What's up, everybody? This is Cortland from IndieHackers.com, and you're listening to
the IndieHackers podcast. On this show, I talk to the founders of profitable internet
businesses, and I try to get a sense of what it's like to be in their shoes. How did they
get to where they are today? How did they make decisions, both their companies and in
their personal lives? And what exactly makes their businesses tick? And the goal here,
as always, is so that the rest of us can learn from their examples and go on to build our
own profitable internet businesses.
If you've been enjoying the show and you want an easy way to support it, you should leave
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Today I'm talking to Sam Eaton, one of the founders of a cookie company called Crave
Cookie. I noticed Sam posting just a ton of milestones on IndieHackers about how much
money his cookie business is making. And it set out to me because not very many IndieHackers
are doing food delivery businesses, not very many IndieHackers are baking cookies. So I
wanted to talk to Sam to find out how COVID-19 is affecting his food business, how a software
engineer got involved in baking cookies and selling cookies in the first place, and what
lessons we can learn from this type of business that has a foot in the real world and isn't
purely tech. Enjoy the episode.
Yeah, well, I think the fact that you're doing a cookie business is going to set you apart
from pretty much everybody else who comes on the podcast.
Well, I was always kind of trying to do the SaaS or B2B side. That's where my experience
always was. You always try to do what you think you've always done or whatever. You
don't see what's available to you. Just having been in big tech for six years and then my
sister saying that she was going to start a cookie thing with my cousin. Oh, my cousin's
going to help me set up a Shopify site and start selling cookies. And I'm like, no, please
let me... I've been an IndieHacker. I was already doing IndieHacker stuff for a couple
of years before that. Like, please let me help you set up your site or set up your company.
So yeah, that was... It ended up being me and my sister.
It's really worked out. I mean, I just talked to Scott Keyes from Scott's Cheap Flights.
And his business has been pretty threatened by COVID because he's in the travel industry
helping people save money on flights. And you're in the food industry. I think most
food businesses are also suffering. Most restaurants have been closed down. But you on the other
hand are thriving. You've been blowing up. You've been posting these milestones on IndieHackers
about how you're making $100,000 in revenue every month and how COVID has been almost
the best thing that could have happened to crave cookie because you're in the delivery
business. Is that just pure luck? Or is that like you change your business model because
of COVID?
No, we were already up and to the right as far as growth every month, every quarter.
But that just gave us probably what... It was probably a 15% bump in what our normal
trajectory was. We were already hitting like the 100k a month or whatever before that.
And then yeah, after that, we just like... What was that? Like in April or May?
Yeah, I think the last one was 110k a month in April.
No, but we hit. We hit over 200k. I think it was in May.
How many cookies is that?
We do probably 15,000 cookies a week.
And that's all just to your local area.
Yeah, it's one kitchen with drivers going around and delivering these cookies. Yeah.
That's nuts.
See, the thing is though, if part of that is... I'd say 80 to 90% of it is just from
our online orders. But we have also partnered with a local coffee shop that has like five
locations. But that's still part of a normal business model. We bake the cookies and we
deliver them to the coffee shop. And then people come and pick up the warm cookies there.
They know to do it at a certain time. And so there's a line of cars lined up at this
coffee drive-thru to pick up these cookies. But yeah, it doesn't add any complexity to
us. It's the same business model, just delivering cookies that are stripped from the oven.
What are your margins like selling hundreds of thousands of cookies?
Yeah, our margins are much higher than the typical restaurant industry. So like, normally
margins for a restaurant is under 15%. Ours are 35% to 40%.
Nice.
It's been really, really good on that side.
I think most technologists, like you're a software engineer, right?
Yeah.
And you also do design because your website's beautiful.
Yeah, thanks.
So you're like this sort of full stack engineer, unicorn. You've started Indie Hacker businesses
before. I think most people in that position would never really dream of doing something
in the real world because the margins are low, because you can't really move atoms as
fast as you can move bits. And there's all sorts of pains to deal with and things in
the real world that just seem antiquated and unattractive if you're a developer. Why did
you decide to do this? Why did you get excited when your sister said she was going to make
a cookie business and not say, you know what? That's for the birds. I'm going to stick with
this digital stuff.
I don't know if it's something because I grew up in sports or whatever. But like, I just
get super enthusiastic about stuff really easily, no matter what company I'm at or whatever.
If someone's coming to me with an idea and they're pumped about it, I turn to a mirror.
I'm like, yeah, this could be sick. We're going to do this. We're going to add this
thing to the database and we're going to start doing all this stuff. And so when she's talking
about like her selling cookies, like I don't even think about the normal model of people
doing Shopify sites. I don't even think about that stuff. I'm just thinking about from a
software engineering point of view, like how efficient Ken, like when I was a growth engineer
too, it wasn't just like a, I do all the full stack, but like for like most of my software
engineering career so far, I've been a growth engineer. So that was a few tech companies
doing that. And so I love the marketing and growth and that side of things. And so actually
building up her cookie forms and trying to optimize how people are like putting in their
information, you know, the way that you make it so people are choosing the flavors right
away before they even have to put in any information. And then finally they put in their address
and it does all that stuff. So like trying to optimize that and just even adding things
like how Amazon has my orders, you know, you can go back and see your order history, adding
that it's built into the product and like seeing how many people, how many thousands
of emails we collect after people. We launched that three weeks and we have like over 10,000
emails locally. This is in a local little place that we have that many emails. It's
like crazy. Yeah. So it's extremely focused on how good those emails we have are, you
know, so it's, yeah. So anyway, yeah, it's just a, I get super enthusiastic about this
kind of stuff and I don't really care what the product is. I just love doing this new
things, but yeah, I do still want to do the B2B side, even doing the cookie thing. Like
I still have a bunch of friends who are in sales and all that stuff. And it's just, I'm
always talking about ideas. There's just something about how big the tech side can be. You have
faster growth or faster potential or bigger potential, but you do have a lot slower growth
on the consumer side. I feel like especially with a physical product, like we're limited
by how much we can do in a store. So I've been super efficient with one store, but we
have to add more, more hubs. Yeah. So, but once we start doing that, it's just, it'll
just snowball. I mean, the numbers are still pretty crazy.
If you think about the typical internet business, you have access to, theoretically, everybody
on earth. Everybody who's connected to the web and you see companies spending months,
years trying to grow their email list and find customers and they don't get to 10,000.
And you have a business where you're pretty much limited to your local area and you've
managed to get 10,000 people on an email list.
They were limited to a 10 mile radius. That's their delivery radius.
And that's it. And it's maybe, you know, is there something about that focus that helps
you build a better product or deliver more happiness or convert more, more signups? Why
is it even able to get to such high numbers, even though you have such, you know, relatively
small pool that you can play in?
Yeah, that's, that's, I think that's it. It's the focus. So the thing is, I always loved
building my own stuff. And so like with the effort it takes to build things, you're actually
kind of constrained in how much, how many features you can add in an amount of time
and all that stuff. So like really we added the, the online form and then it just goes
into this back system thing. And then we, we kind of just keep focusing on the efficiency.
And so as we just get a high volume of cookies, they're still always straight from the oven.
And like, that's the kind of stuff where a lot of customers complain about certain things
like, Oh, I can't mix and match the flavors in a box. I have to buy two boxes if I want
two flavors, but that's part of our focus. It's, we see in our system how many cookies
we have to make for a 30 minute time slot. We have to do this many chocolate chip and
this many churro cookies or this many sugar cookies. And we know that that's each box
is whatever. So we just kind of make all the boxes and then we start grouping those for
the drivers. So it's like, yeah, we were extremely focused and limited. And so that means that
you can just guarantee quality at that point. And so people are just constantly ordering
these cookies are recurring customers. It's, it's really high. You know, it's 60% of people
will buy again. They're just always quality cookies. And there are people so surprised
when they're like straight up warm when they're pulling them out of the box. So like we just
made them.
I've never ordered cookie delivery. But I think I would also be surprised if I order
and the cookies come and they're super warm. Because that means you've got your shit together.
You're really thinking about the customer experience.
Yeah, it's definitely one of those things where if you were to make cookies at home
and you have them straight from the oven and they're still kind of falling apart, you can't
pick them up yet. We're almost at that level. But they're still they're really, really fresh
and you can totally tell that we just made them. Yeah, there's other cookie companies
like this in different parts of the country. We were the first ones to do it in California.
Yeah, like in the Mountain West, there's a lot in like Arizona, Utah, Colorado, and that
kind of area. But as they were growing, they're doing a lot of with franchising and all that.
And we're finding that a lot of their quality is going down really fast. And as they're
kind of really branching out and not really, so yeah, they're, they're growing too fast
in these places. So yeah, we're just extremely focused on the quality. We only have one location
right now. So it's a lot easier to do that. But that's part of the challenge. It's that's
the fun part, stealing that.
So the goal, I think, for most indie hackers that I talked to, is usually some form of
freedom, right? They don't like working in a normal job because you get a monetary ceiling
with how much you can make with your salary. You have to work on this sort of fixed nine
to five schedule. You can't control the time that you work or all sorts of other things.
When you have your own business, you can control all of that. You can work from wherever you
want. You can work with whoever you want, your sister, your friends. You can be as creative
as you want. Does any of this stuff align with why you were building and growing Crave
Cookie? What are your goals?
Yeah, I think I started doing all the indie hacker stuff because I had all those same
goals. But I think what it was is I was just kind of uninterested in the companies or the
just the dynamic of the way that I was assigned work at some of these companies. Yeah, it
is a freedom, but it's one of the things I really like about the Netflix culture doc
and it's part of their big culture thing is they have a, they call it their freedom and
responsibility is a big part of their culture. I really like just the enthusiasm and freedom
of doing something. I don't care if I'm working for someone, if I get that freedom and that
recognition of what we're doing is actually having an impact. You probably even have more
opportunities in a big company to do a lot of things because you don't have to focus
on every single little thing you do as a founder. But yeah, I do like the freedom because I
love the enthusiasm and enthusiasm is contagious. I do feel a little lonely when you're a founder
and you're not just talking to your colleagues and you're not a founder. You're just bouncing
ideas off people and there's no politics involved with that.
Being a founder is an essentially kind of lonely job because even if you have employees,
your concerns, like you said, are much more focused, they're not worried about the entire
business, they're not wearing every hat. And there isn't really anyone, I guess besides
other founders or perhaps your co-founder or investors who can really empathize with
exactly what you're going through at any point in time who are really your true colleagues.
Who's running Cray besides just you? Is your sister helping?
Yeah, so it's me, my sister who's running all the cookie R&D and the kitchen efficiency
and then my brother-in-law, he's running the operations side.
What a phrase, cookie R&D.
Yeah. There's something about being on a team with other engineers and other designers
who have your same skill set and being able to talk to them. When I talk to my sister
about engineering, she has no idea what I'm talking about. I could talk about the business
but you can't talk about the user experience that people have, like the different features
I want to add. She's like, that sounds cool. Okay, I'll add that.
I've seen you posting on IndieHackers about the tech side of Crave Cookie, talking about
how you've kept things simple, your server costs, etc. And that seems almost like it's
your escape where you can talk to some other developers who actually care and know what
you're talking about and are just going to be like, okay, cool.
Yeah, so that's one thing I like about IndieHackers and Hacker News or whatever. You'll see people
with comments and then I say, actually, I use this technology. There was just a post
on Hacker News recently about Crystal, which is a new programming language. And I'm actually
all in on Crystal on Crave. That's our server language. And it's not even at 1.0 yet. So
it's kind of a bad choice from a business perspective, but I don't care.
Well, this is the freedom you get as a founder. You can do whatever you want. No one's going
to say, don't do that. It's a bad choice. If it's fun for you, you just do it.
Yeah, it's just because I feel like I'm actually on to something when I'm doing everything
is extremely simple, but not going all in on the no code side. Everything is on one
server in production and there's a SQLite database, meaning it's not a separate database,
not a separate server. It's literally a file in that same database. When I started it,
I was just writing to a JSON file, the whole database. That was it. And I was reading and
writing from that file and as we started to get too many orders, it's too slow to read
and write. So I just moved it to SQLite and I've never changed it. I had to do things
like change the way I do my database indexing to speed up my queries and all that. But yeah,
it's just getting super optimized and it's cheap. We're paying less than $300 a month
for the server stuff and that includes the deployment and all that. I have another server
for deploying and building all this stuff.
So what kind of stuff are you building? If I am a customer experiencing Crave Cookie
or I'm an employee of Crave Cookie, what are the digital properties that all this code
is running?
Yeah, so most of the code or most of the app is on the admin side. So that's very similar
to how in Shopify when you log in, it's Shopify.com slash admin and that's your, as the store,
that's your side of the app. And so from there, when people purchase cookies, it feeds into
our orders and we can basically view all the orders. There's a lot of filters and things
for viewing orders viewed by time slot, by customer, by whatever. And in the orders,
when we got all these orders by time slot, we have to group those because we open up
maps in the app. It'll open up maps for each time slot, for each 30 minute time slot. And
you can see the clusters of where all these orders are. So we have people who are literally
clustering these orders on the map in the app, like grouping them. And then when a driver
is available, we start giving them these groups of clusters. Like here, you got these five
orders and then the next hour you got these other five orders. Here's all these, here's
10 orders of cookies. Go. That's one of the benefits of me being a software engineer.
Like this, this cookie business wouldn't have all these little tools. This little competitive
advantages of a local delivery business without me kind of customizing all this. Like I'm
using Google maps, all their APIs and with the built into our admin dashboard. There's
other things as far as like, you know, flavor management, calendars, all that stuff for
when flavors are available or delivery hours, how many deliveries per slot, you know, if
we have a driver causing sick, we have one less driver for that few times lots.
It sounds pretty complex. I mean, if I go to order from a website, like a typical website,
half the time I'm not even sure they're going to get my online order. Like their website
looks like it was made in Microsoft paint. I'm like, is this even going to work? Meanwhile,
you've got like a very modern tech business going with this sort of cookie front, where
it's super optimized. You put a lot of work into actually building out all this stuff.
How much of an advantage does that really give you? You know, does that help you save
a ton of money? Does that help you make your business much more efficient?
Yeah, there's features that before I added them, like before I added the maps that were
built in, you literally had the address, that was a link, you would click on that orders
address and open Google Maps in a separate window with that icon. And when we have in
one time slot, 60 to 70 orders in 30 minutes, you can't go through and see where each of
these are, you're trying to guess by looking at the street name where a driver like which
orders go to which driver. And I wasn't grouping them either. Like you were just assigning
them individually to a driver and it was a lot of time. When there's 60 or 70 of them
and you have one person assigning orders, you have to do one a minute. That's insane.
You literally don't have anything else. You can't take a bathroom break. And so it's more
like the technology has enabled us to have a higher ceiling of how many orders we could
actually fulfill based on how efficient the assigning and grouping and making sure the
driver has the maximum amount of orders in his car when he's leaving.
Right.
Otherwise, you're giving them and then you realize that two drivers are in the same area,
then one has a driver across town after that. It's just really bad. And so yeah, there's
even more like now that we're doing all this with grouping, I could start adding software
to just start clustering these groups automatically. I don't need someone to assign them. It's
more ideas I have. And as I keep doing that, the software is more valuable, the business
is more valuable because we're actually innovating. And there are a lot of restaurants that probably
want to use this stuff.
Yeah, you can strip this out and basically sell it like white label to any other restaurant
that's doing its own delivery.
Yeah.
There's something so fun about building internal tools. Because your sister, she's doing cookie
R&D. Her customers are really the people who are eating the cookies. She needs to make
delicious cookies, make sure their process is repeatable. Your customers as sort of the
TTO, technical co-founder are to your really your employees, making sure like you said,
your delivery drivers can take a bathroom break, making their job as easy and efficient
and painless as possible. And when you're developing code and tools for your own employees,
it's just wonderful because you get such good feedback. Like these are people you see all
the time, you can talk to them. They're not, you know, it's people you have to hunt down
and try to figure out how you're going to talk to your customers. They're right there
working for you all the time. And it just I think creates such a positive feedback loop
where it's much easier to make sure you're building the right thing.
That's the reason why I don't always like remote work is there are some of these feedback
loops, especially early in a company, when you're building internal tools, you need to
see the people using them. So I'd have to visit the warehouse a few times and actually
just sit there and watch them, or just talk to them about it. Because they don't always
like a lot of these people are, they're young, like one of our manager, where our manager
of the warehouse is a girl in her 20s. And like she, I don't know if she feels intimidated
to always give me all these little feedbacks about, Hey, this thing is broken. There's
a bug here. Yeah. So like actually being involved more involved with that with the customer
tooling or the employee tooling. But yeah, it's not just the employee side since I do
run the form that when people check out and like their confirmation and their orders page
and their billing history and all that stuff. So it's like doing both one engineer, it's
a lot of work.
Yeah. So it's just you writing all this code, doing all this design.
Yeah, thank goodness. There's all these third party tools that I use like Stripe and Google
Maps and Twilio. I'm like, man, this would be impossible with all that stuff.
I think it's easier than ever, or maybe not easier, but it's more empowering than it's
ever been to be kind of a solo developer starting an online business. Because you can't do all
this crazy stuff by yourself. And it's not easy. I mean, you still probably have to work
a ton. You still have to be good at what you do. You probably developed a lot of skills
over the years, but it's possible. You actually can do it. And that means that you can basically
scale up an operation like this with as few costs as possible. You don't need a giant
team of developers. You can just do one thing and have a ton of profit. And also, I think
you just get the increased efficiency that comes from having a small team where you don't
have a ton of communication overhead. You don't have a bunch of other developers or
managers or people you have to communicate your product plans to and take six months
to develop a feature.
So you can just think of something and build it today because you're just a team of one.
Yeah. But that also means I get excited about a feature. And it's not really the most important
thing, but I don't care. And I'm going to... I love seeing this thing out. And actually
most people... Yeah, I get this hunch to build something and it's not as important as something
else. But people are excited when they see it, especially my sister or whatever. So that's
just being exposed to product development and product managers. They always have these
features they want you to build. But now I actually get to go off my hunch and build
what I feel like is distinguishing. Just little things like when there's only one or two orders
left in a time slot, just actually showing that in that time slot on the forum, that
kind of stuff. It's not as much of a priority as online shipping. Actually, I was shipping
cookies in the mail, because we probably make a lot of money from that. But I want to really
optimize our current business model before I start adding all these other things. Because
the likelihood of me going back and optimizing these things when I have two things on my
plate is a lot lower.
I've got a kind of a recency bias rule for myself and indie hackers. We'll always get
excited about some new thing that I've thought of or someone suggested that I really want
to build. And usually whatever I've recently thought of just becomes by far the most exciting
thing in my mind.
And anything else kind of gets pushed to the back. And pretty consistently, it's been the
case where if I am excited about building something, that excitement outweighs my rational
decision making process. I haven't really thought through it. So my rule for myself
now is basically I have to be still excited about something a month after I first thought
about it for me to actually build it. I'm not allowed to just build anything that comes
to mind. Otherwise, I'm going to waste a ton of time. But it is super fun to just indulge
and do whatever you want. And just use the programming language that you want, build
the features that you're excited about, and realize that it's probably not going to kill
your business and you're having a lot of fun doing what you want to do.
Yeah, everything does go in my backlog and I do order it. So there's at least some accountability
there. But yeah, I do feel like that if you're excited about something, it'll show when you
build it.
Yeah.
I'm feeling it. I'm in the zone. I'll put a little extra touch on my form validations,
all these different things about how the form is processing. If it's just a pain to you,
you'll forget to put the little loading icon into the clicks on a form. They're like, is
it submitting? I don't know. That kind of stuff. You do need to be excited about what
you're working on. Because then what's the point? If you're a founder, you need to be
excited about it.
So let's talk about how you got here. Because you weren't always running a cookie business.
In your previous anti-hacker businesses, your last project was the SaaS business. It was
all online. Tell me about that. What were you working on and how did you come up with
the idea?
Yeah, my last thing was called Gamify. And that was a tool that was basically for gamification.
You make these achievement lists that people can embed inside of their app. And so for
example, when someone signs up for... I had this idea when I was working at Qualtrics,
which is the big enterprise survey company. They're part of SAP now. But yeah, so when
someone signs up, there's so many things to do. Imagine going into Photoshop for the first
time. You never used Photoshop before. How many things do you can do? You want a list
of things. Hey, just draw a square for the first time. And then once you do it, checking
off that item of the list automatically. It's built into the thing. With that achievement
list idea, there was a lot with detecting stuff in the browser. Doing all this DOM diffing
and all that stuff. When someone clicks an element, how do I detect that element is what
they want it to be done. There's a lot of complexity there. And I still think that kind
of stuff works. People don't want guides and walkthroughs where it kind of forces you around
the app. I don't like that stuff. People usually just click X on that. But if it's a little
list that kind of gives you some tasks that you can kind of check off, I feel like that
helps with me. So I don't know what the market says.
So the idea would be that if I were to use this as a customer, let's say I use this for
ND hackers. I would install it on my website and there'd be a little list in the bottom
right or something that says, here are five things you can do. Fill out your profile,
create a product, add an avatar, make a post. And as they do those things, it's kind of
checking off the list and they feel like they're getting better at using ND hackers.
Yeah. And it's even in more advance than that because it has had built-in APIs and stuff.
So you can say, get five upvotes. And you can actually, as ND hackers, kind of figure
out how to detect someone has five upvotes and then talk to my API and tell them if they
have five upvotes. And then they'll see that in their list. And so you can kind of gamify
even more. It's kind of like what badge systems you would see on Reddit or whatever.
But kind of letting other companies have it built-in and it's a separate platform.
Why did you stop working on this? What was kind of the arc of the story?
With B2B, it's super important that you have a people person on the other side. So I did.
I had a guy who's a VP of sales at another tech company. I still talk to him all the
time. We're still talking about ideas. But it's more like I was completely in on the
code and building in the design. But then he was still in the let's test. Let's see
if this is viable, even though I'd already built everything. So he's kind of just like
floating ideas or he's kind of just kind of talked to some people in the discovery phase.
So I kind of jumped the gun a little bit by a lot. I spent too much time on this thing.
How much time?
Probably eight months.
Eight months just coding it?
Yeah.
Wow. Before you had any sales?
It wasn't a full-time job, but like eight months of time. So like probably if it was
a full-time job, it probably would have been two or three months. And so he was kind of
floating. He was talking to people on LinkedIn. He had a good email list. He was just talking
to people with product managers and all this stuff. And it's really hard to just do that
grind. And I don't think he was as invested enough yet because it was still early and
he wasn't as excited about it. So it's like, what more can I really do?
So it was just finding the product market fit and getting a customer base. Like I do
think that it's still something that's super valuable to people. But every time I show
the actual product to people, they're like, wow, that's pretty cool.
Did you make any sales? Did you generate any revenue with this thing?
No. I didn't even have a payment form or anything up. It was still in the beta stage.
You're still building it.
Yeah.
So what was it like deciding to quit that?
Yeah, that was actually... It was not me deciding to quit it. It was more like, oh, look at
that over there. So it was... Like I was saying, I just get super excited about other ideas.
If something is not successful, naturally, I'll just find something else.
Other shiny things will take its place.
Yeah. I don't get super bummed about it. I am a growth engineer. I am a data analyst.
I just see the logical side of things too. It's not... I'm just all emotion and excitement.
So I will just be like, yeah, screw that little thing. I'm just over it.
I assume the shiny thing that distracted you was just saying she wants to launch a cookie
company.
Yes. That was around the same time. Yeah. I started that when I still lived in Seattle.
Yeah. So that was not long after that. That was in 2018. Late 2018, yeah.
And you're thinking, okay, I'm a growth engineer. My sister wants to do this on Shopify. I can
make this so much better, so much cooler. Where did you start with Crave Cookie? What's
the first thing that you do?
We did look at all the stuff with Shopify. We looked at how expensive it is. Just for
an MVP, I don't want to have a commitment of how much I have to pay a month, $60 a month
or whatever it is, plus a bigger cut of your salesman. So I can easily build a website.
I can easily build a form that feeds into a JSON file. And we just handle payments through
Stripe or whatever. And then when you go to the admin side, you just see all the orders.
That's pretty simple. And when some orders mark delivered, it filters that one out, you
don't see it anymore. That was the MVP. And it's extremely easy. You just loop through
all the orders in the file. And I just render a table.
How long until you made your first cookie sales? Because if you're building this from
scratch, I imagine it's going to take...
Yeah, it took me one to two weeks to build this thing. And we had our first sale.
Very cool.
And it was growing fast in that little small town that my sister was living in. So she
moved and sent to a bigger city. We were in a little small town, Ripon, California, little
tiny town. And so she's like, okay, we're going to move to a bigger town and put in
some roots, get this thing growing.
So with an online business, the way people find their first customers is creating an
email list or tweeting or posting on something like Product Hunt or Hacker News or cold emailing
people. How did you make your first sales in just one to two weeks in the real world
selling cookies to people in your sister's town?
Instagram and Facebook groups. This was in 2018. So yeah, she just started contacting
people she knew on Instagram and Facebook, just announcing that there's these warm cookies
available.
Yeah, I think people kind of like the idea of buying some homemade cookies. But it definitely
looked different than just, oh, this girl I know is selling cookies. Because once you
go to the website, it definitely doesn't feel like some local person selling cookies. That
was my side. I'd been trying to make it feel like a reputable company instead of someone
selling cookies from their kitchen in my mom's house. Because yes, he was there. Yeah, they
were in between houses. They were moving from Sacramento, lived in my mom for a while until
they were moving down to Fresno Clovis. And so they had from my mom's kitchen with a cottage
food license, we were allowed to sell up to 40 grand of product a year without much regulation.
Yeah, but she just started selling in there.
Give me a snapshot of all the rules and regulations that go into this because I have no idea how
to start a food company. You've got to get a license. I assume you have to do something
to make sure your kitchen is up to quality, up to snuff.
If you're going to start one of these things, and you're an indie hacker wanting to do an
MVP, you just have to get what's called a cottage food license. It might be different
in different states. But in California, you just need a cottage food license. And that
means, like I was saying, you can sell up to 40 grand a year. And it's much less regulated.
You can be in your home kitchen. You don't have to have all the nutrition facts. You
can just put allergens the way that you package things. It's different. There's rules about
you can't have any pets in the kitchen. You have to have your gates up around the kitchen
and stuff. But yeah, so for people wanting to get something started, if you just want
to just try selling food locally. Yeah, it's just sounds super simple, very simple regulations.
It's like people who go to a like a bake sale or a bake sale or like when they have like
the farmer produce we couldn't go and buy a farmer's market. Yeah, farmer's market.
People have all these little things they can sell farm farmers markets, they have rice
crispy treats, they made or whatever laws people I I'm sure don't have any kind of license
unless the farmer's market requires you to have it. So that so they probably do. Yeah,
it's a very simple license to be able to sell stuff like that. But with our volume, we quickly
needed a real license. So that that's when it starts to get really expensive. Because
you have to actually relatively expensive. We're not we don't have a huge storefront
with all the seating and like the the nice bathrooms or whatever. So like, it's different.
So we just have a warehouse you don't see but it's still there's there's still regulation
you have to have with it the way that the kitchen is set up the way the ceiling has
to be over the kitchen, where you store your ingredients, how you store your ingredients,
the dress code for people making these things, you know, the hair nets and all that and there's
a lot to learn. And none of us had any experience. My sister's been making cookies for a long
time, but she's never done it commercially. So it was a lot of experience and and growth
hacking, kind of doing things and then asking questions later. Yeah, I'm setting up the
kitchen and then and then getting a license for the big warehouse after it's already running,
you know, doing stuff like that. And once you start working, it's not so like, oh, the
police are going to come and shut you down. You're working with the county to get these
things set up and they know you're working with them. They're gonna give you some slack
if they know you're, you're trying to be legitimate and you're running it, you're trying to start
a business. That was good. And especially since we were working with a coffee shop and
they had some experience doing that. So you really need friends who have any kind of experience
in it. And you'll find that if you're doing sales and you're working with people.
Was there an inflection point where you went from, you know, this is just an MVP, it's
me and my sister, we'll see how this goes, sell a few cookies online to, oh, shit, we
need to hire people. We need to expand our operations. This is a real business. I'm gonna
put a lot of time and effort into this.
Yeah. So for me, it's different than for my sister. I always saw this as passive income.
I was fine working in the tech companies I was working in. And even before quarantine
and all the COVID stuff, like I was supposed to go into Google and go work at Google and
stuff while I was doing this on the side. But like, that happened and things changed.
And yeah, so I was always kind of seeing this as passive income. And I would just kind of
keep optimizing the engineering side and put in nights and weekends. But yeah, after the
quarantine happened and we got such a huge bump and I could actually see how much growth
we could get, how this is a seven figure business out of one delivery hub, having a food business
make seven figures is crazy. That's like Chick-fil-A and In-N-Out Burger do that. But not everyone
can own a prime location Chick-fil-A and In-N-Out Burger, you know? So to get a restaurant that
can make seven figures and have almost 40% margins is, it's a rare opportunity.
Now after the quarantine is going, we actually have some capital to work with. After the
quarantine happened and that was like March, we saw all the potential and we actually had
some money in the bank to work with on track for seven figures. Yeah, we got to get a second
location. So that's when things start to get real. Now that we're locking down the second
location, we have it. We're going to get the second delivery hub. There's going to be a
lot of things now that have to change with the software as far as having multi-hub support,
especially when you're ordering, which delivery hub are you in? Are there differences in how
many slots are available? Because there's different number of drivers per different
delivery hub. But these are the kind of problems that once I solve them, the company can just
copy and paste. I can copy and paste more delivery hubs at that point. Once you do the
first new hub, the third and fourth and fifth, they're going to be so much easier. And once
we have like 10 locations, you know, is this something I can franchise? Is this something
that I can, is a software that I can finally sell to other people because we're managing
10 locations. You're kind of like constructing and perfecting the playbook right now. And
then after that, the goal is just to run the playbook as many locations as you possibly
can. My philosophy is always keep things as simple as possible, but optimize it. You want
to stand out because there's other cookie companies. And there's even ones that are
starting in California, they're moving over now, they're expanding. And so we can beat
them with just better cookies, always warm, and they deliver them fast. And yeah, that's
part of it too. It's like when people get deliveries, all of our drivers are wearing
our crave gear. And it's just part of the experience, you know, you're getting a crave
driver, the whole thing is just our brand. And we've even had things where because people
can write messages on the box, that's part of when you order. And so there's people like
they'll write notes and say, tell the driver to spin before he hands me the box, just little
weird things. And then he'll do it. And they post it on our Instagram. That's the kind
of stuff where we're kind of building a brand that's more holistic. It's not just a cookie
delivery service. It's very popular in the town that we're in. And the amount of people
posting about it, like them opening the box or them excited when they open the door and
it's our delivery driver. There is a definite local brand there. That's why it's one of
the, I guess the benefits of us having gone completely do it ourselves, don't hire any
external services. Yeah, maybe it would have been good to use DoorDash or whatever when
we were getting started for the MVP. But my brother-in-law was just driving, we didn't
need to pay DoorDash. And so we kind of just naturally went from my brother-in-law driving
to hiring a driver instead of scaling up the third-party service.
Yeah, that strikes me as a pretty crucial part of how your business works. Because most
restaurants that do delivery, I mean, you're always faced with this choice. Do we do delivery
ourselves? Do we hire our own drivers? Or do we use one of these services like DoorDash,
Postmates, Grubhub, Uber Eats? And it's not just delivery. All these services provide
discovery too. A lot of people figure out what they're going to eat because they go
onto these platforms and see a list of restaurants. But since you're not using them, you're not
there. You have to somehow get people to know about Crave Cookie and want to worry you without
you being a part of all these delivery services. What's been your sort of strategy for growth?
How have you been able to reach so many tens of thousands of people?
It's been completely organic. It's people posting about us. And this is the benefit
of us being a hyper-local company. When people post, it's their friends and neighbors seeing
it. And those are other customers or potential customers. Once people are kind of raving
about a local cookie delivery thing, it just spreads really fast. And so there were some
things that injected the growth, like getting featured on some prominent local people's
feed. It's not like we paid them or anything. It was organic. But then like a news company,
like a local Fox station or something wanting us to be on their morning news for local cookie
delivery for National Chocolate Chip Day or something. We gave free cookies to like policemen
and firefighters or I don't know what it was. So it was that kind of stuff that got us to
be more discovered at first. But then now it's just mostly people posting about it all
the time. And then that gets other people to see it and like, oh yeah, I'm going to
buy some cookies right now. And then we just will post things on Instagram. But yeah, we
haven't needed to do any email marketing at all. No text message marketing at all, even
though every order has a phone number and usually a customer email. We haven't used
those ever to send marketing stuff. So yeah, it's we just been having hyper organic growth.
Yes, it's completely based off of the social media. I'd say it's one of the one of the
best things you can do as an ID hacker when you're trying to get your first foothold and
grow your businesses, you want to pick a really small niche. You know, there's so many big
companies that are targeting the mainstream. And if you can find some small group of people
who share products via word of mouth with each other and who all are pretty similar
and who are underserved by some bigger market, then you can get a foothold. And I think what
you've done that's super cool is like your niche has just been in your local community.
As you said, everybody in your local community, they all know each other. If somebody orders
a box of cookies, it's kind of a naturally viral product. Like you don't order a box
of cookies and eat it all yourself, unless you're me. You're probably sharing it with
other people and they're going to want to know where you got them, etc. And you're going
to talk to other people about it if it's a good experience. And so it seems like such
a great way to just start growing your business and you kind of escape the competition that
way. There's not a bunch of other giant cookie companies competing with you and it's kind
of easier to get on the local news than it is to get on some sort of massive news website
online or be the top product hunt. Everything is scaled down. There's just much less competition
and you can just really shine and then grow from there. So I think it's pretty cool to
see the way that you've actually executed on this.
And having the big tech experience, I see how cutthroat the big tech world is and how
optimized a lot of that stuff is for marketing and all that stuff. And taking that down to
the local pond, it's much easier from that side. There's things that are harder. But
to go back from the growth thing, we did also have early on gift messages that we handwrite
on every box. So you can, when you're checking out, put in less than 150 characters or something,
but we'll write it on the box. And so we get a lot of gift orders. So people are gifting
them to other people. It's a very creative gift. It's a box of cookies from a local cookie
delivery company that are huge and warm. And it's a handwritten message from that person.
So it's a lot of gifts and that gets people to discover it.
Super smart. There's nothing more viral than a product that you can get. Like a Hallmark
card. You never buy a Hallmark card and just keep it. You give it to somebody and then
now they know about Hallmark cards and they'll want to give it to somebody else. And so it's
kind of built into your product to be viral. And if you're selling cookies as gift boxes,
that's such a great natural way for the product to basically be something that others discover.
And it's not something like with online products, a lot of people will put a feature in there
where they'll just say, oh, you know, share this with a friend. Here's the share button.
And it's like, well, the product isn't naturally something that you want to give away. So why
would anyone use that? But with something like cookies, kind of it's a great gift for
a birthday or Valentine's Day or any sort of thing like that. And so if you just nudge
people to do it, you're not trying to convince them to engage in some totally foreign behavior
that they wouldn't do normally. You're just sort of going with the flow and sort of a
judo move like, hey, people want to share cookies. Let's just make it easier and make
that experience better.
Yeah, we literally just broke our single day delivery record on the Saturday before Father's
Day.
Oh, yeah.
Yeah, it's all about the gifting. It's not all gifting, but yeah, even if you're like
me, I'm kind of a health nut where I don't like eating a lot of cookies or just processed
food in general. When I say processed, I just mean not whole natural ingredients. I like
bland almost. I'll straight up just put cucumbers and carrots in a bowl with some peanut sauce
on it. I like the symbol, but even me would gift these to someone because I know it's
nice to gift them. Even if someone just has a few bites, they're still really good.
Yeah, so even though I don't eat our cookies, I definitely enjoy my samples.
So let's talk about the competitive landscape with a local business. Some things are easier.
There's less competition. Your competitors are less sophisticated. They haven't done
marketing at a big tech company. They haven't optimized everything. So you can kind of compete
easier in the smaller pond, but there's some things that are harder because it's local.
What's harder about a local business?
Yeah, once you start doing local business, there's just more regulation. Local business
is the way that business has always been done before tech disrupted it. And so there's human
history of regulation, or at least American law history of regulation. There's a lot of
hoops to jump through compared to just starting an online business. It's where it's still
kind of the Wild West. You kind of do whatever you want. So there's the regulation side.
It's not just local. There's B2B versus B2C because you can be local and serving local
businesses. But yeah, we're serving local consumers. And so in any consumer company,
you always have to have that strong focus on your brand and reputation. And with local,
it's crucial to have a good reputation and set word mouth spreads because we don't even
have a location. So people aren't finding us on Google maps and reading our reviews.
There's no location to look up. And so we are lucky that there's not any bad reviews.
My cookies were too soft. They were undercooked. Oh, no. Because in the first slot of the
day sometimes, we haven't warmed them up enough. That might happen. So people posting on Yelp
or Google Map review or something, that could hurt you bad if it drops you down a star.
We don't care about that stuff. We're just on Instagram. People see us on Instagram.
They see all their friends commenting. We have hundreds of comments on a thread. And
someone's like, oh, we've got to give me some of those. And so it's more like reading reviews
in a live thread. Like if you were to go read reviews on Hacker News or Reddit or something
versus looking at reviews on a static review site. That's more of like where our, yeah,
it's more of the local, where people are just kind of talking locally, how to get involved
with that stuff. So it's not like any business can do this. There's a lot of stuff you would
sell locally like that. They're just, I don't know. At what point does the homemade factor
really help you versus hurt you? Like if you're selling suntan or suntan lotion or sunscreen
or something like, can you do that homemade? Who wants to buy that? It's a solved problem
or something. You can just go do that, whatever. So like, do you want to, but like Chapstick
might be okay. I don't know if you want to be someone who's making like, I have my own
beehives and I have this, my home, like my beeswax or whatever, like that might be something
you can do. Or like I, my uncle owns this, not my uncle, I'm just saying it's an example,
owns a dairy farm or something. Like maybe I can try to do a different kind of local
delivery for the milkman, you know, trying to do that again. So there's certain things
that might have a certain kind of a, you know, cache or certain vibe that you can do kind
of this premium homemade kind of product.
Have you thought about that, expanding into something besides just cookies?
Yes. I want to make smoothies. I love healthy food. It's like, I'm not, I'm not a strict
vegan. Like I was vegan for years. Like I don't, I still don't do dairy or anything.
But like, so I do like the healthier plant based kind of stuff. And so I think just having
something like these premium smoothies that people can get and you just deliver them.
But like that company is literally only delivering smoothies. Like we're not, we're not branching
into jumbo juice where they're starting to sell all these little pastries or pretzels
or whatever. It's like we'd literally just deliver smoothies. And that's the kind of
focus that you get and you start to, you get a brand. People start to associate you strongly
with that product instead of like a, so if they see you as premium cookies, premium smoothies
instead of a cookie company or a smoothie company.
So like another thing is like, um, we've had a lot of change in the last, what is it? 50
years since the rise of fast food. People don't make food anymore at home or not well.
A lot of the knowledge that people got from their parents, grandparents and stuff has
kind of been lost, family recipes and all that. And so is there a way to get back to
homemade food but still tastes better than everything else? So like you're not losing
anything. You're actually gaining everything. You're getting better food, tastes better.
It's higher quality. It's better for you. And is there a way to have a delivery service
that just has, Hey, this is, these are our meals for the week today or Thursday we have
lasagna or pot roast. Friday we have these two things. It's like, and then you have to
still make it simple cause you want to make it so you can have it super efficient, but
then you start sending out these, these foil trays to people. So like families, moms, whatever
can buy actual good dinners, but it's way more convenient and better than everything
else. Like there's really not anything like that, that I know of, but it's just super
focused and it has a really predictable calendar that you can look at. And it has a variety.
It's a lot of the things with variety. People think that having a big menu is variety, but
I like, I like change. People like change. People like changing seasons. They like it
when it's cold and then it gets hot. And when it's the middle summer, you're missing the
winter. When it's middle of winter, you're missing the summer. You like change and people
gripe about it like, Oh, bring back your sugar cookie, but they like it when it comes back
and they buy it. So variety isn't always just having a lot of features or having a lot of
products. Sometimes it's just changing your products or having a, just like a calendar
or a, I don't know, just a rotating revolving product line. So like that's when we added
flavor of the week and we had our churro cookie, which was our second flavor and it was very
popular. People love it. When we announced we were not going to have that as a staple
anymore. We're going to do flavor of the week. People were freaking out because it's very
popular. Do you know it's like 30 or 40% of our sales. Yeah. It's like their favorite
cookie gone. Yeah. But we said, it's not gone. We'll bring it back as flavor of the week,
probably once or twice a month. So you'll still get it. But now you'll probably trust
that mouse that is your favorite cookie. And then exactly what happened when we, we offered
churro cookie once before we, it was a staple and we had a guy who kept going on every single
time he posts on Instagram, bring back the churro cookie, bring back the churro cookie.
And we did, we made it a staple. He loves it. And then we got rid of it. We added flavor
of the week. He tried the sugar cookie and he said, it's his favorite cookie he's ever
had. And he's like, bring back the sugar cookies. Don't make it a flavor of the week anymore.
Like people love the rotation, even if they complain, but like in today's society where
we have all this advanced technology and things, you can mostly get everything you want when
you want it. You can get air conditioning when you want it. You can get, you can exercise
when you want, not because you have to. You can, there's just so many things available
to you that you're not told no a lot. And so to tell people, no, we're not going to
give you that flavor or no, we have a limited amount of deliveries. We're not going to hire
more drivers. No, we're not open past 10 PM or we don't open before certain time. Like
it really does create some kind of scarcity that people like, even if they say they don't.
That's as part of like when you were a kid, like collecting Pokemon cards, there's the
why did, why were Pokemon cards so popular? Cause you were just, there was a scarcity.
There's the randomness. It's kind of like gambling. Yeah. You don't know what you're
going to get in that pack. Yeah. So that's trying to have that kind of, this was all
completely luck starting it. Like it was a constraint of be building the software from
scratch and me not wanting to add multiple flavor support. When I had to change, we had
chocolate chip. When I wanted to add another flavor, we literally had to get rid of chocolate
chip and at the other flavor be the chocolate chip. But in the, in the software I would
changing it to say not chocolate chip or whatever it is. Oh, if it's between these days, show
this flavor instead in the software, even though it still says chocolate chip in the
database. So it was completely like me slowly adding multiple flavor support. Now we can
add as many flavors we want on the form, but we learned not to the scarcity is smart. There's
a, a bakery that I used to live by called Mr. Holmes bake house. And they had an Instagram
account where they would post, you know, here's our menu for today. And every day there'd
be different flavors of donuts and different things. And there was like this one like Apple
bourbon donut they made that I thought was the best thing in the world, but they only
had it like once a month. And if they had it every day, I think I would have just gone
there every day for like a week until I got sick of Apple bourbon donuts and just stopped.
But because they didn't, as long as I lived there, I would check their Instagram account
every day. And then like once a month, I would see that they had the Apple bourbon donut
and I would go down to the, to the bake shop just because of that scarcity. And the fact
that it just caused me to miss that thing. You know, they don't let me sort of gorge
myself and go over the limit. They kind of limit how much I can get of the thing that
I want, which makes me crave it even more. And it makes me a more loyal customer over
time. So I think that's super smart. And it's super, it's in line with just what psychologically
we know about marketing and selling people like scarcity.
Yeah, we sell out daily. And so we, by the, by the end of the day, like if you're at three
or four o'clock, there's no time slots left. And we deliver to like past nine. And so it's
yeah, there's definitely something to it as far as like limiting what people can do. Even
if we could hire a couple more drivers and get a few more slots in there, just let it
sell out. It makes people have a higher opinion of your company just because they think it's
more premium and everyone's buying from it. It's like there was a huge social proof marketing
that was happening a couple years ago where you would see all these popups on a website.
Oh, so and so just bought a shirt. Yeah, this just happened. It's like, there's that social
proof side and just, just by having things sold out or one slot left and we're not lying,
we're not just trying to get you to buy cookies. We only have one slot left. Then yeah, there's,
there's, there's some social proof there and it gets people to continue to associate you
with a higher quality.
There's a good book on this and it's not a business book at all. It's just a psychology
book. It's called Influence by Robert Cialdini. And he talks about kind of six principles
of influence and kind of, you know, how people convince other people to do other things.
And two of the big ones are scarcity and social proof. We like to do things if we know that
there's a time limit. We know that, you know, there's not a lot of resources to go along
to go around. We want to make sure we get something before it's too late and social
proof. You know, we kind of take our cues from other people. We see other people like
things and we trust those things more. We sort of outsource our thinking to others rather
than having to figure out everything from first principles ourselves. So I recommend
anyone who's trying to sell something either, you know, whether it's in the real world or
online to read this book because human psychology is just so important. And this works, you
know, like in online communities and SaaS businesses as well. With indie hackers, for
example, we'll have certain conversations, certain forum posts that occur pretty much
irregularly.
For example, we'll have like a big, hey, show off your landing page post on the forum. And
we tried building this into like sort of a permanent feature. And there was always, you
know, a little bit of participation. People would kind of post their landing pages every
now and then. But then every now and then if we just do like one big post, like once
or twice a month, that post will get like 300 comments. Because everybody's been waiting
for the opportunity to share their thing. And so I think it's not just cookies, it's
not just food or real world businesses. But even if you have like a SaaS business or a
community online, if you sort of limit your features, and you create some scarcity, I
think it'll create more demand. And it's just something I think is underused. And it's kind
of cool to see how you're doing with Crave.
Yeah, that was always the philosophy with like the founders of Basecamp. They always
have that kind of philosophy where they don't give all the customers all the features they
always wanted. And they're still relevant today. So there is still in the news what
they're doing.
It works.
Their hey email thing, they're just launching. So they're... Yeah, that's... It's not the
only philosophy. So they're the ones that work, but it depends what you're selling.
Yeah. Well, listen, Sam, I don't want to take up too much of your time. It's been super
cool to hear about Crave Cookie. Your growth is insane. And it sounds like you've got a
ridiculous number of ideas for where you can go in the future. What would your advice be
to the other indie hackers who are listening in who haven't found any success yet, who
don't know what to work on, and who are maybe considering starting something new? What do
you think they should know?
So I can only speak to really like technical people, because I'm a technical person. But
I guess it's not completely true. But yeah, you're probably really good at something or
really interested in something. And you don't realize how you can pair with someone in a
very random way to sell something.
I was a very good software engineer, growth marketer, whatever. And my sister makes cookies.
And I sell cookies, like it's... And we're making seven figures of revenue. So it's like,
it's unreal how much more success I had doing something that I thought was... That I would
have thought was beneath me. When people love cookies, who cares if it's just like a...
It's like, oh, it's not a big tech sass company. Oh, I'm not featured on TechCrunch. I'm not
whatever. I have more people loving my cookies than a lot of people have actually loving
their stuff. Even if it's something they use all the time, it's just people are actually
passionate about it. And seeing all these little kids posting things, like you see little
kids enjoying it. And it's like their thing. I remember growing up and getting ice cream
from a certain place in my little town. And that's still a memory. People have memories
of this thing that I built from their childhood. So it's like, you can do anything random with
some people, but just find someone who has another skill in a different area and don't
always go solo and try to build something quick and don't waste time, like building
a big old thing. So yeah, that's what I wish I would have done differently.
I think that's great advice. And I want to just reiterate it because I think it's understated.
It's something people should think more about. Number one, if you combine your skills with
somebody else, just the number of combinations of things you can do just explodes exponentially.
If you're just like, I'm a developer, I got to write something with code. There's not
that many ideas that are going to come. But if you're like, hey, I'm going to pair with
a salesperson who's an expert at selling this, I'm going to pair with a cookie maker
or something. Suddenly, the combination of that means you can build something that's
super unique that a lot of other people haven't thought of and aren't doing. So I think that's
great advice. And then number two, you don't have to have the fanciest, flashiest, coolest,
newest thing. There's lots of things out there that people already know and love. People
love cookies, like you said. There's a million things that people love. You don't necessarily
need to innovate to find out what people love. You can just look at what people already love
and figure out a better way to bring it to them or a different way to bring it to them
and sort of de-risk your business in that way. So I think that's super smart.
Yeah, like you said, you don't have to innovate. You just have to be better at something that
people already like or be more convenient or just what gives you that competitive advantage
and then optimize for that competitive advantage what differentiates you from other people.
That's it.
Exactly. And it's frustrating because you see so many people stuck on this like, I don't
know what to build phase. And it's like the world is full of a million things that work
really well. Just build one of those. But for an underserved group of people in a better
way or optimized, and you don't have to worry about what people love. The answer to what
people love is out there. You have any answers to that test, just go build it. Sam, thanks
so much for coming on the show. It's been really entertaining to talk to you about your
cookie business. Can you let listeners know where they can go to find more about Crave
Cookie and maybe where they can buy one if they're interested?
Yeah, so we're at cravenookie.com. We don't have online shipping yet. I've built it out
and I tabled it. So it's just a matter of time. Probably in the next month, I'll probably
add some online shipping so you can actually try these. But basically, I'm not on a lot
of social media. I read books by candlelight at night. I don't like things to be overly
stimulating. I like being in control. And so yeah, I don't have a lot of social presence
online. Yeah, if you want to connect with me on LinkedIn, I guess, send me a message
or whatever. If you have any questions, my email is sam at cravenookie.com. If you have
any questions, that's where you can find me.
All right. Thanks, Tom, Sam.
Yeah, thanks, man.
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