Crumbl: Jason McGowan

Crumbl may be a cookie business – but Jason McGowan turned it into a fast-growing restaurant chain by building it like a tech startup. He and co-founder Sawyer Hemsley meticulously A/B tested the recipe, launched a delivery app early on, and went viral with weekly drops of wild new flavors like bubblegum and Almost Everything Bagel. In just eight years, Crumbl has opened over 1,000 stores, and has dominated the cookie conversation on social media, with more TikTok followers than Starbucks, Domino’s, and Taco Bell combined. This episode was produced by Alex Cheng with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Carla Estevez. Our engineers were Patrick Murray and Jimmy Keeley. You can follow HIBT on X https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected]. Sign up for Guy’s free newsletter at guyraz.com http://guyraz.com/ or on Substack. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. 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.

• 1:32Guy Raz?

  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. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back

• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes 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. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show, because the best

• 4:27Guy Raz?

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• 5:17Guy Raz?

  Hey, just a quick note before we start the show. In this interview you're about to hear, my voice sounds a little bit off. I was battling a pretty nasty cold that day, but the good news is, it's an awesome interview, so you will not want to miss it. Okay, on to the show.

• 5:35Speaker 01

  Sawyer called me up one day and said, "Hey, there's a building here, and I think we can get it for really cheap because they're going to demolish it soon." I'm like, "Oh." I think he was asking something like $1,200 a month or something for it. And I was like, "Sorry, we need to get it to, you know, $800 or $900." And I often think about how many decisions are $300 decisions that are life-changing for you, you know?

• 5:57Guy Raz?

  Yeah.

• 5:57Speaker 01

  And I still, to this day, if that landlord had not lowered the price of that building, I'm not sure where we would be today.

• 6:14Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:25Guy Raz?

  I'm Guy Raz, and on the show today, how Crumble rewrote the recipe on cookies with A/B testing, new recipes each week, a massive TikTok following, and 1,000 stores over just eight years.

• 6:44Guy Raz?

  When most people think about starting a cookie company, they might picture warm memories or grandma's recipe, you know, a cozy kitchen, right? But Jason McGowan, he launched his cookie business like it was a tech startup. He and his cousin Sawyer Hemsley would tweak and test the recipe over and over and over again until it was optimized for sweetness and texture and eventually buzz. And then Jason built an app to manage ordering and deliveries. And this was all for just one store in Logan, Utah, a small city about an hour and a half north of Salt Lake City. Now, if all this sounds a little bit excessive, it might be worthwhile mentioning that Jason

• 7:28Guy Raz?

  had spent his entire career, up to that point, working in tech, where he learned about viral marketing and network effects. Almost from the beginning, he had big ambitions for Crumble. From that single location in Logan, Utah, Jason and Sawyer opened 300 more stores within four years of launching the business in 2017. 300 locations within four years of launch. Just let that sink in. Today, the company has over 1,000 stores across the US and Canada. And a big part of the appeal comes from a methodical and thoughtful design approach. For example, Crumble cookies have always been packaged in pink boxes.

• 8:11Guy Raz?

  The bakeries are clean and gleaming and spare. And each Sunday night, the brand does a cookie drop in which it reveals the six flavors it will sell that week. And some of them are weird, but also designed to go viral. Flavors like everything bagel, cornbread, blue icy raspberry. Not surprisingly, that cookie drop has become a particularly popular event for teenagers.

• 8:37Guy Raz?

  Jason and Sawyer saw potential in TikTok back in 2018, and they used the platform to build a massive following. In fact, Crumble Cookies has more followers on the platform than Starbucks, Domino's, and Taco Bell combined. Now, I should note that Crumble is somewhat polarizing in the food world, and the company has done a pretty good job of embracing that role. Whether you love them or hate them, there's no denying the impact Crumble has had on the dessert world and on the playbook for how to build a food brand in the age of social media. As for Jason, he grew up in Alberta, Canada. He wasn't a focused student and pretty much ended his formal schooling in the eighth

• 9:21Guy Raz?

  grade. But growing up, the church was a huge part of his life. Jason's a member of the Church of Jesus Christ of Latter-day Saints. And in the late 1990s, he came to the United States to serve as a missionary in, of all places, Sin City, Las Vegas.

• 9:38Speaker 01

  You'd wake up at 6:30 in the morning, and you start studying your scriptures and reading the Bible. And then also, I was going out there and sharing with others what I believed. And so, yeah, you were going out there, you were knocking on doors, you were talking to people on the streets, inviting people to come to church. And riding in a suit and tie in Las Vegas weather during the summertime was always an experience I will never forget.

• 10:05Guy Raz?

  On your bike?

• 10:06Speaker 01

  On my bike. It was really, really hot. You learn a lot of tenacity, and you learn a lot of being able to be rejected or grit. I remember one moment I had on my mission, I was riding my bike, and I had my helmet on, and someone had a bottle, and they whipped it at my head. And I put my helmet down, and it cracked my helmet. And all of a sudden, The substance started just kind of going down my face and I looked later and realized and from the the bottle it was spitting too tobacco. So someone had thrown a bottle at my face and I remembered that moment that I was just, I wasn't even sad. It wasn't even like, it was just the, I was there just so focused on helping other people. It just didn't bother me. And I remember thinking, man, this is something that was unique and

• 10:50Speaker 01

  I, I just, the gospel brought me so much joy.

• 10:53Speaker 02

  All right. So you do your mission in Las Vegas with the intention of going back to Alberta. What, what did you think you were gonna do after? Did you have any thoughts about what you were gonna do after?

• 11:03Speaker 01

  I didn't really have a lot of thoughts afterwards. And so when I came home from my mission, I had that other like, wait, what am I doing? What's the purpose, you know, of my career? And, you know, what should I do? And then I realized that, you know, I wanted to be more part of the culture. And where I was back home, there was only a few members of the church. And so it's like, oh, maybe I'll go move, you know, where there's more members and where, where else other than Utah.

• 11:26Speaker 02

  Right.

• 11:27Speaker 01

  So I can, you know,

• 11:28Speaker 02

  Forty, forty-five percent of the state is, are members of the church there. Probably was a bit higher.

• 11:33Speaker 01

  Yes.

• 11:34Speaker 02

  Back then in 2003. And by the way, where in Utah did you go to?

• 11:37Speaker 01

  So I went to Provo, Utah.

• 11:38Speaker 02

  Provo, of course, home to BYU, college town.

• 11:41Speaker 01

  Yep.

• 11:42Speaker 02

  But you weren't there to go to BYU or to explore it necessarily?

• 11:46Speaker 01

  No, I went to a small college. It's called the LDS Business College. You know, my, my main focus when I got there was to, you know, get my GED and try to get back into, you know, I was gonna try to go to college and try to get a career. And as I was doing that, I was in class and LDS Business College and they wanted us to write a business plan for another business. And I remember thinking, wow, that's so much work to do for somebody else's business. Can I just start it? So I just asked the teacher if I could just start something and. And I realized at the time it had to be an internet company because you know.

• 12:21Speaker 02

  Yeah.

• 12:21Speaker 01

  That's when I started teaching myself, you know, how to design and build websites and do all those kinds of things. And, and I built a couple of websites for people and made, you know, a thousand dollars here and a thousand dollars there from just little odd jobs for people. And I was like, oh my goodness, this is, I'm making some money. This is fantastic. And so eventually I built a website called Build Your Universe. So the BYU.com was available because this school had not secured it and.

• 12:50Speaker 02

  BYU.com was.

• 12:51Speaker 01

  Yes.

• 12:52Speaker 02

  Available. Wow.

• 12:53Speaker 01

  And when I say it's available, someone else had it. So I had to buy it off somebody, at least it from somebody and, you know, and it started growing pretty quickly. We started getting people online really quickly. Facebook was going. I'm like, this is social networking. This is the, this is where the future is.

• 13:05Speaker 02

  And what was it BYU.com?

• 13:07Speaker 01

  It was like a social, it was a social network for BYU students. So we were going to go just after BYU students. This is really similar around the time, you know, Mark Zuckerberg and stuff was starting to grow Facebook. And I was like, oh, we gotta do one in BYU here. And, and so we started building it and the church noticed it. And when I say the church, I really mean BYU actually noticed it and BYU sent me a cease and desist letter of like, hey, you know, don't, that's our branding BYU. And at the time I didn't, I didn't have much means. I didn't have, you know, anything. And so I was just like, well, you know, if they're asking me to not do this, then I'm not going to do it anymore.

• 13:44Speaker 02

  Yeah.

• 13:44Speaker 01

  So at the time though, I had someone named Paul Allen and Paul Allen had started ancestry.com. And so he saw what I was doing at, you know, with BYU.com.

• 13:55Speaker 02

  This is not the Paul Allen who was also with Microsoft. This is a different Paul Allen.

• 13:59Speaker 01

  No, he calls himself Paul Allen the lesser. So although, although he went on to create a billion dollar company, multi-billion dollar company, he's still Paul Allen the lesser.

• 14:07Speaker 02

  And Paul Allen was local. He was there in Provo?

• 14:10Speaker 01

  Yep. He's there local in Provo. And he saw what happened when he was at ancestry.com and how he created the myfamily.com brand under ancestry and he wanted to try to maybe replicate something, some social experience with family members for families sharing photos and that sort of thing. And so at the time, I remember I, Facebook was, was growing and I remember it was being very successful. And when I ended up going with Paul, very shortly after, all of a sudden, Facebook opened up their API and was like, you can now build on Facebook. And we said, wait, what if we show people how they're connected to each other, show how they're related? And then they, when they come into the app, they can share, you know, family

• 14:52Speaker 01

  memories and photos and experiences. And Facebook was really meant for college students at the time, but maybe we could be the family part of it within Facebook. And so we launched it and it was, it just started exploding immediately.

• 15:05Speaker 02

  Wow. You were just teaching yourself this stuff. And this really starts a career of working in tech, like particularly with social media sites.

• 15:13Speaker 01

  Yes. And, and I think that's where I got a lot of my experience and my analytical kind of experience, you know, when you're growing so fast and, you know, Paul was a great mentor too as well to help me, you know, with, with understanding marketing and technology and data and all that sort of thing. So I, you know, when you start making a tweak or a change to a UX and you realize, you know, it increases five, 10, 20%, all of a sudden you started understanding user psychology, how they interact with the apps, how to make things frictionless, like my learning curve just was exponential at the time and building this product over time. We ended up reaching to about 120 million users. So it was, it grew fast.

• 15:52Speaker 02

  You eventually left Family Link and when started your, your own next business called pick.com, which I guess was like, um, it was like a social shopping site. I think it was created around the same time as Pinterest.

• 16:07Speaker 01

  It was actually, yeah. I always, I always joked that I always had the idea, I just never had the execution in the early days. That was my, that was my, my curse, you know, to start other companies that someone else executed better on.

• 16:19Speaker 02

  And I read that even before you launched it, it was acquired?

• 16:23Speaker 01

  Yeah. So it was acquired by a company called Fundly. Early for us, it was a nice payday and it was just something that was. It was a great moment.

• 16:32Speaker 02

  Hmm.

• 16:33Speaker 01

  And at the same time, too, when we were doing fundraising, there was another investor who really wanted us to go do a whole concept with him. So that was hang time. That was the concept to kind of, you know, like it was similar to four square, you know? Then that's when, um, you know, we moved our and moved my wife and our early family, we moved out to Tiburon and, and lived in California for a short period of time.

• 16:58Speaker 02

  And I actually mentioned you were married, you were married and you had, I think, at least one kid at that point, or maybe two. So you moved to California to, uh, to the Bay area.

• 17:07Speaker 01

  Yep.

• 17:08Speaker 02

  And how long were you, were you there?

• 17:10Speaker 01

  I was there for a very short period of time. I think it was six months or less and it was just like, it was so exciting, just, you know, walking down the streets and everyone was just like working on the next big thing. And, and so for me personally, it was really, really great. And, um, and then we both felt some personal feelings of that we actually should not be living in California. We should move back.

• 17:34Speaker 02

  You and your wife.

• 17:35Speaker 01

  Yeah, me and my wife. Yeah. And we felt feelings that we should be moving back to, to Utah.

• 17:41Speaker 02

  And where did you guys move to? Back to Provo?

• 17:44Speaker 01

  Yeah. So moved back to Provo. In fact, we had our house up for sale and we were going to rent it out to somebody and we ended up just moving back into the same house.

• 17:53Speaker 02

  Wow. So, all right, you're back in Utah and then you go back to, well, you return back to the, to sort of your, kind of your roots, which is you went to go work at Ancestry as a director of product in 2015.

• 18:05Speaker 01

  Yep.

• 18:06Speaker 02

  Meantime, your wife has a cousin, there's this kid Sawyer, who's, who's at, um, he's a student in Logan at Utah State University. And I guess he somehow gets connected with you because he's interested in becoming an entrepreneur and has an idea for like a clothing brand while he's a student in college. Tell me a little bit about this idea he had and how he approached you.

• 18:28Speaker 01

  Yeah. So he wants to start a clothing company and I gave him some money to do it and it was called Ember, E M B R. And I didn't know if it was going to be successful or not at all. And for me, it was really just, this guy was a, you know, really excited and I thought, you know, I wanted to kind of help him along his entrepreneur way if I could. And it didn't work out. And he came to me at the end of it and was like, hey, I need to pay back all this money I borrowed from you.

• 18:53Speaker 02

  How much did he borrow from you?

• 18:54Speaker 01

  I don't even remember, to be honest with you.

• 18:56Speaker 02

  Was it less than 25,000 or 50,000?

• 19:00Speaker 01

  It's something, it could have been somewhere around there. Yeah. But, you know, he wanted to pay it all back, though, which was significant for him. You know, at the time, he's a college student and

• 19:07Speaker 02

  Yeah.

• 19:08Speaker 01

  And I was like, sorry, that's not how it works. It failed. You know, if the business would succeeded, I would have made money and and you would have made money, but it didn't work out. And, but I was just so impressed by his character and who he was as a person. And that really made me think, this guy's a good guy. We need to start something sometime.

• 19:24Speaker 02

  Just to pause for a sec, you were working at Ancestry. In the back of your mind, were you still thinking, I because you'd seen all of these people in the Bay Area and all these people that you'd come across have these huge, probably successful exits and in the back of your mind, were you still thinking, I'm still, there's still something out there for me to start?

• 19:46Speaker 01

  Yeah, I think, you know, when you get a taste of virality and growth, there was kind of this void in this feeling of like, what am I working on? Like, what's my even my purpose here? Am I working on things just to work on things to make money? Am I like, what? You know, just not feeling like I was making a difference, truthfully. And that was kind of a really painful almost, just to be like, what am I even doing? And is my time valuable and worth it?

• 20:10Speaker 02

  All right. So let's get to the cookies here. So you are, you are obviously searching for something interesting, something that would be, I don't know, would fill a void that you

• 20:19Speaker 01

  Yeah.

• 20:19Speaker 02

  kind of had. And, and so how did the cookies come about? What, what even prompted that? I mean, everything up until this point was around technology, right?

• 20:30Speaker 01

  Yeah.

• 20:30Speaker 02

  And that was your background. You'd been in social media and you'd been a, you know, sort of focused on virality and And then cookies. So how how did that conversation even start with Sawyer?

• 20:43Speaker 01

  Yeah. So Sawyer and I were just trying to come up with some ideas and we thought, and we just, our families love, you know, and I think in the the culture in Utah of people bringing treats and baked goods to each other and and, you know, for parties and family get togethers and that sort of thing.

• 21:00Speaker 02

  It makes so much sense that baking culture is a big part of the sort of church culture because it's about community gathering and also it's a vice, right? It's like the only vice, really. As I started to dig into it, it really made a lot of sense to me why small town Utah was the perfect place to start this thing.

• 21:19Speaker 01

  Yeah, you know, I we thought at the time, well, would it be cool to kind of do something? And we thought, well, why not do cookies? There's some local cookie shops here that started doing cookies too as well. And you had other places in the East Coast that were doing large gourmet cookies that were really big. And but what was actually really exciting for me at the time was not just the cookies, but was the technology behind it. You know, at the time, you know, DoorDash wasn't really prevalent. And so it was like, I could order pizza or that's about it for delivery. I'm like, that doesn't make any sense. And so I thought, well, if we create cookies, the most important thing, though, will be the technology. And we could build this technology and we could leverage it to potentially deliver other things to homes and that sort of thing.

• 22:01Speaker 01

  So it was kind of early, you know, it was like the DoorDash thinking earlier on.

• 22:05Speaker 02

  I mean, initially it was inspired by delivery. I mean, there was, we've done insomnia cookies on the show, which is also a great story. And that started out as a was a delivery brand. And the so the initial idea was let's have a cookie that people can order like through DoorDash to their dorm room or whatever.

• 22:24Speaker 01

  Yeah, that's kind of was the the start of it. But the problem is, is we had absolutely zero baking experience. We didn't know anything. So although our family ate a lot of treats and we had that culturally there, our personal experience hadn't been that strong at all. And so at the time, we were like, okay, well, delivery is the most important. What if we just buy this from Cisco or some other brand? And and just deliver them to houses. And then we, you know, the thing that I know and Sawyer felt strongly this way too is if our names are going to be on it, it has to be the best, all these kinds of things. And so it kind of started us down a quest of, okay, well, how do we create the world's best cookie? What's the methodology for creating the world's best cookie? And traditionally, people would just, they would take a

• 23:07Speaker 01

  Their great grandmother's recipe, or a recipe they found online and tweak it, or something like that, and create this recipe. And we thought, what if we did something different? What if we take the same methodology that we use in technology, this A/B testing model, and let's taste test our way to the perfect chocolate chip cookie?

• 23:24Speaker 02

  Right, so it sounds like already you dropped this idea of we're just gonna deliver whatever cookie we can get, you know, because this is like 2017, this is early 2017 where you start to talk about it. It sounds like pretty quickly you land on the idea that this is gonna be a cookie shop and not a cookie delivery service?

• 23:43Speaker 01

  Well, that was, no, that's a great question, because earlier we were deciding whether we should actually even have a storefront, or whether we should do just delivery. And originally, we thought about even just delivering out of a home, so we'd make homemade cookies, bake it, and then deliver them from our home.

• 23:58Speaker 02

  Right, you know, you're thinking, okay, let's figure out how we're gonna sell these later, but now let's just kind of work on a recipe, and let's just make cookies. And so you guys go down a rabbit hole of cookie making for several months. And what, I mean, what were you trying to do? I mean, what were you trying to figure out during that time?

• 24:20Speaker 01

  We were literally just trying to figure out what tasted the best. What we would do is we would literally take a chocolate chip cookie, we'd change out an ingredient, and we would go to friends and family, and even we started going to the local gas station, like just random people. People looked at us like we were crazy. We were like, hey, here's two chocolate chip cookies, can you take a bite of each of these and tell me which one you think is best? And so then we were trying to decide between milk chocolate chip or semi-sweet. We're like, this is a big decision. Like, for us, it was like the world depended upon whether the chips were gonna be milk or whether they were gonna be semi-sweet. And so we put a survey out on Twitter, and the survey results came back, and it was 70% milk chocolate chip, 30% semi-sweet.

• 25:04Speaker 01

  And that's how we decided that we were going to go with milk chocolate chips instead of semi-sweet.

• 25:08Speaker 02

  Right.

• 25:08Speaker 01

  You know, when you're making the world's best chocolate chip cookie, it's not just about the ingredients, but it's how you prepare the ingredients, it's how you mix, how long you mix for, and I don't want to give away trade secrets today, but, but how long it rests for the size of the cookie, the temperature of the cookie, if, does it rotate, does it?

• 25:28Speaker 02

  Do you slam the pan in the middle of it, right? Things like that.

• 25:32Speaker 01

  Yeah, there's a lot of nuance to, you know, how, how much you whip the butter will depend on how the shape of your cookie. And we were doing it actually in Sawyer's mom's house at first, and doing it at a home and a home oven versus commercial equipment. We learned us two totally different things. And then when we got the commercial equipment, we were like, oh, we have to do this all over again because it's actually completely different.

• 25:55Speaker 02

  Well, but there's a leap from making it and then saying, we're going to invest in commercial equipment. Like, because I think this is like a five month process, right? Of you guys experimenting with different recipes. But what was the catalyst that got you to say, you know what, let's go to the next step and buy commercial cooking equipment?

• 26:16Speaker 01

  Well, you know, there wasn't a lot of grand master planner thinking. It was just tenacity of saying, we're on a mission and we're going to accomplish this. And we realized that like you had to have the equipment for us to actually figure out how to do it. And so we did, sometimes I think we say, we did this backwards, meaning like we rented out the building, we got the commercial equipment, we did all that, and we still didn't even know what the recipe was.

• 26:40Guy Raz?

  When we come back in just a moment, Crumble is finally ready to launch. But just before it does, Jason learns of a rival startup in the same town doing exactly the same thing. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 27:05Guy Raz?

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• 27:50Guy Raz?

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• 28:35Guy Raz?

  puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called "Aligning for the Agentic Era: How AI is Changing Everyday Work." And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it. If your revenues are at least in the seven

• 29:18Guy Raz?

  figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Stripe is built for whatever comes next because the pace of change has never been faster than it is right now. New business models, new currencies, and new expectations for speed, reliability, and scale. Stripe builds financial infrastructure that helps businesses start, grow, and operate globally. From payments and billing to fraud protection and cross-border payouts, Stripe is built

• 30:02Guy Raz?

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• 30:40Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2017, and Jason is still working on the perfect recipe for his new cookie business. And meanwhile, his partner Sawyer is in Logan, Utah, scouting out a place to build the first store.

• 30:56Speaker 01

  Sawyer called me up one day and said, hey, there's a building here. There used to be another business in there. It was super popular. It's this particular location. And I think we can get it for really cheap because they're going to demolish it soon. I'm like, oh. And now, at the time, for me, that was actually exciting because if this didn't work, I didn't want a five-year lease on my hands.

• 31:16Guy Raz?

  Yeah.

• 31:17Speaker 01

  And so this was like part of our test and learn culture here was like, oh, this will be fantastic. We'll rent it. And so I think he was asking something like $1,200 a month or something for it. And I was like, sorry, we need to get it to $800 or $900. And I still, to this day, if that landlord had not lowered the price of that building, I'm not sure where we would be today.

• 31:42Guy Raz?

  Wow.

• 31:43Speaker 01

  I called that the multi-billion dollar decision because... I often think about how many decisions are $300 decisions that are life changing for you, you know?

• 31:51Speaker 02

  Yeah.

• 31:51Speaker 01

  And I mean, it was, it was clearly would have been worth whatever, right? But the landlord ended up saying yes, like, he's probably like, who else am I going to get to rent this building that I'm going to demolish? It was probably, it was a win-win for him too as well.

• 32:04Speaker 02

  Okay. So you, you get this shop that's going to be demolished. And at that point, now, what's, what I'm curious about is the shop was in Logan, Utah. And I think you were living in Provo, right?

• 32:16Speaker 01

  Yes, yes.

• 32:17Speaker 02

  Which has got to be an hour and a half, two hour drive?

• 32:20Speaker 01

  It is. So Sawyer lived in Logan though. And so it was close to Sawyer. And the idea was that I'm going to build the technology, do the marketing and Sawyer would do the, kind of run the store. But while we were getting up and going, I was traveling there all the time.

• 32:35Speaker 02

  Right. And you got the lease, so you could start to move the equipment into the, into the facility. But before I ask you about like, sort of building it out, I mean, it's only going to be around for six months, right? Before they can demolish it. But, I mean, this was going to be a small business. It was going to be a small side hustle?

• 32:52Speaker 01

  Yeah, that was it. This is going to be a side hustle. It'll be fun. It'll be great for learning for Sawyer. And, and really if the technology ends up being really successful, then, then we had something really good that we could use.

• 33:03Speaker 02

  And what was the technology side of it going, going to be? Like, because it was going to be a shop selling cookies, but tell me about, what were you going to focus on?

• 33:11Speaker 01

  Yeah. So I was focusing on, on like, okay, how do we get our first product? Which was the chocolate chip cookie.

• 33:17Speaker 02

  Yeah.

• 33:18Speaker 01

  And then how do we build the technology, meaning like routing it to houses?

• 33:21Speaker 02

  So this was still going to be a delivery business, even though there was a shop?

• 33:24Speaker 01

  It was going to be a delivery business. Yes, yes.

• 33:26Speaker 02

  So you had to hire drivers and things like that?

• 33:29Speaker 01

  Exactly. So we hired our own drivers, did our own thing. How do we keep these things warm? All those kinds of things were things that we were working on really early on.

• 33:38Speaker 02

  But if it was, because just to put this in perspective, I mean, Logan, Utah. Northern Utah, close to the Idaho border, population 50,000 people. I mean, we're not talking about like even Salt Lake City. This is not a huge number of people there, right? And so to me, the idea of putting all this time and effort into building out like a delivery network of drivers and how to keep it warm for a population of 50,000 people seems nuts. I mean, right? I mean, I don't.

• 34:06Speaker 01

  It does. Well, you put it like that, Guy, it does seem a little bit more nuts, even when you say it. Yes, it's in my mind, you know, I often listen to, you know, Paul Graham, and he talks a lot about, you know, focusing on a few customers and making a product or experience really well for them, and then it will scale eventually. And so my whole thinking was, okay, how do I build something that will make these people extremely happy? And we were going to build it along the way. And I was as much fascinated with scratching that itch of just doing something that could be different and physical and not in the technology world. And it was so like going from like pixels to actual physical things was so like alive,

• 34:50Speaker 01

  like like my also in my career, what I was doing was like all of a sudden there was color to it, you know, it was like, oh, this is so exciting. Like, I was as much fascinated by the learning experience of what we were doing as much as like the business or making money or any of those kinds of things.

• 35:04Speaker 02

  Yeah. But to justify the time and the effort and even the money that you were putting in, you had to have thought that this could maybe lead to something else. Like, it sounds to me that like the cookies were interesting, but that maybe the technology that you were building, the distribution network, that's something that you could sell eventually.

• 35:27Speaker 01

  Totally, yes.

• 35:28Speaker 02

  All right, so you guys had the lease. And what about the store? Did you do a build out? I mean, did you, it was going to be demolished, so, but you still had to make it look nice enough, right? Because people are going to go into the store.

• 35:39Speaker 01

  Oh, we totally did. And I was so nervous about it at the time. I mean, I built the first counter, just to show you how frugal I was, like. You know, we went in there and tore things out and started doing things. And even at the time, I didn't even this, I didn't even know that you were supposed to get like permits and all those kinds of things to do a lot of these things. So we were doing some of these things without permits. And of course, we were on social media. We were just sharing on social media behind the scenes, what we were building and pictures of the build out. And at the time, that was like, whoa, you can kind of get a live peek into, you know, a store, a local store getting built out. And we started building a following that way.

• 36:16Speaker 02

  All right. I think you opened the shop in the fall of 2017. And did you open with like, one or two? Like, how many, how many different cookies did you open with?

• 36:27Speaker 01

  We opened with one. That's it.

• 36:29Speaker 02

  Just chocolate chip?

• 36:29Speaker 01

  Just chocolate chip. And the problem was, we didn't have time to do more. Like, the building was going to get demolished. So it's like, if we want to build a full menu, like, there's no way. We, we spent so much time building one product because we just were constantly trying to tweak it to make it better. That we're like, that's it. We're going to launch with one. They're going to be warm. They're going to be big. We wanted them big because, you know, they're meant to be shared. So if you're taking them, you're kind of sharing them. And all of a sudden, people are trying them. And that's how the virality grows within the, the food concept that we were trying to do. And I still remember, because remember, I've been in social media for my whole life. So it was all about grow, grow, grow, grow. We'll worry about profits and revenues later. And I still remember this man came and he had on the plaid shirt. He had bought this box and this four pack

• 37:13Speaker 01

  of chocolate chip cookies. And he handed me money. And it was like, whoa, wait, people are actually going to pay for this? Like, all this energy and all this time. And we handed them, you know, I handed them change. And I remember just thinking, oh, my goodness, we created a business and it has revenue on day one. And I remember being so excited.

• 37:32Speaker 02

  And really, you were building up, I mean, the social media presence, presumably, it was for a local audience, right? It was, you were trying to get people in and around Logan to be aware of it.

• 37:41Speaker 01

  Yeah, we were. And, you know, Sawyer had a, had his personal social media. They had friends and stuff like that. We actually leveraged that. Started off, it had like, I think, 10,000 followers or something like that. And I don't remember the exact number. But we got in the newspaper too as well. And then our competition opened up one week before us.

• 37:58Speaker 02

  Wow.

• 38:00Speaker 01

  They'd saw what we had done and they opened up from their homes and they wanted to do delivery and they launched one week before us. And I remember just being devastated like in technology, first movers advantage is everything. And that's been kind of built into my core. And we're like, oh, is this going to work? Did they already get the first movers advantage? Are we going to look like copycaters? It's just like, what's going to happen here? And I remember just looking over at Sawyer and I think that's why we spent so much time on the product was because we knew that at the end of the day, it all comes down to the product. And I just told Sawyer, I says, let's ignore the competition completely. They're not going to be our customers. They're not going to keep us in business. Let's focus 100% of our customers.

• 38:44Speaker 01

  If we build products that our customers love and they have great experiences in the stores, we'll win.

• 38:51Speaker 02

  And so when you opened, right, your week after your competitor had opened, how did it do?

• 38:57Speaker 01

  It did phenomenal. Lines were out the door.

• 39:00Speaker 02

  Just for chocolate chip cookies?

• 39:01Speaker 01

  Oh, it was crazy, guy. I was still shocked to this day, all the social media marketing, and we did digital spend advertising too. So all the stuff that I'd done before in the past. So we were able to market to everyone and everyone saw it. It worked.

• 39:16Speaker 02

  Tell me a little bit about this or the thinking around the branding or the look like, for example, I think from the beginning, you sold the cookies in these pink boxes.

• 39:28Speaker 01

  Yeah, you know, I think what was interesting is our competition at the time was going after the college market because it was, you know, a college town. The problem was is the people that were coming into our building were women. And we thought, wait a second, what if we're focusing on moms and not on college students? And Sawyer's had a core memory growing up where one of his dad's friends had a Cadillac and it was pink and he loved the color from that Cadillac. And we thought, what if we just take that iconic Cadillac color? It'll set us apart and we'll be different. And Sawyer really kind of loved that.

• 40:04Speaker 02

  All right. So now you've got this and you're going back and forth between Logan and Provo, like every couple of days or once a week or?

• 40:12Speaker 01

  Yeah. Oh, like, yes, there was times where I was slowly driving all the way around Utah, looking for pink boxes. And then delivering them.

• 40:21Speaker 02

  Hmm.

• 40:21Speaker 01

  It was really one of those things behind the scenes where we were everything. I was on the phone with customer service. And at the time, we had a delivery technology that allowed us to do routing for the deliveries. And deliveries was really big early on because people are so excited. You could get something warm delivered to your door. And word of mouth started spreading. But I was behind the scenes on the weekends, literally just moving around the routes. I had a big map and I had all the deliveries on a map. And I was rerouting to try to make sure that the drivers would be optimally driving. And so a new driver would come show up and all of a sudden they'd pop up online. I'm like, okay, I gotta reroute all these. So we didn't have any of the technology at beginning to route everything perfectly. We were doing it by hand.

• 41:00Speaker 02

  I mean, you were building a logistics network. It's like a mini UPS.

• 41:03Speaker 01

  Yes, it was. And it was, it was a lot.

• 41:07Speaker 02

  But how was that sustainable? I mean, delivering is really expensive, right? From what I understand, it really only works on a large scale. I mean, you got, you had drivers being paid hourly to drive to deliver cookies. And how did that work in terms of not, not losing all you?

• 41:24Speaker 01

  Well, what we did early on is we made sure that all the cookies were warm. We had these, these cases and we had these warmers, these gel packs that we'd microwave. Well, what we learned we could do was, is we wouldn't send out drivers with the exact order. Because remember, there's only one flavor. We would send them out with way more cookies than they already had current orders for. And so as a new order would pop up, if it was close to them, I'd just slot it in. And so all of a sudden, the logistics became a lot, you know, lower cost because we were optimizing routes so much. It worked really, really well for logistics.

• 41:56Speaker 02

  All right. So you've got this store that's really kind of starting to take off. And in, I mean, I guess not too long into the business, you decided to open a second store. Like by the end of 2017, decide to open one in, in.

• 42:11Speaker 01

  Yeah, our, actually our second one, we opened up in Orem, Utah. And what's interesting about this is, and so there was another competitor that was in Provo area, and we were like, okay, well, how can we kind of win Utah? And we came up with the idea of creating, using this technology and this delivery network to deliver to all of basically a big part of Utah. So we, our second location was actually a warehouse. So while the competitors are only opening to a small radius, what if we opened up to all of Utah County and we could start delivering into, you know, 10 different cities? It would be a central kitchen, like a central commissary. Yeah, like a commissary. That's exactly right. So we created this commissary in this warehouse and then we opened up to delivery only.

• 42:53Speaker 01

  So that became a very logistical challenge because we just had tons of deliveries and it kept growing and growing and growing. Demand was outstripping, you know, our ability to produce them. And so, you know, we got some bad reviews and it started being, you know, really troublesome for us to figure out how to actually service these customers. And that's when we thought, okay, we also need to have better experiences. And so that's when we decided, okay, we're gonna, we're gonna start opening up in other areas. But the, the reason why we opened up in Banff, Utah, first was because Sawyer's mom was gonna be originally a third owner in the business. And Banff was gonna be your third location? Yeah, Banff was gonna be our third location. It was our first franchise location.

• 43:36Speaker 01

  And the reason we franchised that first location was Sawyer's mom was gonna be a part of the business early on. And Sawyer's dad was like, you're gonna spend a lot of time in this bakery. It's not gonna make a lot of money. You're gonna be away from the grandkids. I'm not sure is this gonna be really worth it to you? So she decided to bow out and not do it. But they came back and Sawyer's dad's like, she's gonna kill me. She sees the success of the business. Is there any way she can buy a portion of the business or is there anything that we can do? And so that's when I started kind of, you know, researching and like, well, franchising, that's like, we already invested the money. The business was self-sustaining. It was already making money and paying for itself. So there was no need for capital at the time and we wanted to try to build this without outside capital. And so we started franchising.

• 44:20Speaker 01

  So we went to a franchise attorney, learned how about the franchising. And so we franchised our first location in Banff. And I will tell you, I have never been more nervous about spending someone else's money in my entire life. You know, it was. It was one thing to waste my own money if it didn't work out, but to now have somebody else's money in there, I was so stressed out that I was gonna lose Sawyer's parents' money and we get to the store Bountiful, we leased the building and I remember someone came in and they said, "Oh, this is gonna be so amazing. It's gonna be so amazing because every other business that's come here has closed down." And I remember just my gut just dropped and like, "Oh my goodness, we picked the wrong location."

• 45:01Speaker 01

  But we powered through it and the minute we opened it up, the lines were just out the door.

• 45:08Speaker 02

  So, there was no plan. I mean, again, like, it seems like it just kind of happened organically. It was-

• 45:14Speaker 01

  It did.

• 45:15Speaker 02

  They wanted to open, they wanted in, you sort of thought, "Well, let's try franchise model." The beauty of a franchise model is you, I mean, if you do it right, you don't need to bring in a lot of outside money because the franchisee pays the fees to build out. And so with the success of that shop, immediately you thought to yourself, "Okay, we're a franchise business now."

• 45:37Speaker 01

  Yeah. And we had friends and family who saw this. So I had friends in my neighborhood and Sawyer had some family members and they all wanted to do a crumble. And so we opened up a few more crumbles and all of a sudden they started doing really well. And then we had someone come in and they wanted to open up 20 locations in Colorado.

• 45:55Speaker 02

  Wow.

• 45:56Speaker 01

  They came to me and they said, "Well, we have two conditions. Jason, my condition number one is that we own the marketing. We want to own our own customers and be able to do our own marketing." And I said, "Okay, well, maybe we can work on that." And the second thing they said was, "There's no way this is gonna work outside Utah if you stay closed on Sundays."

• 46:11Speaker 02

  Right, you're closed on Sunday.

• 46:13Speaker 01

  Yeah.

• 46:14Speaker 02

  The only way, if you let them open on Sunday.

• 46:16Speaker 01

  If we let them open on Sunday, they'll open the 20 locations, they'll grow it across all of Colorado. And they said, "Your business will never be successful outside of Utah if you don't."

• 46:27Speaker 01

  And I thought, we want to be able to give bakers time off. We want them to be able to spend time with their friends and families. And this is just core to who we are. It's spending time with family. And if people want to worship on Sundays or they want to do other things on Sundays, I don't want to work on Sundays. And I remember talking to my wife and talking to Sawyer. And, and we came to the conclusion that even though it financially didn't make sense, that it was important to us because that's really our mission of bringing people together. And they said, your business, it's never going to work outside of Utah. And I said, well, if it doesn't, it doesn't. And that was a big kind of moment for us.

• 47:02Speaker 02

  Um, franchising, the franchising model is complex, right? Because and usually people who do it have experience in franchising. First of all, how did you even start? So, once this one in Bountiful becomes successful and you know that people want to start and open them up, did you hire like consultants to help you understand how to do this? Who, who, who helped you figure this out?

• 47:26Speaker 01

  You know, so a lot of it, we just looked up online and a lot of the people were our friends and family. So it was like, they were very forgiving and patient with us because we would give them recipes. You know, at that time, we started having more recipes and we started giving them recipes like two or three days before they're supposed to be made. And there was a lot of scaling pains and problems early on of us trying, trying to just grow it. And so after we got like, you know, six, seven, eight stores open, that's when things actually really changed. Because everyone kept saying, well, only people in Utah like sugar. You know, it sounds crazy when you just say it like that, but that was kind of the thinking. And it's not going to succeed outside of Utah. It's hot cookies. They're not going to succeed outside of, you know, in, in warm climates. But that one, it started working in Vegas and a couple of other places.

• 48:11Speaker 01

  We really got to this moment that was, okay, sorry, this has been fun side business, but we're now going to take over the nation. We're going to go from a franchise business with our friends and family and trying to do something fun and cool to let's create a real business and let's take over the United States with this concept.

• 48:30Speaker 02

  When we come back in just a moment, Jason learns that almost all publicity is good publicity, even when it's about flavors that flop. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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• 50:31Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2018, a year after launch, and Crumble Cookies is growing into more than just a side hustle.

• 50:41Speaker 01

  It went from, hey, this is a cool concept. So, you know, we said, okay, we nailed it. Now, how do we scale it? Because it's a whole different skill set and a whole different business. Right? And so we went from these cookies and teaching people how to do it. How do we build this big franchise business? And we had one rule, which was, we need to fire ourselves. Every single day I wake up, I've got to fire myself from, from jobs that can be easily done by somebody else. You know, so customer support, we got to fire ourselves. We've got to find who's the best customer support person we could find. You know, it's like, I can't be doing deliveries anymore. I've got to work on the business, not in the business. How do we fire ourselves from delivery drivers? How do we? And one of the things that we, we often would say to ourselves is, we need to quit making 10 store decisions.

• 51:25Speaker 01

  We need to start making 100 store decisions, 1,000 store decisions. You know, like, for example, let me give you a specific example. How are we going to train all the bakers on the recipes? Because at this time, we had a rotating menu, which basically rotated every single week. How are we going to train the entire nation when you have 1,000 stores and 30, 40,000 bakers? And so like, that led to like, the decision of building technology. So we have our own custom app that shows people how to train. We, we invested in videography and training tools. And so, and people can see how many people are trained in their store and what their level is and their knowledge skills.

• 52:03Speaker 02

  But that would come, I mean, that would come later, obviously, as you scaled. But I'm, I mean, I'm curious, in 2018, this is your first full year in business. By the end of that year, there were 16 locations, right? Which is a really fast growth. I mean, not as fast as it would eventually become, but still like, you know. And you had a brand and you had a quality product and you had to ensure that all those 16 stores were doing the same things, right? That they were making the dough exactly the same way, that they were frosting the cookies. Maybe you weren't frosting them quite yet, but, and then when you had a new cookie, you had to unroll, you had to roll that out to all those stores. Like, in that first year, how did you manage teaching people how to do that?

• 52:46Speaker 01

  A lot of it was sending over the recipes to them and doing just content videos of just sharing with them like how they should make this, how this should be done and how the recipe should look. And the second thing that we did is we had everyone send their pictures in. So they'd have to take pictures of the product. And we had people here that would critique and say, that doesn't look right. Let's see what you're doing here. Are you mixing wrong or you're over mixing or what happened? And so we were constantly like gathering data digitally and we were really relentless. And so a lot of it was manual. The processes were manual, but that couldn't last forever. Me and Sarah couldn't even open every store physically. But for the first hundred locations, for example, I did the real estate. So I went

• 53:27Speaker 01

  out and I met with the entrepreneurs and the franchisees and I'd watch, I'd go tour the locations and we'd look at them and we would talk about them and we'd, you know, eventually I couldn't do that anymore, but I was there. We were boots on the ground. We were in it.

• 53:42Speaker 02

  Yeah. Well, I mean, you had to because if the more stores you're opening, the more risk there is that one of them is gonna, isn't gonna be up to scratch, right? And you could start getting negative reviews by people who are like, oh, this crumble cookie place sucks, right?

• 53:56Speaker 01

  Totally.

• 53:56Speaker 02

  If one of those franchises. So it's like, you really had to make sure that their standards were what you needed them to be. I'm curious, like, by the end of 2018, I mentioned, you'd 16 locations and I read that your revenue was about, it's under a million dollars, but you were growing, obviously. And by the, by the end of 2019, so your second full year, you had 55 locations and you're, you'd earned about four and a half million dollars in revenue. Do you think being in Utah at the beginning is a major reason why it was able to scale? That, that because culturally it was the right fit and there was a fan base and it's baking and it's, you're close on Sunday and all these things?

• 54:38Speaker 02

  Like, do you think had you started it, I don't know, in Los Angeles, maybe it wouldn't have worked?

• 54:43Speaker 01

  I think you're probably right. I remember reading the book about Sam Walton and Made in America and how he went to the outskirts of Walmart. It's almost like the Walmart strategy. And where you go to all these smaller towns and, you know, populations of 60,000, 100,000. So yeah, I do think that it also created this energy, excitement, you know, when you go to North Dakota and you, and there haven't been a lot of other brands that have gone to North Dakota. Man, you should see sales go crazy in North Dakota, right? Because people are talking about it, like there's a thousand other concepts in, in, let's say LA or New York, and you're just one of many. But when you're in these towns and you're taking care of these customers that maybe don't have a lot of options, it's also really exciting for them.

• 55:25Speaker 02

  Yeah. Tell me about social media now. I mean, you came from this background, like you had all of this experience with social media. Tell me a little bit about how you started to think about leveraging social media to turn what was a basically a cookie, a good cookie, but there are lots of good cookies available in America. But how do you then use social media to really differentiate it? How did you start to think about that?

• 55:52Speaker 01

  Well, you know, I think one thing that we had done really early on, which sounds very simple, but lots of brands don't do it, is we actually engage with our customers. It surprises me today that so many brands and businesses spend so many dollars trying to attract new customers. And then when they come talk to them on social media, they're just like, ignore them. They don't answer their DMs and they just are constantly trying to grind and find new audiences or create new splashes. And so for us, we carefully, over long periods of time, have built relationships with our customers. And people are like, well, you have a cult-like following. We have a, we call them cult-like relationships here, which we respond back to our customers. We respond to their feedback. If they have ideas for cookies, guess what? We actually implement them.

• 56:36Speaker 01

  When they have complaints or frustrations about a product, if it tasted a certain way they didn't like, we take that feedback, we actually fix our products. And it gets harder and harder over time, but even today, we have over 30 people that are just dedicated to responding to people. So I think as you build a social presence, you cannot underestimate the compounding effects of constantly talking to your customers. That compounds exponentially over time.

• 57:02Speaker 02

  How did you land on what I think a lot of people think of Crumble Cookies as sort of like a frosted cookie? It's almost like, you know, I think that there was a cupcake craze, it's still, still around, right? People still go eat cupcakes. But, you know, a lot of your cookies have a, you know, layer of frosting on top, which is different, unusual. How did that come about? Because I think, again, that when I think of Crumble Cookies, I think of that sort of really sort of lavishly decorated cookie.

• 57:29Speaker 01

  You know, one of the things that, you know, Sawyer and I think about a lot, so we constantly ask ourselves, how are cookies different, unique and special? And it allows us to just try crazy things, you know? And because our menu rotates every week, if something doesn't land, guess what? Who cares? At least we were trying something fun and it was different and unique. That's kind of been our mantra. You know, we started doing things like adding a frosting. And I remember when we add the frosting for the first time, like operationally, it was extremely challenging. Customers love it, which created demand, which created more.

• 58:02Speaker 02

  Some people hate it, right?

• 58:04Speaker 01

  Oh, yes.

• 58:04Speaker 02

  Which also works to your advantage because it's controversial. There are people who do see this and they're like, that's disgusting, that's too much sugar.

• 58:10Speaker 01

  You're right. It does create this controversy and this conversation online. But at the end of the day, we look at the data and say, what do customers want? And, you know, we say this a lot here at Crumble, is our critics don't pay for our business, our fans do.

• 58:25Speaker 02

  I think that's a really important point because I think a lot of brands and, you know, folks do pay attention to their haters and that's not who's buying your product. I wonder about, how did you start to think about really getting this idea of Crumble as a brand? Like when people think of cookies and, for example, who were you targeting in particular? Because initially it was, it was women, it was moms coming into the store in Logan. But I imagine eventually it was like, well, it's actually kids, teenagers.

• 58:53Speaker 01

  Yeah, it's a combination of both. Those are our two strong demographics is both moms is kind of our primary and then teenagers is our secondary. But how, so how do we think about brand? You know? Being in the tech world and being around, you know, Steve Jobs and, and, you know, a lot of people call us the apple of cookies sometimes. And especially early on with our stores and their white and like unlike other cookie concepts, you can actually see them making the ingredients, right? You can smell the store when you get in there. But a big part of the brand is the rotating menu was born after Bountiful. After the first week in Bountiful, by that time, we had something like 11 flavors. We couldn't keep them all in stock. People were frustrated to come get their favorite flavor, but they couldn't get them. And we sat down at the end

• 59:33Speaker 01

  of the week in that Bountiful location and we said, what if we rotate the menu? We drop it on a Sunday when no one can get it. People will freak out. They'll want the product. They'll be talking about the product. But then everyone across all of our locations can experience the same flavor at the same time and have conversations around them. You know, people are not going to remember the exact flavor that they had that week, or they're not going to remember the exact taste, although those things are really important. They're going to remember how they felt, what the experience was like, you know? And so, and, and sometimes even works even on product that is completely, people don't like. One, one good example was everything but bagel. We launched this everything but bagel and all of a sudden people are like,

• 1:00:15Speaker 01

  what the heck are you even doing, Crumble? But the amount of conversation and the amount of people come in to try it and then telling us why it was horrible, it actually facilitated our mission.

• 1:00:26Speaker 02

  When you make an everything but the bagel cookie, that's going to generate a lot of conversation. I mean, it's, it's

• 1:00:31Speaker 01

  Totally.

• 1:00:31Speaker 02

  From a marketing perspective, like, it makes a lot of sense.

• 1:00:34Speaker 01

  Totally. It makes a ton of sense, you know, and sometimes they may not even be the biggest sellers, but the earned media behind them becomes a really big deal.

• 1:00:43Speaker 02

  When you're like a year or two in, right? I mean, from the outside, it looks like, wow, you're just crushing it. 55 locations, you're a year and a half in for four and a half million dollars in revenue. But actually, that's when you're extremely vulnerable. I mean, there are tons of examples, not tons, lots of examples of franchise models that failed, that went under after, you know, expanding or selling tons of franchises. So in a sense, like, you're actually still very vulnerable at that point.

• 1:01:11Speaker 01

  Yeah, no, definitely. And I think I think people see it on social media and all of a sudden they're like, oh, I could do this. This is just cookies. It's simple.

• 1:01:19Speaker 02

  Yeah.

• 1:01:19Speaker 01

  So of course you have people, you know, competition others wanting to open up stores. And so for us, though, that became, how do we become really nimble and really quick even as a larger company? And how do we grow the, the store footprint to cover across the United States as fast as possible?

• 1:01:37Speaker 02

  That was, that was the realization that you had to do this very fast.

• 1:01:41Speaker 01

  Scale, scale and speed. So scale and speed, you know, it creates this moat and it creates this experience that, you know, discourages competition if you become the first movers. And you see this with, you know, In-N-Out or Whataburger, how one has the East Coast, one has the West Coast and they're, they're kind of, you know, several brands. And for us, our belief was how do we, how do we go across the nation as fast as possible so that that, that doesn't happen?

• 1:02:06Speaker 02

  Yeah. Let's talk about TikTok because you really figured out how to get virality, like massive viral. I think you've got 10 million TikTok followers in your channel, more than Starbucks, right? For example?

• 1:02:16Speaker 01

  Starbucks and Nucky combined. I think we have more than both of those combined. Yeah.

• 1:02:19Speaker 02

  So what do you, what did you do on TikTok that worked and that was able, like, was it just images of cookies breaking? Was it just crazy cookies with wild frosting, like weird flavors? What were you putting out there that caught fire?

• 1:02:37Speaker 01

  Well, I think it's first and foremost, the one of the most important decisions we made was to go on the platform early on. And you see the engagement numbers, you see everything else and you're like, this is going to be huge. Go all in on TikTok. So we had a first early movers advantage over a lot of brands. And the second thing that we did is I think a lot of brands and companies, they try to take their, their content and they try to just disperse it across all the social networks and just like, it's all the same, right? It's like the same video. Let's drop it on all five platforms. Well, the problem is, is the customers on X are different than the customers on TikTok and are different than the customers on Instagram and what they're going for and their motives and their desires are different. So how our photos look and the photography in Instagram, really

• 1:03:22Speaker 01

  big deal. TikTok, nobody cares. Right? So, so what the second thing that we did, other than just the early, you know, movers advantage is we tried to find out what the customers were already doing and leverage that. So one thing that we did was the customers were really excited about, you know, sharing their reviews. This is kind of where reviews started really taking off in TikTok. And so a couple of things started happening like, wow, how do we champion these reviewers? And so we started, you know, putting their videos in the stores. People physically would walk in like, oh, my goodness, there's TikTok videos of like.

• 1:03:53Speaker 02

  In the stores.

• 1:03:54Speaker 01

  In the stores.

• 1:03:55Speaker 02

  On a screen, just on like replay, just.

• 1:03:57Speaker 01

  Yep, replay, doing it, right? We started kind of highlighting the TikTok, you know, customers. We started reposting them and then we started just doing reviews. And I remember I did a review and I did a positive review. And I did a negative review on a cookie I didn't like, because everyone has different taste buds. And they're like, the CEO is doing a negative comment on a cookie? And like, it just, we were authentic. We were just who we were. It wasn't like we were trying to do something or we were just trying to be authentic to the audience that was there.

• 1:04:26Speaker 02

  So this is the other kind of, I think, differentiator, which is you change all of the cookies every week, except for the chocolate chip cookie. That stays, right? And everything else is changed every week.

• 1:04:37Speaker 01

  Every single week.

• 1:04:38Speaker 02

  And you drop that, those flavors. It's like a drop, like a, like a new purse or a new sneakers. Like you, you have a flavor drop every Sunday. And literally, I mean, even if you could have a week, right? Where only the chocolate chip cookie is selling well, but the other ones are not like, I'm looking at it this week here in my area. Like blueberry cheesecake is a flavor and that might not be popular. Or it might be super popular, but it's gone in a week.

• 1:05:04Speaker 01

  Exactly. You know, and you have people that they don't want to miss it that week. And so there's FOMO that plays involved in it. All those, all those things come into play. But yeah, people, people will freeze them. People will buy them in droves. If it's their favorite flavor, they'll buy them and they'll freeze them so that they can have them later.

• 1:05:20Speaker 02

  But this is interesting to me because I, I have spoken to a lot of conferences of franchise owners and, you know, they always have some criticisms of the parent company. And I'm thinking if I'm a franchise owner and I'm paying, you know, you eight percent or nine percent. And, you know, you're telling me I've got to make the almost everything bagel cookie that week and no one's buying it. And I'm like, well, last week we had the butterscotch crisp cookie and that was crushing it. Like, I'm annoyed because I'm making less money that week.

• 1:05:50Speaker 01

  Yes, well, and I think that's the part of the business. And so, yes, you have some franchise partners who probably are frustrated and wish we had this flavor versus that flavor. One thing that we've done recently is we've brought our franchise, we bring a council together of franchisees. So we have several franchisees who've run extremely well, you know, well-run stores. And they come together and they help us pick the flavors together. We do it as a team.

• 1:06:12Speaker 02

  I mean, sometimes, like, what is the criteria for, like, you've had, like, pineapple Dole Whip cookie, right? Or cornbread cookie, which doesn't, to me, or strawberry limeade with Nerds candies. That just sounds really gross to me. How do you?

• 1:06:29Speaker 01

  Have you tried it?

• 1:06:30Speaker 02

  I haven't, no.

• 1:06:30Speaker 01

  Yeah, so you gotta try it. You gotta try it. I could tell you haven't tried that one because you probably would like that one.

• 1:06:36Speaker 02

  You know, like, how weird are you willing to go?

• 1:06:39Speaker 01

  Yeah, I think we can go pretty weird. Why not? It's fun. So we will, our brand will always do that.

• 1:06:45Speaker 02

  I mean, the flip side of, I mean, innovating, obviously, but the flip side is, is that you do too many things, right? Is that you're pushing too many things out. But I guess that you're, what you're saying is you experiment and if it doesn't work, you just move on. You just kill it.

• 1:06:59Speaker 01

  Yeah, I think that's why our franchise partners are willing to work with us and willing to try new things.

• 1:07:04Speaker 02

  Because they know you're going to kill stuff if they don't work.

• 1:07:07Speaker 01

  They know equally, equally that we're trying new things that will kill something. When it's a bad idea, that's culturally like just part of who we are.

• 1:07:14Speaker 02

  Yeah.

• 1:07:16Speaker 02

  I know COVID was a huge, you know, like, actually was a huge sort of boost for the brand because a lot of people were on social media, they were noticing the brand. And in many states, the stores could stay open. And that also inspired and continues to inspire copycaters, right? Which I think is a form of flattery, but also can be threatening to the business. And, and you did file lawsuits against competitors that you felt were, were copying your brand or your look or the boxes and things like that. And this was, it was dubbed the Utah Cookie War by the newspapers at the time because these were both Utah-based companies, both of which are still around. In your view, like, is it worth it to go after somebody who's copying your?

• 1:08:00Speaker 02

  Because we've had founders in the company who's just say, at the end of the day, it's not worth the time and the effort to do that. You just focus on. Your brand and others say, no, you've got to go after every single one because they can threaten your business.

• 1:08:13Speaker 01

  Yeah, you know, I think that's a great question. I think my answer before and after all this experience is probably different. The biggest struggle we actually had was what's my fiduciary responsibility as CEO? Because it was not like people were just copying us. We had, we had somebody that came and worked for our company and stole our recipes.

• 1:08:33Speaker 02

  Your trade secrets.

• 1:08:34Speaker 01

  Yeah, stole our trade secrets and then started. So for us, we of course felt like we had a very strong case and the, the judge felt like we did too as well. And, but the court of public opinion is different. It's about sound bites. And, you know, by this time we got larger. So they tried to create it to be a David versus Goliath experience.

• 1:08:53Speaker 02

  I think even one of your competitors that you sued took out billboards or considered doing it that would say things like, cookie so good, we're being sued.

• 1:09:01Speaker 01

  Yes. And that, that was the company that actually had an employee that worked for us that took the recipes. But, but looking back on it, I think, I don't think it was worth the time and the energy. Our, our whole career has been built on not focusing on competitors. And then all of a sudden this happened and it caused us to lose focus for a little bit, to be honest, too. So I would probably lean more into the camp with not being worth it.

• 1:09:24Speaker 02

  By the end of 2022, you reached a billion dollars in sales. So listen, roughly five years after launch, which is absolutely incredible. I mean, this, the growth was just astounding and entirely self-funded, right? I mean,

• 1:09:39Speaker 01

  Yep.

• 1:09:39Speaker 02

  There were no investors at that point?

• 1:09:41Speaker 01

  No investors. Yep. We had no investors.

• 1:09:44Speaker 02

  Still to this day, right?

• 1:09:45Speaker 01

  Well, we actually took on a minority partner just a few weeks ago, and that's the first time we've had a minority partner.

• 1:09:52Speaker 02

  Congrats.

• 1:09:52Speaker 01

  Thanks. It was a, it was a pretty exciting thing and we were not really announcing any of the details of the deal. But, you know, it's, the, the company value was amazing. And we had just, you know, a few of us on the cap table and that was it.

• 1:10:08Speaker 02

  So I'm curious about something and I don't want to rain on the parade, but, you know, part of my job is to ask questions that might sound like that. But, you know, when I was growing up, the big cookie brand was Mrs. Fields. And it was started in Palo Alto by Mrs. Fields, Debbie Fields. And it was everywhere. It was in every shopping mall. It was everywhere. And they were good cookies. I remember and I can't remember the last time I saw Mrs. Fields. I'm sure they're around somewhere, but I don't know where. It can't be as big as it once was. I mean, there is always a risk that, you know, the sort of the virality or the excitement or the novelty of it wears off. And so how do you, I mean, I know, for example, you slowed expansion, which again, doesn't

• 1:10:52Speaker 02

  suggest that that's happening, but you're, you've got over a thousand locations and you were growing very rapidly and now you're going to slow down expansion a little bit. But how do you protect the future of the business? Like, how do you make sure that in 20 years, this isn't Mrs. Fields, if you care at all about that?

• 1:11:09Speaker 01

  Well, how I look at, no, of course, we care about that. We care deeply about that. We want Crumble to be a brand that's around forever. And we're really excited about it and we're very optimistic, you know? Even just now, we took a minority investment. Could we have taken the whole company off the table? You know, that's, that's, that could have been a possibility. But it doesn't matter what business you are, you know, if you stop innovating, you stop growing, you start dying. So for example, today, a lot of times, people don't even know it yet, but we're not just cookies anymore.

• 1:11:36Speaker 02

  You have cakes, too.

• 1:11:37Speaker 01

  We have cakes, yeah. We've got pies, you know? One of our slowest times of the year used to be Thanksgiving week. Well, guess what we did last, last year? We just sold pies for Thanksgiving week. They loved the pies. The sales were off the charts, right? And so, you know, we did slow the growth, but some of the growth had to be slowed because we were opening, you know, 200, 300 units a year, right? That's like, doesn't matter what brand you are or how big you are, there comes a point where, you know, you've got to open the right amount. And so we still plan on growing, right? We still plan on growing 100 units or so a year. But we want to be a little bit more strategic in how we do it and where we place them and all those kinds of things. That's how we stay ahead.

• 1:12:19Speaker 02

  Jason, when you think about the journey you took and where you got to now, how much of this do you attribute to the work you put in and the grind? And how much do you think has to do with just getting lucky and the right timing?

• 1:12:32Speaker 01

  Yeah, I think for me, it's been a combination of three things. One, it is just tenacity and hard work can get you through a lot of stuff. And second is the timing. There is luck involved in there. And what would happen if I would have started BYU.com before Facebook? And I mean, but then I think the other thing too is the learnings from my faith and having that be a part of my focus. And those are the three things that I think about. But if we just had luck and not all the other things, it wouldn't have worked. If we had all the tenacity in the world and all the faith in the world, and we didn't have a little luck along the way, you know, that it wouldn't have happened. So I think it's a combination of all those things. And any successful entrepreneur, you know, they may or may not admit it.

• 1:13:16Speaker 01

  They have those things in their life, you know? And I think that's what helps makes them successful.

• 1:13:24Guy Raz?

  That's Jason McGowan, co-founder along with Sawyer Hemsley of Crumble. By the way, remember how Crumble's pink packaging was inspired by that 1959 Cadillac owned by a family friend of Sawyer's? Well, in 2021, Sawyer actually had the chance to buy that very same Cadillac, pale pink with those classic tail fins over the wheels. And it's now become kind of a mascot for Crumble. They call it the Pink Caddy. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas and lessons, particularly for small business, sign up for my newsletter at guyraz.com or on Substack.

• 1:14:08Guy Raz?

  This episode was produced by Alex Cheng with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Carla Estevez. Our engineers are Patrick Murray and Jimmy Keely. Our production staff also includes Casey Herman, Sam Paulson, Kerry Thompson, Catherine Seifer, Noor Gill, Ramel Wood, Andrea Bruce and Elaine Coats. I'm Guy Raz and you've been listening to How I Built This.