July. We launched in April. We don't have holiday flavors, but you know, it's Oprah's favorite thing. So we're like, um, you know, and we just named the like classic holiday flavors. We're like gingerbread and peppermint and all these just like random things. And she was like, okay, great. Um, what does your packaging look like for the holiday? And so we had at the time, if you had come to Smorgasberg, all of our display, we set the bags in old milk crates. So we were like, it's going to be a crate. And she was like, awesome. I need a sample. This is Saturday. I need a sample in my office by Monday. And we were like, not a problem.

• 43:41Guy Raz?

  Wow. Wait. So, so the idea was for your Christmas offering, and this wasn't even something you had thought about until she asked you, what's your Christmas offering? You're like, well, we're gonna, we're gonna sell like a four pack in a crate. That, that you just kind of had to come up with that instantly.

• 43:53Speaker 02

  Yes.

• 43:54Speaker 01

  Yeah.

• 43:55Speaker 02

  And so we were like so excited and it was just, I can like still feel that moment of like, you know, we had no idea who was standing in the back of our time. We were just like trying to give her a second and then being like, could this actually happen? Like what, you know, and we had so many things that were working, like right time, right place, that we were like, no way. Like what's going on? And so we like pack up and Jeff is very good at like building things and fixing things. And he like goes home and like build the crate. Like he like feeling stains the wood, figures out all the measurements, does all.

• 44:27Guy Raz?

  And yet, and the idea was the other bags would be in the milk crate. That's how you would sell it.

• 44:32Speaker 02

  Yeah. For the holiday thing, we were like, let's do four bags in one crate. You know, that'll be, that'll be the holiday offering. Cause you know, traditionally popcorn was in a tub, like a tin.

• 44:44Guy Raz?

  Yeah.

• 44:45Speaker 02

  And you know, it's like the holiday tin, like, you know, everyone knows that. And we were just like, we don't want to do a holiday tin. Like that's not who we are. We want to be different. And so this was our workaround. And yeah, so went home. Luckily like we were really able to just like test recipes, you know, very easily. We tested a few, made the gingerbread, the peppermint.

• 45:06Guy Raz?

  How do you make a, how do you make it taste like gingerbread? You just put like cinnamon and nutmeg and. Allspice on popcorn?

• 45:13Speaker 02

  That's what we figured out, but when we said it, we had no idea.

• 45:16Guy Raz?

  Right.

• 45:17Speaker 01

  Yeah. I mean, we barely had our, our own flavors. We were still testing and, you know, kind of like refining a little bit.

• 45:24Guy Raz?

  By the way, what flavors were you selling at that point?

• 45:27Speaker 02

  At that point, I think our flavors were sea salt, kettle, rosemary, and crabby?

• 45:34Speaker 01

  Crabby.

• 45:35Guy Raz?

  Crabby was like bay seasoning. Old bay seasoning, right. And she wanted Christmas flavors.

• 45:40Speaker 01

  So, yeah, we just started to like, research how to make, which is easy, right? Like, here's what's in a gingerbread seasoning, kind of deconstructing and then rebuilding in a way that would lend itself well to like seasoning a snack food. But we, we went down a path of doing like chocolate and mint, and we got like way ahead of ourselves. And it was kind of an iterative process with, with Oprah's team, really trying to prep us to get a yes from Oprah. So they were kind of helping us like, you know, Oprah likes these flavors and trying to kind of pique her interest.

• 46:09Guy Raz?

  And what, what did they tell you Oprah liked?

• 46:11Speaker 01

  Truffle.

• 46:12Guy Raz?

  Truffle. Oh, man.

• 46:13Speaker 02

  And then specifically truffle with lemon on top.

• 46:17Speaker 01

  And, and we tried every possible way.

• 46:20Guy Raz?

  To make a truffle lemon popcorn?

• 46:22Speaker 01

  Yeah. We had our mom dehydrating lemon peel and grinding it into a dust. And we had, we were using lemon juice and lemon essence. We, we tried everything. And there was only one thing that we could get to work, which was, in the typical popcorn way, the most difficult thing to do.

• 46:40Guy Raz?

  Which was?

• 46:41Speaker 01

  Which was zesting fresh lemon on every single batch of popcorn.

• 46:44Guy Raz?

  Wow. Just taking like a micro planer?

• 46:47Speaker 02

  Yes.

• 46:47Guy Raz?

  And just, and, and where'd you get the truffle from?

• 46:50Speaker 01

  So Oprah's team had a relationship with a, a company that made truffle salt. And they said, you know, give these people a call, they might be able to help you. And it turned into something, you know, that worked really well.

• 47:01Guy Raz?

  Wow. So you, you threw some truffle salt on the popcorn, some lemon zest. Sent it back to Oprah's team and

• 47:09Speaker 01

  They said, you know what, Oprah likes it. She doesn't love it, but she likes it.

• 47:14Guy Raz?

  Pretty good. It's pretty good. She didn't love it. You kind of want Oprah to love it.

• 47:17Speaker 01

  We wanted to love it. So, so they were like, hey, come to the office. She's making her final decisions this week.

• 47:23Guy Raz?

  And was Oprah gonna be at the office?

• 47:26Speaker 01

  No.

• 47:26Guy Raz?

  No.

• 47:27Speaker 01

  We, we were just gonna go and set up. So we were gonna go bring a crate and, and their advice was get a big red bow. Like make it showy. Do whatever you can do to make this look great. But it's all about presentation too. Like it's gotta be the whole thing. And then you might, you know, get a yes from Oprah.

• 47:44Speaker 02

  Yeah. And one thing that we, we hadn't said was they were filming behind the scenes. So we had been filmed at Smorgasburg. They came to Smorgasburg and kind of showed the process of like finding peoples. Cause they were trying to make an episode of how does Oprah pick her favorite things?

• 48:00Guy Raz?

  Right.

• 48:00Speaker 02

  So we had already been filmed. So when we get to the office, they were like, we need to film this part. Where like people bring all their things. So they mic'd us up, put us in a room and they were just like, the scene we're trying to show is this is when you like walk into the room, you put it down, you set it up and then you walk out. That's all you gotta do. And so we were like, okay, cool.

• 48:21Speaker 03

  Oh my goodness. Everything's so beautiful.

• 48:23Guy Raz?

  Hello. That's why I kept saying, you have to do beautiful. That's why I said, presentation is key as well as taste. Okay, I'll be back in a moment. Just do your thing. I'll be back in a second.

• 48:33Speaker 02

  We walk in.

• 48:34Speaker 01

  All right. What do you think?

• 48:35Speaker 02

  Put it down on the table. They were like, okay, well, take the bow off. Right? They were kind of instructing us to do like a few things. So we like take the bow off and then all of the sudden, the door swings open. It's Oprah.

• 49:00Speaker 02

  She just walked. It feels like it's not real. Like you.

• 49:03Speaker 01

  You don't even know that Oprah's real.

• 49:04Guy Raz?

  And then she's there.

• 49:05Speaker 01

  She's there.

• 49:06Speaker 04

  I'm here today. I've already chosen this. You're in. Yeah, it's a yes.

• 49:13Speaker 02

  We had also been waiting in the office for a pretty long time. And I just, I just can like, remember being like, is this actually happening? Like, is this real life?

• 49:22Speaker 01

  So she immediately starts asking us questions about the product. And we were like, Oprah, so sorry, but like, we need a couple of seconds. Like, this is a lot. We can't think straight. And then I was, I had to ask her if I could give her a hug. I wasn't sure if somebody else would bust through a trapdoor and tackle me before I got to her. It was like-

• 49:40Guy Raz?

  And she said you can hug her?

• 49:42Speaker 01

  She did, yes.

• 49:44Speaker 02

  And I think, I mean, it's so overwhelming. You're like, I want to tell you everything and thank you for everything, you know? I wish we could have like, redo it when I could like, be in my body. Because I fully left my body.

• 49:56Guy Raz?

  Wow.

• 49:56Speaker 01

  So we left and then we had to like, figure out, you know, this is August and this is going live in November. And we are only a couple of months old. We didn't have the production to support it. We didn't have these crates actually made and we didn't have a vendor to make them.

• 50:12Speaker 02

  And we didn't have money.

• 50:13Guy Raz?

  They needed money to do this.

• 50:15Speaker 01

  Yeah, we didn't have the flavors perfect. And we had to go figure all of that out in an incredibly short period of time.

• 50:28Guy Raz?

  When we come back in just a moment, how Jeff and Jennifer scramble to prepare for the Oprah air date and what happens after their website inevitably crashes. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 51:00Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's late 2012 and Jennifer and Jeff know that as soon as their episode with Oprah goes live, there's going to be a surge in demand for pecan corn, especially because they're working on all these holiday flavors. And what better Christmas gift than a crate full of peppermint and gingerbread infused snacks?

• 51:26Speaker 01

  So we really set our sights on some commercial popping equipment, which was a challenge because we wanted to replicate the same process. We wanted to keep going with that whole like pot on the stove.

• 51:37Guy Raz?

  But that's not possible, not practical.

• 51:40Speaker 01

  Yeah, it's um, we found this guy, I think he was outside of Seattle, who essentially would make these like cauldron style farmer's market poppers, where it's this big, huge pot and these burners. It's like the burner that you'd use for like a wok. So incredibly powerful, big flames. You put the oil in and you put the corn in and it's essentially the exact same process as popping it on the stove.

• 52:08Guy Raz?

  It just moves it around?

• 52:10Speaker 01

  Yeah, so in the beginning, we couldn't afford the part that stirs it automatically. So we had big wooden paddles and we would just agitate the corn, stirring it, stirring it, stirring.

• 52:19Guy Raz?

  Wait, I'm trying to figure this out. How do you, how do you do that? Doesn't it pop into your face?

• 52:24Speaker 01

  Yeah, yeah. Every now and again, it would. It was usually fine, even if it popped out and it hit you, it wouldn't be a big deal because it would just bounce off of you. But if you're popping a sweet flavor with some melted sugar.

• 52:35Guy Raz?

  Yeah.

• 52:35Speaker 01

  It sticks to you. So it pops out and it's burning hot. And it's, and it happened to me a couple of times where it would stick to like my neck and it would, it would burn you. I mean, it was, it was painful.

• 52:45Guy Raz?

  And where did you put, did you still use it in the commercial kitchen that you were working out of?

• 52:49Speaker 01

  No, so we tried. Um, and they were like, you're crazy. This is a shared space. You're in here for four hours a day, but then someone else comes in.

• 52:57Guy Raz?

  You can't just occupy all this space with your giant machine.

• 53:01Speaker 01

  Right, so we, we found a kitchen. We moved to New Jersey, right off the George Washington Bridge in October. And we were able to um, put in equipment, lock the door. We had kind of had our own little space that was just for pip corn.

• 53:14Guy Raz?

  But all this, like buying equipment, uh, moving to a new space, how were you paying for it? I mean, you presumably didn't have much money yet beyond some sales from, from Smorgasburg.

• 53:25Speaker 01

  Yeah, this was the point where Teresa, so I met Teresa working in banking and she kept down that path.

• 53:31Guy Raz?

  She, she was still working in banking because she had a steady job. You were married and you, you didn't have a steady income.

• 53:39Speaker 01

  Yeah, so we actually weren't married at the time.

• 53:41Guy Raz?

  You weren't.

• 53:41Speaker 01

  We were just dating and that whole thing. But she really kept her job full time to support me, like being able to do this full time. But she had also saved up enough money to put some capital in so we could, in this really short period of time between August and November, build something where we could weather the Oprah storm, like we could meet the demand.

• 54:02Guy Raz?

  All right, so you've got this ginormous expensive popcorn machine and you're making lots of popcorn. And presumably, the Oprah episode goes live. When did it go live?

• 54:14Speaker 01

  November.

• 54:15Guy Raz?

  November 2012. And what happened?

• 54:18Speaker 01

  They showed a pan across shot at the market of our packaging. And when they showed the name Pipcorn, our website crashed.

• 54:28Speaker 01

  Before they even showed-

• 54:30Guy Raz?

  The power of Oprah.

• 54:31Speaker 02

  Yeah.

• 54:31Speaker 01

  The power of Oprah.

• 54:32Guy Raz?

  That quickly? People just went on to order your popcorn?

• 54:36Speaker 01

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

• 55:12Guy Raz?

  Oh, wow. Did you get a lot of orders for, like, Christmas orders for the Christmas flavors?

• 55:17Speaker 02

  Yeah, we got a ton. I can't remember, actually, how many now, Jeff, do you remember?

• 55:22Speaker 01

  It was like, close to, you know, $200,000 in sales in a short, in a, maybe like $150,000 of sales in a really short period of time. And we were, you know, we had bought this new equipment. We had this space that we could, you know, have our own packaging and popping area. And back to the crates, we hired somebody to make, how many, Jen?

• 55:43Speaker 02

  Thirteen thousand?

• 55:44Speaker 01

  Thirteen thousand, I think. Wooden crates, handmade in Brooklyn, hand stained, hand sanded.

• 55:50Guy Raz?

  Wow.

• 55:51Speaker 01

  Like, these beautiful, beautiful crates. So, we, we had a process where we had the crates. It was all, what I think helped us was the crates were very rigid and the paper coffee bags were also rectangular. So, you could like slide them into the crate really easily, put a little cover on it, tape it up. And it was a pretty small, compact package. So, we were just literally popping around the clock, packaging around the clock, packing boxes. Parents, friends, coming on the weekends. It was just non, but it took us a long time. Also, we, feature was November. I don't think we shipped all the crates until probably February.

• 56:24Guy Raz?

  Wait, wasn't this, wasn't this supposed to be for Christmas?

• 56:28Guy Raz?

  It's supposed to be a Christmas gift.

• 56:29Speaker 02

  Yeah.

• 56:30Speaker 01

  Yeah.

• 56:30Speaker 02

  There was a lot of long phone calls apologizing.

• 56:33Guy Raz?

  There was a lot of Christmas in February.

• 56:35Speaker 02

  Yeah.

• 56:35Speaker 01

  A lot.

• 56:36Guy Raz?

  Yeah. So, it sounds like it was, I mean, obviously, super exciting, but kind of a nightmare.

• 56:41Speaker 01

  That's a, a perfect way to say it. It was incredibly exciting, but one of the most stressful moments as well because we were doing our own customer service. We were picking up the phones. We were, you know, people, you ruined Christmas, you ruined this, you ruined that. And then other people were like, we fully, you know, we, we wrote an email saying this is going to take us a lot longer than we thought. Uh, if you want a refund, we will get you a refund. But if you want to stick with us, we'll get your order out by this time. And, you know, we had a lot of support too, but it was a bit of a nightmare. I mean, it's hard to work through like a big back order when you can only make so much.

• 57:16Guy Raz?

  Were you, were you like, was like the UPS truck pulling up in front of, of that kitchen space where you were working? And just like, you were just like loading boxes onto it every day?

• 57:25Speaker 02

  Yeah.

• 57:25Speaker 01

  Yeah.

• 57:26Speaker 02

  Did he come, I feel like he might've come twice a day.

• 57:28Speaker 01

  He came twice. We would like tip him a little bit here and there to like get him to come back a third time. I mean, we were all hustling, including the FedEx guy. Like, we were all hustling.

• 57:38Guy Raz?

  All right, so you get through that and you now, I mean, you were on Oprah's Favorite Things and Smorgasbord got quite a bit of press attention, so you had some visibility and I guess it sounds like it's going amazing.

• 57:53Speaker 02

  Yeah, I mean, it was. I think we had proved that we have something real. You know, it's not just like a fun hobby. It's not just this is going to be really big. But I think it was really hard. You know, I think the Oprah, we sort of like pivoted a little bit too much to focus on like being an online gift. And we had to like swing all the way back to figure out like, okay, well, that's seasonal, right? People love that for the holiday, but then the rest of the year, what are we going to do? And we had to swing all the way back to figure out wholesale. How do we scale? How do we get our shelf life up? And even though we made a lot of money through the Oprah experience, it cost us so much money to like get to do all this that we really didn't have a lot of money to do.

• 58:38Guy Raz?

  You probably burned through most of it.

• 58:40Speaker 02

  Yeah. And we didn't really have enough to scale in the way that I think people looked at us like we could at that time.

• 58:47Guy Raz?

  Yeah. But meanwhile, from what I understand, around that time, you did open up another stream of revenue because you were able to get into a Whole Foods, right? Like, I think you got into this cafe in a Whole Foods in New York in the Bowery, right?

• 59:03Speaker 01

  Yeah. And this was through our relationship with Smorgasberg. They opened up what they called a snack bar. They had like a vacant, like a coffee bar or something that they shut down, not near any of the other food, but they were like, let's launch here and we can showcase some of these vendors from Smorgasberg. So we were like, absolutely, like it gets us in the door at Whole Foods, like we'll do anything.

• 59:24Guy Raz?

  So here's the thing I'm wondering, though. When you're in a Whole Foods with the coffee bag and the stamps, like the hand stamped stamps on the bag, like if you're at a farmer's market, it's different. Or the Smorgasberg, because you can go up to, people can go up to you and you can say, oh, this is heirloom corn and it's, we're using interesting flavors and you can tell the story. But if you're just on the shelf of Whole Foods, how is somebody going to know?

• 59:48Guy Raz?

  That this is unusual or different or worth trying.

• 59:51Speaker 01

  Well, this was a really interesting time for the brand for a number of reasons. But one of them was just this opportunity with Whole Foods was really unique because we got in through the snack bar and we didn't have to go to the grocery department. They brought us in through specialty. So we were being purchased by the same department that purchases like beer and cheese and like these high end crackers. So we were able to have these big displays in the entryway and by the cheese department. We had all these amazing opportunities to be visible elsewhere because we weren't in grocery. And what made it even better was that the specialty department in New York never had a product they could stack up.

• 1:00:36Speaker 01

  It was always like these cheeses and these like specialty items that were small. So this was the first time that they had like boxes of a snack food that they could stack on top of each other and display in the store and kind of compete with grocery a little bit. And that was a massive opportunity for us to be that snack for them and to sell a story to other stores within the Whole Foods network, even like the store down the road saying, hey, have you seen what's happening at Bowery? Cause you should go check it out. We could do the same thing in your store.

• 1:01:07Speaker 02

  Yeah. So the other specialty buyers wanted us, right? Like they, they could look at the numbers in the system and be like, whoa, these kids are moving a ton of product. Like we have to bring it in.

• 1:01:17Guy Raz?

  But how were you moving so much product?

• 1:01:19Speaker 02

  Demoing. We were in the store every single day. We were demoing nonstop.

• 1:01:24Speaker 01

  And visibility. I mean, it was, it was definitely the demos, but that's, this is when we started taking this data and this, all of these data points and going to other stores saying like, hey, we can do the same thing for you. And then we hit a major roadblock when we discovered the power of a store like this and specifically the Columbus Circle location of Whole Foods.

• 1:01:47Guy Raz?

  This is, I think their biggest location in New York, the Whole Foods in Columbus Circle.

• 1:01:51Speaker 01

  Yeah.

• 1:01:52Guy Raz?

  And what was that, what was the roadblock?

• 1:01:54Speaker 01

  So if you've ever been to the Whole Foods in Columbus Circle, or if you haven't been, to separate the express checkout from the normal checkout, they usually have like a partition. And in, when we launched into the store, they said, we're going to use you guys, your cases to essentially build the partition between the checkout lines. So. We're used to selling maybe between 10 and 20 cases to a store. And they were like, we want 300 cases. We're gonna go big with pip corn. So we popped it for a week, bagged it, rented a U-Haul, delivered it. And the next day, we get an order for another 300 cases. And like, we couldn't do it. We, we were overnighting, you know, pallets of corn, 2,000 pounds of corn. We were like scrambling.

• 1:02:38Speaker 01

  We were producing it as fast as possible at a loss, delivering it ourselves. It was like one store was all of our business. We would just kept getting these huge orders and we never said no. So we were always like, yeah, well, we'll make it work. So it was like, we would get any friend to come and help. The Columbus Circle Whole Foods like legitimately almost put us out of business early on because the volume was so huge.

• 1:03:02Guy Raz?

  Wait, I mean, this is, this is sort of counterintuitive. You had so much business, so many sales, so much volume being moved that it almost put you out of business?

• 1:03:11Speaker 01

  Yeah, because we just weren't prepared for it. We were used to, you know, pretty good volume from the other Whole Foods, but nothing like, they used us for the checkout line. So if you're in line on a busy day, you have to walk past pip corn. You know, it was just, the volume was so much more than we ever anticipated.

• 1:03:28Guy Raz?

  So were you guys like freaking out?

• 1:03:31Speaker 01

  Yeah. Yeah, we, we didn't know what to do. I mean, we, it's like, you know, people would say, oh, that's a great problem to have. You know, it's too much, demand is great. And we were kind of like, yeah, I mean, it's amazing, but like all of these really, really amazing problems kind of like equate to like a pretty serious issue. Like we, we need to figure it out. And so we, we did, we, this is when we started to then get new equipment that was equipment that you see in the movie theaters, more commercial, more reliable, higher output.

• 1:04:02Guy Raz?

  Cause you couldn't just stand there moving the stick around all day.

• 1:04:05Speaker 01

  No, no, we, yeah, we had, we had to graduate.

• 1:04:08Guy Raz?

  And, and by the way, how, how were you paying for? I mean, if, because Whole Foods, I'm assuming pays you what 60 to 90 days later, like many companies do.

• 1:04:17Speaker 01

  Yeah, I mean, we would owe our bills in 15 and we'd get paid from them in 30 days. So we had cash flow issues for a really long time because the growth was so extreme that yesterday's checks might not cover next week's bills.

• 1:04:31Guy Raz?

  Wow.

• 1:04:32Speaker 01

  And that was Whole Foods, right? So Whole Foods is, they're Whole Foods. They pay on time and the whole thing. But we were also selling to a lot of other smaller stores that. You know, sometimes we'd have to go chase people down for 100 bucks because we needed it and we sold them products, so.

• 1:04:49Guy Raz?

  And by the way, who was, who was doing the, the business development? Like, were you going out as a sales rep? Or did you, did you hire somebody or a distributor?

• 1:04:58Speaker 01

  It was just us.

• 1:04:58Speaker 02

  It was us.

• 1:04:59Guy Raz?

  How were you making popcorn, packaging it, delivering it to Whole Foods? And also still getting direct to consumer orders and going to shops and trying to get them to sell and stock your popcorn?

• 1:05:13Speaker 02

  Guy, I honestly don't know how we did it. Like, thank God.

• 1:05:16Speaker 01

  When you say it, it's like, what? How did we do that?

• 1:05:18Speaker 02

  I remember there was the specialty stores that we got into. And I think that one thing that we replicated was we'd like go on to Yelp and just look for cheese shops, specialty shops, gourmet shops in other cities, right? Like Philly and Boston and Chicago and all those things. And I think that was really helpful in like figuring out how to get into those. I remember Ellie Truesdale from Whole Foods, she was like, don't make the mistake so many people make, which is getting into Whole Foods and then being like, I want to get into every store. And I think that that helped us a little bit because we didn't make the mistake of trying to get into like a massive retailer where if we couldn't fulfill it, then we would have gotten kicked out.

• 1:06:01Speaker 02

  Aside, you know, like obviously aside from Whole Foods, but we didn't have a lot of those going on. It was all these like specialty shops.

• 1:06:09Guy Raz?

  But I'm, I'm getting stressed out because no one is popping popcorn while you're doing all this. You gotta make popcorn. Who's making the popcorn?

• 1:06:15Speaker 01

  So I mentioned Joanna, our first employee. She, we essentially just recruited her entire family to come and pop popcorn for us. So her sister came, her cousin came, they brought friends and we built this like family, essentially. Well, really it was Joanna's family, but we became like an extended family and they really helped us to grow. So we could finally get out of the kitchen full time and we could start doing all the other stuff and feel very comfortable that we had an amazing team popping the corn.

• 1:06:48Guy Raz?

  All right. So you, you guys are trying to just keep your head above water. Come out of 2013, good year, $200,000 in sales that year.

• 1:06:58Guy Raz?

  And in 2014, you decided to apply for Shark Tank.

• 1:07:03Speaker 02

  Right.

• 1:07:04Speaker 01

  Yeah.

• 1:07:04Guy Raz?

  Which is, I mean, I don't even want to ask why, because obviously why? It's a huge national visibility and huge attention.

• 1:07:11Speaker 01

  Yeah, they actually approached us to be to apply for the show in 2013. So while all this crazy stuff is happening.

• 1:07:19Guy Raz?

  Because they saw you on, they saw you on Oprah or how'd they know about you?

• 1:07:23Speaker 01

  They saw us from Oprah.

• 1:07:24Guy Raz?

  Okay.

• 1:07:24Speaker 01

  So we had all this stress with, you know, popping the corn and growing the Whole Foods relationship and like all these exciting things. And in the back of our minds, we had this Shark Tank opportunity that was just like, what are we going to do? We have so much happening and Shark Tank could change our lives, but we're just not ready for it yet. If we go on Shark Tank, like they're going to eat us alive. We're, we've been in business for a year and three months. We just didn't see a way to be successful. So we told the casting agent, who was super understanding, we told her, the timing just isn't right for us. Like, we just think we'll be so much, you know, more prepared next year. If we can come back and reach out to you in 2014, like, we'd love to do that. And she said, absolutely, like, let's reconnect next year.

• 1:08:07Speaker 02

  Yeah, and it was just such a wild, wild experience. And when we win, our producer, like every, every contestant has a producer kind of like walking you through things and just helping you get prepped. And he said to us, when you go out there, you aren't allowed to talk to anyone about Shark Tank. Like you, you're going to be picked up and you're going to be on set. And even when you're on set and there's other entrepreneurs there, you can't talk about, you can't talk to anyone. Like, there's like Shark Tank spies who are around and if they catch you talking, then you're going to get kicked off and all this stuff. And so.

• 1:08:42Guy Raz?

  They don't want you to talk to the other contestants?

• 1:08:44Speaker 02

  No, they, and that's what they said to us. And so we were like, okay, got it. Like, we are never going to mess up this opportunity. So like, we are not going to talk to anyone. So we get off the plane, they're like, no one can know you're there for Shark Tank. They said somebody would be there to pick us up. And we get to the curb and it's like a massive van that says Shark Tank Season Six all over it. And so we were like. What's happening? Like, is this a test? And we get on the van. Teresa was with us and there's all, all the other brands who are going to pitch. And everyone's talking, like every single person is talking to each other. And we're like, is this a test? Is this all a test? Like, what's happening? And so Jeff and I don't say a word. And so we seem like such, we just seem like horrible people.

• 1:09:29Guy Raz?

  Yeah.

• 1:09:29Speaker 02

  And Teresa's responding for us. So like, somebody will ask us a question and we'll like, look out the window. Cause we're like, we don't want to get kicked off. So we like, go to the room, we like check in, we go to then the lot where they're filmed. And we see our producer and we like walk up to him and we're like, Ian, everyone's talking. We were feel so weird, we're not talking. And he goes, fuck them. And then he was just like, don't say a word.

• 1:09:54Guy Raz?

  Wow.

• 1:09:55Speaker 02

  Don't talk. And we were like, what? And I think like in hindsight, he was really just trying to help us because you watched people psych themselves out. You watch people talking and hearing how much bigger other brands were than their brand, or how much they prepped compared to other people.

• 1:10:10Guy Raz?

  Yeah.

• 1:10:10Speaker 02

  And we were sort of in this bubble of not talking to people. And so we like, didn't psych ourselves out. So I really think it was just to help us.

• 1:10:18Guy Raz?

  Huh.

• 1:10:18Speaker 02

  But it's, it's one of like my favorite Shark Tank memories.

• 1:10:22Guy Raz?

  And how were they? I mean, everybody can watch the episode if they want, but, but how, how was it? I mean, you go, go out there and you start talking about your popcorn and how were they? How, how were you received by the sharks?

• 1:10:32Speaker 02

  Yeah, so it was the first day of filming for that new season. So I think they were like, excited to be back.

• 1:10:37Guy Raz?

  Yeah.

• 1:10:37Speaker 02

  But we were the last people to go. So I think they were probably like tired. So like having a snack at the end was great.

• 1:10:44Speaker 01

  And when we came out there, everybody was just snacking so much that no one was really talking a lot.

• 1:10:50Guy Raz?

  They were just munching on your popcorn.

• 1:10:52Speaker 01

  Yeah, like, I don't think Mark Cuban said anything.

• 1:10:54Guy Raz?

  He's just eating your popcorn the whole time.

• 1:10:55Speaker 01

  He's just eating the, an entire bag of kettle popcorn the entire time.

• 1:10:58Guy Raz?

  Wow.

• 1:10:58Speaker 02

  And even Mr. Wonderful, who like, his job is to give you a hard time was like, you guys are crazy for that valuation. And then being like, but this is delicious.

• 1:11:07Guy Raz?

  What was the valuation that you, you, you, you, you put it at?

• 1:11:11Speaker 02

  Two hundred thousand for 10%.

• 1:11:13Guy Raz?

  So you were saying it's, it's $2 million company?

• 1:11:16Speaker 02

  Yeah.

• 1:11:16Guy Raz?

  He was saying your valuation was way too high.

• 1:11:18Speaker 02

  Yeah.

• 1:11:19Guy Raz?

  Did that rattle you at all when he said that?

• 1:11:22Speaker 02

  It really didn't because he, it seemed more like they had to say that, like they had to, I don't know, play their parts and like he wasn't going to go in. He was never going to invest. And so he had to like criticize us.

• 1:11:33Speaker 01

  But we'd also prepped ourselves like in a, I would say a different way than other people that were at least there with us. Like we, we knew the business. We had done everything from popping to bagging to delivering to yada, yada. We'd, we'd done it all. So we knew the business inside and out. So instead of going to LA and locking ourselves in our hotel room and, you know, studying nonstop, we thought, okay, let's do that for one day. Let's go to a CVS and buy a ball, like a beach ball. And Teresa would essentially would like throw us the ball and ask us a question and we had to answer it quickly to train ourselves to like re- recall information quickly. And then the second day we were in LA, we rented a car and we drove around LA. We just enjoyed the fresh air. We saw the sights. We didn't

• 1:12:18Speaker 01

  stress. And then of course we got home at 10 o'clock at night and we're like, we should have, we should have been in our hotel room this entire time. We should not have rented a car and driven around LA. But it, but, but it, what it did was it allowed us to just clear our heads and be ourselves. And we went on set the next day, just kind of like feeling normal. Like the hard thing about Shark Tank for us was like managing the personalities. Like we made a pact, like we're not going to go on and act crazy. We're not going to let them get to us. Cause like, that's part of the thing. They're making a TV show too, but they're also trying to make deals. So we knew we wanted Barbara. So Robert offered us a deal, but he cut our valuation in half. He said, love you guys, love the product. The valuation is too aggressive. So I'll give you 200,000 for 20%.

• 1:13:02Guy Raz?

  For 20%.

• 1:13:03Speaker 01

  Yeah. So he cut it in half and we said, no, that's not going to work for us. And he, his response was, okay, what's, what will you do? And we just said 200,000 for 10%. That's what we came here to do. That's what we're here to do.

• 1:13:16Guy Raz?

  Nice.

• 1:13:16Speaker 01

  And we were really just trying to, you know, on TV it looks really organized, but in person, like. There was a lot of like, no, no, don't answer their question. Answer my question or, you know, here's a question for you. And it was a lot, it was really intense. So we were trying to manage the people, answer the questions as many as we could, but also just like hang around long enough for Barbara to come in. And that's what we did. And then eventually she's kind of, she, she offered us the deal that we asked for. And as soon as she said it, we were like, yes, yes, absolutely. Please get us out of here. We want that deal done.

• 1:13:50Guy Raz?

  So Barbara Corcoran does agree to make a $200,000 investment for 10%, 10% stake in the company. But she also negotiated a slightly better deal for herself, which is also a 10% draw from your salaries.

• 1:14:05Speaker 01

  Yeah, correct.

• 1:14:06Guy Raz?

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

• 1:14:14Speaker 01

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

• 1:14:45Guy Raz?

  All right. So she's in for 10%. The show airs, and I have to assume it's another Oprah moment. Just orders are going like through the roof.

• 1:14:54Speaker 01

  Yeah. Blood pressure rising.

• 1:14:56Speaker 02

  It was just as bad, yes. It was like a blessing and a curse, but the, well, it wasn't a curse at all. The good news though, after this, we had gotten our print job, the first packaging print job. I feel like it came in, what, a few weeks before? So we were no longer hand stamping bags. We were still hand packing all of them, but they were fully printed. So that was eliminated a massive step and allowed us to like fulfill way more, like we would have never been able to get out of. The situation if we are still hand stamping.

• 1:15:28Guy Raz?

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

• 1:15:42Speaker 01

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

• 1:16:20Guy Raz?

  I guess by 2017, your popcorn was pretty much in every Whole Foods in the US. I think, I think, I read that by 2017, you're, you guys were doing $5 million in sales.

• 1:16:34Speaker 01

  So 2017 was actually closer to $2 million in revenue.

• 1:16:37Guy Raz?

  Okay.

• 1:16:37Speaker 01

  We hadn't gotten to five yet, which is like a major tipping point for, for brands that we, it was, was another crazy, crazy milestone. But by 2017, we were distributed nationally in Whole Foods. I think we had three popcorn flavors in Whole Foods. And when you go into this large scale distribution, we're no longer renting U-Hauls. We're no longer making, you know, direct deliveries. We're going through big distributors. So we essentially sell to the distributor and then they make the deliveries to the stores. And Whole Foods works with one in particular that has access to, you know, tens of thousands of retail stores that are not Whole Foods. So we were able to start to target those as well without doing any additional work from a, you know, distribution perspective.

• 1:17:20Speaker 01

  We could sell to the same distributor and then they could go deliver to another retailer that wasn't Whole Foods because they're, they already have the product in their distribution center.

• 1:17:30Guy Raz?

  Right.

• 1:17:30Speaker 01

  So that was a huge tipping point for us, like very late 2016, when we got into Whole Foods nationally, because it opened up this major opportunity to start growing, you know, elsewhere.

• 1:17:39Guy Raz?

  Between 2012, April 2012 and 2018, you guys were just like, On this march forward, like, you know, Kate Spade to Oprah into Whole Foods and then Shark Tank and like everybody and then all over Whole Foods nationally, like you were just kind of hitting it out of the park. So I imagine when you started to pitch investors, you were, you had to turn them away like they were competing to invest.

• 1:18:05Speaker 01

  Yeah, we, um, we got hit with like a freight train in 2018. Like it was, we made the decision to raise money. We thought this is the path. We can grow in a major way. We got received a couple of term sheets. Like, you know, we, like you mentioned, we, there was some interest. There was a lot of interest and we thought there's one group in particular that we really loved. They knew the agricultural side of things. They were really patient capital. They understood like the struggle of being a founder because they were founders in previous lives. So we, you go ahead, John.

• 1:18:38Speaker 02

  Oh, no. The one thing I was just gonna add was like, we kicked off the fundraising process and then I feel like in two weeks, we had, or two or three weeks, we had like two term sheets.

• 1:18:46Guy Raz?

  Wow. And two term sheets is amazing. I mean, that's commitment. That's a real commitment to, to investing in your business.

• 1:18:52Speaker 01

  Yeah. So like when you do a deal like this, like the first phase is like you go out and pitch and then once you receive term sheets and you sign one, then it's like, okay, this deal is on a path to getting done. So that's what we did. And, you know, it was about six months of back and forth. There was a time difference. They were, they were based out of South Africa. So.

• 1:19:09Guy Raz?

  And you mentioned two term sheets. So was, was one of them based in the US?

• 1:19:14Speaker 01

  Yeah, one was based in the US, but the one from South Africa was a stronger term sheet for us.

• 1:19:20Guy Raz?

  So you, so you went with them?

• 1:19:22Speaker 01

  Yeah. So we went down this pretty long process. We had lawyers draft up the entire agreement. We, everybody was on board. We went through the whole negotiation. It was like grueling.

• 1:19:35Guy Raz?

  With this, with the South African investment group?

• 1:19:38Speaker 01

  Exactly. Yeah.

• 1:19:39Guy Raz?

  And but how much were they, how much were they gonna invest, by the way?

• 1:19:42Speaker 01

  They were gonna invest $3 million.

• 1:19:43Guy Raz?

  $3 million. Okay. Which was gonna be transformational presumably.

• 1:19:46Speaker 01

  Yeah, definitely. And it was gonna allow us to realize some of these dreams. And all along the way, we had been prepping to like make these, these things a reality. So in the 11th hour. We like exchanged wire information. We gave them our bank information. We signed the documents, like the legal docs that essentially is like our new operating agreement. And they didn't sign. So we, we found out that the money wasn't there. They went radio salin on us for a couple of days. And after like a day or two, we were able to connect with one of the team members and he told us that they weren't going to be able to invest in us.

• 1:20:18Guy Raz?

  What? Wait, they sent you a term sheet? That's basically a contract?

• 1:20:23Speaker 01

  It is. And we, and then after the term sheet, we negotiated like these long form deal documents and, you know, had a $100,000 legal bill.

• 1:20:30Guy Raz?

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

• 1:20:36Speaker 01

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

• 1:21:15Guy Raz?

  The negotiations.

• 1:21:16Speaker 01

  The negotiations, yeah. And it left us in the middle of the summer, which is like a really hard time to try to start a new deal. So we had nothing. We, we were in a really tough spot.

• 1:21:30Guy Raz?

  When we come back in just a moment, how Jeff and Jennifer figure out how to keep the business afloat and even begin to experiment with other types of snacks. So spoiler alert, we will soon be talking about how to make a cheese ball puff. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 1:22:08Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's the end of 2018. Pipcorn has just lost a big potential investment, and the whole business is starting to feel pretty fragile.

• 1:22:24Speaker 01

  We just didn't have money, like, at all. So what we did was we pivoted really quickly to our friends and family. Our parents, Teresa's parents, Teresa's sisters, and some friends just kind of bailed us out.

• 1:22:38Guy Raz?

  Wow.

• 1:22:39Speaker 01

  And then because they bailed us out, we were able to buy a little bit of time and restart a process in January of 2019.

• 1:22:47Guy Raz?

  So what did you do?

• 1:22:49Speaker 01

  So after a little bit, kind of a short period of time, we were introduced to a couple folks, and we wound up signing a term sheet that was very different than the first deal, but we were able to raise $6 million in May of 2019.

• 1:23:03Guy Raz?

  How?

• 1:23:04Speaker 01

  So in the time period from July of 2018 to when we closed our deal in May of 2019, that was when we really went back to the drawing board and said, like, okay, we're not just a popcorn company. We have this amazing raw material and this heirloom corn. So we started tinkering, and what we came up with were two initial products that we loved. One was a chip, like a corn chip essentially, that was in a shape that you could dip into dips and eat.

• 1:23:31Guy Raz?

  Like a Frito-Lay?

• 1:23:32Speaker 01

  Kind of like a Frito, exactly. But it was made with this heirloom corn that was incredibly delicious, high-quality.

• 1:23:38Guy Raz?

  Heirloom corn Frito.

• 1:23:39Speaker 01

  Heirloom corn Frito, yeah. Yeah, so that was the first one that we really, product that we really loved. The second one was what we quickly realized was going to be the future of the company, which was our cheese balls.

• 1:23:52Speaker 01

  Yeah, so good.

• 1:23:53Speaker 02

  It's everyone's reaction.

• 1:23:54Speaker 01

  So we very strategically thought like, let's get into some extruded products like popcorn, shelf space is going a little bit more towards these puffed items. Let's see what we can do there. And we quickly realized that like, there's a space here to create something that is so nostalgic and so fun and so different that has never been done in natural with heirloom corn, with organic cheeses, with no artificial anything. And to take it one step further, if you flip over a package of a cheese snack that you might have at home, there's a good chance that that cheese puff has natural flavors in it, which is way better than artificial flavors. But it's still something that is, in our minds, shouldn't be in a cheese seasoning.

• 1:24:37Speaker 01

  So what we did was we removed all those natural flavors. So 100% of the cheese flavor you get in our cheese ball comes from real cheese, which is like a novel idea, but it's kind of like, not many people are doing that.

• 1:24:49Guy Raz?

  Not just cheese flavor, but actually cheese like shavings or, you know, powder.

• 1:24:56Speaker 01

  Yeah, exactly.

• 1:24:57Guy Raz?

  You guys felt like now we should actually become a snack foods brand and make other snacks based around this heirloom corn.

• 1:25:06Speaker 01

  Yep.

• 1:25:06Guy Raz?

  What was the vision in your, in your minds? What did you want to make pip corn? What you wanted to be like the Frito Lay of sort of natural and organic foods? Like what, what, what in your mind were you thinking?

• 1:25:19Speaker 01

  Yeah, I mean, to a certain extent, we wanted to take all of these snacks that we loved eating as kids. And taking those snacks and making them okay to eat was something that was really exciting to us. It's like de junking junk foods, essentially like, there's a way to clean up these nostalgic favorite snacks. Let's, we have this relationship with Whole Foods, they're a captive audience, they love innovation. So like, we can have, we can sit across the table and talk about what do we want this brand to be? And then they can actually like, help us get there. So we had some ideas that we've been working on for a really long time. And 2018 was like, the moment where we thought, you know what, like, let's do it.

• 1:25:59Guy Raz?

  How hard is it to make a cheese ball? I mean, popcorn's easy. You just put it in, with some heat and shake it around, you got popcorn.

• 1:26:06Speaker 01

  Yep.

• 1:26:07Guy Raz?

  But there's like an extruder and, and like, a long process for a cheese ball, right?

• 1:26:13Speaker 01

  Yeah, it's, as easy it is to make. A bag of popcorn, it's, it's

• 1:26:20Guy Raz?

  The inverse.

• 1:26:22Speaker 01

  Yeah, it's the inverse. So you're essentially taking cornmeal, like corn grits, and you're putting it into a tube that has a screw inside of it that does two things. It, it acts as an auger, so it pushes the corn down toward the end of the tube.

• 1:26:39Guy Raz?

  Yeah.

• 1:26:40Speaker 01

  And then when it gets to the end of the tube, it creates so much heat and friction that it essentially liquefies the corn grit and forces it through a plate that has some kind of a shape on it and turns it into a puff. So to get that to happen, it has to be the proper moisture content in the corn. The extruders have to be at the right speed, the right temperature. It's not easy to do, especially using like a whole grain item like we are because usually when you do these manufacturing things on a high level, you want to control every single variable, everything. And that's how you get a consistent product. And we're the opposite. We're, we're using heirloom corn. There's so many variables that people can't control.

• 1:27:23Speaker 01

  So usually when you get a puff, again, if you flip over the package of a puff, you might see like degermed yellow corn as a first ingredient. And what that means is the germ of the corn or the tip, the pointy part, that's where like a lot of the nutrient is, honestly. And it's the enemy, like extruders can't work with the germ of the corn. It clogs it, it doesn't extrude, it makes a mess. We don't take it out of our corn. That's why it's a whole grain snack. We leave it in. So it's hard. I mean, that's all to say, it's a hard process that

• 1:27:54Guy Raz?

  Wow.

• 1:27:55Speaker 01

  Once you get it, you can replicate it, but it's hard to get it right.

• 1:27:57Guy Raz?

  So in the factory, is it like, is like one of those Nerf guns? That's just like shooting out those like round Nerf pellets? Is this like shooting out cheese puffs?

• 1:28:06Speaker 01

  Yeah, that's exactly.

• 1:28:07Guy Raz?

  Wow, like a Nerf gun, can you imagine a Nerf gun cheese puff blaster? How awesome would that be?

• 1:28:12Speaker 01

  We might need to make that.

• 1:28:14Guy Raz?

  You basically, you were able to transition from a popcorn company to a snack company.

• 1:28:19Speaker 01

  Yeah, and I think what, kind of getting back to your question of how did we get this deal done, we had these things lined up. So we sold it into Whole Foods. We're not just popcorn anymore. We have chips, we have cheese balls, we have other things we can do. We met with the cracker buyer and said, you know, we have all of this corn flour that's a byproduct of our cheese balls, let's upcycle it into a beautiful heirloom corn-based cracker. And that's how we went about this innovation with the cheese balls and the dippers, was like, work with the co-packers to develop it, but like, do a lot of sampling, a lot of taste testing. Like, we always, whenever we innovate, we always start from, like, what would we snack on all day long, and then build from there.

• 1:28:59Guy Raz?

  Did that take some pressure? I mean, on the one hand, I imagine it took some pressure off because you didn't have to make it yourselves and pack it yourselves. On the other hand, a $6 million investment in your business actually is a new kind of pressure, right?

• 1:29:14Speaker 01

  Definitely. I mean, not having the manufacturing was a huge weight, and that was a long time coming. But raising money, there's a lot of pressure, because now, especially for a brand like ours, that didn't raise money for, you know, seven years, to then have this new relationship and these new partners, I mean, it's just a different, totally different way of doing business. So, yeah. And then, like, you know, the goals that we set in the beginning of the year, it's like, we gotta hit these goals. You know, it's not as fluid as when it's kind of a startup bootstrap lifestyle.

• 1:29:48Guy Raz?

  Yeah. You've got this investment. This happened in 2019. You get this investment, and I'm assuming 2019 was probably a great year for you, right? I think that was the year that you hit 5 million in revenue, is that right?

• 1:30:02Speaker 01

  Yeah.

• 1:30:03Speaker 02

  Yeah.

• 1:30:04Guy Raz?

  So you go into 2020, presumably like every other business, doing very well, and then the pandemic hits.

• 1:30:09Speaker 01

  Yeah.

• 1:30:10Guy Raz?

  I'm assuming at this point, you know, a lot of your revenue is coming from traffic in stores. People just go into the aisles. Were you preparing yourself for having to take austerity measures and prepare for a huge hit in revenue?

• 1:30:27Speaker 01

  Yeah, we, yes, the short answer is yes. We, we did a ton of work to be visible on the digital shelf. I'll let Jen talk about all the things that we did on the D to C side, which is the new, the new normal.

• 1:30:39Guy Raz?

  Yeah.

• 1:30:39Speaker 02

  Yeah. So a lot of what we did with the website was for education, right? Like so that people in the store would come to our website and they would learn about heirloom or they would, it was way more education focused rather than conversion focused. And so I think in that, you know, in March, we had to make a ton of really fast changes to make sure that like it operated in the way that like was easy to buy, was quick, like, you know,

• 1:31:03Guy Raz?

  What did you guys do?

• 1:31:05Speaker 02

  I mean, I think there was lots of little things like, this sounds really simple, but you couldn't jump to each product while being on one page. So you couldn't be on sea salt popcorn and see the other popcorns. And that sounds small, but when you're shopping and you want somebody to like, not get bored or not get frustrated that they can't just go to the next product, you need them to be able to jump around. But if your website is built for like, education and sales, like you're, you want them to kind of like browse, you want them to like, learn about other things and find the thing they're looking for. Where, when you want conversion, you want to show them what you want them to see. And so we did little things like that. I think, you know, we've always had a really

• 1:31:45Speaker 02

  strong email business, like newsletter following, but we implemented and started using SMS.

• 1:31:51Guy Raz?

  When people get a text, they then read it and then they, they order at higher, higher levels, higher rates?

• 1:31:57Speaker 02

  Yeah. And you can just communicate in a more casual way. And we've really built a community around our brand. So it's kind of more in line with how we communicate anyway.

• 1:32:06Guy Raz?

  How did you guys get, build like a mailing list and stuff? Was it simply people just signing up on the website when they ordered?

• 1:32:13Speaker 02

  Yeah, we, you know, we were fortunate that like, obviously when we're on Oprah and Shark Tank, you get a lot of people coming. So I think that's how we have a ton of people on it, but also running ads. So we had never run any ads previous to like before 2020. And so I think when we started running ads, whether you buy or not, you come to our site, you probably want a coupon and you join the list.

• 1:32:35Guy Raz?

  I think you're available in like 10,000 stores across the US. And what's percentages like direct to consumer through the website? And what percentage? I'm assuming more of your sales are through stores? Or is that not right?

• 1:32:49Speaker 02

  No, that's correct. Yeah, I think it's like 20%, 25% online. And then the rest is wholesale.

• 1:32:57Guy Raz?

  I guess your projected revenue for this year is like $12 million, which is a huge jump. And you guys now have, still, you're still pretty small, right? You've got just five total employees. Is that, is that right, by the way?

• 1:33:11Speaker 01

  Yeah.

• 1:33:12Guy Raz?

  Yeah. And so I have to assume that you are close to profitability or maybe even profitable?

• 1:33:19Speaker 01

  Yeah, we're close. We're projecting profitability by end of next year. But yeah, I mean, it's the business that we're operating today is definitely different than what we had been operating. We're, you know, without a doubt, marching towards profitability to really set ourselves up for the, for the next chapter.

• 1:33:38Guy Raz?

  And by the way, I mean, I'm curious. This, this may or may not have had an impact on your business, but there was a, a lot of attention paid to black owned businesses in the middle of last year, obviously because of the protests against racial injustice. And there were earnest, and let's say some less earnest attempts to support black businesses. But there, there was sort of a groundswell. We know this because we, you know, we talked to some founders who experienced that, black owned businesses. Were you, did you see any of that connected to your business at all in any way?

• 1:34:13Speaker 02

  Yeah, and I think it was, I was talking to a friend and we kind of described it as bittersweet, you know? Because it's like the support came after, obviously, George Floyd getting murdered and, you know, obviously years and years of injustice, that it took this for then people want to want to support us. So I think that's a very bittersweet moment. But what's amazing is we are getting the support and that people are wanting to support black and brown brands, you know, and minority owned brands. And I think where it feels good is when it's companies or people who are reaching out to you who have always supported you. And they're just amplifying it. I think the part where it gets

• 1:34:55Speaker 02

  Confusing of how to feel about it is when you can tell it's an opportunity for them to lift their brand.

• 1:35:01Guy Raz?

  Right.

• 1:35:02Speaker 02

  And it isn't actually about lifting us as a black founded brand.

• 1:35:05Guy Raz?

  Right.

• 1:35:06Speaker 02

  So I think that that was a really tricky thing. And I think it's tricky because it's like something so personal that affects us, who we are and who our family is. And navigating this at the same time as trying to, I don't know, I think it's just been like a really, really interesting few months of how to be really grateful, but also like kind of really eye opening of what people's, why they're doing the things they're doing.

• 1:35:34Guy Raz?

  Yeah, yeah. I mean, it's interesting because there are some brands that, you know, where the fact that they're black owned businesses are more connected to, to what they make, like, like the lip art. We had Melissa Butler on and she created this brand because she felt like cosmetics companies weren't, you know, they weren't making products for black and brown women. You know, they weren't making the kinds of cosmetics that, that she and her friends wanted. And so who she is and her story is so connected to that product. Your product is so connected to the idea of heirloom corn, right? Like, based on our conversation over the last few hours, I would think that the, sort of the core identity of what you put out into the world is based on this amazing product that you discovered.

• 1:36:19Guy Raz?

  Has the last year, I don't know, brought your own personal identities closer to the center of what your brand represents in your minds?

• 1:36:29Speaker 01

  I mean, I think it would be hard not to.

• 1:36:31Guy Raz?

  Yeah.

• 1:36:32Speaker 01

  I think it would be hard to not go through this year and be like a little bit more kind of intertwined with what's going on in the business and my personal life. I think that, you know, being a minority founder, being a black founder is something that is who we are, right? Like, we were asked a question recently, what's it like to be a black founder? We're like, we're, this is just who we are. Like, I don't even know how to answer that question. But I feel like having us wrapped up into this business a lot more, and Teresa too, on like, you know, Teresa's Chinese and, and a lot of this push recently, and really in 2020 since COVID, to like this push to stop Asian hate is like another thing that's just like, we, we can, we can speak to so many people as founders, so let's do it.

• 1:37:15Speaker 02

  What's changed for me is I think the way that I'm treated, or the way that I guess I refuse to be treated anymore. And I think that has given me a lot of power this year. Like, I, you know, in the past, I've always just laughed off. Somebody says a comment to me that's racist, or sexist, or homophobic, or whatever it is. I laugh it off because I feel awkward and I don't want them to, you know, I just want to make the situation end, right? Like, that's what we all do. And I think what this year has really given me is like, I don't cosign those things anymore, right? Like, I don't, I'm not rude, I just won't laugh. Like, and I think that that has been really shifted a lot for me because I didn't feel,

• 1:37:58Speaker 02

  I felt responsible in those moments to make it go away. And I don't feel that anymore. And regardless of how people, like, people haven't changed how they treat me. But I think my reaction has definitely changed. And I think that's been just something that I'm very grateful for coming out of this year and realizing I was doing so much of.

• 1:38:23Guy Raz?

  When you guys think about all you've been through now and where you're heading, I mean, at some point, and we know this because of all the people who've been on the show and have had, have started food brands, including Angie's Boom Chicka Pop. At some point, there's an acquisition offer, or in some cases, they reject the acquisition offer, like Clif Bar. But at some point, it'll come. You know, a big brand, a General Mills, or a Frito-Lay, whoever, I don't know who it is. And is that something you think you'd be open to down the road? I mean, it could be a life-changing amount of money and could put you in a position where you could pretty much do whatever you wanted to do for the rest of your life.

• 1:39:07Guy Raz?

  Does that prospect sound attractive to both of you?

• 1:39:11Speaker 01

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

• 1:39:57Guy Raz?

  Your parents must be so proud of you guys that you're brother and sister and you're working together and you built this from really from nothing.

• 1:40:05Speaker 02

  Yeah, they're so proud. They're the best. They always talk about, they're like, we miss the old days because they would always come up to Harlem or wherever it was, helping us do things. And they're just happy that, you know, we're still working together. We still get along. We're still growing. We're still learning. And I think that's, that's all they want.

• 1:40:24Guy Raz?

  Yeah.

• 1:40:24Speaker 01

  Yeah, there were moments like in the early days, like in, let's say, 2013, when we were at that kitchen in New Jersey, and our parents live in New Jersey, and we would be popping, delivering, bagging, stamping. And we were so tired. Like, we were just beat. And they would get in the car, drive an hour, hour and a half to the kitchen, you know, at 11 o'clock at night, just to like, tag us out. They would do the dishes for us, clean all the equipment, mop the floor, wipe down the walls, get it ready for the next day. So we could go home and get like, three hours of sleep and then come back. And they would just do it because, you know, they were so excited for us and like, they saw how tired we were.

• 1:41:05Speaker 01

  So like, any slack they could pick up, anything they could do, like, they were just in.

• 1:41:10Guy Raz?

  What do you attribute your, the success of your brand and the growth, you know, all the things that happened to you? I mean, some people say, oh, I was lucky. Some people say I worked hard. Some people say it was...

• 1:41:20Speaker 01

  You know, other factors.

• 1:41:22Guy Raz?

  I don't know. Is there, is there anything you think about when you, when you think about why you got to where you got to today?

• 1:41:29Speaker 01

  Yeah, I think, I think it's a lot of hard work. It's a lot of luck. There's a, there's a certainly a component of like right place, right time. Like, look at the Oprah thing, you know? But it's also like a level of humility and a level of connection that is really important, too. Like, be a good person and try to do the right thing. And, uh, you know, in business, that stuff really matters, especially as a founder of a brand who's like going into the meetings, talking to people. Like, those connections are really important. And then one thing that we always honestly joke about is like, don't let the highs get you so high and don't let the lows get you so low.

• 1:42:09Speaker 01

  Because being really low is, is hard and it's, there's a lot to work through as, as a founder. But those super high highs, like getting that Oprah, getting that Shark Tank and stuff, that can also be crippling if you don't deal with it the right way. So like, we've learned over the years because of these amazing experiences, like the not getting super low is maybe an obvious one. But not getting super high is kind of hard, too, because you gotta stay right in the middle so you can continue operating. That's always been like a lesson that we remind ourselves.

• 1:42:39Guy Raz?

  Jennifer?

• 1:42:39Speaker 02

  Yeah, I agree. I think there's pockets of luck that happen through your life. I think like, you know, and they come back. You miss one, another one happens. And working hard, I think that we worked so hard and we just never stopped. There's been so many moments where maybe we should have stopped, but we didn't. And I think that the mix of like not giving up, pivoting and knowing when to like really give everything to that moment where like the universe is opening up and you're like super lucky is such a key. And I think that's helped us so much.

• 1:43:13Guy Raz?

  That's Jennifer and Jeff Martin, co-founders of Pipcorn, along with Teresa Zo. And by the way, a few years ago, the three founders ran an experiment to see if you could make popcorn only by harnessing the heat from the sun. So they went out to the hottest place in the world, Death Valley, California, set up a solar cooker, and it worked. They popped some Death Valley popcorn and even sold some of it. But even before they went to Death Valley, they tested the solar cooker on the sidewalk at the corner of 113th and Park Avenue in New York City. And yes, it actually worked there, too. Hey, thanks so much for listening to the show this week. If you're not a subscriber,

• 1:43:57Guy Raz?

  please do subscribe wherever you get your podcasts. If you want to write to us, our email address is [email protected]. If you want to follow us on Twitter, we're at How I Built This or at Guy Raz. And on Instagram, you can follow at How I Built This NPR or my account at Guy.Raz. This episode was produced by J.C. Howard, with music composed by Ramtin Arablouei. Thanks also to Janet Oo Jung Lee, Liz Metzger, Farah Safari, Derek Gales, Julia Carney, Neva Grant, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This.

• 1:44:38Guy Raz?

  This is NPR.