Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / Lessons in Failure: “I had Lady Gaga wearing my clothes!” with Mid-Day Squares’ Lezlie Karls (Part 1)

Transcript

Lessons in Failure: “I had Lady Gaga wearing my clothes!” with Mid-Day Squares’ Lezlie Karls (Part 1) · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:00
  Hello, it's Dune here, your host and hype girl. I am so excited to bring you this special mini series on the pod that is centered around failure. The next three weeks that we're going to be diving in and reflecting on some of our favorite episodes that are all about embracing failure and turning it into your greatest asset, which
• 0:22
  Because we've all been there or we all will be there. Failing is literally just part of the journey, whether we like it or not. I remember for me when I was building Kinks, my D2C jewellery brand, you know, it didn't go as planned. We closed it down and that could have been viewed as a failure for sure.
• 0:42
  But for me, it turned out to be this critical learning and this critical experience that really shaped where I am now. And it actually got me to figure out what I actually wanted to do. It led me to Female Startup Club. So this miniseries is really about highlighting similar journeys from other founders who have faced their own challenges and emerged stronger than ever.
• 1:07
  Tune in over the next few weeks to hear these gritty stories and the valuable lessons that come from failure. Whether you're navigating a tough phase or you simply want to know that you're not alone, these episodes are going to remind you that every setback is a setup for a comeback and we all have it in us to fail forward.
• 1:27
  And if you have a story to share all about failure, we would love to hear it in the Facebook group. Come in, join us and be part of the conversation. Alrighty, let's dive in. This is Leslie Carls for Female Startup Club.
• 1:53
  Hey everyone, it's Dune here, your host and hype girl. Today we're learning from Leslie Carls, the co-founder of Midday Squares. Now, what are Midday Squares, I hear you ask? They are the number one vegan protein bars that are also known as little pieces of heaven, perfectly designed to stop your hunger or cravings in between meals. And they're on a mission to take over the world of healthy snacks. Okay.
• 2:21
  In this episode, we're talking about a solid 10 out of 10 sampling program that they launched with overcoming hurdles with manufacturing and operations, turning down a crazy acquisition offer, and a little dose of drama they went through when Hershey's came banging on their door with a cease and desist letter.
• 2:44
  If you love this episode, please do shout about it on social media or email it to a friend who would benefit from hearing this founder story. Let's get into it. This is Leslie for Female Startup Club. Leslie, hi, hello. Welcome to the Female Startup Club podcast. What's doing, Dune? Thanks for having me. I'm so fired up to be here.
• 3:06
  I am all sorts of excited to be having you on the show today. I was saying this to you before we started recording that I feel like, you know, when I look at you and I look at your content that you put out online, you are an open book, which is something that we love on the show. So I'm super excited.
• 3:24
  Same. I mean, our whole concept of Midday Square is to really be as transparent as possible. Obviously, we're still a company, still a brand. But overall, it's transparency is the highlight of our content and our marketing. We'll get into that a little later.
• 3:39
  Yeah, and I think it's really important. It's something that I'm also choosing to do with my non-alcoholic wine company is to build in public and take people behind the scenes on the stuff that typically might be a little blurred out and not overly shared, especially when it comes to things like money and just the shit that you go through. I think it's really important to build in public, especially as women. We see a lot of guys doing it, but...
• 4:05
  On the female front, I think we see less. So, yeah, I'm pumped. Tell us what Midday Squares is for anyone who doesn't know what they are.
• 4:13
  Perfect. So Midday Squares is a functional chocolate bar. What does that really mean? It's basically, it's chocolate that's indulgent, but you've got the function to it. So protein, plant-based protein, fiber, non-refined sugar, and really clean ingredients. And Midday Squares was really designed, it was actually born out of creating that afternoon snack. Nick, who is my partner and husband, was eating that crappy chocolate bar in the afternoon. And this was even before we were married. We were just living with each other as roommates.
• 4:42
  And I'm like, I can make you something better. It's not going to have protein and fiber at the time, but it's going to be made with better for you ingredients. And so I made him a version of fudge, which is our first product. And it was made to kind of get him through that midday slump. And so...
• 4:57
  Midday squares actually could cover you for three to four hours on hunger. And so it's really a midday snack. It's chocolate. It's a healthy indulgent made up of really clean ingredients. And it's really got every attribute to it. It's non-GMO. It's fair trade. It's organic. It's gluten-free. It's kosher. It's non-refined. It's actually like crazy. I always get, I'm always like, I feel like I have a song out of the attributes. It's ridiculous.
• 5:22
  So it's got, it's really for everybody. And when we made it, we didn't make it for like, let's say, you know, the health fanatic or the gym person. We made it for the everyday person that's on the go. Nick and I have always been entrepreneurs, always been on the go. And having just a better for you snack has changed our lives, you know? And Nick's not my only partner. My brother's also my partner. We'll get into that also when I tell you a little bit about the story. But that's what Midday Squares is.
• 5:52
  It sounds so delicious. And you know what you just made me think is like when you were saying it could be a song, I feel like you could do like a really cool like rap jingle. You don't even know what's coming out. We are dropping a music video. Oh my God. Shut up. I can imagine it.
• 6:11
  We did. So basically the first time I'm really talking about it loud, but we made a parody to Eminem. Hi, my name is. It's fucking hilarious. And we're filming mid-December. It's coming out in January. So I'll send it to you. But it's legendary. Oh, my God. I'm so excited. That's amazing. Love that.
• 6:32
  Look, we make chocolate, right? Like that's part of our vibe is we're about good vibes, feeling good. Chocolate makes people happy. So that's also part of our marketing is just general crazy feel good kind of stuff. Yeah, I feel that. I feel that when I consume your content.
• 6:50
  Let's go back to that early founder, like startup story. Always love to go back to the very beginning. Like, you know, obviously you were making this snack with your partner, but like what was getting you thinking about turning this into an actual company? I think you had a different company at the time. What was kind of your approach to being like, let's actually do this?
• 7:10
  So here's the story. Basically, Nick and I and Jake have been entrepreneurs for the last decade. And the truth is, we've been swinging and missing. I mean, I've had, you know, two other companies that didn't work out. I was in fashion for both of them. And I've also always been, you know, somebody who's dreamed up ideas. And so Midday Squares is really 10 years in the making. And so basically what happened was Nick and I were living with each other as roommates, but he had previously invested in.
• 7:40
  in my clothing company called Hector. I was pushing that for about three years. Fashion wasn't for me in the end. The industry, it just didn't speak to me. It wasn't super inclusive. And I'm a no bullshit kind of gal. Like you wanna do business or you don't wanna do business and that is not fashion. And so I tried that for three years. Nick came in on the last year and invested and we tried to take it totally e-com.
• 8:07
  which didn't work as well. We failed, but we knew we worked really well with each other. And so fast forward a little while, I'm living with him. I'm making this product. We think nothing of it. Nick gets some information. He has somebody close to him that's in CPG and mergers and acquisition and sent him some data. And the data was basically that there was two explosive categories on a tear, which was plant-based protein and real chocolate. So like the, like,
• 8:35
  The lint, the hues, you know, chocolate companies are not using palm kernel oil. And so he's literally taking a shower. I'm making breakfast. We're like, he comes out. He's like, Les, I have an idea. And I'm like, what's this idea? And he's like, we need to launch that. We need to commercialize that thing that you make.
• 8:52
  that we eat in the afternoon. And I'm like, I have this moment. I'm like, I just said, I'm like, let's fucking do it. Like we, that's Nick and I, like we've always just been number one supporters of each other. It's just like, we support the ideas and we go with it no matter how crazy it is. And so in my kitchen, in our kitchen, we decided, okay, let's take this thing to the market.
• 9:13
  And we were just about to get married and we go on our honeymoon to Stowe, Vermont. We're big, like we love the fire. We love the wine, like cheese, all that stuff. So we go to Stowe, Vermont. We leave a day early because we're so fired up about the business. And we say, let's start it. Let's go. And so basically we started our market research.
• 9:34
  And Midday Square is a baby of the two divisions. It's basically people sometimes say, well, what exactly are you? Well, the dough has the function to it and the chocolate is the indulgent. And so we'll get a little bit into that. But we basically go, we start driving to grocery stores. We start walking the aisles. We're looking what's out there. We're like, okay, look, generally it needs to have this much protein, this much fiber, this much sugar. You know, what are the competitors doing? Where do we want to live in this space? Okay.
• 10:03
  And so that's how it all started. And I was literally making trials in my kitchen. We were iterating. We use this website called recipe pal.com. And we were like figuring it out and like how to draw a nutritional label. And, and so we, after like, I think it was like a hundred trials. I don't even remember three years ago. This is 2018 and,
• 10:23
  Um, after like months of iterating, iterating, iterating the recipe to make it commercial ready in August, 2018, it was ready to go. And basically in like May, we knew we needed May of 2018, someone to be like the face of the brand. Nick and I are like introverted, extroverted people, but we're very, the type to spend like the whole weekend in the house at home.
• 10:46
  And so we needed someone to be loud. We needed someone to build community. And that was Jake, my brother. And at the time he was doing something else and we convinced him
• 10:55
  to leave what he was doing. And he was, at the beginning, he really didn't believe in what we were pushing. He's like, you're gonna launch a chocolate bar? He's like, that is the most saturated market. Like, how are you going to even, you know, succeed in this market? And we're like, no, we believe we're gonna have product market fit. There's a white space for what we're doing. And so we convinced him, it took us like three months to convince him. He finally comes on, we're ready to go. August like 15, 2018, we launched the brand.
• 11:24
  And we haven't looked back since. And it's been one hell of a journey of ups and downs. And the business for a good amount of time walked us. We're only now starting to get control, you know, the infrastructure, the business and all that. So that's our founding story.
• 11:42
  And a lot of people say, well, you know, why are you guys partners? Jake, Nick, and I are not partners because we're family. We're partners because we each attribute very different things to the partnership and we're the right people to get this done. So that's also very important because a lot of people partner up with their family members and their friends, cause it's easy, you know, or they think it's simple. It is the hardest thing to be in business or partnered with your family. Let me tell you, and we can,
• 12:10
  That is other things that we can hop into of being in business with my husband and my brother. But that's generally the story of how we started Midday Squares.
• 12:18
  Gosh, I love it. That's so cool that Jake decided to come on board and join you. I have so many questions that I want to dig into. But first, I want to just like go back for a quick second and ask you something about Hector. When you say the business failed, you decided to shut it down. What did that actually look like? Why did it fail? Like, were you making sales and you just decided like, hey, it's just not working enough. Like we couldn't get product market fit. Like, what does that actually mean to fail? And like, how did you decide? Okay, yeah, let's like cut it and move on.
• 12:48
  I love that. So basically, like I said, I was pushing Hector for three years. I even at one point, Lady Gaga was wearing my clothes. And so you think you're going to have this traction, right? Like this big celebrity, it's not paid. But no, it didn't happen, right? And so the company number one needed an extreme amount of capital injected into it. And I think by the time that it needed capital injected into it, I lost what I loved about it. That was the first thing.
• 13:16
  Second thing, I didn't design clothes for myself. I am 5'3", so I will say I'm 5'1", but I'm 5'3", okay? And curvy. I was designing clothes for the six foot model, so I couldn't even wear my own clothes. That's a problem right there. And that's one of the biggest learnings that I had going into Midday Squares is, I ate Midday Squares. I was a consumer of my product. And so with Hector, I wasn't a consumer of my product. So if I'm not a consumer,
• 13:46
  Maybe there's not going to be another consumer. Maybe there is. I actually didn't make any real sale. I had a lot of people, like friends and family, that purchased at points. But I never made a sale to a person I did not know. And the other thing is I didn't utilize my community personally.
• 14:05
  So my products were within the 1% of price point. So it was very, very high price, high-end fashion. And my community couldn't afford to support me. When we launched Midday Squares, it was easy for people to buy a $399 product, right? It's easy for people to support you, which can help create virality.
• 14:28
  With Hector, not many people could support me from the get-go. And then the other thing is I didn't put myself out there. I was behind the scenes. What is more engaging, and this is what I learned now with Midday Squares, than seeing a 24-year-old.
• 14:43
  three-year-old running around New York City in heels with a 20-pound collection over her shoulder trying to get into stores. I mean, if that's not inspiring, you know, I don't know what is. So I didn't show that. I was, like, again, I wasn't pushed to do that. So I was introverted about the whole thing. And I was very...
• 15:03
  behind the scenes. And I think those are the few things like not launching for my community, not being a consumer of my own product and being behind the scenes were a huge part of my failures. And I think at one point you need to know when to shut something down. And I think a good entrepreneur knows when to throw in the towel. And so I did after three years and I took some time off and then realized what I needed to do differently in the next venture.
• 15:31
  That is so interesting. And yeah, it must be a real shock, like a positive shock going from something that's high ticket to really low ticket and being able to reach a mass audience instead of being able to reach a very specific someone.
• 15:46
  So let's get into that like early launch of Midday Squares, like how you were gearing up to, you know, press go live on your website in the in the first couple of days and all that kind of thing. And what was the response? Like what happened in that early period?
• 16:05
  So we did something a little different when we launched Midday Squares. So when Jake came on, part of his agreement to join the company was that we were going to put ourselves out there and we were going to show everything, the good, the bad, and everything in between. So for me, I was very uncomfortable with that idea, but we did it anyways. And so we started showing, getting everything ready for launch. We started building that hype and
• 16:29
  Each one of us had, you know, small communities, maybe I had 1000 followers, you know, Nick had under 1000, Jake 1000. So we had, if you add that together, it's still almost 3000 people. So we were starting to build that by the way.
• 16:46
  Yeah. It's like, hey, it's a thousand, but that's still a thousand. Like you don't need to have 50,000. You can just have a thousand. You can have 500. That's still 500 people. There you go. There you go. And those people have microphones. And so it's how do you get those people to use their microphones, right? So what did we do? We basically launched a really shitty website. Again, we didn't care about it being perfect. It was so shit. Yeah.
• 17:13
  We launched this website and we did this sample. We did this sample program where we knew we were going to lose tremendous amount of money. So we basically, for 50 cents, you could get a full bar of Midday Squares one time. We would bring it, well, ship it to you. I'll get into that in a bit. We would ship it to you, but we knew you were serious because you had to put your credit card in. So because you had to put your credit card in,
• 17:40
  that other step of really wanting something, you know, versus it just being free. And so when we would get an order, we would, at this point, we were only shipping locally in Montreal. We would get in the car and we would go deliver the package to the customer. And they would freak out because they ordered this thing online.
• 18:03
  They saw us on Instagram, they saw us making it, and then they got to actually meet us. And so there was this like real connection that started happening, this community, this thing that we started building from day one. And in the package, we took Polaroids, which we still do today and you know, it's a little different, but we would take with a mini, like a mini max. And at five in the morning, the three of us, we would dress up really crazy and we would take a photo.
• 18:29
  And then we would go on their Instagram and find out, let's say they had a dog named Lucky. We'd be like, give Lucky kisses for us, MDS. And wow. Do the things that are not scalable. That's the not scalable thing. That's amazing.
• 18:44
  Oh, my God. That took your word. No, but you do you understand. Right. And so that created from day one virality. So when they would receive the package, they would see us, then they would open it, they would take a picture, they would see the Polaroid. And that's when we started getting people's microphones.
• 19:04
  And it really created a moment from there. You created moments that are shareable. And for someone to be like, hey, this is really cool. Like, I want to shout about this. Two quick questions before you keep telling me about these early days. How much were you losing per order? And how many orders did you do like that? So we did that for about two months. We, I, my, my brain's foggy on how many orders. We're probably doing about 60 orders a day at this point. Oh my God. That's a lot.
• 19:33
  Oh, yeah, yeah. Well, I actually developed, so I was the one making the product. I developed tinnitus. I have, like, my wrists are completely done from, like, rolling the product all day. And it was, we were doing it in my condo, right? Like, we literally launched it here. We moved the furniture. We, like, brought in tables. It was crazy. My brother, who has dyspraxia, was weighing the salt, and I would always lose on him because he has, like, fine motor skills. But we were doing it, right, together. And it was mayhem. There was cocoa powder.
• 20:03
  literally in my, like, a little butter, a little butter seeped into my floors. And yeah, so we did about 60 a day. That was our max because we were making an eight by eight pan. And we were, so basically because we weren't shipping the product, we were able to like save some of those costs because shipping is ridiculous. Everybody knows it's like $15 to ship a product, right? So you're $15, we're charging 50 cents. So there you go on the 15th.
• 20:28
  Then that's if we couldn't deliver it. And then the product itself costed a lot of money at the time because we had no scale, right? We were buying stuff from a grocery store. So we were losing a lot of money, but I would say we were retaining serious amount of customers. And because we had this virality of through the sample program, which we shortly after stopped.
• 20:49
  we got our first store within the first two months of launching. And that's how it started happening. Customers were going into the stores and saying, we want midday squares. And that's how we started getting natural stores, mom and pop shops. And like I said, we were in my condo for two months. I remember on month, like it was maybe early October, we were in my condo for two months.
• 21:11
  And I was like, Nick, Jake, I can't do it anymore in here. My bedroom was like the shipping room. Like it was, it was crazy. We were working 15 hour days in the condo. We had a cleaning crew come in at 11, like 11 o'clock at night. And within one week we found like a shitty facility, really shitty. And we got it on a Friday and we were producing in there on a Monday. And that was the beginning of really starting to ramp up production.
• 21:38
  And so during this time, like, obviously you go through this two month sampling program that gives you all of, you acquire all of these customers at a kind of high cost, but like a really, you develop like loyal customers immediately. You get proof of concept. What are you thinking after that? Are you like, Hey, okay, we need to actually invest some money here, or we need to go out and find some money or like, what's the kind of thought process once you've proven it out? Yeah.
• 22:05
  So that's exactly it. So to start Launchment Day Squares, it costed us, I think it was $20,000 between all the trials, packaging, all that stuff, the ingredients. It was about $20,000. A very lean startup to prove a product market fit. Then we invested about, between the three of us, a million dollars. So Nick, actually, prior to leaving his company...
• 22:28
  to be part of Midday Squares, had a lot of success in software. And so he had some money that he had made, which he was able to cover myself and him in funding in Midday Squares. And Jake was able to come up with some money as well. So we took the first year, not first year, but a year and a bit, a million dollar investment. Once we knew this thing was pumping.
• 22:51
  After that, we knew we wouldn't be able to continue funding. So we would have to do our first raise, which we did do. I think we closed our first raise in September, probably of 2019, our first raise. And the truth is, so in the company, how it's set up right now, I'll kind of give you a breakdown of how we operate is. Jake is the chief rainmaker. So his one job is to go out, get people, network, bring in the deals, build the relationships,
• 23:18
  build the finance relationships, all that stuff. So he's a lot on the road. Nick and I are co-CEOs. So basically I manage of the company manufacturing, recipe and development, media marketing, and customer experience. And then Nick manages operations, finance,
• 23:38
  sales and performance marketing. So when we speak about money, that's really Nick's expertise. I just say, I trust you, get the money, get what we need. You know, and he goes out and does that. But we, I will say one thing on raising money
• 23:52
  It is hard and you need to be ready for it. And it's the due diligence and the cost and the due diligence and the lawyer fees. A lot of founders are not aware of these things prior to getting into raising. We took venture capitalist money. So it's a bit of a different road. There's so many different ways to raise money, you know, through, you know,
• 24:12
  Through crowdfunding, through family and friends, through VCs, through private. There's so many avenues. But we did choose to take the VC avenue. And it's intense. I mean, you don't have money until it's in your bank, right? You get a term sheet. And that term sheet could be cut on day 40. So we say we start raising almost eight months before we run out of money.
• 24:35
  because it does take long and you need to find the right partners in doing so. But yeah, I would say a million dollars was the first year to really get us off of our feet, to be able to support retailers, support manufacturing. I mean, you know, most CPG brands turn to co-packers, so they get their product co-packed. So they don't have the capex that we had in getting this thing started. You know, we have to invest in building a manufacturing plant. And that was
• 25:05
  almost impossible, you know, but we, we can get into that as well, but we didn't go the, we didn't go the Copac route. We actually have, I'm proud to say today we moved it in 2020, a full facility that's 95% automated and it's incredible. I was watching one of your videos talking about the journey of the automation, the automation process. And I mean.
• 25:28
  I watched that video and I was like, damn, I just don't know if I could do that. Like it looked like a real journey. It's all well and good to be like, you know, everything's great now, but like far out. That looks like a real pain in the butt to get that, you know, buying like extremely expensive machinery for it not to work. Like all these things. I was like, but.
• 25:48
  how, and I don't come from any kind of background in like manufacturing or logistics and operations and that kind of stuff. So to me, I was like, whoa, like you are a superstar. That seems like a lot. I'd love to, um, I'm so tired from building that plan. Like I always talk about, I'm not, I'm still not rested from that experience, but yeah. I mean, I can understand why I can understand why.
• 26:13
  I would love to keep talking a little bit more about your marketing, especially like how it evolved and why you think that you were able to kind of continue that sticky traction, like what you were doing that kept the momentum going. And like, you know, I've just read like these articles you guys are doing so well. You've, you know.
• 26:30
  kind of crushed it. And what do you think it's been about your marketing? Like, I know that you guys document everything and it's so easy to see it now because your content is so great. But what do you think when you like you thinking about that evolution of your marketing over time? I think we're still figuring it out what it needs to look like. I think the idea of midday squares when it comes to marketing is to, okay, so if you're on a shelf with 30,000 products,
• 27:00
  Why is the consumer picking your product? That's the first question we need to ask ourselves. So for us, our whole concept is, well, we build relatability and we connect with our consumer or our crew love and they feel like they're buying a product from their friend, their neighbor, their brother.
• 27:22
  Jake, Nick, or Les, someone else in the company, that changes their whole experience because there's this relatability factor that most other brands don't have, right? If you look at, I'll just take Hershey's, for example, who's behind Hershey's? Who is Hershey's?
• 27:40
  Right. In 2021, the consumer wants to know who they're buying from, what they stand for, who they are as human beings. And so Midday Squares has chosen the path to show everything. You know, I get stopped in Montreal locally from people. They say, I feel like I know you when I hear that.
• 28:00
  I feel fired up because I'm like, that's the goal. The goal is that you feel like you know lies. When I'm in bed looking like shit, I'm not wearing makeup. I'm not doing anything. I'm on the gram talking. The customer...
• 28:13
  feels related to me. I'm not this fancy person. I'm not this unattainable person. I'm just less out there trying to pursue this chocolate bar company. And it becomes very relatable. People feel very connected. And then the idea is with Midday Squares is to encourage people to be bold and to do bold things, whatever bold means to them. And that's what we show through our stories is we have ups and downs. We have serious hardships, but that doesn't stop us.
• 28:39
  You know, and so life is not easy. Right. And whatever that means for everybody, everybody's different in what that means. Some people, you know, like everybody struggles, everybody's suffering in different ways. And so we've got to continue to be bold. We've got to continue to push forward. And I think that's what we're trying to promote is that. And so our marketing is basically to to.
• 29:02
  help people feel bold and to show them and to create relatability. I think if you look at Nike, it's just do it. Right. And so there's a lot of other brands that have different kind of references to what they're trying to do. I know with Nike, I'm in the Nike community when I want to get into shape. The first thing I want to do is have a pair of Nike sneakers, you know, get on the treadmill and I feel like I could do it and whether, whatever the case may be, I could probably do without those sneakers, but that's what they've made me feel. And so,
• 29:30
  Our content, our marketing, our concept is to make people feel something deeply, have them relate to the brand, and try to inspire people to be a little more bold in whatever that means. Jake, Nick, and I are very untraditional founders. If you come to the Midday Squares headquarters,
• 29:45
  You could wear pajamas. It doesn't matter. Just be yourself, show up, and have some fun while you're doing it. And that's basically what our vibe is. The evolution of our marketing, you know, I think we need to continue. I think Midday Squares is ahead of the curve on storytelling. And I don't just say that because...
• 30:04
  I'm in midday squares is because where is content going? Like Instagram, you know, I'm less, less entertained in Instagram these days. The content's not strong. It's repetitive. Everyone's kind of pushing the same story. Where is it going? Where is the big question mark for me?
• 30:22
  TikTok, that's an amazing platform. They're still, you know, if you kind of get into the creators on there, there's incredible things out there, but there's no real platform yet for people to storytell in a vertical format in the way that you would watch a reality show on TV. And so Midday Squares does that. We are showing, we're telling our story. And so how we elevate that, I don't know yet. It's still a question mark, but we're continuing to work on it every single day. And I think if we continue to,
• 30:51
  you know, tell our story and push through, it will eventually really connect on a global scale. Yeah, absolutely. I love that. That's amazing. I'm wondering, I don't know if you're able to share this, but I'm wondering like for you, how does this marketing approach actually translate into sales? Like, are you able to share like how you performed in year one or year two or anything like that?
• 31:16
  So our first year, we set out a goal to do $250,000 in revenue. And we did a million. And so we really surpassed our goal. And again, I do believe that it all goes back to making people feel something deeply and them wanting to support Jake, Nick, and I because they see what's happening. They see the struggle. They see the highs, the lows. They want to be part of that with us.
• 31:42
  And by being part of that, they could buy a product for $3.99. They can help us succeed by buying our product. So, you know, this is how close we are with our customers. We had a coconut sugar problem, okay? We use really fine grind coconut sugar. And basically, we couldn't get our fine grind coconut sugar. And we can't make our chocolate without it.
• 32:03
  And so we were at a standstill. And so we needed a special type of machine to grind down the sugar, the whole coconut sugar, to make it milled, like super milled, super powdered. And we couldn't find this machine anywhere. We finally find something. We buy this like commercial grade. It's not industrial grade machine. Breaks down on us. We reach out to our followers. We tell them, guys, we can't ship product. We're in need. You know, all this stuff.
• 32:29
  Within 24 hours, we had a customer that was able to get a machine shipped to us. Like no way. Yeah. What? To help us solve the problem. That's what I'm saying. This is the crazy part of the whole thing is, is the customers, because we're so transparent, they're with us on the journey. If we ask for help, they help us. They're understanding. They're empathetic.
• 32:51
  And I think that's incredible. Now, look, as we go on and we continue, we don't know where it's going to go. Not everyone's going to like us, right? Not everyone's going to like what we stand for or how we do business or what we show. Sometimes you get messages is this is something you should keep behind the scenes.
• 33:07
  We don't believe that. We want to show everything, right? But again, in life, you're not going to want everyone. So I do believe that our sales and our dollars, like how we do sales is really correlated to how we build the brand and how we put Jake, Nick, and I out there and show everything. And I think, don't get me wrong, we're heavy on performance marketing. Like Nick is your guy if you want to hear about that. I mean, we spend a lot of money on performance ads, bringing people in,
• 33:33
  and all that stuff. But I think it's once they come in, they have a rabbit hole. Like when you went on Instagram, you were able to go down a rabbit hole on who are these people? What is the brand? And so that's been, you know, we can get people, but then when we get them, they want to stay. You know, they want to see more. They want to stay. So we do spend, so our actual first, not first, our second operational employee was a videographer. And everyone told us that is the wrong move. That is not where you should spend your money.
• 34:03
  And we said we disagree. And we had, it was Jake, Nick, and I, we had like an office manager of a time startup. You wear a hundred hats. We had this videographer. We didn't even have a salesperson. And the story made the sales. Like we got Whole Foods through our story. Someone said, I'm an ex-buyer at Whole Foods. Let me connect you. So social media and storytelling, in my opinion, super powerful. And everyone should do it.
• 34:29
  you know, midday squares does their thing. I think everyone needs to find their thing, what's true to them. But I think storytelling and using social media is super powerful. And if you do it right, you can really, like you said, you don't need 50,000 people. We didn't start off with a bigger following. We built it organically, but we started off with, you know, a thousand, a couple hundred, a thousand. It doesn't matter as long as you are connecting and there's true loyalty.
• 34:57
  You know what I also think is like, you know, you touched on the performance marketing thing. Performance marketing is so important. It's important to have a good paid marketing strategy. But like coming into 2022 and like following all these like iOS updates and things like that, it feels like two years ago you could build a brand solely on ads and like launch a brand with ads.
• 35:15
  it's not the same anymore. The landscape has drastically changed. You need to be doing content storytelling right, or else you're not going to be able to like add in that supporting performance marketing side of things. You just can't rely on that as your main kind of launch strategy slash like main channel anymore. I just think it's so different now. Content storytelling is so important.
• 35:41
  It is. And I think you're right. The landscape is changing. And the truth is, you don't have control over that, right? So you need to think you need to have other strategies, don't put all your eggs in one basket. And I think influencer marketing, and finding the right people that can carry your brand voice is really important. Like we have had influencers that blow shit up for us. You know, yes, they're expanding, they could be $25,000 for a post.
• 36:10
  but they will bring in $60,000. Yeah, we have. We work with... No way. I don't want to... Yeah, $25,000 for one post, and they bring in $60,000 worth of sales. What? That is amazing. So for people who say influencer marketing doesn't work, influencer marketing works. Was that on TikTok or was that on Instagram? That was on Instagram. And I'll tell you one thing.
• 36:37
  You want to find it's not about how many followers the person has. It's how engaged are their followers. And, you know, look, some you'll hit and miss. That's life, right? Like you'll put some big, big dollars into something. But you need someone who knows what they're doing. You need to find the right people, find the right influencers. You know, make sure you're asking the right questions. Make sure you're seeing their data. And yeah, I mean, look, there's a no brainer. If it costs 25, but it's bringing in 60.
• 37:03
  It's incredible. And how many of the people, that's what they're bringing online sales. How many of those followers are going to Whole Foods, going to Sprouts, buying the product from seeing those videos. And that's what's incredible. And snail mail and all of these things,
• 37:18
  They could be good if done right, but there's so much more power in finding if you have a grocery store in your neighborhood that you just put your product in, you have the ability to find the surrounding people that go to that grocery store, target them, get some sort of discount code to them, and then have them go to the store. And so when we launched Midday Squares, we did something very similar to the city-by-city strategy.
• 37:43
  We focused on making people in Montreal feel like we were exploding. And how we did that was making sure they saw it at every point in their day. So when you went to get your coffee, what was in five kilometers of that coffee shop? Well, it's their mom and pop shop, so we would be there. Then what's in five kilometers? Their spin studio. So we would be at the spin studio and all of a sudden you're seeing this product. What is this product?
• 38:06
  Then you go on Instagram and the content's there and you start falling in love. So there's so many ways to market. There's so many things you can do. I would agree. Marketing is expensive, but it doesn't have to be. You can get creative. I have a video on my Instagram when we launched peanut butter that costs $600 to do and it
• 38:27
  It wasn't a lot of money, but it sure as hell got a lot of views and it sure as hell a good amount of engagement. And so, you know, people will make excuses that you need all this money to make noise. You don't. As long as your content is good and it's making you feel something deeply, there will be another customer out there that also feels deeply about it. I love that. That is so amazing. Congrats, by the way. What an exciting journey.
• 38:51
  You mentioned a few seconds ago or a few minutes ago, Hershey's. I want to talk about the drama that you've been going through earlier this year. That's how I actually found you. I saw either you or Jake or Nick posting an article about what you've been going through and this kind of like dilemma you've been faced with. How did it start? What happened? What's happened since? What's the vibe?
• 39:17
  Okay, so Midday Squares launched a flavor called, first it was actually called Busta Peanut, okay? And then we couldn't use that name because stores wouldn't stalk us because it was inappropriate, which I don't think it's inappropriate. You know, it's not Busta Nut, it's Busta Peanut. Anyways, we have to change the name. Now it's Peanut Butter.
• 39:39
  And we launched it with the orange that we're all familiar with. And so people would say, well, Hershey's said that it's the Reese orange. Now, why I have beef with this is Midday Squares is not, number one, it wasn't the Reese orange. It was a Pantone of orange. But we'll get into that. So Hershey's called up Midday Squares in like March of 2020, I think. And don't quote my timeline. March of 2020, I want to say.
• 40:09
  And they were interested in acquiring us. And, you know, we met with Nick, their M&A team. No way. Put out an offer and all these things, okay? Nothing was said about the color of the packaging at this point in time. We then had the conversation that we're not interested in selling this company. We're looking to build this company to be the company that stands next to Mondelez, Hershey's, Mars, and inquire other companies. We're not interested in selling.
• 40:35
  And obviously that conversation was great. What was the offer? Are you allowed to share? I can't share the offer. Okay. Okay. Thought I'd ask. Just trying. It's okay. But it was a good offer. It was a good offer. But again, I think, you know, when I started this company, money was something that did drive me. I'll be fully transparent. I was really in the mind of like, let's build this company. Let's sell it, you know, five, six years, the typical CPG route, and then go on and do other really incredible things.
• 41:01
  And then my love for it, like, just change, like the customer, the putting up better for you snacks. There's such shitty snacks on the market that, you know, like, we're actually making a difference. And what's so fucked is a lot of people eat our product, cancer patients, diabetics, it's changed their lives. So when you see that, you have a different purpose, right? Anyway, so...
• 41:24
  The whole idea of not selling these companies kind of, you know, threw them off again. We're a competitor. What would Hershey's look like if they had to launch in 2021? They'd look like a midday square. So we go on a couple of months later. We get a season to six from Hershey's that we need to change our packaging immediately, that we're infringing on their color. People are confused. Come on. Yeah. It's fucked. It's fucked.
• 41:49
  The worst is they said people are confusing Reese and Midday Squares. And they sent us like 30 pages of customers saying this is a healthier Reese. So number one, how are they confusing if they are saying this is a healthier Reese? They clearly are not saying this is a Reese. We're in the refrigerator. You're on the shelf. You're confection. We're better for you indulging chocolate. So we get the season desist. We also get hit with a season desist from Kellogg's.
• 42:20
  for a package that we're infringing. Yeah, that we're infringing on our X bar. Okay, that the lines and the fact that our logo is on the left is that people are confusing midday squares in our X bar. So at this point, the whole David versus Goliath is true. We don't have the means to go up against Hershey's or Kellogg's
• 42:40
  Even though we're right, we would have to face them in court. And at that point, you're looking at millions of dollars in legal fees. So no matter what. And all it does is like take away from your focus of building your brand. It's an energy stock, right? It's an energy and money stock. Two things we don't have. It's negative. So these cease and desist backed us into a wall of having to change our packaging. And now here's the thing.
• 43:06
  In CPG, or even in my, I'll talk about my product, it's six inches by three inches. That's not a lot of space to figure out how to design a product, how to put all the information you need to put. There's only so many ways you can lay a logo, you can lay a photo, whatever the case may be. So being forced into a rebrand,
• 43:27
  And having to re-band in under a month and get these things approved by these companies is devastating and shook the company because we were only going into a re-band starting 2022. We were going to start going into a full re-brand because the package we launched with has too much information on it and all these other things. So it did need a re-brand, but we weren't re-branding it because we were infringing. We were re-branding it because the brand needs to elevate.
• 43:51
  And so we were forced into this rebrand, which was really shitty. And what bothers me is these companies are super entitled. You know, there's 11 basic colors out there. And in a basic color, you have hundreds of tones of that color.
• 44:09
  Hershey's wants to own the whole color of orange, but then there's only 10 basic colors. And then if you go and, you know, there's KitKat who has red and there's O'Henry who has yellow and there's Bounty that has blue and there's Cadbury that has purple. It's bullshit. You cannot own a basic color. And so we had to change the color. We had to change the packaging and we made it happen. But it put a lot of stress on the entity. And look, it wasn't a problem for them when they wanted to acquire us.
• 44:36
  It was a problem for them when we said no. And look, I have no beef with these companies. I understand they want to try to protect their branding and all their stuff. But I think at the end of the day, they feel threatened. And that's it. And so...
• 44:50
  It's only the beginning of all that that's going to come. You know, business is really political. And I didn't know that when I got into it. There's so much like it's dirty. You know, people want to play dirty. People do dirty things. And that's what makes me sad about business because I'm just trying to make healthy snacks and have fun while doing it. And then there's all this whole other side. Um...
• 45:14
  That's and also putting yourself in the limelight, right? Putting yourself out there opens you up as a target for people that are miserable, you know, and so there's a lot of things I didn't expect going on this journey. But that's the story with Hershey's and Kellogg's. Everything's settled now. But what does that mean? Everything's settled as in like the, you know, it went well, the packaging was accepted. Or was there like some kind of settlement where you had to come to an agreement?
• 45:39
  No, the packaging was accepted and we moved on from that and that was it. Do you think it worked in your favor? Like because you were able to tell this story and because you were able to be like, Hey, we're actually not going to fight this. We're going to fucking change it. And we're going to do it in 30 days. We're going to document it. Do you think that like made people like from my perspective, it would have just made your customers love you even more for being transparent and be like, what the hell? Like, why is the big guy taking on the little guy?
• 46:08
  That's exactly what it did. I mean, at the end, our approach, we didn't go out and bad talk or, you know, try to turn into this whole press. We just documented what we need to do to change, to show people that sometimes you need to do things that you don't want to do. But like you said at the beginning of this conversation, the beginning of this topic is the money and the energy suck is just not worth it. And so sometimes in life, you need to make hard decisions. Leading with ego in a business is always detrimental, even though it hurts the ego and you want to fight.
• 46:38
  It's not always the right move. There's a time and place for everything. And customers, they were right there with us. They were fired up. They were really fired up. Wow. Gosh, what a crazy journey. I feel like regardless of the situation, it just still must have been quite mentally draining. And, you know, obviously you didn't go out there and fight, but you still had to, like, do this. And you had to do it in a quick turnaround. And you had to, like, you know, climb the mountain.
• 47:08
  Well, one of my employees left after it, you know, I mean, she was completely burnt out. You know, it did affect us in a negative way. I was paranoid. I was, you know, I was in charge with my graphic, my graphic art, art director to make these changes. And I was driving her nuts because the truth is I was so, you know, I gotta be honest, you know, and, and.
• 47:31
  I would drive her nuts because I had to make such big decisions in such a short period of time. I didn't get to bring the product to the grocery store. I didn't get to see it fully printed. I didn't get to test it in stores. And so you're going through this whole thing of trying to make sure it has all the information, speak to the customer, still be the brand, still feel like the brand.
• 47:50
  And, you know, I think we changed, I think I changed the packaging 100 times in a month. Because we did, I mean, if you watch the video, and whoever's listening, watch the video, you'll see at one point, the brand all of a sudden looked like Unreal bars. And then we're like, oh, now we're infringing on Unreal, you know, and that we spent, you know, time working on that package. So in the end, it burnt me out, it burnt one of my team members out. And we got it done, but it still, you know, wreaked havoc.
• 48:20
  on the, on the end. Yeah. Yeah, absolutely. Jesus. Gosh. With all this in mind over the past few years, your highs, your major highs and some pretty low lows, what is your most important piece of advice for entrepreneurs coming into 2022 who are in that CPG space? I think the most important thing is be you.
• 48:45
  find out what that is and find out how you're going to stand out on that shelf. I think three really important things, product market fit, strong brand presence and storytelling. I think those are three things to win in today's market. I think storytelling always has been a way to win. I mean, if you look at, you know,
• 49:08
  Pixar and all these other companies that have just nailed storytelling. I mean, it's powerful. And so I would say those are the three things that before you launch, figure out if you have product market fit and have a strong brand to follow up with that product and have some sort of good storytelling. Love it.
• 49:29
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 49:54
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• 50:16
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