Joel Clark & Cameron Smith – Co-Founders, CEO & COO of Kodiak Cakes
What a great conversation with the co-founders of Kodiak Cakes! Meet Joel Clark and Cameron Smith, the CEO, and COO of possibly the best-tasting pancake mix (and other terrific products) around! From their homegrown story of starting from Joel’s mom’s original pancake recipe to becoming a nationwide brand and even their stint on Shark Tank! So many exciting stories and great learnings on this episode of #TheKaraGoldinShow
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Joel Clark 0:00
So many times, it’s not the business that fails. It’s the entrepreneur that
Kara Goldin 0:03
quits, I am unwilling to give up. That I will start over from scratch as many times as it takes to get where I want to be, I want to make sure you will get knocked down, but just make sure you don’t get knocked down knocked out. So your only choice should be go focus on what you can control control control. Hi, everyone, and welcome to the Kara golden show. So join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone, its Kara golden from the Kara golden show. And I’m super, super excited to have two incredible guys here today, who we’re gonna share lots and lots of tidbits of really, really amazing stuff. So we have Cameron Smith, and Joel Clark, who are the co founders CEO and CEO of Kodiak cakes. And if you haven’t tried Kodiak cakes, and you’ve been not that you haven’t had a great breakfast in a while, let’s just say that right? I mean, it definitely so good. With some terrific maple syrup, real maple syrup, none of that log cabin stuff, you got to you know, go rail on on all of this. These guys are, you know, amazing. We’re gonna hear more about their backstory, and just overall on their journey, and just really, really incredible. So like I said, Cameron is the co founder and COO, and Joel is the co founder and CEO. And they started this company, I guess it was Joel’s mom, who originally imagined that Wright had the idea for this amazing breakfast and, and we’ll talk to him a little bit more about that. And it’s just a really, really interesting story they live in just outside of Park City. So Park City, Utah, and that’s, I mean, that’s becoming more and more, I believe, like kind of a entrepreneurial, also foodie capital where lots of innovation and entrepreneurial spirit is incubating for sure. And just overall, we’ll also talk about some kind of recent news with the company too, which is really, really exciting. But I won’t say anymore. I’ll just jump in and let you guys do most of the talking. But so welcome you guys. Thanks for having us. Yeah. Thanks for having us. Good to be here. I’m very, very excited. So let’s start with just a trip down memory lane, I guess starting with Joel. So can you share a little bit more about how the the squat started in your family?
Joel Clark 3:03
Yeah. So it really was kind of pancakes were a big part of my childhood. And little did I know that I would actually be selling pancake mix someday when I got older. But like Cody, the way Kodiak cakes got started is pretty like homegrown, right. It’s just like a homegrown story. My mom had this great recipe for making whole whole wheat pancakes at home. And she had a wheat grinder, and she would grind her own wheat and she was way into really healthy eating when I was growing up. And didn’t always love that, you know, as a kid, but, but we loved her pancakes. And she had this kind of idea or kind of dream to make a product out of her recipe and sell it. And so when I was eight years old, we made homemade pancake mixes in brown paper lunch sacks. We put them in my red wagon, and I went knocked on doors in the neighborhood and sold these little homemade pancake mixes. And so that was when I was really, really young. I was eight years old. And we did. So we didn’t keep going with it at the time that but that was really the kind of inspiration behind making a business starting with pancake mixes. And so in the mid 90s, my older brother john wanted to start a company. And he was talking to my mom and she said, Hey, john, why don’t you take the pancake recipe and make a real product and go sell it. So he created our first product or first flapjack and waffle mix and created the brand Kodiak cakes in 1995. And asked me to help him start selling it. So that’s really when we got started. And then I took the company over a couple years after that in 1997 1997
Kara Goldin 4:36
Wow, that was a you know, a long time ago. Right and you know so much has happened since then, obviously and you always remained you were from that area. You always remained in Utah.
Joel Clark 4:53
Yep. Yep. I grew up in Salt Lake City and then and then we I lived there for a long time and then We moved up to midway, Utah about nine years ago. And then Cameron and his family moved up a couple years after that. And then we moved to the brand in the Park City, about maybe seven years ago, something like that. And Park City just became an awesome place to put the brand. It’s got such a great active outdoor lifestyle culture here in Park City. And that has really just become a huge part of our brand at Kodiak cakes. So really, you know, it’s about eating healthier and living, active. And so Park City is just an awesome place for us to be.
Kara Goldin 5:31
That’s awesome. And so when did when did Cameron, when did you come into the picture?
Cameron Smith 5:37
Right, I actually joined in in 2009. So I was going to school at the University of Utah, and started started looking for jobs. And I saw a job post from from Joel on the University of Utah’s job board. And I and I stumbled upon it, I thought it looked pretty interesting. And then when I went and met Joel and his dad was actually there at the same time as well. I remember walking out just thinking man, that would be a lot of fun. And, and then like Joel mentioned, I mean, the business was under a million dollars. And I was just I was just kind of looking for what would be some fun experience to do some some pretty cool stuff. And I mean, now looking back at it, I have no idea what what what I was joining and where we were going to go. But you know, at that time it was I was just finishing up school. So I was just looking for work could be a long term landing place.
Kara Goldin 6:33
I love it. And you were just saying yes. Right? You’re just jumping in and and dry. Not right? What’s the worst that could happen? So as I say, I love it. Super, super fun. So officially, when did Kodiak really launches a business? I mean, it sounds like you, you guys, were sort of dipping your toe into it a little bit? And then, you know, starting from 1997 to 2009. I mean, it sounds like, you know, where were you at that point? You have product in local stores? Or what was kind of the the map at that point?
Joel Clark 7:08
Yeah, those were some Those were some pretty long, hard years, because so when I took it over in 1997, it was the company was was really small, my brother had been running it on the side, for those, you know, for those couple years trying to get it off the ground. And then he came to me and he’s like, Hey, I he wanted to go back to school and, and just try to kickstart his career. And he’s like, I don’t have time to run this little pancake thing on the side. So I took it over, I was going to college at the time. And so I ran it for about seven years on the side for the next seven years, just as a side hustle, trying to keep it alive, trying to keep it going. And then finally in 2004, I quit my job to go full time with it. And then my dad helped me He joined me. He was retired, he was 65. And he’s like, I’ll help you let’s do this together. So he and I worked on it for the next four years together and got it from about 150,000 in revenue to about 800,000. And so we were making some progress, but it was still really small for a consumer food brand. And so then that’s when you know, 2009 then that’s when Cameron joined. And, and really the two of us just Cameron became a co founder with me. And the two of us really started to, you know, make take the momentum, my dad and I started to create and then we just built upon that and started to really we started to innovate and started to finally see some really great exponential growth.
Kara Goldin 8:28
That’s awesome. So what was your first store? Like how did you I mean, people are always asked me like, how did you get your product, you know, on the shelf? I mean, what was kind of the first the first sale that you made? I guess
Joel Clark 8:41
so in so in November of 1995 when my brother john had just gotten this, this product ready to go he had found someone in Salt Lake to make it and so we had like, I think one pet one or two pallets of product. So that was like the very first production run. And so he got this done. And we had like actual product in hand that we could go sell. So john went to work one day, he still had his he had his he had a job. He’s like Joel, can you help me sell it so i that i remember i i left his house this this one morning with all these samples in a bag and I literally just got in the car. And I drove downtown Salt Lake, and I started going into gift shops. So I went into hotel gift shops in downtown Salt Lake and I started just I’d go in and meet the manager, I drop off a sample and literally just say, Hey, we have this pancake mix, would you be interested in carrying it here? And I went to other kind of gift shops around downtown Salt Lake. And we started to get people saying, hey, yeah, I’ll buy a case of this. I’ll put it on the shelf and just see if it does anything right. And so it was really really small, really grassroots and people were just like, I’ll buy one case. I’ll see how it sells. You know, and then like that Saturday, john and i took a trip to Park City and, and we each took one side of Main Street. It’s like a hill. It’s like a street that kind of long, and it goes up a hill and so he and I were each kind of going going in and out of these gift shops as we walked up Main Street, trying to drum up more, you know, people to sell Kodiak cakes. And so we picked up a bunch of stores there. And then we and then we took a trip to Jackson, Wyoming and Sun Valley, Idaho, within the next couple of weeks. And we picked up more stores there. So I think in the first, in the first couple of weeks, we’d picked up maybe about 50, little gift shops selling this and we were just, you know, john was just selling it up passing it by the case out to these people as they would kind of run out and need more. That was really like how we got started.
Kara Goldin 10:32
Now, why gift shops? I mean, it’s such an unusual strategy to go after gift shops versus, you know, most people and kind of the, you know, natural better for you food. They start obviously, in Whole Foods, Whole Foods wasn’t I guess they were technically around, but down in Texas, so they weren’t in your area. But why did you think that gift shops would be a natural fit for this product?
Joel Clark 10:59
Good question. So I think john felt like people that were on vacation, and going into gift shops, like had, you know, they were in spending mode, they had a little bit more disposable income. And so they like there was that there was that impulse buy of buying, like a really unique packaged product, right. And so the hope was that, you know, you’d get people that could pay more money for a really high quality product. But we but you’re right care, because pretty soon, we learned that you wouldn’t, you couldn’t sell very much out of a gift shop. And so the only way that we were ever going to make any money on this thing was to get it into grocery stores. And so that’s what you know, and that was John’s original plan was eventually he wanted to get it get a lot of volume on this and sell it to kind of mainstream consumers. But he felt like the gift shop world could be a good place to start good place to see how people liked it. And then so it wasn’t too long after that, that he approached, started approaching grocery stores and our first major kind of more major grocery chain was actually Qf see up in Seattle, and so early 1997 they became a customer and put it in their stores and it started working.
Kara Goldin 12:05
That’s awesome. Where are you guys in Jackson’s up in Jackson Hole?
Joel Clark 12:09
We were in? We were in a lot of stores. I don’t know. I don’t remember Jackson’s? Was it like a grocery store?
Kara Goldin 12:15
Yeah, they just actually just got acquired by by Whole Foods. And but they were they were like a, they’ve been around for a while and independently owned the right in downtown Jackson Hole. And anyway, they’re, they’re a great store. And I know we continue to sell lots of hint there. But they’re, you know, they’re definitely a kind of a, I don’t know, they’re they’re a trendsetter for, uh, you know, great products. I wouldn’t be surprised if you guys were in there.
Joel Clark 12:46
I’ll bet we were we were in a lot of stores up there. And you know, you get the right consumer does go into a lot of those higher end natural food stores and gift shops. Right. So you kind of you can get a lot of great consumers out of those.
Kara Goldin 12:58
Yeah, that’s awesome. So you started with this pancake mix? And then you know, you’re, you’re learning about the the whole world of of not only gift shops, but grocery stores. And, you know, what did you how did you figure it out? I mean, what what was kind of, you know, your thinking on on this, I mean, I certainly I came from Tech, I did not come from this world. And I remember it was like, you know, this whole new world that I didn’t know, I mean, brokers and distributors, and, you know, like, it was just crazy town. And and I think in many ways, what you guys did around around the gift shop strategy, we actually kind of grew up and tack. And so we were in Google and Facebook. And you know, when in fact, we were the only drink and face or sorry, in Google for the first like two years of you know, and so we just like, we had no competition, and it was like a beautiful world. Right? It was like a very different world than what we were dealing with on the with Whole Foods and the grocery stores where there was competition. I mean, we were, you know, it was kind of like, do you want cherry or blackberry? I mean, it was just that was the big choice and the big decision. So what was it like? I mean, just trying to figure this out. And how did you go about it?
Cameron Smith 14:19
You know, it’s, it’s, it’s funny here because we that that figuring out process, we kind of always had that. You call it a chip on our shoulder of, you know, funding people can figure it out. We can figure it out, too. But I remember when I first joined I was telling Joel like, yeah, let’s, let’s, let’s grow. This sounds great. And he, he gave me this list of all the gift shops, and he said, Here are all the gift shops we’ve sold before. Why don’t you start calling them and I was like, Okay, I’ll start calling those. So I started ticking through the list. And as I went through the list, I was like, Man, this seems like a long slog. I’m not sure that this is actually going to work. I remember so I grew up in Nebraska and I remember working at a hyvee In high school, and so I thought, I bet if we can get this into a high V, that that can actually, you know, increase sells potentially. And that feels like if I can make one phone call, and be able to get into potentially a couple 100 grocery stores that feels like I can spread my work out better than calling 100 gift shops, right? And not knowing what the sales are gonna look like. I love it. Yeah, that’s exactly right. So, so I called up hyvee. And, and you know how this is buyers never answered the phones, and they never respond. Well, the buyer actually answered the phone. So here I am. I’ve only I’ve joined Joel, a few months in, and the buyer answers a call. And I remember just kind of freezing and just being like, yeah, we have pancakes. And, you know, I talked, I talked to the buyer, and I didn’t go anywhere then. But from there, I put together a list of what are the top 100 grocery stores throughout the US and then just started kind of ticking through those lists. And we got into target we got into Meijer in the Midwest, we we got into round ease in the Midwest. And then what we started to see is if we really want to grow this, it’s it’s those main retailers but but just like you said, we had no idea how to work with them. And so we would actually go into buyers, and ask them questions and buyers were man, they were they were so nice, because we’d say, Alright, well, I mean, when you say promotions, like what type of promotions? Are you looking for? Like? Well, I’m looking for this many promotions at this type of cadence. Okay, great. And often, we would ask the buyers, you know, because they would say, do you guys work with a broker? And we would say, No, we don’t work with a broker. But who do you recommend? Because you know, we want to find someone who you like working with them? You know, so a lot of it was just kind of asking questions to buyers, just just to understand and, you know, we asked so many questions along the way. And that’s something we continue to do, right? Because you have to continue to learn and grow. And then you do a lot of that from asking questions to people who gone down that path and gain that experience. But it does, you know, you’re right. I’ve had entrepreneurs in food asked me, and how do you get started? And I’m like, you pick up the phone, and you start calling and you start asking questions. Yeah.
Kara Goldin 17:17
And you have to be able to be humbled. Right. And and taking, you know, because as I, as I said, I actually had a little different experience with trying to get my answers every time I answered, or I asked the buyers at the grocery stores, they’d say, you have to, you have to figure that out. I’m not going to figure that out for you. And so what I did is I talk about it, I just launched the book, and I talk about in my book that I literally would like camp out. And in Whole Foods, I would sit in whole foods for like 12 hours. And then the minute that somebody in like the chip aisle looked like they were kind of official, and it’s really challenging because you know, Whole Foods, you work at Whole Foods, there’s no uniform, right? You don’t even have an apron, they look like you know, like people stocking the shelves, you’re like, gosh, they they look like they’re kind of official, I’m like, hey, do you work here? No, I work for this brand. And then I just start talking to them. And I’d ask them, you know, how did you distribute your chips? And, you know, do you know any people in the beverage industry, I’m trying to figure this stuff out. And so my biggest fear was actually getting kicked out of the stores by, you know, Whole Foods, like I was like, they’re gonna, after a while, they’re gonna be like, stop bothering our customers. These are really a customer he like works for, you know, the, whatever the chip brand and, and so I was constantly asking, but I felt like the more questions I asked, the smarter I became, and, but there was no manual for this. And it was, you know, it was, as a friend of mine said, who had been in the industry, the natural products industry for a lot longer. He said, it’s just, it’s like pick and shovel work. It’s like, you know, you just keep picking away at it. And, you know, you take few steps forward, and then you take, like, more steps backwards, and then you you know, come forward again, and then hopefully, forward again, and then, you know, and and that’s what’s fun about it. I mean, it’s kind of sick, right? In our in a way, like the people who jump into this industry, and you guys know what I’m talking about? It’s like, you know, it’s a choice. Definitely. It’s, it’s a lot of fun, but it’s definitely, you know, got its moments for sure.
Cameron Smith 19:34
Well, and you said, you know, you said pick and it made me think of the gold mine, the Gold Rush, how many people run out there and they’re picking and they’re digging for gold? And we’re just the lucky ones who actually struggled, right? But there are a lot of other people that are digging just as hard as we are and picking just as hard and then haven’t found that gold yet. But and same with you and us it’s like Alright, we actually found something that does work and does resonate.
Joel Clark 19:56
And then you just keep going right so i think i think like you just keep going keep picking, because I think something I think a lot about is that so many times it’s not the business that fails. It’s the entrepreneur that quits. Oh, really. And I think that happens so much. And so it’s like what you’re saying cameras, like, we finally did get some luck, right, we did finally get some things that we found some gold, but man, we were out picking for a lot of years, it just really kept at it. And and I think that’s really one of the you know, I think that’s one of the great things are skill sets that I think entrepreneurs really need is just the ability to persevere to keep going and to keep trying and to and to, to really ask like said, like, you guys, were talking about the ask those questions and, and figure it out, because it’s you, you don’t have somebody there to really mentor you and teach you every day, you have to find mentors that can help you here and there. But for the most part, you’re kind of on your own, just being scrappy, and figuring it out. And that can be pretty fun, right? because like you said, camera, we always had to have this belief that hey, if anybody else could can do it, then well, why not? Us? I mean, why can’t we? So let’s just go do it. Let’s just go figure it out. We’ll ask the right questions and persevere as long as we can until it
Kara Goldin 21:08
works. Who did you find? To be kind of like you mentioned mentors? I mean, who did you find to be really, really useful for for you along the way?
Joel Clark 21:19
I think for me, like I always had some friends. Well, let me back up a little bit. Like I remember when I was in college, my older brother john did an MBA and he was he he for one of his classes, you’re interviewed a bunch of local entrepreneurs. And, and that was kind of for me, and he took me along with him on these interviews. And he had asked these guys questions, all these people questions and just learning. And I remember thinking, one of the answers, one of the guys said was surround yourself with great people. And that’s a major key of success. And that just resonated with me at a really young age. And I thought, Man, okay, I need to have people around me that I can just talk to you. I can ask, because I can get help from and so, you know, I’ve had a lot of friends. I mean, a good friend of mine, CEO at Trager grills Jeremy Andrus, for example, I mean, I think he’s been someone I’ve asked questions to for years, and he moved, he moved in next to me, we were, we were neighbors straightaway, and got to know him. And he’s just an example of that. I’ve had a lot of other people like him, but you need people around you that you can get to know Yeah, that you can call and say, Hey, what about this? What about that? What would you do here? What would you do there? And those relationships evolve, and they add value.
Kara Goldin 22:27
I love that example, though. Because it’s not somebody who was in the pancake industry, because one thing that I talked about a lot is coming in from Tech, I thought, okay, I’ve got to go and find all these, you know, people in the beverage industry, who will, you know, show me how to do this and pave the way and instead, like, those were the people who were like, you know, you have no experience in this industry, you’re gonna be roadkill. And you know, and frankly, I mean, not a lot of them were very nice. And there’s been, you know, many stories that, that I’ve talked about, about that. And some were nice, they just weren’t very helpful. But I found that almost any entrepreneur, right, like part of it was just kind of getting me in the right mindset. And just being able to say, like, Hey, I remember when, you know, it was really bad for me, and then what I thought about, you know, kind of storytelling, and sharing those times when things were really hard, and giving me ideas, not necessarily solving my problem, or giving me a phone number for a distributor or telling me how to deal with Whole Foods, but kind of, you know, helping me know that, you know, I wasn’t alone. And, you know, and that was really the most the most helpful thing for me. So I love it’s gonna, I think so many entrepreneurs today. I mean, I feel like there’s so many more resources, there’s our podcast, there’s, you know, so many other, you know, books out there and great podcasts that kind of help people. But I just also feel like, you know, the answers are not necessarily sitting with, you know, the experienced people, the people that have all done it. And, and so often, if you don’t have those relationships, and those mentors, then you think that you can’t, right, you’ve Yeah, you stop before you even start.
Joel Clark 24:22
Yeah, that’s the motivation you’re getting, you’re getting inspiration and motivation from those relationships a lot of the time, and that’s just, that’s what you need. It’s like fuel to keep you going. Right? Yeah, that’s often just what you need. You just need time. You need to keep going. You need to persevere and persist. And then doors start to open up.
Kara Goldin 24:39
I love it. How was your original packaging? I mean, you talked about it being in a paper bag, like did you change your packaging a lot over over the years.
Joel Clark 24:49
It hasn’t changed a lot. I mean, we’ve you know, the bear hasn’t really there hasn’t changed at all, I don’t think and then, you know, just little, little little subtle changes here and there as we’ve kind of gone through as we’ve evolved, but Yeah, it was a bag in the beginning then it became a box that we’ve printed on kratt directly on Kraft paperboard, for example forever, and but just subtle changes over time. Not drastic,
Kara Goldin 25:11
how important do you think the story is like to consumers? And would you think that realism in obviously, taste is is so incredible and important for your category? I believe, but what? What do you think in terms of the story? I mean, how important do you think that is for this consumer?
Joel Clark 25:30
Um, I think it’s, I think it is, I think it is important, I think people are looking for authenticity and food brands. So I think it is, but I think you have to dig a little bit to get to that, though. Because, like the brand, like it’s not right on the packaging, for example, right. So the packaging is different, the packaging is about kind of nourishment for today’s frontiers, what we say so we’re about, you know, whole grains and, and, you know, better nourishment. And with a frontier theme, you know, like harkening back to the old frontier when food was simple, and real and wholesome. And I think it’s cool to have a, you know, great authentic story, because then when people really dive in deep and really want to know, get to know a brand, like ours, then they, they find that story. And then I think they engage even more with with the brand, and they’re even more loyal to it. But so I think it is important, but I think, you know, really, it’s not what gets people to initially buy it. What gets people to initially buy Kodiak cakes is whole grains and protein and this, you know, natural, authentic brand that has a lot of meaning.
Kara Goldin 26:33
Yeah, and then the taste you’ve got, I think today I I always pick on red ball and say that if you know Red Bull launch today, it wouldn’t be successful because it doesn’t taste but no one has ever said that Red Bull tastes good. Right? Like, it’s like they bought it for the for the bump, right for the for the energy. But today, you have to have a product that tastes great. Otherwise, it’s just I think the consumer is very, very particular. And much more so today than even 30 years ago, for sure. So, so you, you all went on Shark Tank and and I’d love to hear a little bit more about that.
Cameron Smith 27:15
Before before we went on Shark Tank. So this was about 2012. In the winter, Joe and I were just talking about how can we get more awareness to Kodiak like, I mean, as as you know, when you’re a small brand, there are a couple of big things that you’re trying to solve. One of the biggest things that we were trying to solve was awareness and trial, what we need to get this into more hands and more households. And with with no budget, right, like we didn’t have millions and millions of dollars that we’re going to go and spend on a massive advertising campaign. So you have a lot of cards stacked against you. And we were just kind of brainstorming and what could we do? And the thought kind of popped in my head? Well, what if we went on Shark Tank? You know, my wife and I had watched Shark Tank for many years. We’re a big fan of the show. And I remember talking to Joel and Joe’s I yeah, so what’s the show about? And I was like, Well, here’s what they try and do and he’s like, yeah, cool. I mean, it sounds kind of interesting. And I was like Joel, I mean, we there’s there’s six to 7 million people that watch this. So this could be huge awareness. He’s like, Great, yeah, let’s, let’s, let’s do it. So, so I reached out and just on, you know, their, like ABCs website and and and just send some information. A few weeks later, I got a phone call from someone saying, Hey, I’m a casting director for Shark Tank would love to talk to you about Kodiak cakes. So talked a little bit more, they put us in touch with some producers that we started working with. And then we went out and and filmed the episode and the you know, the whole thing for us was was pretty surreal. You know, the show that you watch the, you know, with, with these celebrity entrepreneur, business people, and when you stand in front of them, it’s, you’re you’re kind of nervous, right? Because you’re like, I’m pitching my idea. But there’s cameras, but then I haven’t had the opportunity to actually like just sit and talk to them. You know, to call them some of those nerves.
Kara Goldin 29:10
So you never talk. So you don’t talk to them at all. So you get up there. That’s so that’s,
Cameron Smith 29:15
yeah, so it’s so I mean, so you pitch the idea. And then they ask a ton of questions. And they’re all asking questions, sometimes at the same time, and you’re trying to like, figure out who are you going to answer what question first? About but all in all, I mean, they were really respectful. They were they were really nice. And it was a it was a positive experience. You know, we went in thinking, Man, if we could get a partnership, this could be even better. Maybe we would get the show. Maybe we’d get our episode on TV. And if we had a partnership with one of these sharks, that could probably accelerate growth as well. So maybe we can hit a couple birds with with that one stone and unfortunately, we didn’t get a partner But it opened a lot of doors for us after that, you know at after that happened. And after our episode aired, Joel and I started thinking a lot more about bringing on an actual financial partner to help us continue to grow and scale. And and I think if we wouldn’t have gotten on Shark Tank, I don’t know that we would have gone down that path in that time. Yeah, because that’s a hard thing for entrepreneurs to sign up for is giving away part of your business, which can feel like giving away part of your baby your child to someone,
Kara Goldin 30:35
you hadn’t raised money at all up until this point. And no until Shark Tank. Oh, that’s right. That’s amazing. And then after Shark Tank, did you guys eventually raise money?
Joel Clark 30:45
We did. Yeah, we about let’s see, I guess two years after this show aired. So summer of 2016, we did finally raise capital from from private equity investors. And, and that really was that really was just such a positive experience for us. I mean, we were able to bring on a great partner, we were able to bring some finance, you know, more financial resources and cash into the businesses to help us grow. And and I think what we really got out of that partnership was just so much vision, vision and mentorship for how to how to scale a brand and how to scale ourselves, you know, as leaders of a business. And so we really did get a lot from that. And it was so positive and added so much value. So I think that was but it was a hard decision. It took us a long time to make that decision. And, and and we talked to a lot of people in that process, because we wanted to pick the right partner wasn’t just about who’s going to give us the best valuation, it was, well, who’s going to be an awesome partner with us? And who do we like and who believes in us, and who could align with the way we want to build the brand. So yeah, turned out to be just awesome.
Kara Goldin 31:51
And so you didn’t just to back up, but to the Shark Tank, so you didn’t take the sharks money. It was it. If I remember correctly, it was two of the sharks that came together that actually gave an offer, but it wasn’t what you guys were looking for. Who were the sharks.
Cameron Smith 32:09
So Barbara, and Kevin went in on a deal, taking 50% of the business. I mean, they were offering 500,000 for 50% of the business. And Robert and Robert said, Hey, I’ll do one better. I’ll give you the 500,000 for 35% of the business and Joe and I walked in thinking okay, maybe 10% maybe we could stretch up to 15%. And, and so once they started with those, you know, we were like, Alright, we’re pretty far away. I don’t know that this is this is gonna happen. So it was I mean, when and now in hindsight, right. I mean, that would have been an amazing deal. Yeah, exactly. Yeah.
Kara Goldin 32:55
No, it’s always it’s become very difficult for me to watch shark tank and over the years because I just sit there and it’s through the whole thing. So it’s, it’s very, very complicated. And I you know, I appreciate and and love watching. You know, people I admire I should say watching people get up there and and pitch but I know how difficult it must be and and Do you get any time in between their offer to kind of make a decision or, I mean, the two of you are just like looking at each other just trying to figure it out.
Joel Clark 33:31
We’re like, well, what happened was like when, when Kevin’s on or when? When Yeah, when was it Kevin Kevin’s offer came in and he wanted half the business. Like, well, I mentally started checking out like, right that I started like, I’m like, You’re in my mind. I’m like, we’re out of here, right? And then, you know, then Robert goes, Well, okay, I’ll do it for 35% of business and, and so then I’m like, literally, I’m starting to walk away. I’m like, I’m about to say hey, thanks. It’s not gonna work. And so Cameron looks at me and he’s like, should we counter? And it’s like, Yeah, actually, we should counter that that’s a better move than just let’s just walk away. And so I know he had a much, much more presence of mind than I did. And and so we did counter but we didn’t we didn’t have any time to just we didn’t walk you can I guess walk off and take a minute and talk about at least you used to be able to we didn’t do that we were just like we just countered rattled at this on the spot up to where our max was like cameras are stretching up to maybe 15%. But in fact, I think that got edited out they didn’t even show that but but we but they you know we were still so far away that we ended up just saying thanks and walked away. So we never even talked to them. You just go on and then you if you don’t do a deal, you don’t really even talk to them. You just kind of walk off the show and you’re in you’re kind of done.
Kara Goldin 34:49
Wow, that’s wild. So wild. Well, one one day maybe I’ll I want to go on there and be a judge. So I’m going to straighten them all out. I would love to do So, what has surprised you the most in your entrepreneurial journey?
Joel Clark 35:05
I mean, I could start I think, for me, it’s, it’s been probably just the, I think I under under estimated what my own personal leadership development journey would be, would be like, because that’s been really like, you know, we brought on capital. And then we started to have to professionalize the business we did we started to, we brought on a leadership team. And, and so I think, you know, we we were these small entrepreneur entrepreneurs running a small business and needed to scale up to CEO and President like, and so Cameron and I, we had to go through a lot of scaling a lot of development. And that has been, I think, something that I totally underestimated and didn’t really think a lot about early on, I think we I just thought to myself, okay, we have, we have food products, and we sell them. And I didn’t really think a whole and I weren’t, you know, I thought about marketing and sales. But I didn’t think a whole lot about leadership development. And that’s something that we’ve had to spend a ton of time on. And it never ends. Like we’re always doing that we have leadership coaching involved now with helping us and so that’s been, it’s been a lot. It’s been fun. It’s been challenging. It’s it’s been hard, it’s stretching us the whole time. But that’s that’s been surprising to me.
Cameron Smith 36:20
Yeah. And I think, you know, one that earlier on things that was that surprising for me now looking back on it, you know, pretty early on, I think we thought we could grow Kodiak to 10, maybe 20 million, and then probably sell it at that point and then do something else, right? I mean, I think when you think entrepreneur, you think serial entrepreneur, you go from one business to the next to the next to the next. And you never just, you never just sit and just like calm down and just focus on what’s in front of you. Because you’re always looking for that next shiny object. And I remember pretty early on for Joel and I, we would get distracted on a lot of random ideas, you know, we’d go on, we’d go to food shows and travel together. And we talk about a lot of whether it’s business ideas or products that, you know, we were always, oh, no, Joel was as much, but I was always looking past Kodiak, I was always thinking this like, Alright, well, we’ll sell this and then and then we’ll go do something else. But as the more Kodiak has grown, the more I’ve seen will actually, this is our thing, this is what we’re doing, there’s, there’s a good path here and, and there continues to be more and more whitespace in front of us, I thought years ago that when we got to this level and skill, that a lot of the whitespace would have been gone. But today, I feel like we have more whitespace for the brand, than the organization than we’ve ever had. And and the path to the path to actually get this brand to the you know, call it a billion dollar brand, what what I could say is like a mega brand, is is a lot more in reach, than I ever would have thought it could have happened years ago. And so I think that’s some of that evolution as entrepreneurs as your entrepreneurs, but then like Joseph, like your role starts to change, then you have to be okay with embracing that. Because if you don’t embrace that role change of, hey, you’re not necessarily an entrepreneur anymore, you’re a CEO, now you’re a president now, and, and the roles are different, the expectations are different. And then that can be a hard transition. If you don’t make that transition, then you do need to sell and you need to bring in someone else so that you can go back to tinkering back to being an entrepreneur. And that’s been what’s kind of surprising for me is just seeing that there continues to be a path here at Kodiak for where we’re going and what we can accomplish here.
Kara Goldin 38:38
Yeah, totally. are you guys doing a lot on direct to consumer?
Cameron Smith 38:44
We don’t we’re doing we’re, we’re doing some, but I think that’s something that we think a lot about, is really growing that direct to consumer, you know, what, what’s happened this last year with COVID? And how some of the buying behaviors have just shifted in the past year and a half. You know, there’s there’s a lot of opportunities we do we interact with consumers a lot on social. And so bridging those two together, I think there’s a real opportunity for the brand.
Kara Goldin 39:11
Yeah, totally. So I, I think that that is that’s how you get to be a billion dollar brand. There’s so much whitespace there for sure. So you’re all on Amazon, obviously, but you’re just not selling on your own site. So I think that’s that’s definitely huge. I mean, that business for us during COVID has tripled. Wow. And it’s almost it’s almost 50% of our overall business for the kind of unbelievable, that’s massive so and what’s interesting, the more we grow our direct to consumer business, the bigger we get in stores, and so we get more and more and more space, because we know that you know, consumers will buy it online, but then they’ll go into Costco and they’ll see, you know, pack a variety pack and they’ll be like, oh, hint, you know, I’m gonna go Buy it. And so it’s it, they play off of each other. And it really, I think, if I think COVID really highlighted for me that the consumer really is in charge of where they buy products. And if you’re, if, if they’re buying a majority of their products online, maybe they’re moving to a place where you don’t have a store that carries your product, and you’re not available online, you lose them. Yeah. Right. And I think more and more people are, you know, shifting out of major cities, they’re going to places where, you know, they don’t have the cool stores anymore. So. So anyway, I just think it’s, it’s a, it’s really interesting, I can see. And it’s also an opportunity to tell your story more. And I think that that’s where the consumer really starts to, you know, you become top of mind to consumers and developing data and email base. So, super, super cool. So well, I absolutely love your story. And before we go, I mean, sort of the the final thing I want to talk to you guys about So you talked about your private equity partner. So is that Do I understand you guys sold the business? Is that correct?
Joel Clark 41:16
Yeah, we sold most of the business. So we, we, we were acquired by L catterton, which is a another private equity group that’s focused on building consumer brands. And they’re really probably, they’re probably the best in the space at, you know, building consumer brands like ours, and taking them to the next level, and really, you know, really scaling. And so, you know, we’re really excited about these guys are gonna, they’re, I think they’re just going to be such great partners for us. And so we didn’t sell all of our shares camera, and they rolled a lot of what we own still into the business. So we still own a significant minority stake in the business. But, you know, we had private equity involved before. And I think that’s kind of the natural evolution, the private equity needs to get out at some point. And so it was time for us to get new partners involved. And but we’re, you know, Cameron are still involved, day to day running the business, just like before, so in many ways, it’s business as usual, but with a new partner on board with some new capabilities. And so we’re, you know, like Cameron said, it’s like, the white space continues to grow. And I think it’s getting the right people around around us getting the right people around the table and helping us see it and then helping us go and get it. And so, really exciting times ahead for for us here at Kodiak cakes for sure.
Kara Goldin 42:36
Very, very cool. Well, thank you guys so much for coming on and sharing just the whole entrepreneurial journey that you guys have taken. I mean, it’s just it’s awesome to you know, hear that you guys have gone truly from nothing from a bag, brown paper bag when you’re eight years old, right into, into what it is today. It’s very, very exciting. So and if you love this episode, everyone, definitely give it five stars and subscribe to the Kara golden show. And if you haven’t picked up a copy of my book, to undaunted, overcoming doubts and doubts doubters, please pick that up. And where’s the best place to pick up your product?
Joel Clark 43:24
It we’re in most grocery stores around the country, target Kroger, Walmart, Costco, and then, you know, we’re online Of course, and then, you know, follow the brand on Instagram, you can really kind of engage with us and learn a lot more about our brand and what we’re about through social media. So
Kara Goldin 43:42
I love it. So great. Well, thank you to both you and both Joel and Cameron. And thanks, everybody, for listening. We’re here every Monday and Wednesday. And thanks again. Thanks for having us, Kara. Absolutely. Yeah, thanks, Kara. before we sign off, I want to talk to you about fear. People like to talk about fearless leaders. But achieving big goals isn’t about fearlessness. successful leaders recognize their fears and decide to deal with them head on in order to move forward. This is where my new book undaunted comes in. This book is designed for anyone who wants to succeed in the face of fear, overcome doubts and live a little undaunted. Order your copy today at undaunted, the book calm and learn how to look your doubts and doubters in the eye and achieve your dreams. For a limited time. You’ll also receive a free case of hint water. Do you have a question for me or want to nominate an innovator to spotlight send me a tweet at Kara golden and let me know. And if you liked what you heard, please leave me a review on Apple podcasts. You can also follow along with me on Facebook, Instagram, Twitter, and LinkedIn. Kara golden thanks for listening
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