Pod Insights How I Built This with Guy Raz SmartSweets: Tara Bosch About this episode Tara Bosch wasn’t always considered a likely contender for success. At 21 years old, she dropped out of college the summer before her junior year and moved in to her grandmother’s basement. But, with a gummy bear mold from Amazon and a sugar-free candy recipe she tinkered to perfection, Tara got to work on a wild vision: she would create a global company called SmartSweets that would revolutionize the candy aisle and become a top seller of low-sugar candies. In 2020, Tara achieved her goal and sold SmartSweets for $360 million — a mere five years after creating the brand.
This episode was produced by Carla Esteves with music by Ramtin Arablouei. It was edited by Andrea Bruce with research help from Melia Agudelo. Our audio engineers were Gilly Moon and Maggie Luthar.
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Transcript 13,694 words · 6 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Guy 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.
0:45 Guy Raz? 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 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
1:30 Guy 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?
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5:48 Speaker 01 We put a launch date for December of 2015. Come second weekend of December, they call me and they say, "Hey, we are not going to let you use this recipe, this formula. You can use another formula with chicory root fiber as the bulking agent." And immediately I knew what they were telling me was, "We're going to give you a recipe that's actually not digestible. That's going to blow up people's stomachs." That manufacturer took the recipe and ended up going on to launch a product themselves.
6:31 Guy Raz? Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
6:42 Guy Raz? I'm Guy Raz, and on the show today, how Tara Bosch built and sold her $360 million business, SmartSweets, in just five years.
7:02 Guy Raz? So I'm just gonna come out and say it. I have a bias against young founders on this show. And wait, wait, wait, wait, wait. Before you take that pitchfork out and yell, "Okay, boomer," just know that I love young founders. I love their energy and spirit and hustle. And yes, I know Alexander the Great was just 20 when he became king of Macedon and conquered the biggest empire known to man by age 30. I know that. But this show isn't just about how someone built something from nothing. It's also about life and the hard-won lessons you learn simply by living life.
7:42 Guy Raz? So generally, even with founders who cashed out at 21 or 22, I still prefer to catch up with them once they've reached at least 35 or 40. But then, of course, like all annoying rules, there are exceptions. Like today's founder, Tara Bosch. Tara started her company, SmartSweets, when she was just 21. She had very little money, she had no experience in food, or candy-making, or entrepreneurship, and she was about to drop out of college in Vancouver. So not someone you'd necessarily bet on. And yet, five years later, at age 26, she sold a majority stake in her brand for a whopping
8:26 Guy Raz? $360 million. So this story is almost like a remarkable how-to guide for anyone who doubts they have what it takes. Because Tara didn't come from money, she didn't have connections, and she truly didn't know what she was doing. But she had an idea, and she was determined to make it work. And it started by buying gummy bear molds on Amazon and looking up recipe ideas on YouTube.
8:55 Guy Raz? She wanted to create gummy candy that was low in sugar, but still delicious. Tara grew up an only child in Vancouver in Canada. She says her drive to become an entrepreneur started when she was a kid, especially because she watched her mom deal with financial insecurity.
9:14 Speaker 01 So when I was 12 is when my dad left the picture. And my mom really kind of having her security and self-worth that was so tied to that marriage swept under from her. Unfortunately, she got into a abusive relationship. So it's me, mom, and this abusive person living in this home. So when I was 13, I went and got a job at McDonald's. I was like an illegal worker at the time for a year because I saw really how her having dependence on someone else impacted her so greatly.
9:49 Guy Raz? It's illegal because I think the working age is 14, right, in Canada?
9:53 Speaker 01 Yes, it is. It was illegal for a year. And then also shortly thereafter, got a job at Domino's. So work really became my life. I really wasn't athletic. I wasn't academic. I felt lonely a lot of the time. And at the same time, I became obsessed with the idea of entrepreneurship through watching Shark Tank and Dragon's Den.
10:22 Guy Raz? This is in the early, I guess, mid 2000s, right? I mean, you were basically teenager in the 2010s.
10:29 Speaker 01 Yes.
10:31 Guy Raz? And so you were going to school, a teenager, high school, but working at fast food places, basically?
10:38 Speaker 01 Yeah, fast food places first, and then coffee shop. I'd go open the coffee shop at 4:00 a.m. before school, go to school, and then go at that time work at a bakery afterwards.
10:51 Guy Raz? Did you have a lot of friends as a teenager?
10:54 Speaker 01 I had a couple of close friends. As a whole, I really just felt like a misfit who people thought was kind of a dud going nowhere in life.
11:04 Guy Raz? And I mean, you kind of raised yourself up watching Shark Tank and Dragon's Den. I mean, I love those shows. They're so, you know, the drama and the way they sort of edit them. And it's super entertaining. Like, what was it about those shows that you, that seemed to resonate so much with you that you loved?
11:23 Speaker 01 I felt in my teenage years so trapped by such negative energy in the situation I was living in. And so for me, I think it was just seeing like, wow, these people have such a deep sense of purpose and did it. They had this courage that was so mystical and inspiring to me because I was so insecure and had such low self-esteem. And and just seeing people do that was so wildly inspiring to me.
11:58 Guy Raz? All right, so you get to university, I guess in 2012. And I mean, even though you were inspired by these entrepreneurs, it sounds like still at that point, you didn't think this was something maybe you could do. Maybe you would go and work somewhere one day. I guess while you were in college, you got a job at like a supplements store, like a chain, right?
12:22 Speaker 01 Yes.
12:23 Guy Raz? Yeah. And and at that time, were you yourself getting into like fitness and nutrition?
12:30 Speaker 01 Yes, so my boss hired me because she saw I had McDonald's on my resume. And she became really, aside from my grandmother, the first figure in my life that helped me to see that food is not something that you have to have a tumultuous relationship with. It can be something that can really nourish your body and your soul and just finding those smarter choices. So for me, I began making gummy bears at home. Then I was eating those every day and I felt good about it. And so that replaced the candy.
13:09 Guy Raz? Tell me a little bit about your your relationship with food a bit more. I mean, what what kind of effects did it have on you?
13:18 Speaker 01 Yeah, I think especially as a kid, I had, I think I had pretty severe body dysmorphia. So I remember when I was eight years old, standing in the Junior Jacobs change room, trying on pants and the salesperson was like, "Come on out, let's see the pants." And I remember thinking, "I can't come out. I'm like, I don't want her to see how big I am." Which I wasn't big at all, but I grew up in a family where my, my grandmother was, was always pretty overweight and people would make comments in public that I'd hear. And we loved enjoying all sorts of amazing foods together. She's German, so very hearty foods, a lot of carbs.
13:59 Speaker 01 And so at a young age, I think I really adopted the, the thought that like, oh, food means something that isn't just food that you feed your body with. It means something about your identity, your weight, all these kind of complex things around it.
14:20 Guy Raz? I guess at a, at a certain point, your grandma, did she at one point in her life said to you she really regretted the amount of sugar she ate? Did she ever develop diabetes or any, any conditions connected to, to sugar?
14:36 Speaker 01 Yeah, she, it was really just her whole life, really it felt like to her, I think, a fight between her body and food and herself. And just the weight that she had that impacted her because she wasn't able to walk very well anymore. But I really think it just kept her in this place of feeling poorly about herself. And so we're sitting down at, at her table one day and she knew how much I loved candy. We enjoyed it so much together. It was just such an emotional thing for us. And she, yeah, had shared with me, like, you know, "Over the years, I regret having so much sugar because now at my age,
15:19 Speaker 01 I, I, I feel so limited in what I can do mobility wise. I still feel poorly about myself. And I just wish I had done things differently and had developed a relationship that was a peaceful one with food." So that was shocking to me at the time because I thought magically you grow up and all of a sudden just have a harmonious relationship with food and yourself and all the things.
15:46 Guy Raz? Yeah, it's, and I mean, the thing is, is that sugar, right? As delicious as it is, refined sugar is, it's connected to, increasingly connected to diabetes, cancer, heart disease, even Alzheimer's over the long term. And most people in, certainly in the Western world, consume so much of it.
16:09 Speaker 01 Yeah, 100%. I, I think the like key word for me is like excess. Sugar consumption and just really going down that rabbit hole after that conversation with her to exactly what you're saying, where I was really became aware of like, wow, excess sugar consumption is this silent epidemic happening? And it was shocking to me just how intentionally it's happening. And so that really ignited the passion within me to think, hmm, this silent epidemic is happening and why can't you feel good about candy?
16:48 Guy Raz? All right, this is around 2013, 14, and it's still, it's around the time, you know, people, more people are adopting paleo diets and keto diets. And so there's more awareness growing around sugar. I think it's much, much bigger today. And you are, at the time, a student at UBC. And but how, how was your student life? I mean, did you, uh, did you find anything about university appealing at all?
17:17 Speaker 01 So really, the gift, I think, of university for me was really just finding out more things that I wasn't passionate about. However, I began to have this confidence that I could act on an idea. And it was called Decalled Out. It was vinyl and chalkboard wall decals for students and home renters.
17:36 Guy Raz? Decalled out?
17:37 Speaker 01 Yes.
17:38 Guy Raz? Like a decal?
17:39 Speaker 01 Yeah, yeah, exactly. So it was vinyl and chalkboard wall decals for-
17:44 Guy Raz? Oh, vinyl, like a chalkboard, but like a decal, made out of vinyl that you could put on the wall and write chalkboard on instead? And, okay, got you, all right?
17:52 Speaker 01 Yeah, basically for students and home renters who didn't want to damage their walls.
17:57 Guy Raz? Ah, okay. And so, oh, that's a good idea. And, and, but it seems like something you could just buy on Amazon, like, you know, or like-
18:06 Speaker 01 Alibaba.
18:07 Guy Raz? Alibaba, yeah.
18:07 Speaker 01 Yes. So there were more kind of generalized things available there. I was doing really specific ones with different quotes and things like that. So I would design them and then I found a manufacturer in China. And then just started selling them directly to students and had a little site.
18:27 Guy Raz? And what did they say on them? Because you said they were quotes.
18:30 Speaker 01 They were, yeah, there were all these quotes that I found really inspiring and uplifting. I know one of them was like a Steve Jobs quote. It was like, have the courage to follow your heart and intuition for it already knows what you want to become, things like that.
18:47 Guy Raz? You'd go door to door, like dorm room to dorm room or apartment to, I don't know, maybe people, just go to people's houses?
18:55 Speaker 01 I would do a fair at UBC and then I'd reach out to all the different student groups and connect with them. But it really, it really didn't resonate and really get traction. And so ended up, I was living with my grandmother at the time, ended up having her apartment filled with all these vinyl and chalkboard decals.
19:19 Guy Raz? And inspiring quotes.
19:22 Speaker 01 Inspiring quotes, yeah.
19:24 Guy Raz? And did you, was it, was it expensive to start this up? I mean, I'm assuming you were, you were saving money because you'd been working since you were 13.
19:33 Speaker 01 Yeah, I was super scrappy. I just put 800 bucks into it and then just like what I made reinvested. Margins were insane because the decals would cost me less than a dollar and I'd be selling them for like 30 to 50 dollars.
19:49 Guy Raz? Wow.
19:49 Speaker 01 So I just put the money back in and, and just really kept it scrappy.
19:55 Guy Raz? Why did it fail?
19:57 Speaker 01 I think I really didn't pause to think, hmm, what is the real value here that I'm creating for the consumer? I was really creating a product for a problem that I wanted to solve for myself and made the assumption that it was the same problem other people were having.
20:17 Guy Raz? But that, it seems like that really gave you some confidence, maybe, to keep going, to try something different.
20:26 Speaker 01 Yes, it was the biggest blessing because the failure of that, all of the little golden nuggets that I collected from why it didn't work were really the stepping stones that allowed me to have the confidence and insight for my next idea, which was about two months after I made the decision to shut that down. At this point, it's 2015. The summer's coming up. I'm would be going into my third year university in the fall. At this point, I'm practically failing out of university anyways because I had just started to take German classes. So I was like, at the very least, I'll speak German with my oma, my grandmother, if nothing else works here with uni.
21:08 Guy Raz? So you, all right, at that time, what was your, were you, did you have a job? Because you mentioned you had a job at a supplement store. Were you working at that store at the time?
21:16 Speaker 01 Yes, I was. And it was coming up on, on the summer. And one of the jobs I had as well, I worked at the border for Canadian customs on the commercial side. And so I, and it was really, it was like $18 an hour, which was like an amazing wage.
21:36 Guy Raz? You were just, just working in our office there?
21:39 Speaker 01 Yeah, yeah. So if someone wants to import anything into Canada, I would be the person collecting the fees and, and validating the fees on what they wanted to import. So all sorts of things, whether they wanted to bring in kangaroos, dogs.
21:54 Guy Raz? Kangaroos?
21:55 Speaker 01 Commercial shipments from Sephora and stuff.
21:58 Guy Raz? Okay. All right. So you have this job on the border, doing the in customs for 18 bucks an hour, Canadian dollars, but still pretty good. It's, that's, that's not bad.
22:07 Speaker 01 Yeah. So I remember specifically a phone call where they had called and asked if I want to come back and called my grandmother and I'm telling her about this and she's like, you should do it. That's such a stable and reliable source of income. It'd be a really great thing for you to do. And at the same time, I had just had this conversation with her where she had shared with me and that she regretted having so much excess sugar. And something was stirring in me. And the idea for Smart Sweets was really beginning to bubble up to feel like something I was viscerally pulled to. So I remember having the call with her and then sending the email and declining that job and, and feeling like I'm gonna act on this thing.
22:53 Guy Raz? You declined the job because you wanted to spend as much time as you could working on this idea.
22:59 Speaker 01 Yeah, I declined the job because it was the first time in my life I felt like I had a purpose. I felt like I was being pulled viscerally by something larger than myself towards this idea. And just after going down that rabbit hole on sugar, I really, really felt that wow, if I can bring to life this mission to kick sugar and keep candy, that at a larger scale, on a global level, we can help move the needle in the sugar reduction movement. And to me, it was shocking that this didn't already exist in different verticals. In the grocery store, almost every vertical by then, there had been innovation.
23:43 Speaker 01 In the ice cream aisle, Halo Top Creamery was blowing up at that time. In chips, there were all sorts of things. But nobody was innovating candy. It was the same thing that we were enjoying, that our grandparents were in the 1930s, when all the brands were created.
24:02 Guy Raz? All right, so you start to get, go down this rabbit hole. When you decide to basically stop working and you decide to drop out of college, as you mentioned, you decide you're not going to go back to college.
24:13 Speaker 01 Yes.
24:14 Guy Raz? You're probably, what, 22, 21?
24:17 Speaker 01 21, yes. I had the, you know, in the worst case scenario, could I go back to college? Sure. At the same time, I was on the brink of failing out anyways. So if I hadn't dropped out, I may have failed out.
24:32 Guy Raz? Right, okay. How much money do you think you had saved at that, by that point?
24:37 Speaker 01 I had probably at that point around $8,000 from just saving since I was starting at McDonald's back when I was in my early teen years.
24:47 Guy Raz? So pretty good. I mean, you, as a 21-year-old, you could live off that for a while.
24:52 Speaker 01 Yeah, I felt like I had a good little nest there.
24:56 Guy Raz? All right, so at this point, you decide, I really want to figure this thing out. And like candy was the thing that you wanted to try and tackle?
25:05 Speaker 01 Yes.
25:06 Guy Raz? Because sugar, sugar was the thing, right? And you could go in a million directions. You could go to beverages, you could go to cookies, you could go to bagels. And that was, it was clear to you was candy was the thing that you wanted to try and figure out.
25:20 Speaker 01 Yeah, it was, you know that show Extreme Makeover Home Edition?
25:23 Guy Raz? Yeah.
25:24 Speaker 01 I watched that as a kid and I would always be like, my dream is to have a Willy Wonka candy room. Any projects I had at school, I'd be doing the, we had to make a map of the world map in something creative. I did Candy Land World Map. Candy was just my thing. I, I had so much joy in it. And so same with my Oma. And so candy was the thing that I wanted to be able to feel good about.
25:51 Guy Raz? And in your mind, you had a kind of candy you wanted to do?
25:55 Speaker 01 Yeah, so originally in my mind, I was like, okay, gummy bears. Everyone at some point in their life has known and loved gummy bears. It's pretty universal.
26:03 Guy Raz? Yep.
26:03 Speaker 01 And this was me probably going back a little bit to finding what resonates for all consumers and not just yourself. Nobody was doing a snackable marshmallow at the time. So I thought, hey, marshmallows in a snackable format could be interesting. So it was gummy bears and marshmallows.
26:19 Guy Raz? So as you started to kind of try and understand how gummy bears are made, what do you then do? Like, do you like buy a mold of gummy bear? I think I've seen YouTube videos on this before, but like, you know, gummy bears are basically a form of jello, but like a hardened jello.
26:37 Speaker 01 Yeah.
26:37 Guy Raz? Kind of, I'm oversimplifying it. But how did you start to like go about the process of seeing if you could make them?
26:45 Speaker 01 So the tricky thing about candy is really that it's 99% sugar and 1% everything else, flavoring and coloring. And so when you're looking at, okay, how do I take out 99% of what something is? You're really, really starting from zero. So I was looking at, you know, what are the alternatives to bulking ingredients that exist? What high potency sweeteners that we can, can we use that don't have an aftertaste? What exists for natural flavoring that is actually truly natural?
27:18 Guy Raz? What kinds of, what kinds of ingredients were you talking about?
27:22 Speaker 01 Um, all sorts of bulking agents, so all sorts of different fibers.
27:26 Guy Raz? When you say a bulking agent, the agent that would turn it into a gummy form?
27:31 Speaker 01 Yeah, so when you think of corn syrup, corn syrup is really what makes up the viscosity of candy, what really makes up the bulk of what candy is.
27:41 Guy Raz? And, and the sugar side, I mean, by this point, stevia was a sweetener you were gonna land on?
27:46 Speaker 01 Yeah, there was stevia, there was monk fruit. Um, stevia worked really, really well in creating the, the mouth feel and the sweetness without that aftertaste. When it comes to stevia, there's like hundreds of variations of stevia. And so when you, when you get into like the rabbit hole of an ingredient and the variations of it and how that impacts all of, all the things in the candy making process, that's where the raw material suppliers were really helpful.
28:17 Guy Raz? All right, so take me into your apartment kitchen. You were like cooking up, um, all these ingredients, you were heating them up, dissolving all the things, all the powders and fibers in a pot, maybe with some water or whatever liquid you were using, and adding extracts of flavors and then what, like, is that what you were doing?
28:39 Speaker 01 Yeah, exactly. I had my candy thermometer, cause um, cook temp is really important for candy. Um, candy has a really high cook temperature, so at one point, there would be steam going outside my basement unit and my landlords thought I was cooking weed gummies or something illegal.
29:00 Guy Raz? How high, how, like, what is a temperature, like over 200 degrees?
29:05 Speaker 01 Oh yeah, the soft and hard boiling point. It's beyond a regular boil point of, let's say you wanna boil potatoes in water or something like that. It's um, very, very high. And then there's different boil points for a soft candy versus if you wanna a hard candy boil. And then as soon as it reaches that point, you have to remove it right away. I would use my eyedropper, put it in the molds, and then let it set at room temperature over to kind of let it naturally cure. And then 72 hours later, I would see how it had set. I'd see, you know, is this, is this even staying together? Is it coming out?
29:50 Speaker 01 Is it moldy? Sometimes it'd be like jello. Sometimes they'd be hard or they'd have a jello like inside, but they'd form this harder crust on the outside. They, they really didn't come out in any shape or form that looked like a promising candy until hundreds of recipes down.
30:12 Guy Raz? And, and while you were doing this, I mean, were you talking about what, what you were trying to do with anybody?
30:18 Speaker 01 A few of my closest friends I shared at a high level the idea with, really the only person other than my boyfriend at the time that I shared with on an in-depth level was my grandmother, to which her response was, you know, you're crazy. Why are you throwing away university to be making candy in your kitchen? Have you gone nuts? Have you gone off the rail? What's wrong with you? You know, they're really just German direct. Because for her, she never had the opportunity to go to university. So for me to throw that away to her was just kind of unfathomable. But at that point in my life,
31:00 Speaker 01 I had gotten pretty used, I think, to feeling underestimated or misunderstood. So I pretty easily discarded the thoughts and opinions of others that, that didn't serve me well. My grandmother's words I always took to heart, though. So I know I remember being like, you know, one day she's going to understand and she's going to get it and I'm going to do right by her and she's going to be proud.
31:29 Guy Raz? When we come back in just a moment, how Tara gets her homemade gummies out of her kitchen and onto a few store shelves. Stay with us. I'm Guy Raz and you're listening to How I Built This.
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35:28 Guy Raz? Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2015, and Tara's testing candy recipes and educating herself on how to be an entrepreneur. But she still needs investors and a business plan.
35:44 Speaker 01 I didn't have a timeline panned out of, you know, this is when this is going to launch on shelves so much as I had clarity of vision. So from day one in my kitchen recipe testing, I truly remember having such clarity in my mind that, you know, SmartSweets was the global leader in revolutionizing candy. It's all happened and now I'm just reverse executing on it. Okay, step one, need to get a product.
36:11 Guy Raz? So help me understand, you are every day, all day, doing research, cooking up batches for like several months?
36:23 Speaker 01 Yeah, this becomes my life. Equally so, I became so aware from different podcasts, like Oprah's Super Soul Sunday on YouTube, How I Built This, your podcast had just launched and became like Sarah Blakely's episode I listened to at least 30 times that summer. Like, I just really immersed myself. There are certain books I would like rip out the page from and just read it over and over. So just as much time as I spent in my kitchen, I spent on like immersing myself with the mindset of people who had built something that I aspired to go down a similar path because I could get so paralyzed in fear and my own thoughts
37:07 Speaker 01 and being like, who am I to do this?
37:11 Guy Raz? At what point did you feel like you would be able to start to go to people to raise money? Because to raise money, you'd have to have a decent product and a good enough recipe, but then you'd need it manufactured. Did you, were you even thinking that far ahead yet?
37:28 Speaker 01 I was still just thinking product, but what I did know that I needed was, I knew that I wanted to find people who had brought to life a product in the CPG world before and then I could... Talk to you and get golden nuggets from. So I began Googling and LinkedIn people who I really admired and just being really clear and being like, hey, really admire your journey. This is what I'm doing. 10 minutes of your time, like, would be infinitely grateful. And I was actually shocked how many people responded. And shortly after that, I found an accelerator program for young entrepreneurs called The Next Big Thing from Ryan Holmes at HootSuite.
38:13 Guy Raz? This is an incubator that Ryan Holmes had created to, I guess, to help early-stage entrepreneurs get connected and get mentorship and maybe even gives you a little bit of money too, I think, right?
38:26 Speaker 01 Yes. So like you got to, if you were accepted, you got to work out of their offices with all the different people in your cohort and they had different fireside chats and things like that.
38:38 Guy Raz? So you, you got it. And did you, was it based somewhere in particular or could you do it from Vancouver?
38:47 Speaker 01 Yeah. So I remember the very first day of the incubator, it was all tech and beauty companies. And then I was the girl recipe testing gummies in my kitchen. And I remember just walking in and just in the imposter syndrome, just being like, who am I to be here? Like, I don't belong. And having to like go in the washroom and pull out my phone with the quotes on it. I'm just like, you are capable. You are deserving. All the different quotes, the cheesy ones that I had written down.
39:21 Guy Raz? All right. So you start in this incubator and which is awesome because now all of a sudden you've got these connections to people. But meantime, how long did it take you in your kitchen to get to a recipe where you were like, huh, I think I, I think I might have gotten it. I think I might have nailed it.
39:38 Speaker 01 Yeah, it really wasn't until about three months after I started intensely recipe testing. Where I was like, okay, at a bench top level. I have verified and validated that this can exist and that this actually tastes good and has a it was a two-week-long shelf life. This validates that now I need to find a manufacturer that I can scale to launch this with.
40:09 Guy Raz? And what was it? I mean, how did you know that it was right?
40:13 Speaker 01 It was at that point really just doing taste tests, mainly with my peers in the Accelerator Program. I'd bring these little bags with all the different gummy bears and like be a little gummy dealer around the office and get everyone to be the guinea pigs. And thankfully, they were all happily willing.
40:34 Guy Raz? And what kind of feedback were you getting?
40:36 Speaker 01 It was really that like, wow, yeah, this actually satisfies the craving that I have for candy, which felt validating. There was a whole slew of, you know, the texture is like a little bit too chewy. The sweetness doesn't really come through after like the first five seconds of me chewing the gummy. The sour coating is a little bit too tart or a little bit too bitter. But what I heard through that all was the baseline of, yes, this actually is satisfying my craving for candy. And so all the other stuff, I knew I could iterate on.
41:13 Guy Raz? So at a certain point, you were confident enough to feel like you could make a batch of this stuff. And for the first production run, how many bags of candy did you want to make?
41:25 Speaker 01 It was all guestimates, you know, of how much do you make? And that sort of thing, making these forecasts that were just me throwing guesses at a wall of numbers and that sort of thing. And based on my estimates in my mind, The very first run, I wanted to make 13,000 bags of each flavor.
41:47 Guy Raz? So these would be like little snack bags that would sell, you know, by the register or something?
41:53 Speaker 01 Yeah, in the candy aisle by the register. The, the kind of concept was one bag, one serving. Cause with candy, I would always eat the whole bag and then turn the bag around and be like, oh, that was 2.5 servings.
42:06 Guy Raz? Right.
42:06 Speaker 01 Well, that contributes to how I feel about having eaten that whole bag now.
42:10 Guy Raz? So each bag would be one serving?
42:12 Speaker 01 Yeah.
42:12 Guy Raz? Got it. And 13,000 bags, how much was that going to cost?
42:17 Speaker 01 For the first kind of run and then packaging, my guesstimate was that I was going to need around a hundred grand to be able to do that.
42:27 Guy Raz? Okay. So you had the name Stevie, that at this point is Stevie Sweets, right?
42:31 Speaker 01 Yes.
42:32 Guy Raz? And then you had a logo or design? Did, how did, did you do that? Did you get somebody else to do that?
42:39 Speaker 01 Mm hmm. So I wanted it to feel kind of whimsical and evoke the emotions of joy that candy brings and nostalgia. So I found a local graphic designer.
42:51 Speaker 01 And then was kind of just like, this is what I'm able to pay. Are you able to do it? At that point I was pulling from the savings I had in my bank account. And she said, yes. And so we met in a coffee shop and she hand drew the logo. And we iterated on that and that became the Stevie Sweets at that time logo.
43:12 Guy Raz? And does it look similar to what Smart Sweets looks like today?
43:15 Speaker 01 It's the exact same logo. Yeah. Just the words are different. Yeah.
43:18 Guy Raz? Okay. So you had a logo and, and, and, um, in terms of finding a manufacturer, how do you, how did you find one? How'd you get into one?
43:29 Speaker 01 There was two main things that I realized quickly. One was that all candy manufacturers, their machinery needs sugar in order for their products to be able to be made because sugar is 99% of what is candy for it to run on the machine. The other thing that I learned quickly was that, The minimum runs and the quantities were were very significant for what would pique a manufacturer's interest. So it really focused on sharing the vision of what smart sweets will be, what's in it for them, and this is happening in the candy industry,
44:09 Speaker 01 whether you move on it or not. And there was one manufacturer that said, yes. So we put a launch date for December of 2015. Come second weekend to December, they call me and they say, hey, we are not going to let you use this recipe, this formula. You can use another formula with chicory root fiber as the bulking agent. And immediately I knew what they were telling me was, we're going to give you a recipe that's actually not digestible. That's going to blow up people's stomachs. That manufacturer took the recipe and ended up going on to launch a product themselves. So at that time, pretty much
44:53 Speaker 01 overnight, I was like, oh, my gosh, I need to find another manufacturer to launch this product. Went back to another manufacturer that had said no, and went to them in person this time, and really focused on specifically sharing the vision, specifically painting for them my forecasts that I had made up, and had no idea what those actually would be.
45:17 Guy Raz? You find this new manufacturer by going to Toronto?
45:20 Speaker 01 Yes.
45:21 Guy Raz? And presumably you had enough money for their minimum, right?
45:25 Speaker 01 I did not, no.
45:26 Guy Raz? You did not? How much how much money did you need?
45:29 Speaker 01 So the for for this manufacturer's minimum, I was going their payment terms were also different. So they needed the money upfront. Their minimums were higher, and I was going to need 105 K upfront to be able to just move forward with them.
45:47 Guy Raz? To pay them that upfront even before you sold one bag of candy?
45:52 Speaker 01 Yeah, I ended up working with them on the terms and so I was able to kind of shimmy it down from that, but yeah.
45:59 Guy Raz? How'd you get the money?
46:00 Speaker 01 So what I did at this point, this is like just before Christmas in December of 2015. And I realized, okay, like I'm gonna need to raise money. I don't have this saved up. I start LinkedIn-ing, cold emailing investors on LinkedIn. And thankfully, graciously, a few of them did reply. Nobody was interested in trying the product because of the name Stevie Sweets and the negative connotation at that time to the negative aftertaste of stevia. But it was the biggest blessing because it caused me to pause and be like, oh, Stevie Sweets is not the name.
46:41 Speaker 01 And that's what gave me the Smart Sweets evolution.
46:46 Guy Raz? How did you come up with that name?
46:48 Speaker 01 I was just spitballing in my mind, different names and that sort of thing and this concept of just like smarter choices and my own journey with food and it's just smarter choices really resonated with me. And I also wanted a name where you could read the name and you could get the nuance that they're trying to do something better, but also that it doesn't lean so far that it feels like it's like health niche. So once that name came, that's when I was like, okay, I'm not gonna get money from investors at this point in time. I'm gonna need to get debt financing.
47:24 Guy Raz? Yeah, I mean, investors were not gonna give you money because you had no product to show for and you had no track record yet. Like, they probably would have wanted you to make the batches on your own and then sell them and see how they worked, but
47:36 Speaker 01 Yep.
47:37 Guy Raz? Nobody was gonna give you anything, so you had to get debt financing. But you're 22, you have no assets. How are you gonna get debt financing?
47:46 Speaker 01 Yeah, so I have one asset, a 2009 Honda Fit hatchback.
47:51 Guy Raz? Nice. I don't know, 10,000, 12,000, 15,000 bucks?
47:55 Speaker 01 Yeah, that's a gracious probably valuation for it. And so I applied through one program called Futurpreneur and BDC, the Bank Development of Canada. And then at the same time, I approached another A lender, they're a bank called Van City. So I went to the one bank and said, hey, I'm talking to this other bank, went back to that bank and said, hey, I've progressed in the conversation with this bank. In the meanwhile, I'd share them updates like, hey, I'm talking to this retailer and this retailer, these are my projections and just really focus on the vision and just really being like, if you take a chance on me now, I, I promise you that like I will not squander this opportunity and it worked.
48:39 Speaker 01 They both said yes.
48:41 Guy Raz? Both these banks?
48:42 Speaker 01 Both these banks, yes, yeah.
48:44 Guy Raz? And were they, was it debt financing, was it a loan that's tied to a government program, like the Canadian government encourages loans to small startups?
48:54 Speaker 01 Yeah, so Futurepreneur is a program that's kind of has that ethos around it. And so the thing that I had to do was to put up my Honda Fit and had to take out life insurance. And so the loan was tied to me personally, of course.
49:08 Guy Raz? And they, they gave you the money, needed the hundred thousand Canadian dollars?
49:12 Speaker 01 Hundred five, yeah.
49:13 Guy Raz? Wow. And in the meantime, were you also calling retailers, asking if they would carry the product? Cause you were gonna have, what, 13,000 bags of this stuff?
49:24 Speaker 01 Yeah, so there were basically two things that were the, the front of my priorities every single day to wake up with my like bull horns and run at. One was the debt financing to sort the manufacturing stuff. The second was get the distribution, get the access that consumers can actually reach this product with. So I always felt clear that e-comm, I think for us, was gonna be a surprise and delight, but that candy is an impulse purchase and people are gonna wanna have a sweet tooth and pick up the bag in store.
49:56 Guy Raz? How did you know that?
49:57 Speaker 01 I think it was really just, probably from listening to other people's journeys and how they think about navigating, creating value for the consumer and like honing in on who is she, cause our consumer was female primarily and where is she going in her day to day life? And very quickly, I realized like, oh, she's not gonna be having the forethought to buy this online two weeks in advance for her sweet tooth that's gonna come two weeks later.
50:25 Guy Raz? All right, so you get the money to make the first batch of these. And you've got some stores that are committed to, they've agreed to carry it when they're ready?
50:35 Speaker 01 Yeah, so by the time we're in the kind of spring of 2016, I've banged down the doors and got the first few yeses for stores, and they were primarily in the natural channel.
50:50 Guy Raz? In Vancouver.
50:51 Speaker 01 Yeah, and we were going to launch. At the same time, in my mind, social media and just the power of, at that time, Instagram was really powerful. So I had the hypothesis that, you know, it's actually going to be less frustrating for consumers if we launch and create accessibility at a national level than if we launch regionally, because now with social media, we can reach people all across the country in such an effective way. So it's going to be more frustrating for them if they know about us, but they can't reach us. So my true goal was to find a national partner that we could launch with.
51:32 Guy Raz? So how did you, I mean, even getting into a regional market, right? The stakes were really high. You put $100,000 of debt into making these. So I have to imagine that every time you would, you know, cold call and then get a meeting with one of these retailers was kind of terrifying because there's a lot on the line there. Like, you needed them to agree to sell your product.
51:56 Speaker 01 Definitely, there was a lot on the line. I think the minute that I'd step into the room with the retailer, the phone call with the retailer, I stepped almost into like a different version of myself, where I spoke with such conviction and always focused on what's in it for them. And for the retailer, I focused on, you know, we're a higher ring per bag. They're going to make more money on Smart Sweets than they are traditional sugar penny candy in a bag.
52:24 Guy Raz? Because the price point's higher and the margins are higher, their take is higher?
52:28 Speaker 01 Exactly, yeah. It's like 200 to 300% an increase from traditional candy on their shelves.
52:35 Guy Raz? Because people, your bet was, healthy consumers would be willing to pay a little bit more for an indulgent treat that wouldn't spike their blood sugar.
52:46 Speaker 01 Yeah, exactly. How I positioned it to consumers, as you know, traditional candy is an occasional treat. With SmartSweets, we're creating the ability for candy to become an everyday snack if people so choose for it to be.
52:59 Guy Raz? Got it. Okay. And I guess around this time, you managed to get two Canadian stores, chains. One's called Choices, the other one was Bed Bath & Beyond, which of course is not just in Canada, but the one in Canada, they agreed to put your product on their shelves, but they wanted it fast in like a couple of months. And I guess you needed, like you were still on your own. So you needed somebody to help you. And I guess it was around that time where you hired your first employee, right?
53:33 Speaker 01 Yeah, Beth Ritchie.
53:35 Guy Raz? All right. So you hire Beth, but I mean, you were spending all, you had to spend all the money making candy to fulfill this order. How did you, how are you going to pay Beth?
53:46 Speaker 01 I basically wasn't for the first year. And then I paid her 30 grand and gave her equity.
53:56 Guy Raz? And when you finally got the products and you were ready to launch in July, how were you going to promote it? What was your, I mean, again, you had no market, no marketing budget, no money. What did you do?
54:08 Speaker 01 We didn't have money, but I really didn't feel like we needed money to create brand awareness. I really felt like through the scrappiness and just the blessing that existed with social media that through the sheer grunt work and just hammering it out on our phones, we could do it. So what that looked like really was we sat down and thought, you know, okay, like, who is this product creating the most radical value for, focusing on that niche and then expanding through niches? And that was the kind of hypothesis I adopted for what we were going to do.
54:42 Guy Raz? So what did you do? How were you going to reach that, even that small tribe of people initially?
54:48 Speaker 01 Yeah, so one of the first communities that I was like, okay, this is going to create the most radical value proposition for are people who can't have candy.
55:00 Guy Raz? Yeah.
55:01 Speaker 01 Because of diet choice, because of whatever it may be, they haven't had candy in years. And so focused on those groups at the time, I changed my Instagram name to SmartSweetsFounder. I would message people from that account really authentically. It wasn't a part of the message was copy and paste, but it was really authentic and being like, hey, like, I think that you actually might really like this product. Can I send you some? And that worked. And so slowly, I remember with the Weight Watchers community as an example, within three months, SmartSweets seemed like a huge brand to that community.
55:38 Guy Raz? So, I mean, this is like a very methodical strategy. You were going person by person and hoping that they would then promote the product on their social media pages.
55:49 Speaker 01 Yeah. And then coupled with that, at the same time, we were finding other brands like Halo Top. I remember when Halo Top responded to us and we had a call with the Director of Marketing. We were like, oh, my gosh, I can't believe this is happening.
56:05 Guy Raz? He just hopped on a call with you just out of courtesy?
56:07 Speaker 01 Um, well, we, we had messaged them about like partnering together to like push out a giveaway and with their email list and social. And yeah, they were, they responded to us. We would often not message the brand's pages or the founders, but we would message like the Director of Marketing, the Director of Finance, the Director of Ops.
56:27 Guy Raz? Easier to get.
56:28 Speaker 01 Yeah, just less noise to move through the sea.
56:31 Guy Raz? It's so smart and scrappy. Um, and, and so that starts to create awareness, right? Because most people going through the checkout aisle at Bed Bath & Beyond might see SmartSweets and not know. Although on the package, I think from the beginning. It did say just three grams of sugar to whatever it had, right?
56:52 Speaker 01 Yeah, that was inspired by Halo Top's packaging. Like the notion of, you know, three seconds or less consumers have to understand what you're doing and be compelled enough to pick it up off shelf.
57:05 Guy Raz? Were you worried, and you mentioned that, that your first potential co-manufacture that didn't work out, they were launching their own competing brand. Were you worried about that as a, as a brand that could really hurt you guys?
57:19 Speaker 01 I always tried to not operate out of fear, but to balance that with the dance of running like hell, knowing that 10 people are probably behind me working on this and that other people are going to be running at that too. And so it kind of used it as like a motivator to just like continue to like run like hell, but to not get stuck in the fear of looking backwards at what they're doing.
57:45 Guy Raz? In year one, you sold roughly, roughly a million US dollars in, in revenue in Canada in sales, which is pretty great. Were you profitable in year one or was, were you just all the money that, all your sales going right back into making more product?
58:02 Speaker 01 Year one, we were like pretty much almost at break even, but
58:06 Guy Raz? Wow.
58:06 Speaker 01 we were not technically profitable. And so I never planned for what if things go really well? And things went really well. And so I realized I was going to need more cash to do a larger manufacturing run to continue the, the train and keep the momentum. I had maxed out on the debt financing available to us at the time. So I was like, okay, shoot, now I actually am going to really need investors. And Beth was doing demos at a Choices Markets and met this woman, her name's Shelley. And right away she was like, I get it. I want to be involved.
58:48 Speaker 01 I met with her the next day at this restaurant and then kind of like in the cheesiest way possible, she wrote on a napkin that she was going to give me 80 grand. And her, she signed the napkin, I signed the napkin and we agreed we would sort out the terms at a later date. And so that was a huge blessing to get us to our next run.
59:08 Guy Raz? That same year, 2017, you applied for and got selected to go on Dragon's Den, the show you watched as a kid, as a teenager, the Canadian Shark Tank, which actually started before Shark Tank. And that was going to presumably be huge because all of a sudden you'd be exposed to a national audience instantly.
59:30 Speaker 01 Yeah, I had applied back when I was recipe testing in my kitchen, but hadn't heard anything. And then one of the producers kind of serendipitously ate the product or something. And so they had reached out and were like, could you come to Toronto next week? And I was like, absolutely, I'm planning to be there actually anyway, which I was not, of course.
59:51 Guy Raz? So you go on Shark Tank and I read that you got, all the sharks wanted to invest. They all wanted to invest. You'd get 10% of the company for a hundred grand. And so you get offers from all of them. And what happens? Did you close a deal?
1:00:11 Speaker 01 They all offered a deal at double the valuation I had gone in there for. On air, I had accepted a deal. Off air, chose not to go through with it just because it didn't make sense anymore. But I was like so grateful that they all saw what I saw in terms of vision and potential.
1:00:32 Guy Raz? And it got you a lot of attention.
1:00:34 Speaker 01 It did, yes.
1:00:35 Guy Raz? And I think it led to Whole Foods approaching you about selling your products.
1:00:41 Speaker 01 So it was a couple of months after that, a producer from Fox Business in New York reached out to me on Instagram and she was like, hey, I'd love to do a feature on your story in Smart Sweets. Would you like to come to New York? And go to New York, film the segment, the segment airs. And three minutes after the segment airs, I get an email from the global candy buyer at Whole Foods saying, hey, would you be interested in a global candy launch with Whole Foods? And I call Beth and I'm like, I just got a spam email, but that would be amazing if that was real. Can you imagine if that was real? That would have been so cool. Reply to him, fully thinking this is spam. And it's not spam.
1:01:25 Speaker 01 And we ended up doing a global, it was our entrance to the USA national from day one, about eight months after that.
1:01:34 Guy Raz? Wow. When we come back in just a moment, how SmartSuite's growth starts to explode after Whole Foods picks it up, and why Tara starts to question whether she should even be running the company at all. Stay with us. I'm Guy Raz and you're listening to How I Built This.
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1:03:26 Speaker 05 Hi, Guy. This is Zach Bola from Brooklyn, New York. I'm a student at Columbia Business School and a huge fan of the show. My favorite episode of How I Built This is with Jim Cook, founder of Samuel Adams. As a former consultant and avid beer lover myself, hearing Mr. Cook's journey to launch Sam Adams and the craft beer movement was eye-opening. I even showed the episode with my strategy class. Mr. Cook's journey of drive, humility, having the courage and the desire to find his life's purpose, all told with his humor, is full of wisdom. Love the show and thank you so much for all that you and your team do.
1:04:02 Guy Raz? If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is, and why, a lot like the voice memo you just heard. And email it to us at [email protected] and we'll share your favorites right here in the ad breaks in future episodes. And thanks so much. We love you guys. You're the best. And now, back to the show.
1:04:43 Guy Raz? Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2018 and Tara has the Whole Foods deal, but immediately hits a few obstacles. For starters, she needs more cash to make more product. She's also got manufacturing problems and she has to make the launch of the product in the US work. So you're now in the US and of course, nothing against Canada. I love Canada. My wife and children are Canadian. But if you want to be a really scaled company, you've got to get into the US market.
1:05:16 Speaker 01 Yeah, totally. Like just population-wise, it's the whole population of Canada, I think, is less than the population of California.
1:05:24 Guy Raz? California, yeah.
1:05:25 Speaker 01 Yeah. And so, yeah, when Whole Foods, when we were like, okay, we're doing a national launch with them simultaneously at the same time, the first manufacturer that we had... Sketchy things start happening. There's metal that's starting to be found in some bags. There's, um, I get a call from the place that was packaging our product. Cause at that point it was manufacturer in one place, package in the next saying, "Hey, someone just came in here with a GoPro camera filming our facility." And then they ran into a getaway minivan and sped off. And I learned that was the manufacturer.
1:06:01 Guy Raz? Wait, what are they, the manufacturer was filming?
1:06:04 Speaker 01 Uh huh. Trying to get the intel to figure out how they could set up packaging in their own facility.
1:06:10 Guy Raz? Oh, I see. Okay. Wow.
1:06:12 Speaker 01 So I realized, okay, we have seven months to like find a new manufacturer, change and evolve our, our branding to be able to meet this national launch with Whole Foods.
1:06:25 Guy Raz? But how did you resolve this, the challenges of like metal being found in the bags? How did that even happen?
1:06:32 Speaker 01 The, the manufacturer and their QA protocols were not what they really presented them to be.
1:06:40 Guy Raz? Their quality assurance protocols?
1:06:41 Speaker 01 Yeah.
1:06:42 Guy Raz? Did any of those bags get to Whole Foods?
1:06:44 Speaker 01 Those bags did not. So I knew I needed to find a new manufacturer. I was like, okay, I'm just going to go show up at this small town manufacturer who had been running the business for generations. And so the dad, the grandfather sit down and I'm talking with them and they get the vision and they say they'll take a chance. And that ends up being the manufacturing partner that we launch at Whole Foods with. And that takes us through to scale.
1:07:09 Guy Raz? All right. So back to the timeline. You now are in Whole Foods in the United States and all over Canada. And I think in this year, 2018, but you get, you applied for a fellowship and got it. This, this is the famous Peter Thiel Fellowship, the, obviously one of the founders of PayPal. He created a fellowship many years ago that basically said, hey, if you're under 23 and you drop out of college and you are starting a business, I'll give you a hundred grand, no strings attached. You get this in 2018. You get this fellowship. Tell me a little bit about, about it and why you wanted to do that. At that point you were already kind of starting to crush it.
1:07:48 Speaker 01 Yeah, I think relayed through that just like mindset of like you don't know unless you try, you know, even if never know a million years, I think I would actually get that. And the reason why I wanted to try was because it's strings free cash at the end of the day, which when you're a startup, you can always use strings free cash.
1:08:06 Guy Raz? And mentorship from Peter Thiel, too?
1:08:09 Speaker 01 Yeah, and mentorship from Peter Thiel. And the most powerful thing about that was the peer group, similar to the first accelerator I was in. All of a sudden, I was around these people where I was like, just so wildly inspired and just like it really feeling my fueling my mind to even be more expansive and be like truly anything is possible. And it really helped me to level up my mindset for the next step in the journey.
1:08:39 Guy Raz? So that year, you also really raised significant cash, at least for, you know, for the first time. I think you raised $3 million in 2018. And I have to imagine by that point, you're two years in, it was a little bit easier and you could probably raise money on really good terms.
1:09:01 Speaker 01 Yeah, it was interesting because it didn't feel easier. I was still getting, they weren't necessarily outright no's, but there were no's in the sense of it was a yes with, okay, I need this preferred share. I need it to be structured this way. I need this valuation, which made it a no to me because I was very clear in my philosophy of what felt congruent for me and what was honoring team and how I wanted our cap table to be structured. I had the blessing of meeting two people who became my two formal advisors. And so, once they supported me, we closed the round in two weeks.
1:09:42 Guy Raz? Wow.
1:09:43 Speaker 01 And had a really clear philosophy about this is common shares. So there was never any preferred shares. And that was it. And we didn't share financials or anything beyond just like the four page deck that we had.
1:09:56 Guy Raz? Wow.
1:09:58 Guy Raz? That year, a year and a half after you launched, you sold 11 and a half million US dollars' worth of product. So you are well on your way to building a really significant brand. At that point, I think some other competitors start to come out of the woodwork. Earlier, you mentioned that you weren't, it wasn't that you were looking at the competitors worried, but that it did set like light a fire under you to accelerate, to keep moving fast. Because your competitive advantage would be your brand name, right? Especially if like Hershey's or Nestle or a big company, you know, all of a sudden decided to do the same thing, which they could have done very easily.
1:10:41 Speaker 01 Yeah, there were kind of two filters that I always had. And one was just being obsessed with, are we always out exceeding the value proposition for the consumer? The answer was always no. And so I never felt the need to dig further. And then secondly, the other filter was, are we creating a customer experience that can't be replicated? So we were obsessed with making sure that our consumers felt like our friends.
1:11:08 Guy Raz? How did you do that?
1:11:09 Speaker 01 When it was just Beth and I, it was easy for us to have quick response times. And as we scaled, it had to be really intentional. So across the board, we always had a 12-hour response time for social media, whether it was DM, in our comments, hashtags, posting photos of SmartSweets. When we came to emails, it was 24 hours. We were obsessed with making sure that our friends, we called them our friends, felt seen and understood at the end of the day by us. And it sounds like such a simple thing, but as we scaled, maintaining those KPIs became really hard to do.
1:11:50 Guy Raz? And so as you are, you know, hitting 2019, that year, you're growing to like 30 people. Did you, I mean, it started out with just you and Beth, right? Who were the kinds of people you were hiring? And more importantly, you had never before that time.
1:12:11 Guy Raz? Been a supervisor, right? You'd already always worked in fast food places or in shops, or you'd always been working, and then you started this thing on your own. How did you learn how to do the management side and to be a boss of people?
1:12:25 Speaker 01 In the beginning, it was really just finding people that could wear all the hats. So that were really generalized. Like, we had, our first five were like a marketing, sales, ops, and finance. And it was really people who got the vision, who like left their ego at the door. And most importantly, I think, we made sure to be really clear about the whats in it for them. So, everyone had equity in the company, but those first five people, they all had at least 1%. To your point of never being a supervisor and that sort of thing, I was really, really good at inspiring people.
1:13:07 Speaker 01 But I wasn't that great at knowing how to keep people engaged and inspired and motivate them. Weekly one-on-ones and that sort of thing drained my soul to its core.
1:13:16 Guy Raz? Yeah.
1:13:17 Speaker 01 Not because I didn't care, but because it just wasn't a strength that I had.
1:13:21 Guy Raz? So you realized that your strength was, you had a vision, it was creating a vision, it was coming up with this inspiring idea. And that could inspire people, but where you weren't strong was in sort of building and maintaining a company culture. That wasn't a strong suit of yours.
1:13:40 Speaker 01 Yeah, I think always applying the filter in like a non-deprecating way. What do I suck at?
1:13:46 Guy Raz? Yeah.
1:13:47 Speaker 01 And then, how may I be holding the business up? And where do I serve best? And combining those three answers to kind of like indicate where I best show up. And that ebbed and flowed throughout the business in different stages.
1:14:02 Guy Raz? That's such an important point, because I think a lot of people, and I've talked about this too, focus on culture. That culture, you know, obviously, there's a famous quote, "Culture eats strategy for breakfast." But culture building and culture maintenance is a full-time job. Very few...
1:14:19 Guy Raz? CEO founders can be that and also maintain the culture on their own. Oftentimes, you do need a COO or somebody else who is the keeper of culture. And I think that that is a very self-aware thing that you had and have, which is you knew you weren't, it wasn't a core strength of yours.
1:14:40 Speaker 01 Yeah, I think not having any attachment to my role in the business, just having a really strong attachment to the mission and just to how I best served, I think, was a really helpful lens.
1:14:53 Guy Raz? As you started to bring in some outside money and your revenue started to grow, because I think by 2019, you hit close to $40 million in sales. Within a couple of months, you had the pandemic of 2020. Many companies like yours actually had incredible banner years because all of a sudden, people are at home stuck looking at their computer screens and being bombarded with ads and social media ads and things like that. I have to assume that your direct-to-consumer side just kind of really took off that year.
1:15:26 Speaker 01 Totally. Yeah, and I think candy is such an emotional source of joy and comfort in those times. And so SmartSweets became something that was really an emotional support for some people through that time period.
1:15:44 Guy Raz? That is also a pivotal year because it was announced towards the end of the year that you sold a majority stake of the company to TPG, big private equity company. Tell me about about that decision. I mean, of course, it was a lot of money. It was like over $350 million for a majority share. You still kept a minority stake, and I think you're still the largest single shareholder. It's an incredible amount of money, obviously, to get, but also, what did that, in your mind, instead of just staying independent and turning it into a billion-dollar company on your own, why did this make sense at that point for you?
1:16:25 Speaker 01 Yeah, I think from day one, like- I had clarity of the vision, which was to be like a global company, revolutionizing candy, and to be the go-to candy brand that our grandchildren are enjoying. And I always felt like at some point in our growth, it would make sense to tap into a larger multinational company's manufacturing and distribution systems and to execute with a faster pace on that vision. And coming up in 2020, we crossed over the 100 million mark in revenue and really just began to felt like a different stage.
1:17:06 Guy Raz? Less than four years in, you're crossing 100 million dollars of sales. Unbelievable.
1:17:11 Speaker 01 Yeah, just when we entered into that fourth year, it was the first time that I was like, I don't have that same gut instinct that I feel like I have had so far on like, what do we need to do? And what is around the bend to navigate that next stage of growth, to get from 100 to 200 to 300, and then to grow outside of North America? At the same time, there were, the low sugar space began to really grow and become something that was, it was exciting. So I was like, this, the vision is being validated, like low sugar is here to stay.
1:17:51 Guy Raz? But a lot more competition.
1:17:53 Speaker 01 Yes, and I was like, we need to be pouring fuel on the fire to really actualize that vision of being the global leader.
1:18:01 Guy Raz? Yeah.
1:18:01 Speaker 01 And so that was really what informed, okay, this makes sense timing-wise to bring on a partner. And so we began that process and, and started that journey. At the same time, my grandmother, who was the reason I started my company and my why, my whole life, she was starting to go through her end of life. And she had the fortune of seeing the journey through, but because I was so intensely in building, I really wasn't showing up for her in the way that I wanted to, time and energy-wise. But I really didn't feel like I would be doing her and my relationship right
1:18:44 Speaker 01 if I didn't honor the freedom of time and energy to show up for her the way she showed up for me my entire life. So that was also a factor in timing too, where I was like, you know, I need to show up for my Oma now.
1:18:57 Guy Raz? So you, at that point, you stepped down as CEO. But what did it mean for your role with the company? I know you kept a board seat, but did you really? Day to day operationally, you were, 2020, you were going to start to wind down.
1:19:12 Speaker 01 Yeah, so originally, that really wasn't the intent. Originally, I was going to be still in like a full time capacity. And like, one week after I signed the papers, slowly, slowly, slowly, over the course of the next few months, my health starts to decline pretty rapidly.
1:19:30 Guy Raz? What was going on?
1:19:31 Speaker 01 I didn't know. I thought, you know, adrenal fatigue, burnout is real. I had gone to naturopaths who validated this, had been in the hospital from severe chest pains. And then, six months after that, I find out that I'm not slowly dying, but I'm six months pregnant and I'm going to have a baby in three months.
1:19:53 Guy Raz? Wow.
1:19:54 Speaker 01 And so that was why I took a larger step back originally than I had intended to, from being operational, pretty quickly after the transaction happened.
1:20:06 Guy Raz? So, here you are now, a couple of years later. I know you're still sort of an ambassador for the company and still a shareholder. And so you, and you still retain a board seat, right?
1:20:16 Speaker 01 Yeah, yeah.
1:20:17 Guy Raz? And I think today, Smart Sweets is the number one selling sugar, low sugar candy in North America.
1:20:25 Guy Raz? Tell me about your life now. And so, I mean, you started this so young. You had such a smart, and I think lucky, vision, already in your teens, and you really pursued it. And here you are, you know, in your late twenties at this point, in this position where you are extremely wealthy and it's public, like, people are aware of this. This is not a secret. Tell me a little bit about what that's meant for your ability to, I don't know, to make friends or to trust people or to, because I think you're... A single mom, right?
1:21:03 Speaker 01 Yep.
1:21:04 Guy Raz? If I'm not mistaken. Does it complicate parts of your personal life? Just even knowing who to trust?
1:21:10 Speaker 01 When it comes to trusting people and that sort of thing, yeah, I've gone through a lot of navigating for sure. That has, I think, been a practice to not taint the inherent belief I have of like, people are good. I think what it just means is that just like I really try and just root down in the gut feeling about like, is someone being authentic? And then when that's famous saying of like, when someone shows you who they are, believe them. And trying to just always ground back down to like the gratitude. And I have such gratitude for like, the exact same feeling I had when I got the idea for SmartSweets of like,
1:21:54 Speaker 01 how am I so lucky to somehow have this idea? To be in service of others in this way? How am I so lucky to have freedom of time and energy? To be able to create whatever impact I'm able to? And so I'm grounded in such gratitude for that. And I don't know where I'm meant to serve next. And I trust in the universe and whatever that path that leads me to do.
1:22:18 Guy Raz? When you think about the journey you took and, you know, I mean, for some people, there's a million ways to read the story. Wow, you know, rags to riches in three and a half years or, you know, something like that, that's obviously an oversimplification.
1:22:32 Guy Raz? But it was, it is remarkable. I mean, you know, started in 2016 and you got a big buyout in 2020. How much of where you got to and where you are, do you attribute to, to the hard work you put in? And what about, what about luck as a factor? How much, how much is luck?
1:22:51 Speaker 01 I truly feel like it's like the mishmash of like, the right timing, the right idea, the saying, you know, the harder you work, the luckier you get. But above that all, the serendipity was like a swear jar world when we were building because it was used so much. Now I use the word God, but that like, there is something bigger than us out there. And if we let ourselves listen to that whisper in our hearts, it will guide us to where we're meant to go.
1:23:21 Guy Raz? That's Tara Bosch, founder of SmartSweets. And by the way, Tara loves all kinds of candy, but if you were to ask her what her favorite is?
1:23:31 Speaker 01 Oh, my goodness. I love sour candy. I love those Live-- I don't know in the States if they're called Live Wires, but they're like, kind of like licorice that are infused with white cream.
1:23:41 Guy Raz? I don't think we'd have those.
1:23:43 Speaker 01 You don't have those?
1:23:44 Guy Raz? No, we might, but it's--
1:23:45 Speaker 01 There's some nuance between Canada and US candy, you know?
1:23:48 Guy Raz? You guys have those honeycomb Violet Crumbles? Oh, I love those.
1:23:51 Speaker 01 Yeah.
1:23:52 Guy Raz? So good.
1:23:53 Speaker 01 Manufacturers, they'd always ask me to bring down ketchup chips and coffee crisp for them.
1:23:58 Guy Raz? Coffee crisp, that's the other thing. Oh, so good.
1:24:00 Speaker 01 Yeah.
1:24:01 Guy Raz? Phew, my blood sugar's just rising talking about it.
1:24:04 Speaker 01 I know.
1:24:04 Guy Raz? I can just feel it going up.
1:24:07 Guy Raz? 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. And as always, it's free. And don't forget to sign up for my free newsletter at guyraz.com. It's full of insights and ideas from some of the world's greatest entrepreneurs. This episode was produced by Carla Esteves with music composed by Ramtin Arablouei. It was edited by Andrea Bruce with research help from Melia Agudelo and audio engineering by Gilly Moon and Maggie Luthar. Our production staff also includes Casey Herman, J.C. Howard, Neva Grant, Alex Chung, Catherine Seifer, John Isabella, Sam Paulson, Elaine Coats, Carrie Thompson, and Chris Messini. I'm Guy Raz, and you've been listening to How I Built This.
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