#110 with Kat Cole - Ideas From the Head of a $4B+ Business

Shaan Puri (@ShaanVP) hosts the pod today with guests Kat Cole (@KatColeATL) COO & President of Focus Brands. In today's episode you'll hear: (00:56) Kat introduce herself and the company she leads -- Focus Brands, (2:38) Kat explains her career trajectory and how she got to where she is today, (9:24) Shaan explains how he got into entrepreneurship in college and how he ended up leading an idea lab, (19:25) Shaan and Kat get into the brainstorm -- Kat's first idea is for an app that assigns people a score for how good or bad their lifestyle is for the planet, (30:50) Kat proposes her idea for a new type of restaurant that blends grocery store, convenience store, and restaurant (she calls it "food as pharmacy"), (33:40) Kat gives her opinion on ghost kitchens, (41:00) how Focus Brands and Kat dealt with the coronavirus pandemic Companies mentioned: - https://www.focusbrands.com/ Books mentioned: - https://www.secondsale.com/i/eat-right-4-your-type-the-individualized-diet-solution-to-staying-healthy-living-longer-achieving-your-ideal-weight/9780399142550?gclid=CjwKCAjwnef6BRAgEiwAgv8mQWoId6gPA1nb1ICM_usP-nwG1olrG_K4cbsBuLPvM4XklGDz2y4arhoCROwQAvD_BwE This episode is presented by Tempo! Check them out at tempo.fit and use code "Sam100" for $100 off. Have you joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. See acast.com/privacy for privacy and opt-out information.

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

• 0:19Shaan Puri?

  Okay, so Kat Cole is here.

• 0:23Shaan Puri?

  She's the president of many brands, including my favorite brand of all time, Cinnabon.

• 0:29Shaan Puri?

  Did I get that correct? Is that true? Or am I just getting excited about?

• 0:32Speaker 01

  That's right.

• 0:33Shaan Puri?

  Okay, and yeah, so give people kind of like, I don't know, like the two-minute summary. Like, who are you? Why should people be excited to listen to this? I like to let people sell themselves because A, you'll do it better than me. And B, most people are really afraid of bragging. And I'm like, no, no, this is the time to brag. For two minutes, just brag and then we'll be humble the rest of the time. But for two minutes, tell people why they should care. Yeah, flex, exactly.

• 0:56Speaker 01

  So I run a company as president and COO called Focus Brands. Four to five billion in global consumer product sales. Just under 7,000 units, 60 countries, seven food brands that people know and love. Cinnabon, Auntie Anne's, Carvel, Jamba Juice, Mo's, Southwest Grill, McAllisters and Schlotzsky's. The business grows by acquisition. So we're constantly looking for new brands that are big enough to make sense in our portfolio, but have enough upside potential in multi-channel retail franchise CPG growth to bring them in and apply all of our strengths to those brands to build them over time.

• 1:38Shaan Puri?

  So two questions. Okay, three. What's your favorite Cinnabon? Let's start with that.

• 1:43Speaker 01

  I love the Cinnabon Mini-Bon. It's not mini because the classic is giant. So it's just like, it's more normal sized.

• 1:55Shaan Puri?

  You won't hate yourself later, Bon.

• 1:56Speaker 01

  That's right.

• 1:58Shaan Puri?

  Second, do you guys have not, so I see all the food brands. Do you guys do non-food brands? Are you specifically focused in the food category?

• 2:03Speaker 01

  All food, all food and franchising as the core legacy business. And then even better if it's extendable into other licensed formats and grocery products. And, and even better if it can port around the world.

• 2:18Shaan Puri?

  Gotcha. And are you guys public or this is a private company?

• 2:20Speaker 01

  Private equity owned.

• 2:22Shaan Puri?

  Private equity. Okay, gotcha. Okay, so you're a baller. That's amazing. How did you get here? Are you kind of like, I worked my way up from male clerk for, you know, 20 years and now I'm the president COO? Or did you have some other career and you kind of sidestepped into this? How'd you get where you are?

• 2:38Speaker 01

  Oh, it was kind of like the great poet Drake started at the bottom. Now I'm here. I am one of those stories. So I started out as a hostess and a waitress when I was 17, 18 years old at Hooters Restaurants, putting myself through college, first person in my family to get into college, grew up the child of a single parent alcoholic father, helped raise my sisters. And so I just had to, you know, work to pay for school and I was the first person to get into school. And so everybody was really excited. And then something really crazy happened. Hooters happened to be growing around the world at the time that I was a waitress. And I was asked to be a part of the training team that would go launch the franchise on different continents around the world.

• 3:20Speaker 01

  And so I said, yes, I started doing that Australia, then Central America, South America, Asia. I did that so much, I was traveling, I had to be in these countries for 20 to 40 days to launch the franchise. I very quickly moved from being on the team to leading the teams. And by the time I was 20, I had opened up the franchise on most continents and was failing college because I was never there. So I dropped out of school before I got my two-year degree. Luckily, since the company was growing, there were many corporate job opportunities for people with my experience in the company. And so I moved to Atlanta. From Jacksonville and took my first corporate gig with a paycheck instead of cash and tips.

• 4:01Speaker 01

  And and found my way into the professional world. And again, as the company grew, I grew. I was vice president of that company. When I was 26, while they were doing seven to 800 million in revenue. Stayed with that executive team, all kinds of really interesting things during that executive tenure that we could double click on later. Started my humanitarian work in Eastern Africa, did a lot of nonprofit leadership that gave me some really cool, parallel leadership experiences that allowed me to be just a better leader at a younger age than many people. Because I was leading my, like my day gig, my nonprofit on the side humanitarian work.

• 4:40Speaker 01

  And eventually, when I was 31, well, before that, went back to school. I have my masters without having a bachelor's. So I went through an MBA program nights and weekends. It is allowed. It is rare but possible. And that's the story of my life, rare but possible. And and then became the president of Cinnabon and helped turn that around out of the recession. And again, as that company grew, I grew every three years, have had a different and larger gig and now oversee all the business.

• 5:09Shaan Puri?

  Okay, that's amazing. So we, I did tell you when you came on, I was like, we're gonna talk ideas. Yeah. Because I try to warn everyone, because whenever some legit guest comes on, they're just like, cool, you're just gonna ask me about me. And then I already know that story, so I don't need to prep and I just go on the show.

• 5:23Speaker 01

  For sure. And they show up and I'm like,

• 5:26Shaan Puri?

  And I'm like, hey, you know, what are, you know, what are some cool things you're seeing? Tell me about the future, not your past. And they're like, wait, what the hell is this? So I gave you the idea, but I gotta, I gotta ask you some questions about your past, because that was,

• 5:38Speaker 01

  Okay, but I want to get to the ideas, because I really was very excited about them.

• 5:43Shaan Puri?

  We will do the, I'm actually gonna look at the clock right now. I'm gonna make sure that I I stop myself at some point. But I have two questions for you. So the first one is, you come from such a non-traditional background, you get into these leadership roles. One thing a lot of people feel is what they call like imposter syndrome, where you're like, okay, they gave me the keys to this car. Do I know how to drive? And like, you know, do I really know what the hell I'm doing? And like,

• 6:09Shaan Puri?

  Some people, I've met two different types of people, people who felt that and then they sort of danced with it and overcame it in some way. And I found other people who I've met other people who are like, you know what, I understand that, but I've literally, I never felt that way. I'm just curious, when you were like, okay, it sounds like you dropped out of a two-year college, right? So you dropped out of a community college and now you're 25, 26 years old, you're VP of a multi-hundred million dollar brand. Did you have those feelings or was that not something that registered for you?

• 6:38Speaker 01

  Kind of a mixed bag. I love that you've talked to people that have both responses. For me, the way a version of that showed up, when people talk about imposter syndrome, I've found that some are talking about slightly nuanced, different experiences. Like, one is just this self-talk, I don't deserve to be here. Do they think I don't deserve to be here? Is everybody looking at me like, what is she doing here? So there's that worry, that internal talk. But then there's another version that was more what I experienced. So that first version, I haven't experienced. But the version that I've experienced is

• 7:18Speaker 01

  an over-indexing on humility and curiosity at times when I really needed to pull forward more courage and confidence. And I would ask myself in my head, because I respected the people I was now a peer of so much, who in the early days, they'd been in business longer than I'd been alive. Literally, I was a 26-year-old executive and they were in their 50s and 60s. They had worked for 30 years. And so there was something in my head that whether it was caused by them or not, that made me ask, who am I to question them? It comes from a place of deep respect. And there were times where I had the humility to ask that question. But I should have had more courage to answer it. And the answer

• 8:01Speaker 01

  is, you are the vice president overseeing these functions. And if you don't ask these questions, no one will. And I learned very quickly, because I had so much responsibility at such a young age, when I did not use my voice when I had a seat, that I would later regret it. And whether that was bringing up something that was supposed to be what I was there to advocate for a particular stakeholder group, or just an idea that I had that could have saved us a ton of money, or made us a ton of money, or helped do something better. And I just held back because I thought, again, who am I to kind of wedge that into these guys, historically guys, discussion? And I always regretted it. And so I learned from

• 8:45Speaker 01

  that pain, from that regret, that I shouldn't overindex on humility. Humility is good, but I need to pair it with confidence and courage so that I'm always showing up in the way that I should.

• 8:57Shaan Puri?

  Yeah, that's a good way of putting it. Like, it's a classic thing. Like, your strength is always also your weakness, depending on the context. And so if you, if you overindex on any one thing, whether it's confidence, confidence becomes arrogance in the wrong context. If it's humility, humility becomes, you know, I don't know what the word would be, but sort of that, that mousy feeling where you didn't step up and you didn't do the thing that you were trying to be nice. And actually, the nicest thing would have been to step up and say something. And I'll share a little story of mine that's sort of similar. So I, I started my career as a, as a entrepreneur. You can't even call it a career. I was a college kid. I thought I was going to go to med school. And then I had this idea to start a sushi restaurant. And I went and decided I'm going to build the Chipotle of sushi. So yeah, I come from the quick serve kind of background. That

• 9:42Shaan Puri?

  was the very first thing I did. And I got the confidence to do it. I think I've told the story once before, but I got the confidence to do it because I took this class at my university called Getting Rich. It was my senior year, I had done all my required classes.

• 9:55Speaker 01

  That was the name of the class?

• 9:56Shaan Puri?

  That was the name of the class. And it was, it was actually really funny. It was taught by this woman, Lisa Keister, who changed my life. I should email her and tell her she changed my life. She had graduated, and she had graduated with a degree in Mandarin. And all of her friends were like going to, you know, become bankers, consultants, lawyers. They knew what they were doing. They were on that track, that pre-approved track of like, this is what a good career looks like. And they were like, this is, you know, 20 years ago. They're like, oh, what are you going to do with this Mandarin degree? What the hell is that? You know? And she was like, I don't know, but like, I bet I could find a job in China. Like, if I could speak Chinese, I can go. And so she went over there. And she found a great career, basically bridging companies in China with who wanted to do business with the West. And she was like, I could speak both languages. I was

• 10:36Shaan Puri?

  a friendly face. I could make it happen. And so she makes a killing. By 2223, she comes back to the States. She invested all in the dot com boom because she's like, oh, the internet, this is a great thing. And invest it all gets this huge run up. Fortunately decides like, you know what, I want to buy a house and I want to like, change things up, pulls it all out right before the crash. So she avoids the crash, you know, not because of some genius, but then invested on real estate. So then from 2001 to 2006, he's in real estate, which is also on this huge run up. And then she takes it out by 30, she's retired, she's married with the, you know, to the man of her dreams and she's done it all. And she's like, what do I want to do now? So she's like, man, everything that helped me, you know, succeed in life, I didn't learn in school. So she decided to like, you know,

• 11:21Shaan Puri?

  go back to the university that she went to, which is Duke, where I went. And she decided to become a professor and teach the class she wished she had. And she, she named it getting rich because she's like, I know this will attract the type of person I want. And it's not going to be a class about getting rich. It's going to be a little bit about personal finance. So you learn a little bit about the way money works. And then every class I'm going to bring in a speaker like someone like you who would come in and say, hey, here's my path. Here's how I stumbled into success. Like I didn't, I didn't have some magic clarity when I got started. I just sort of did one thing and then the next thing. And then eventually I figured it all out. And I took the road less traveled. So anyways, I heard that. And that's when I was like, oh shit. These people who are telling their story about, you know, starting a t-shirt company or, you know, becoming the vice president

• 12:04Shaan Puri?

  of JP Morgan, they all said the same thing, which was like, just as clueless as you back when I was 20 years old, and just started following my nose of the most interesting thing, tried to do a great job of it. And whether I succeeded or failed up, this is America. It's amazing. You can even fail and you go up. And so, and they were like, look, at the end of the day, I'm the one hiring people, you know, so I'll tell you what I look for in a resume. Everybody's got the same degree, you know, every, you know, I go down to the bottom of the resume where it says like other, and I try to figure out, do you have anything to offer me? Any other experiences in your life that are novel or different? Because that's what separates you from the other stack and the other people in the stack of papers. So anyways, long story, but I'm going to get to the part that was relevant to what you said, which was.

• 12:50Shaan Puri?

  I do a couple startups. I fail essentially with them. Like minor success, but failure really. And then I decide, okay, I'm coming to Silicon Valley. That's where I want to be. And I join this idea lab started by this guy, Michael Birch, who had him and his wife had built multiple companies, multiple successes. And now they were sort of like, well, we're billionaires, but we still want to create new startup, new startup ideas. But now we don't need investors. We'll do it on our own terms. So they, they buy this pimped out office in San Francisco. They smashed together seven condos and create their dream office out of that. And then they hire up a team of 20 of the smartest engineers and they're like, great, we own this whole thing. You all own equity in any project

• 13:32Shaan Puri?

  we do. It's like sort of communism for startups. And, you know, we're going to build our own ventures. And so I joined him just to work for him. And I, I didn't know what the hell I was doing. But I knew two things. One was, I had this idea was how do I get 20 years of experience in the next four? Kind of like what you were saying, which was like, by throwing yourself in the fire and being like, I'll, you rose your hand, you raise your hand.

• 13:57Speaker 01

  Totally. Compress time.

• 13:58Shaan Puri?

  I'll go launch, you know, our Australia business or wherever. Like you will go learn a lot more that way. So that's why I joined his startup lab because I was like, oh, a lab has multiple ideas. I will get multiple reps rather than just focusing on one thing. And I'll learn from this guy who's done it before. So I'll get a bunch of experience just sitting next to him every day. And that's what happened. But along the way, he emailed me one day and he was like, hey, meet me at this coffee shop today. Don't come to work. Meet me at this coffee shop. You know, there's something I'd like to discuss. And I was like, you know, six months into the job and I was like, oh shit, I'm getting fired. Like I heard this is what happens. They take you off site and they sort of shoot you where nobody could see you. And, you know, because I had been changing a whole bunch of things. I had been doing the thing you said, which was like, if I saw something that didn't make

• 14:43Shaan Puri?

  sense to me, I would just say it didn't make sense and I'd change it without even asking for permission. And I was like, I probably overstepped. And, okay, whatever. Lesson learned. I told my mom, I was like, I'll be home for lunch. I'm probably getting fired today. And I go meet this guy and his wife. And he was basically like, is the exact opposite. He was like, you know, Uh, he's like, every single person I ever hired at this lab, 20 people I hired and I said, you know, make of this what you want, you know, whatever you make of this is what your experience will be. He's like, I told all of them that. And then what everyone does is they go and they sit at their desk and they wait to be told what to do and they just do what they think their job title is. And he's like, we hired you as product manager, but you've been acting like the CEO of this, this lab. And I want to make you the CEO. I want to give you my job and I'll, I'll move to the board and you run this, this thing.

• 15:28Shaan Puri?

  And I was 24 years old and in that moment, I had this fear, like kind of what you were talking about, the, the nuance number one that you mentioned. And the fear I had was, and I asked him this, this is how I got over the fear. I asked him, I was like, you know, I'm the youngest person at the company. I'm 24 people. I'm, I've been here the least long. I've only been here for six months. Are other people going to be okay with this? Like, I get that you're crazy, but like ultimately you're going to leave and I, I'm going to be the one standing in front of them. And if they don't respect me, I'm screwed. Um, and he told me this, he gave me this anecdote and I think, I honestly think he made this up. But it worked. It totally made me feel great, which was, he goes, he goes, I talked to, you know, these four leaders of the, of the team, you know, um, already.

• 16:10Shaan Puri?

  I asked them how they feel about this. They all were supportive. In fact, you know, Paul called me yesterday and was like, dude, are you making this transition yet? Like, what's the holdup? And, and that just gave me this like wind in my sails and I was like, oh, they want me to lead. And then I never questioned it again. And now looking back, I'm like, I think you might've made that shit up. That might've been like totally, uh, not true, but it was a real gift that he gave me. And so for anybody out there who's putting somebody in a position where, you know, they're punching a little bit above their weight. They're, they're not, you know, sort of technically on the resume qualified to do this. Give them that gift of like, people want you to lead. They trust you, uh, in some way, somehow it really changed my experience. It sounds like, uh, for you, you, you had that, uh, on your own. So.

• 16:54Sam Parr?

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• 17:38Sam Parr?

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• 18:06Shaan Puri?

  SAM100.

• 18:08Sam Parr?

  One word, you'll get $100 off. So check it out. I use it. If you look me up on Twitter, you'll see I'm always filming videos where I'm talking to that company, saying I'm trying to crush their employees on the leaderboard because I actually love this thing and I use it all the time. So check it out.

• 18:20Shaan Puri?

  Anyways, I don't know why I made this all about me, but I felt compelled to tell you that story.

• 18:27Speaker 01

  That's awesome.

• 18:29Shaan Puri?

  Okay, we're getting close to the idea time.

• 18:31Speaker 01

  Tell me more. Tell me more.

• 18:33Shaan Puri?

  Yeah, let me tell you about my ideas now.

• 18:36Shaan Puri?

  Let's do the ideas. So I asked you, the homework was one to three ideas. You might have exceeded that. I don't know.

• 18:44Shaan Puri?

  Let me ask you, are you an idea person? Do you like constantly have ideas and stuff? Where do you capture them? Or do you write them on your phone or Notes app or something?

• 18:51Speaker 01

  Phone, voice notes.

• 18:54Shaan Puri?

  And do you plan to do anything with these or you just gotta like get it off your chest?

• 18:58Speaker 01

  I am very good about socializing ideas as soon as I have them. So I just put them out there, even if it's like, oh, maybe I could actually do something with this. If somebody else moves faster on it, cool. If they don't, cool.

• 19:12Shaan Puri?

  And you just tweet them out or what?

• 19:14Speaker 01

  I just talk it out. I'll just talk with a friend. I have so many creative friends and people in the entrepreneurial world and

• 19:22Speaker 01

  So yeah, I just share, I was thinking about this, wouldn't it be great if this existed? Would you use this if this existed?

• 19:29Shaan Puri?

  So give me one of them, what's on your mind?

• 19:31Speaker 01

  Okay, one that I actually started, this was, I don't know, six, nine months ago, started messaging a few investor friends and people who I know are passionate about this topic, and they loved the idea, I got busy. So maybe somebody will do something with this. So, an app that lets me enter all the life decisions that I want to enter, and evaluate and measure my real environmental impact. So, the shampoo I buy, the method of transportation I have, my food choices, and I want a score, right, it's just for me.

• 20:15Speaker 01

  And then, if there's enough, if there are enough people participating, enough data points, it can kind of benchmark by region, by different demographic, if I opt in to show that, because there is so much greenwashing, that there are things that are promoted or advertised as better for the planet, that when I've had occasion to work with experts, or go deep into the research of the entire value chain, it's actually not. And there, you know, there are websites right now that rank products in this way. So, EWG, you know, whatever version it's become now, where you can put in your SKU, scan the barcode, and it'll tell you if it's like green, yellow, or red,

• 20:58Speaker 01

  or if it's good, fair, bad, or horrible for the planet, or if it's got concerning ingredients for your body. So, like a really souped up version of that, where it's easy to click transportation, home, utilities, food, whatever it is, and I put it in, and then I can see how the choices I make add value to the planet, or are hurting. And for me, it's just about driving more consciousness. And then of course you could gamify it, and like do all kinds of things, and it could actually create energy around the growth of companies that really are net better for the planet.

• 21:41Speaker 01

  So it just feels like there's a lot of good that could come from that.

• 21:44Shaan Puri?

  Right. And have you made any shifts recently that you're like, oh, I wasn't aware of X, but now I do Y and it's better for the planet? Have you have you done anything like that?

• 21:55Speaker 01

  Well, I use the what was formerly branded as the EWG app that where I can just put products in and it has, you know, both packaging, some packaging measurements as well as more ingredients for the body. And so I've just shifted product choices based on the information in the app.

• 22:17Speaker 01

  But it's still only covering product purchases, not car, not, you know, transportation and lawn care and home goods and my children's clothing and all the, all the consumption items, all the choices that I'm making. I just, I would love that same level of consciousness without having to do all the work of the research and then running into light research and making actually a decision that's not based on the depth of everything that a product or a service actually involves. So it doesn't exist. I've looked everywhere. Nothing is this comprehensive.

• 22:55Shaan Puri?

  Right. So let me tell you what I like and I'll tell you what I dislike about it. Maybe you could tell me why I'm wrong. So what I like about it actually is, well, besides the like net good that would come of something like this, what I like about it is that I think you could start this as a quiz. So I've noticed just in trying to make things move on the internet. Quizzes are like, I don't know, they're like the bacteria of the internet. They just spread like crazy. And, you know, I was telling you about Michael, who was the kind of CEO of the lab. He had launched, he got big on a social network. It was like kind of as big as MySpace back in the day, as big as Facebook. And he had launched it with a quiz and in nine days he got a million members. Back then, that was, that was really fast. Like a million was a lot back then in

• 23:39Shaan Puri?

  the internet size. And he had did it with just a quiz called the best friends quiz, which basically I was like, how well do you know me? I answer questions about me and then I send it to you. You get a score of guessing how I, what I would have said. And then I'll do the same back for you. And it was this viral quiz. The guys who were behind Tickle, I remember, did this with, which dog breed are you? Right? BuzzFeed did this. And so I think that there's one way to onboard people with this, which is just like, Question, question, question, question, question, score. And how does that compare to blah, blah, blah? And so you don't even have to make, it doesn't even have to start as a full fledged, you know, app, app. It can be something that just collects a whole bunch of people's information and interests around their lifestyle choices.

• 24:21Speaker 01

  And maybe even makes them more energized about a deeper engagement on the platform to enter and things like that.

• 24:27Shaan Puri?

  Exactly. So I love that it can be formatted as a quiz, as a starting point, as a wedge. And then the part that I dislike is I, the one thing about these quizzes that works well is when you get a result that you like. So it says something good about you. My fear would be, uh, would people end up getting bad news? Or just basically like, I feel like we're all screwing up the planet and we all have pretty like consumptuous lifestyles, if that's a word. And I don't know anyone who's going to score well on this. And so I think you'd get a bunch of people to like, would people opt into doing something that results in them feeling somewhat guilty? I'd like to think, yes, because then they'll change. But I think what will end up happening is people will avoid it, just like they avoid stepping on the scale if they know they're getting out of, you know, overweight or whatever.

• 25:11Speaker 01

  Yeah.

• 25:12Shaan Puri?

  And so that's my fear.

• 25:13Speaker 01

  That's a really interesting point. I'm such a geek around like psychological models and human behavior. And I just think humans are magic and fascinating. And so I love where you're going with that. My thinking, and I haven't thought about this too deeply beyond sharing it with some, um, you know, fellow,

• 25:37Speaker 01

  fellow thinkers around making better decisions for the planet, who happen to be investors or very entrepreneurial. My thinking is that, one, I think you're right. People already know it's bad. And, and that's different, right? Because sometimes people don't want to get bad news when it conflicts with how good they think they already are.

• 25:59Shaan Puri?

  Right.

• 26:00Speaker 01

  And this is like, I know I'm bad and I actually want to get better. It's why I'm using it. And so tell me how bad I am. You know, give me and and or I'm already this conscious. I'm going to show you that I'm actually on a journey. I'm yellow, not red.

• 26:16Shaan Puri?

  Right.

• 26:16Speaker 01

  But my, my teenage son or my partner or my friend. Um, I really want to get them into this or my mom or my dad. I'm trying to get them to make better choices. And, um, and maybe it's not just that it's red, yellow, green, but it actually in some way, using psychology communicates what is actually bad about that. Like if this continues with this many people around the world, here's what will happen to your grandchildren's climate.

• 26:47Shaan Puri?

  Here's what the world looks like.

• 26:48Speaker 01

  Yeah, yeah.

• 26:49Shaan Puri?

  You know, uh, like I think the good thing about this is even if a lot of people are in that bucket where they're like, oh, it's bad and I don't want to hear the bad news. Like, for example, my wife is vegan and so she will, you know, if she's talking to her mom, mom, right, her mom, when her mom was growing up, the vegan wasn't a word. That wasn't a lifestyle. So, you know, she's now in her 60s. She doesn't, she's not going to change to being vegan. Uh, but she loves animals and cares about it. And so when she brings up my, when my wife brings up this information of like, do you know how that showed up on your plate? And do you know what, you know, how dairy works, right? Do you know how that, how bad these systems are? And her mom is just like, I don't want to know. Don't tell me it's just going to ruin my life, my day. Like, please don't tell me I'm not ready to change, blah, blah, blah. But the thing with this is this is a product where everybody, it's everybody is the total

• 27:34Shaan Puri?

  market, right? We're all, we're all humans on planet earth. So even if it's just 5% of the population that actually would opt in to knowing this information, um, that's a huge number of people. And then they can sort of bring on that next wave of people who are looking to be more conscious, uh, and that that will just sort of cascade through the population over time. So maybe my initial thing was it doesn't matter because there's enough people, the total breadth of market is everybody. So there's enough people who would opt in to finding out this information. And then the other sort of, um, interesting thing that you brought up was like psychology, right? So. One of the guys who taught at the school I went to was this guy Dan Ariely, who's wrote a bunch of books like Predictably Irrational. He's sort of like the leader in kind of like behavioral economics, pop science.

• 28:19Speaker 01

  I am familiar, actually, because it's commonly applied in approaches to menu and the food business and sales and things like that.

• 28:27Shaan Puri?

  Right. I remember he was saying he was working with Panda Express at one time. They're trying to get people to make healthy choices. And they were trying to figure out, how do we, how do we label our menus so people make healthy choices? Should we include this information? Or what? And the experiment he wanted to try, which I think ultimately didn't work because they didn't implement this, but the experiment he wanted to try was when you walk through the door, there's actually two lines. There's the, I'm like, I'm going to treat myself, or I'm going to make a good decision for myself. Both are positive, but it was like, go left or right. And then the menu you see is a different menu, and you just only get the options. But you make the choice upfront. You don't have to like wade through the tasty and then the like, maybe healthier options and try to figure it out. So I don't think that would work. But he did tell us about one experiment that did work in the psychology

• 29:10Shaan Puri?

  realm around this, around climate. So he was talking about, he's like, why is it that people will buy a Prius, or they'll buy an electric car now, and Tesla maybe now, but they won't do, they won't like insulate their water heater, or something that will have like, actually quite a big impact.

• 29:26Speaker 01

  Exactly, exactly.

• 29:27Shaan Puri?

  And they, you know, they won't do that. But they'll like, you know, virtue signal in other ways, you know, they'll recycle a bottle, but they won't change this thing that's actually like a bigger impact. Why do people do that? And so he's like, he's like, I think it's about signaling. I think that there's a, there's.

• 29:42Speaker 01

  The power of optics, yeah.

• 29:43Shaan Puri?

  Yeah, the optics, like you feel good that you are signaling to the world that you do good. And with your water heater, it's in a closet somewhere in your house, in your garage, or something like that. No one sees it. You don't even see it. And so the motivation to do it is very, very low. It's only for the diehards. And so he then, they ran this experiment in a neighborhood where they would put a sign in the, in the.

• 30:04Speaker 01

  I read about this.

• 30:06Shaan Puri?

  Yeah, it had this amazing result. So you put the sign that said like, hey, we upgraded our water heater. We went clean and green or something. And so you were signaling to everybody that our house, we did the thing. And as, you know, in a neighborhood, when five houses did it, then everybody felt like, oh shit, we should probably, we should probably not be the neighbor who didn't do this.

• 30:22Speaker 01

  I cannot be the jerk that doesn't do this.

• 30:24Shaan Puri?

  Right. And so I love that. I love that idea. And how you can apply that into product design, I think is cool. So, okay, I love this idea. Give me another one. What else you got?

• 30:37Speaker 01

  I think there is an opportunity, there's a, there's a theme here of, of impact, but I think there are real business opportunities here and, and they're just needed entities and

• 30:47Shaan Puri?

  Kat, we get it. You're a good person. You're a good person. We understand.

• 30:52Speaker 01

  Okay. Um, so next is, uh, food business, like restaurants. So think, you know, the whole restaurant world's being blown up right now, right? Like rightsizing of retail, um, independent restaurateurs, casual dining, fine dining, being heavily disrupted alongside other food trends. So first I'm thinking of, um, starting kind of the, the modern food chain, the un-franchise franchise, uh, that is about healthy food, but food as pharmacy, where you go in, you get a diagnosis in some way from some network of doctors that take your blood tests and do all these things and are like this, these are the types of things

• 31:37Speaker 01

  you, you need to eat menu A. And, um, and then there's a, this chain of restaurants that has menu A, B, C, D, something more fabulously marketed than that, but you get the point. Um, and, and it's this like beautiful, delicious, um, place that, that ignites the senses, that blends the pleasure of food and the functionality of food and very clearly communicates it as food is medicine, but it's not just that positioning of healthy. It is what I think the future of restaurants really will be, which is if you were building one today, it would be the best of all worlds. It would be part sit-down with a lot of outdoor and kind of spaced, built for delivery, built for pickup, built for takeout and speed. Um,

• 32:22Speaker 01

  it would have meal kits, to-go items that you could pick up. It's a little bit grocery store. It's a little bit convenience store. It's a little bit restaurant. It's a lot off-premise and production.

• 32:34Speaker 01

  With all the design elements of coming in and out really safely and easily with fully contactless experience. So it's not only the what it sells at scale is a part of the future of food, but it's the how it does it and the routes to market that are not just these old models that have patchworks of some of these channels like start over from ground zero, bringing all these things together in one place, make it a franchise. So local entrepreneurs, local independent operators can have a part of scaling this future of food and make sure it's at a pricing tier that is low to mid. So it is broadly accessible

• 33:15Speaker 01

  and not just the aspirational type of product that is typically introduced to the market. That one's not as far off as the first one. And there's little symbol, little signs of it happening in certain markets, but no one's doing it with that much clarity, that much intention at scale. Maybe I will one day post focus brands.

• 33:34Shaan Puri?

  Well, I mean, you can see which industry you're in, you know. So, so I got a couple of questions for you. First, what do you think of, I'll react to your idea in a second, but I wanted to know, what do you think of ghost kitchens in general?

• 33:47Speaker 01

  So, one, I think a delivery only or an off premise mostly model is going to only continue in popularity and prominence around the world. The math really only makes sense today in hyper densely populated areas because you have to have enough delivery only business only through a digital channel to warrant the rent and the supportive infrastructure that, and I'm very familiar with what all those are, as you can imagine, the different companies that are doing it, Kitchen United, Cloud Kitchens, all the ones doing it around the world.

• 34:30Speaker 01

  So you've got to really have not only a different marketing engine to market digitally for what are typically impulse purchases. You know, I'm hungry, I want food now. What type do I want? What's going to be fastest? Which brand do I trust? Am I in the mood to experiment? Do I have time to experiment? You know, all this back to psychology, all the psychology that goes on. You've got to market differently and transact differently. So in hyper-dense markets, many cities in China, many cities in India, Kuwait, Manhattan, this has been going on, delivery-only businesses for decades. It's not new. They just also had some customer-facing part of their business.

• 35:14Speaker 01

  And then you looked at it and said, wow, we're paying premium for this real estate. If most of our revenue is going to be delivery, which only makes sense in very dense markets in most cases. And because you need the cost of delivery to be low and you need the time of delivery to be low in order to properly batch and keep it efficient, whether you're a third-party or a self-delivery person and you've got your three kids driving around on a scooter delivering the food, doesn't matter. The delivery time has to be fast, the radius has to be short. The only way the radius is short is if the density is there. And so cloud kitchens are crushing, crushing it, dark kitchen, cloud kitchen, whatever you want to call it, in hyper-dense markets. There is a lot of churn in tenants in cloud kitchens in not-dense markets.

• 35:58Speaker 01

  People are excited about it. They're trying it and they're going, oh, I only have delivery revenue. And that's not necessarily working for the economics that these companies that are trying to do this at scale really need to make it work. I think it's all going to work itself out in North America. We are just so behind the rest of the world in delivery-only concepts. I mean, pizza obviously has figured it out for a long time, but the whole economics of the model, the digital infrastructure, and they have their own driver. That works, so it makes a lot of sense. Other industry sectors are trying to come at it from the outside. Owning your own driver infrastructure is very expensive, competitive, and the insurance alone is something a lot of small businesses can't bear.

• 36:41Speaker 01

  So using a last mile logistics partner like an Uber Eats or a DoorDash in the US, which they are, they do have big growing parts of their businesses that are last mile only, not marketplace, not front end, but back end. All of those, it's just all kind of the puzzle pieces are coming together.

• 36:57Shaan Puri?

  It's all coming together.

• 36:58Speaker 01

  Slowly, they're already like clicked and glued around the world. They're just slowly coming together in the, in the US and they're coming together faster in dense markets. I'm a fan. It's just not as, not as much the, oh yeah, totally. That's the solution today is a lot of people think or some of the hype I've heard because they clearly don't understand the economics, but it's getting there.

• 37:19Shaan Puri?

  It's, it depends.

• 37:20Speaker 01

  Yes, it depends.

• 37:22Shaan Puri?

  And for, for you guys, I mean, I can imagine how many locations you have throughout suburban malls and, you know, you know, all across America where you're not going to be in this, this type of hyper density. And what you're saying is that for that, for that, you need a very different model than, than what you're going to get in, you know, downtown New York or LA or San Francisco.

• 37:42Speaker 01

  I would say on the other side, however, that some of the brands we have, we are one of the original multi-brand platforms that co-brands and tri-brands. We can put multiple concepts together because they meet different occasions. They're not competitive, but they're complementary and they make sense to be together. So think Cinnabon, Auntie Anne's and Jamba or Cinnabon, Auntie Anne's and Carvel. And we can smush them together in really tiny spaces. We've been doing it for a long time in airports and malls and urban centers. So that does make it interesting for cloud kitchens in that we can put multiple brands. So I don't have to rely on one brand's revenue stream, delivery only to make it work in a cloud kitchen. I can actually put three brands together in a pretty small kitchen.

• 38:26Shaan Puri?

  But you would need to then.

• 38:27Speaker 01

  Take different day parts and then maybe it's got a fighting chance when it's even not as dense. So on the other side, there is some opportunity unique to the brands that we have.

• 38:36Shaan Puri?

  Right.

• 38:38Shaan Puri?

  On Uber Eats, I don't know if you guys have done this or thought about it, but like, you know, one of the problems, let's say I wanted to order something and I wanted a pretzel or something and I wanted a Cinnabon or a Jamba Juice with it. I can't do two orders, right? So you kind of need, either the platform needs to enable you to say this and that, or you would have to list as a, as that cluster. It's like, you can order from a menu and here's the menu because it's actually all one co-located.

• 39:04Speaker 01

  That's what we do. Yeah. That's, it's the easiest, it's the lowest friction way to use the way the platform is structured without confusing the consumer. So it shows up as an Auntie Anne's location, but right when you pull up the menu, it says, that's the problem is it's got to have a lead location, but because it, because the brand shows up in the menu, it does show up in the search. So if you search Cinnabon, but Cinnabon's actually co-branded with what was first in Auntie Anne's, you search Cinnabon, it pops up, it says Auntie Anne's, but then it shows you the Cinnabon menu item. And so that's how we do it when we're co-located today.

• 39:36Shaan Puri?

  Gotcha. Okay, that makes, that makes sense. So sort of a little growth hack, a little workaround that you have to do. That's cool. And I also have a different question. So actually, I'll talk about your idea. I like the food as pharmacy, food as medicine. I think that's the way the world is going. You know, somebody sent me this book. I don't know if this book is real or it's, you know, total fake science, but there's sort of like this old book that's popular called Eat Your Blood Type or something like that. Yeah, something like that. So I don't know if that, that exact, you know, method is, is true, but I think that there's definitely a, at the very minimum, you can see if somebody's deficient for certain things and you could recommend foods that will supplement, right? Like, so that's a, that's a no-brainer, let alone, you know, what this book says is like, hey, if you're, you know, B blood type, eat more red

• 40:21Shaan Puri?

  meat or whatever. I don't know if that's true.

• 40:23Speaker 01

  Or if it's just the anti-inflammatory or the, the, you know, build your immune system diet or what, you know, whatever it is. I mean, we've got very similar structures on our Jamba menu, but that's a smoothie chain and it's not a whole end-to-end solution and it's still more fun for you wellness than like.

• 40:46Speaker 01

  Prescription.

• 40:47Shaan Puri?

  Right.

• 40:48Speaker 01

  Wellness.

• 40:48Shaan Puri?

  And so how do you, or you're the COO and president of all these food brands. Obviously, you have all these different locations and COVID comes and COVID, you know, COVID strikes and foot traffic dies and malls close and, you know, who knows what's going on. So walk us through what's it like to be in that executive chair when this is happening? How did you approach it? And then, you know, if you made any mistakes, what do you, what do you look back and say, oh, we should have done this sooner or I should have, I should have treated this a little differently. So I'm curious how you did that and what, you know, what's that email you send out to the whole, whole group? I'm just curious how that goes.

• 41:19Speaker 01

  You mean the emails everybody's sending me. You know, one thing I think is just important for your listeners, we, that we always bring forward our full selves. It just so had, one, we have a lot of businesses in Asia, so we had a little bit of a heads up of what was happening. And Auntie Anne's and Cinnabon are both in Asia. They're mostly in malls there as well. So we had a sense of what that would be like for malls. Malls are only, you know, just over 15% of our business at Focus Brands, but it's a majority of the business for Auntie Anne's.

• 41:49Shaan Puri?

  Okay.

• 41:49Speaker 01

  And so benefit of having a diversified portfolio, but very serious impact for one of the brands and then Cinnabon to lesser degree because it's in more areas, but still meaningfully in malls and airports. And airports are just as impacted as, as malls.

• 42:05Shaan Puri?

  Yep.

• 42:05Speaker 01

  And, and so I was in the hospital, in the ICU with my then seven month old daughter who had IVs, feeding tubes because she had a horrible respiratory virus and I did as well. We caught it from our toddler and it was just horrible.

• 42:25Shaan Puri?

  Wow.

• 42:26Speaker 01

  And so here I am in a hospital while there's a nursing shortage because there were no tests. And so basically if any doctors or nurses exhibited any symptoms, they had to self-quarantine. So there were, I'm dealing with that and then, you know, working on my phone. In the hospital with my mask on, not sure if what I have is what she had because we hadn't, they weren't, hadn't identified it yet. We finally identified it was something called metapneumovirus, which is one of the big, bad seasonal viruses. It was not COVID. But right as COVID was hitting, you know, it was already big in Seattle, kind of coming west, from the west, across the United States. And just a lot of alarmist, you know, news coming out.

• 43:08Speaker 01

  And very quickly, the malls started shutting down. Right. And it started in states that tend to be more progressive, and then quickly moved to the rest of the country, as more information was shared about how it spread. And I was navigating the period that you just asked about with my child.

• 43:32Speaker 01

  Weak, thin tubes in her nose. We finally got out of ICU. This was mid-March. So really, peak, peak hitting us with lack of knowledge. Coming home, having all these conference calls with people from all over, pulling, my baby was pulling her feeding tube out of her nose, showing it back in her nose while I'm dealing with this. So the, Oh my God. Just the, that reminder of we all have full lives, even during these times. So then what was it like in addition to that? One, her and her health, you know, her health was the most important thing to me. So it kept everything else a bit more in perspective, which was actually very healthy.

• 44:13Speaker 01

  Then, what I, what I'm really proud of, both for my leadership and my team and the whole company, is that we got crystal clear on the few priorities we had, which was, one, protect people, right? Safety of our employees, safety of our managers, safety of our community. Like, and whatever that meant. If we were open, that meant safety, extra safety precautions beyond what food businesses already have to do. It meant not asking people to travel or not having them go, even before a lot of these companies started shutting down offices and before travel bans were put in place. You know, we were already going down that path. Safety, number one. So preserve health and well-being. The second priority is preserve cash.

• 44:57Speaker 01

  Because these businesses are small. Yep. Collectively, they're quite large, but independent franchise-owned businesses. I think JP Morgan or one of these banking financial institutions puts out a report every year that basically says the average independent retail operator, including restaurants, has like 14 to 21 days of cash on hand, max. And that is very typical of super small business owners. And so we knew we had to preserve cash. So keep everybody safe, make sure there's nothing we're asking people to do or that conflicts with that, make sure that we're providing any safety precautions, et cetera, then help them preserve cash.

• 45:37Speaker 01

  So put a pause on any royalties, put a pause on any advertising fund, make sure that we're negotiating with vendors to help franchisees not be stressed about their near-term obligations while they are wondering what is going to happen. So we just, I mean, it was so powerful having that clarity. You know, don't talk to me about anything unless it does one of those two things. Right. Keep people safe, preserve cash. And if it conflicts with either of those, we're not going to do it. And if it does both of those, it's moved to the top of the list. Right. And that was it. So we did that incredibly well. Every communication, every email, every department went to work. I mean, radical focus.

• 46:20Speaker 01

  Then we were thoughtful about the stages in the evolution. So we were amazing at responding to the crisis with heart and with mind. But then things start to normalize and all of a sudden, the government starts to respond with Yep. help aid packages and every city had a different regulation and it was a spaghetti mess of things for the owners, franchisees to navigate. And so then we went to work with every external resource, our own lawyers, our private equity firm, just trying to consolidate guidance and information so that it also de-stressed them and allowed them to make informed decisions. Then PPP comes and all of these business owners or these small business owners are

• 47:05Speaker 01

  trying to figure out, do they qualify? Should they apply? Do they need it? If they do, how do they get in line? And it was our job to just guide as much as we could. And then as it normalized a bit. Putting systems in place that allowed them to open. Most of our malls are open. And most of them are doing more sales than people would think. Mainly because not all the food providers are open. And so, yes, it's a smaller pie of customers walking through and mall employees, but we're getting a bigger share of that group, which is great. And in most cases, the mall operators, again, this is a small portion of our total business, but the mall operators are running on one shift and not two.

• 47:48Speaker 01

  So in some cases, short term, they're able to preserve their livelihood and profitability because it's lower sales, but more than people would think. But running it off one shift, so a bit improved margins because of the labor ratios. And the real question is, what's the future? You know, which of these malls are going to get repurposed into something that doesn't make sense for a snack business? Which ones are going to have a long, slow, painful exit? So which ones are going to close fast? Which ones are going to be a slow road to go away? And which ones actually, because you then will have a redistribution of retail shopping, even if it's less, you know, just like our example of food, there are fewer places for them to go. And in some communities, malls are community centers.

• 48:33Speaker 01

  It's not just a place to get shoes. And so I think that's going to be really interesting to watch. And so we're helping them navigate real estate negotiations. You know, how do you approach a mall landlord with a lease? Do I just wait until it gets really bad and then I have more leverage? Do I try to renegotiate something now so I can plan my business? What happens if it's a large mall developer versus an independent? And so we've moved from crisis response and clarity to helping them navigate unbelievable amounts of information in an unprecedented time and way that many people were kind of reaching out to support government and local entities, back to, okay, getting back to what is now our new normal.

• 49:17Speaker 01

  They got to start paying rent. The stores are open. Bills are coming due. Some of our brands are doing better than last year's sales because they have drive-throughs and curbside and the benefits of the technological investments we made. So the other discipline in where I think we've been good, but it's been a great lesson for me, is to keep. Stepping back and asking, are we exiting one chapter of crisis management and entering into another? You don't want to get stuck in a certain type of behavior too long.

• 49:48Shaan Puri?

  Yeah, that is great. I'm so glad you shared that. I feel like this sort of, you know, there's a sort of a masterclass in how do you lead into, you know, I don't know if we call it crisis, but I think that's one way to put it, but just in general, in a time of a lot of change and lack of information. And so you have to be like highly adaptable. And then you have to be responsible and have to be humane and all, you know, all the different things you want to be, and you're never going to be perfect at it. But I thought you kind of walked everyone through it very well.

• 50:20Speaker 01

  Crisis is my jam.

• 50:22Shaan Puri?

  Yeah, stressful. How do you deal with that? That's, that's crazy. I'm like, I try to have such an easier life than the life you live. That is my goal is to have like the opposite of that situation, which is like, how do I, how do I have the minimal amount of sort of stress and the maximum amount of, you know, fun and impact? That's like, what I think, because I used to think I want to run a big company and then my company got bought, we got acquired. And so now, you know, Twitch is a 2000 person company and I see what the executives' life is every day and they're great at it. And I think they thrive on it. But I'm looking at him, I'm like, wait, that's what I would get promoted to? Like, that's, that's a trap for me. I don't, I don't want that. I'm, I'm not, I don't know if I'm not built for that. It's definitely not what I would want, but it's kind of cool to see different people who you need people who are going to do that.

• 51:07Shaan Puri?

  Otherwise, who's going to run these systems? So you're one of those, one of those special people and I admire that about you. Cool. All right. Well, thank you for coming on. We should, we should wrap it up. I promised you an hour. You know, you're welcome to come on anytime you would like. I think you should be what I call, you know, a friend of the show.

• 51:25Speaker 01

  Oh, awesome. I would love to, seriously. If you've got like random topics you want to jam on, I'm so, I love, you know, spider webbing into different industries. My husband's in VC. I've been a part of the startup world for quite some time through angel investing and mentoring. I love jamming on brand, you know, talking about brands and how to build brands and what does it really mean? And, and just the human side. It sounds like you really are into the psychological. Filter of the world, not in a manipulative way, in an understanding way, and using it as a resource way, and I am too. So I would love to geek out on those topics with you anytime.

• 52:04Shaan Puri?

  Right on. And where should people find you? So is Twitter the best way to connect? Or what's the best way?

• 52:09Speaker 01

  Yeah, Twitter. I'm one of the growing number of people that have a Substack. So you can go on and find my newsletter, Checking In, just sharing leadership lessons. But Twitter, LinkedIn, Instagram, all the places. I'm not hard to find.

• 52:22Shaan Puri?

  Okay, so it's @katcoleatl on Twitter. That's where I follow you.

• 52:26Speaker 01

  Yeah.

• 52:27Shaan Puri?

  Because you're not like corporate drone just saying basic things. You talk like a human and you say funny things all the time. So I enjoy you. You're a good, you're a good follow. I highly recommend.

• 52:37Speaker 01

  Feel the same about you.

• 52:38Shaan Puri?

  Okay, cool. All right. Thanks for coming on. I gotta go to, I gotta go nowhere. I gotta sit here and click the next Zoom thing and then do the next Zoom thing, which is the weird, the weird world we live in now.

• 52:48Speaker 01

  Awesome.

• 52:49Shaan Puri?

  Kat, nice to, nice to actually finally meet you.

• 52:52Speaker 01

  Yeah, you too.