Tate's Bake Shop: Kathleen King

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I four decades building a brand that eventually sold for half a billion dollars. It's hard hard for me to think of a more simple and elegant enterprise than eliminates. It's kind of like a laboratory where you can test out a whole bunch of hypotheses. He's around marketing and price structure and human psychology take for example the experience of my own children their first lemonade stand was just lemonade dollar glass and did fine. They made about forty bucks. The second lemonade stand sold lemonade and freshly bakes cookies. Two dollars for a lemonade and a cookie and did better than cleared about seventy five dollars but the third stand had have the lemonade and cookies. But also a hand-drawn sign hanging from the table. That read organic hand made lemonade. They added an additional sign. That said twenty percent of all profits go to the humane society of the United States. Now that lemonade stand totally. Crushed rushed it. Passersby would literally hand them five and ten dollar bills and tell them to keep the change in a span of just two hours my then eight and a six year old cleared one hundred and fifty dollars in profit and donated thirty bucks to the humane society. That's two hundred and seventy five percent growth between between lemonade. Stand one and three now. Imagine doing this every day for an entire summer depending on how many hours and weeks you work you could at this rate realistically clear about five thousand dollars by Labor Day which is kind of what Kathleen King discovered as an eleven year old girl except upped her cookie. Hustle turned into a business called. Tate's bake shop that Kathleen would eventually sell for half a billion dollars. Tate's cookies Giza's brand now owned by Monde lease the huge food company. That also owns oreos chips Ahoy Ritz crackers but long before any of this happened happened. Kathleen started a small bakery and Southampton on the eastern end of Long Island in New York for twenty years. She grew her little bakery into to a sustainable business. Until as you will hear she lost almost everything in a bad partnership deal and so at the age of forty two Kathleen lean had to start all over again and even though she grew up in the Hamptons Kathleen did not exactly cross paths with a glamorous celebrities and rich financiers who go there in the summertime. Her mom was a nurse and her dad ran the family farm where he raised chickens and cows when I was growing oppose about thirty acres and my dad used to sell the milk could to shrank dairy which was a local dairy and on the cows. We had maybe be. I don't know thirty or forty so everything was small chickens. Maybe a thousand nothing nothing. Big How many gamut of kids in the family. Only I'm the youngest of four two brothers and one sister. We had a lot of responsibility. We were nurtured emotionally. But we grew up in the sixties. You fall down. You know you get up cry. I'll give you something to cry about and you all work on the farm. That was just expected we did it. It was just given there was. They weren't options though occasionally. A brother or sister would escape from time to time to go. Do something fun but I had to collect eggs eggs and pick vegetables and wait on the costumer. We did everything there. The interesting part of my growing up was we didn't have any role playing because my mother was ahead of her time so we had to work outside and inside the girls and guys the boys had to do the same thing was what was your dad's business sustainable. Was it enough to support the whole family or were there. Were there times when you know was a struggle no thank. It was a struggle. Yeah my mom. She worked and she brought A consistent paycheck into the house nurse. If you like my father used to barter like you know a half half a steer to the dentist to get our teeth down and we had everything we need it. We just didn't we didn't go to restaurants and gone vacation. Yeah tell me about baking at your house. I mean you're on the farm. You've got responsibilities and chores that you have to do was speaking of just something that was going on the house all the time. My sister and her friend were baking brownies and Brad and cookies and selling them at the farm stand. They turned fourteen. They wanted to get a real job so they could be boys so they want it until the local ice cream parlor and I was the youngest so my dad said okay come. You're you're gonNA start doing these cookies. You'RE GONNA start making cookies and sell them at the farm so he can buy your own clothes for school next year and Blah Blah Blah. So I was just like okay and I just started baking like we. Didn't you know nobody was caught then. Nobody taught us you know and and respiratory you're using on the back of the Nestle chocolate chocolate chip beck the toll house trump right. Yeah and did you sell directly to people passing by in their cars or anything like that. Yes we had a farm stand in the yard a matter of fact what is baking cookies. I would look out the window and see customers pull up in the night. Run outside. Wait on the customer and then sometimes I'd have to say the customer. I'll be right back. I gotta run in because I knew my cookies. We're going to be done around that time and I just baked them. I put them in a plastic bag and put him on the counter. So did you get to keep the earnings from cookies more. Yeah the beginning. My Dad said he'd would buy all the ingredients and everything. I just made the cookies and made all the money you and then as I started selling a lot of cookies he said we need to discuss our arrangement. And you have to start buying your own ingredients and But I always got. I always got the eggs for free by the way I make my kids. Pay Me for the ingredients for the lemonade stand. Is that horrible. No that's what you should do. Unfortunately people don't don't do that anymore. I mean I wanNA lemonade. Stand sometimes where I see kids and I'm like why are you selling Newman's own which should be making your own. You get a niche. You get a niche. Get one step above the others all right so you are So you're making cookies farm stand but yet but what accounts for the fact that you were increasing the demand for them was increasing because they were really good and it just started to spread but what was so special about them. Did you change the recipe. Well when I was eleven I was Probably measuring a little haphazardly and then created the cookie. The way I liked it. I don't like cake cookies at all or thick cookies and I made them. They were like five inch diameter at least because back then. That was before supersizing so I wanted to do something that drew attention to them. mm-hmm so I made them very large and they were thin. They weren't crisp like Tastes are today but they were. They were thin with a little Chris Chewy Shuey and people would drive there sometimes just for the cookies so as I got older. The amount of sales grew so by the time I got into high high school. I was baking in the summertime. Seven days a week ten hours a day in my mom's kitchen and she just allowed me to sprawl all over so by the time you're high-school baking cookies at the stand Like were you making significant pocket money or even more than pocket money. Oh Yeah yes. I bought my own car car. You know like the second hand car like kind of car you pay for two thousand or two thousand dollars. Yeah and You on this summer I could earn like five grant. Wow and You just stand there all day and and You know kind of like fueled my loaner side a little bit because I never had like a real summer job where there were lots of kids and people did things and they went out and all those things I just to the kitchen picking cookies all right so so. You're so you're actually making some serious dough people coming by buying cookies. Just you know and I'm assuming that when you were eighteen when it was time for you to college. Did you didn't think that your life was going to be the life of a cookie. Baker that you were going to go to college figure out what you're GONNA do and and sort of get a quote unquote real job right. Yeah you know. I went to Two Years College Coppola Skill. I started in a restaurant management and just kind of went to school and I don't know I had ideas in my head. Oh well maybe I'll work on a cruise ship. You know 'cause I thought I might like to travel. I hadn't and then I graduated in nineteen seventy nine and went home to make cookies again for the summer. Because that's where I could make the most money. Sure my mom said That summer so so what are your plans and I was like. I don't know and she said well. This is your last summer making cookies here. Why did you save say that because my mother was also like my father independence and standing on your own feet? That was everything and and then she said you. I know there's a bakery for rent in town so I went to the bake shop and it was a fully equipped bake shop. Two bakeries had been in their prior to me both have both failed and so I looked at it and I was like Oh this is perfect. This will work for me so I just rented it. I needed to work and my goal when I opened the shop was really to to rent an apartment and Get a car and by the way how I mean. How much money did you need to due to start this bakery did you? Did you have any Miami. Did you have some savings yet. I I had five thousand or so that I saved before I rented and and I had to borrow some money and of course I couldn't get it from the bank so my brother lent me a little bit of money because I had to buy My chocolate chips was two thousand dollars and the store wasn't pretty. I took old barrels from the farm and I painted them and turn them upside down and put plywood. I went on top and I made a tablecloth and put that on top and then my labels I wrote by hand. And what did you call shop started out as Kathleen cookie but then to expand. I changed the name to Caffeine's bake shop because I sold more things than just cookies. And how B before you actually opened it it to the public will I think I rented it in like November and then I opened in May so what I did that winter was just get things prepared as as much as I could and develop the recipes on a larger scale so I did blueberry muffins. Carrot Cake Apple Pie like like the top ten ten typical American baked goods so may of nineteen eighty year. Like twenty one twenty two years old something like that. Yes twenty one. And and it's just you and you open the shop. I opened the shop. My sister-in-law a Robin King She helped 'cause she was working on the Pie. She had a baby at the time. And my niece Christina. We used to just put her in a box the floor at a blanket in it and you know my father was my pr guy. I saw anyone that went to the farm. He would say you know. My daughter's open a big shop. Bump up am aired back then print ads and the you know the community was always very supportive of me. So people came that summer of nineteen eighty right all of a sudden you get the summer crowds into the hands. The House business. It was good I did really well and right before memorial weekend. Florence fabric came in from the New York Times. The the theme is food writer. Florence fabric. Gas You just happened to come in randomly. Yeah because she lifts out there she may have been shopping there prior to coming in and requesting an interview view. Did you even know she was now. I have a New York. Times was like what city people read so a couple weeks later. This article gets published in The New York Times. Yeah do people start to clamor to come. Try your cookies. They did they did. And that was not expected. Because I didn't know the power of the times and people are telling me like what do you mean you're GonNa be New York Times you you need to and I would be like really. Oh okay you know. I have so naive so that it was So you've got this pretty good summer crate. Summer I but in the summer ends and Pino a lot of people go home and people come for summer jobs sleeve What would happen the fault is your business? Start to slow down significantly. Oh yeah the business slows down tremendously and then weekends are okay and and you know for a while. Oh you're really grateful for the rest. And then things get progressively slower. And I thought I needed to change that so I went into the the city because that's where most of my customers were from and just had my cookies in a shopping bag and just went door to door to places you know some customers would tell me Oh good about do Chico disabled or go to Dean and Deluca your customers were coming out to the Hamptons. We're saying you know you really should make these available in the city. Yeah and and I remember I remember walking into Balducci cold calling and I'd be like Hi. Have Cookies maybe you want to sell some and they were like yeah. Let's see what she got and they would they try them and they were like yeah. Bring me one hundred bags next week and then I go into another store and someone would not be so nice and he would say you know. My mother made cookies like this or may better but you know just walk out. I've always had confidence with my cookies. Not so much myself all the time when I was younger but with my cookies I was like. You're just wrong. So you see you're going to Manhattan pitching the cookies. You're getting some some places that say sure we'll take him yeah So what do you do you go back to Southampton and you start just cranking out the cookies and just packing them up in like bags. Yeah with my my hand printed label. which now I got printed? It was all handwritten but then I gotta printed. I thought that was major because now you have to sit at night right them all but how. How would customers know to buy your cookies like they? I had a choice of because remember. This was the early eighties. There wasn't competition like there is now you know finding a homemade cookie product in the stores. I was A great find you know. People recognize them from the Hamptons and and new them. Then and then you know word of mouth spreads and that's how most of my career was established. Was it at this time. Where the recipe for the chocolate chip cookies started to resemble assemble? What we know of? Tate's cookies today. Yeah because after a couple of years with Kathleen cookie people. I feel didn't want everything is big and so I just started making them smaller and when I started making them smaller that's how they came out did just came out krispy. Yeah and I was like all these are good. Would you know when I used to create new products at the bake shop. I used to watch my staff taste the product if they tasted assistant and they would be like. Oh this is good. And they walked away and didn't turn around and come back for another bite. I said it wasn't good enough. But what were what were you doing differently. We're you adjusting the butter were you making brown butter. Were using more Brown. Sugar was it that you were doing You know I I can't really tell you everything but there's no you know this there's one little trick nothing major but I can't tell you that it is fair enough. Listen it's a half half a billion dollar brand. He can't protect product. I know I know all right so you start selling these cookies To the shops in New New York City. And is that like does that. Become a significant generator of revenue for you. Yeah because off season is long you know. A Hampton season is so short and people think. Oh I've always making money hand over fist. I'm like well. Now take that two months of money and you've got to survive for the next so so I started building my brand mourn in the city and was selling. That's when it was busy so I would be selling their all winter long and then of course in in the summer I had to maintain it so I I got another van or so and then I had hired drivers and they would deliver. Tell me what you're what your average days were like when you were all twenty two twenty three. When I first opened my first of a bake shop I would go to work like two talk in the morning and then bake and then open the store and then get home at like eight at night? Then I changed my hours. Because that wasn't very healthy. I would drive to work at like two in the morning wanting to hit a tree so I go to the hospital and rest because you know it's very depressing driving to work at two o'clock in the morning and everybody's light Office and you know. They're in their bed so then I changed my schedule but I worked eighteen hour days six days a week. It was not not easy. It was I gave up. My use. Really wasn't overwhelming for you. I mean you were baking and if you weren't baking I'm I'm assuming you were like doing the business stuff. Yeah yeah it was really hard. Yeah what's really hard but I was always kind of liked just you. I keep working harder. You know let's just try to figure it out stay afloat. What was the thing that kept you going pride right? I didn't know how to say I can't do this. Pride in the other side of the coin is the fear failure. I didn't have a fear of failure. I just had more of the fear era. Saying I can't do this but you just told me that there were times where you want to hit a trees. You could go to the hospital on sleep right right so I mean a part of. You felt like you couldn't didn't do this that. This was not sustainable right but I just kept working. Because that's how kind of like how I was raised. We just keep going. Yeah just keep keep pushing so as you kind of this business was was kind of growing. I guess There is a building in Southampton that becomes available available for purchase. Yes and you decide to purchase this to kind of bring your bake shop into that new building was that that was that because you had to expand you. Were you needed more space or yeah I was outgrowing my current location. I didn't like having a landlord and so kept my mom says well you know. There's a building for sale up the road and I was like all right and she's well. It doesn't hurt to call so I met with the owner. It was three hundred fifty thousand dollars for the building and he wanted fifty thousand dollar down payment and he would he himself would hold the mortgage for three hundred thousand at like nine and a half percent interest back then right and I had forty thousand dollars saved from the business from sales from the business and I had to somehow find that ten and my family didn't have any money and and then my father used to help this older woman with her chickens. She had chickens in her yard. I guess so. He helped her from time to time. And one I was looking for the ten thousand dollars she died died and she left my father ten thousand dollars. Wow and he lent it to me talk about luck right. Yeah all right so you have now a pretty significant mortgage to pay down right on this. So what did you for the for Your Business. Did you have to really ramp up sales to cover your it costs. I did I had to. I knew I had to double my business in order to pay for the mortgage and my business plan back then was okay I I can do that. That was my plan. Or is he start out Sort of early to mid eighties right. Mrs Fields Exploding all over shopping. Ping Malls in America There's famous Amos a couple other national brands. That are starting to come about. What do you think it was I mean about about your cookies was that it was in the Hamptons and people on vacation and it was sort of a goto place or or what? Well you know it was was kind of like a goto place because it was something that was part of their part of people's weekends. I mean I have kids that are fully grown and married. Now that come in and say Oh me on I I remember them I. They were raised on my cookies The cookies thin and crispy delicious. They were different from Mrs Fields Yields and David's cookies. But just a nice concept but more of a fad. You know they were hot served off the tray type of cookies and I always thank. How can they grow? Because you can't eat their cookies cold young they're only good warm and now you're really stuck so all right so you are kind of it. Sounds sounds like like the business was growing. But it wasn't really your you didn't have a plan for to grow just kind of organic. Yep Slow Growth. This this was your business. If this was a lifestyle business it was a you're able to pay rent and even save some money and put it back into the business and did you start to actually actually. was there a point. Where in those days in the eighties where you started to actually earn even more money for yourself and even your parents earned? Oh yeah but that wasn't hard break break because they weren't making a whole lot of money right and so with with your kind of growing the the growth of the business were able to buy a house and and all those things yes I I bought. I bought a little tiny house in the village. I paid the mortgage off from my family's farm and you you know I started getting time off. I'd get like a day off and then I had two days off and then I had weekends off and could go on vacation Dan so basically Kathleen for almost twenty years. Yes you're running the bake shop. You were distributing the cookies mainly to Manhattan Manhattan or a little bit beyond their no beyond to also demand Hatton and the Long Island and we we also ship cookies to Texas. We did some cookies in California. We did like spotting who were still small business pretty much. Oh Yeah and how did you feel about it did you. I mean you're now in your starting to approach her forties right. Did you feel like you needed a change rewarding to break or or did you. Yeah I you know I was like forty years old and the had made good money you know I had had gotten married and divorced. No kids now. I was forty so like the kid thing was over and the so I was like just me so I said well I wanNA have you know more of a life. I want to have less responsibility and and more time. So how are you going to do that. Well I decided I would if I could sell my company. That would be great but I wasn't really fully prepared to retire so I Took on two partners. I had a bookkeeper He didn't have any money but he was interested in Becoming a part owner of the company and and paying me off along the way and but he insisted along the way that his brother also become involved which I wasn't one hundred percent comfortable with. I didn't really know always brother but I don't know what happened why I just went along with it. What we go? Let me try to understand this. He says I WANNA buy into this this light and okay and so okay so he brings his brother in and they agreed to pay. You know I I read. It was about like nine thousand dollars. Total title they were not going to give you any this money upfront. They're GONNA pay you in installments. Over time right. Yes and so. If he and his brother you took over running the business and I still was part of it but I had more time. And then I was part of the hub the prophet system and then they would pay me for the business over time. I was like okay. That's okay because I don't need I don't anymore. I don't eat a lump sum of anything. Thank I'm I'm cold. So basically you kind of brought them in as partners and did they have a yes. What was the share? How did you divide up? We each had one third so so you said Yeah. I'll give you a third. I'll take a third. Your brother will have a third right. You guys run the business all but but that meant that you gave up two thirds of your business. I always thought one third one third one third was equal. I know it's ridiculously naive. What did anybody you go to a lawyer Mac Kathleen? I don't know if you want to do this or or were too seem totally like a great idea. No I I went to a lawyer and everything I did have like second guessing guessing and you know and I said well you know I I gave my word I you know. I can't back out now. I had no idea how horrible all the deal really was. What is it that they promised you that they wanted to do with the business? Because you're in the Hamptons grow. Grow the business obviously because it definitely had the potential essential do they have any experience doing this. They marketers were they. Do they have any of that. No and what was their plan. Wha what was the first thing that they did well I they started a you know at the bake shop and then they went to Virginia to put together a cookie. Plant production down there so they said Hey Kathleen we want to open up a production facility bakery in Virginia And you thought okay. Great you're fine with it. Yeah I thought I I thought it would be okay because the cookie business was what really was a value to expand on that so what happened. They moved down there and You stay up in Southampton and and I stayed in Southampton who just communicate by phone a couple times a day. Yes when did you. When did the tension start to arise a very early on because anything anything that they made are sent from? The factory in Virginia was horrible. Like terrible cookies will not go. We're not because these weren't good. The pies is were terrible. I and I wouldn't sell it. What was the issue? They using the head the recipes. They had the recipes. But that's like anything you can. Nobody was trained properly properly. Nobody was making anything correctly. Like an apple pie or member finding with a whole apple inside then. I'm supposed to be running the Southampton store and depositing the money which I'm doing but they they were meeting payroll but they weren't They paying any local vendors so I got frustrated and so the money that the bake shop made I started paying the local vendors because that they were the ones that were making taking the money from the bake shop you need vendors would call you and say Kathleen. We're not getting paid. What's going on? Yeah and I was like what because I always pay my my bills and They weren't weren't paying people. And then that's when I put my foot down and I started to pay the local people with the money that I was making. So when you I started to pay the vendors yourself What did the did your partner say? Oh they had a fit they were really angry and they and and I was like well. You know this is what I have to do. And then they I was supposed to go away for the month of January. This this is two thousand. Yeah on a cycling trip and a guy that Work down there. That moved down there to work down there that I knew he called called me and he said Kathleen. They're planning on coming up when you're not there and taking older getting rid of you so I didn't go on my trip and I waited and one day I came to work. They were there. I walked into the office and they handed me papers saying that I was fired when we come back in just a moment. Kathleen watched everything she built over twenty years collapse and how that turned out to be best thing that ever happened to her. Stay with us on garage and you're listening to how I built this from NPR Hey everyone just a quick thanks to two of our sponsors who help make this podcast possible I to capital one with the capital one saver card you can earn four percent cashback on dining entertainment that means four percent a milkshakes shakes with the kids and four percent music with your pals you'll also earn two percent cashback at grocery stores and one percent all other purchases now when you go out. 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Hey welcome back to how I built this guy rise so it's early two thousand and Kathleen and our business partners. The Webber's have basically had a total meltdown. They disagree unjust about every aspect of how the business is being run and so the brothers they fire her and of course they can do that because they control two thirds of the company anyway according to the records and media reports from the time Kathleen basically thought the brothers were running the business into the ground and she was devastated. I would just hold my breath the time I think that was the only thing I could control and so I started holding my breath and I was like a doan headlights. And you've you know there were moments that were really hard and then there are moments that were great. You know because I was just so grateful for waking up in a house house you know I just simple things of really going down to the bare bones of gratitude and because can always always get worse you know. Try to get to that place when you get down that far. You're not getting up and what about your business partners. I was the plan I had to fight them. I had to get my my business back and I wanted to get out of the contract contract because they had that point had driven my business six hundred thousand dollars into debt. I realized even though I was fired and had the job I was responsible for one third of that debt and all the money that the company had was gone so okay so at this point join the lawsuit start and this is a super complicated story as these things usually are but but sort of long story short You sue them. They sue you back right. This goes back and forth and this is just over like over two years after you. I formed this partnership with irs. Yes I mean wow breath how quickly that became a nightmare. Yeah but the community was incredible. People would call me. People sent me cards cards symptom. Courage moment The community really rallied for me. It became like a hallmark made for. TV be movie. And I said I can spend my days and focusing on the evil of two people or I can spend spend my days in focusing on all this kindness and support that I had no idea. was there for me. Meanwhile what's going on to the bake shop or people still still coming into work. People are still coming to work but a lot of people were not shopping there any longer. So the business was suckling down and what one hundred percent was going on there. I really don't know you know like some of the employees I would gather at my my house. They were very supportive. Yeah yes so I mean. Obviously this is a super stressful situation and everyone knows that like that litigation Asian can take years and of course lawyers are expensive so so I guess in the middle of two thousand you guys decide to settle you decide to settle with the brother Yes Ryan and as part of that settlement do dropped you gave them the name the name Kathleen Bake shop became there You got to keep cheap. The location Southampton the building. Well Yeah I always owned location. But unfortunately they were the tenants of the location action so I had to get them to release the lease to get them out. And then as you mentioned The business had like six hundred thousand dollars of debt at this point so Another part of the settlement I wrote about was was an agreement to divide up that debt three way. So that means of that total owed around two hundred thousand dollars. And and you lose your name your name your name use my no Kathleen Bake Shopper. Offer presumably Kathleen cookies that I felt that that must have been. How did you get to a point where you able? You're able to let that go. I don't know it's Kinda like how I opened the first bake shop. You just do you know you just you just do. Because what's your choice. Were or you bitter where you just I mean because I can imagine I would be right where you dislike seething I oh no I. I can't say bitter. I don't it's not it's not my nature either I was angry but which you know helped me to recreate a new brand. The but the whole point of starting this partnership with these two people was to give yourself some freedom and space to kind of you know enjoy. Life feud worked really hard at one eight years. I know going more than I bargained for. And so now you find yourself here like forty two. You're back in the situation situation where you have to if you want to Keep going completely start from scratch. You could be startup all over again. Yeah it was It was very draining I would say opposed to like rage and bitterness and all of that I was really kind of more. I walked around kind of even little bit in shock. I had felt that you don't every emotion that I could have ever had was stripped down to the bone and I don't know what I had left in me tooth fully and I didn't have any choices this is like I couldn't go get a job anywhere else because I didn't know how to do anything else I just had two years of college And the things that I didn't know how to do. I used to hire people to do so really. I didn't have a choice but to start again and do what I knew. That's that's how I did it so you you decide that you're going to you're gonNA reconstituted business and by the way. Keep your old employees. Yes and so what. What were you going to call it? Tate's bake shop and how did that. What were the name? Come from. Tate's it was my dad's name was just a Nickname he called him that so I wanted a name that was like a local name that that was genuine and integrity and kind kind and that was like my dad so I thought that that would fit nicely for the bake shop and I ended up. I had to get open for August because it was the season and the August. Sally could make some money. And you've been out of the kitchen and the business since February. You're locked out right. Yes well you. Oh my employees. They all rallied to work hard. And I Ended up remortgaging the bake shop because I had had paid off. Yeah because it was a fifteen year mortgage so thank God for that. I- remortgage the bake shop. So I got some money so I can have some cash flow to make more money and and then I ended up hiring a business manager because I was in such financial trouble I needed to have a business creating income in this the business manager. Who who who was he and had you find him? His name was Michael Namie. He was in the city and he became my my business advisor. Sir which really was A Godsend for me because I am very instinctual but of course I make mistakes from time to time and and when you when you hired Michael to help you launch tapes were you. I mean after matchup of Hartford. who still kind of standoffish right? Because you've just gotten burned really bad I mean were there like trust issues there. No he was great. I was like he felt. I felt to me like a lifeline but it was safe because I could walk away anytime I want. You know. I wasn't bound by any contract or money or anything. I find not trusting people way too to exhausting and it's not the way I want to live my life so I was very very naive and I used to trust blindly now. I still trust everybody but I trust with my eyes. Open all right but now you have to reestablish your brand right as tate. It's the same cookie but you got to reestablish a brand new brand. I had to actually make a better cookie because I had to compete against Kathleen Bake Shop. So there meantime. Those guys are down Virginia with plans to take your brand that you'd spent twenty years building up and really Expanding that to were you did that cause anxiety for you did you think. Oh my God they're gonNa take my name my brand and they're gonna go all over the country people are GonNa think it's me no it because I don't think about what others are doing and I just had to think about what I had to do. And of course my goal was to take them down through goal was to beat them yes to be better. So did you continue on with your previous strategy of baking in the retail shop and baking for wholesale and mainly kind of gourmet shops in in major cities in the US. Yes and when Michael came on board we went through all the products and the products that had the highest margins is the ones we focused on selling so he just kind of really zeroed in on the cookies. You know starting Tate's was about surviving so you know when you're in a survival double mode those things. Those kind of decisions are hard. They just had to be executed. They just have to be done. So where were you guys. I mean. Did you start to expand their distribution. Yeah first of all I had to get. I had to get all of Long Island in New York City back because my whole story was so public. Some stores welcomed with open armed some stores stuck with the Kathleen's brand a lot of stores carried both right and that's how it shook out and then even when I was some vendors I had for twenty years and and when I opened up Tate's they treated me like I was brand new customer. Others were just so helpful and just said okay. I know you uh-huh uh-huh this forty thousand dollars. You know you pay that off when you can and and we're standby you you know it's amazing you know just the difference people it both just amazing so when you re launched the company is Tate. You had wanted to take a break in your life. You knew that was is not gonNA happen anytime soon because all of a sudden you gotta start up again and so were you back at hamster wheel back to those crazy long hours off only for a short time because when I opened tate's then I had a plan and I had a goal. And what was your plan will. What was the goal I? I had to have an exit strategy. My goal is to sell when I was fifty five. So you knew you reconstituted this thing and you relaunched it. There was a time horizon. Yes and you were thinking maybe some local business would put bite or something like that. No I thought I did think bigger than that and I didn't think as big as I went but you know I was going to sell it fifty five so I could retire her. I mean you're still a pretty small shop at this point right it's still forty or so employess When I first open tate's yeah and in those first few years of tastes like annual revenue? I mean I would say we might be started out Couple of million but as we start to expand I I couple years down the road. I rented a five thousand square foot additional kitchen and and then I needed to. We outgrew that and so then we needed. It's something bigger so I purchased a school in East moriches and you turn that into a bakery to start to bake more cookies. Yes way we turn that into a commercial kitchen I making it fifteen thousand square feet and then adding on at because we had space to it on and we add it on as as we needed and by the way your former business partners who have the name Kathleen Bake Shop. They were still trying to compete with you but But then I guess just a few years after the lawsuit and then the settlement they actually go out of business. Yeah I never even know what happened to them. You have no idea it would happen to them no. I don't know what happened with the name of the brand. Nothing I just doesn't exist as far as I know well. So was it pretty clear to you pretty soon after you launch. Tate's that you know this wasn't just about survival mode that this could actually grow. This could actually get bigger than than Kathleen's yes. Yes because that was my plan. But how are you going to do that. Because you know food companies The big guys right the General Mills Kelloggs and I mean they they have a huge distribution networks. They decide what goes on the supermarket shelves. Where were you guys? Negotiating and getting big companies companies to pay attention to you into agree to distribute. Put your stuff on their shelves. We'll that took time. I mean first of all we started where I we had our own trucks and we went for small guys with like ten to twelve th k us and then we would strategically pick areas of the United States that we were going to go sell Zell to start to build our foundation with upscale gourmet shops. That the first year when we were building our brand and then as we started to get bigger we went into into the second tier which was like the whole foods the fresh markets the you know Cinderella and how would you. How would you those meetings you would? I mean I'm assuming some buyers. Her whole foods may senior products at some of these smaller stores. Yeah I mean some some buyers W- you know would contact us You know Michael was also a great salesperson person so he helped negotiate some of those deals to get into various locations and because Michael was such such a great numbers guy and forecaster. We did then do every year he would say okay this. Here's the plan. I drew up three forecasts for you. We can into a B or C. If you do this route you'll make this. If you do this route you'll make this and if you did this route you'll make this. And then he would say which. Which route do you WANNA take? And and I would say okay this. This one works for me and then we would do it so as you recovery branding and growing again. I mean you started attention engine again. I mean I think Rachel Ray row like it was on her show she said just asking America and then Consumer reports voted Tate's bake shop at best cook reports. Yes did that you know two thousand eleven when when consumer reports called you the best America and after Gwyneth Paltrow Rachel rain. Most people are saying that about your cookies. Were the line starting to go out to shop. You know we're always busy like I can't say the lines out the door but we were always increasing. You know tastes you know had like thirty percent or more increase per year. Wow Yeah which is amazing. When when I guess when you start to get closer age fifty five you were serious? This really was your plan. You are sticking to this plan I am going to. I WANNA an exit. Yep and so how did who even begin that process. Who How do you what do you tell how? Do you put your business up for sale. Well you know my business matters and I we would discuss a lot and and and a lot of You know investment bankers. They're all watching. But this time around I was going to do everything right and I wasn't wasn't going to leave a penny on the table so I interviewed a couple bankers settled with TM capital in New York City. And they were basically a go. Could I take your company and say all right it's available and who's in rocketed to sell it and this is two thousand fourteen. I think run two thousand thirteen eighteen yard so they started to do that and because this was already a pretty strong brand name recognition it had value with their lots of bidders. Yes this was there was it will start off with like Like something like fifty people that showed an interest. We narrowed it down to like twelve. Both you know put in another bid and then it came down to like five. I I think that I think eventually a private equity or investment from Riverside but majority stake. Yes in the end We settled on Riverside and I ended up selling eighty percent of the company. Because I was really ready to retire. They paid one hundred million dollars for it in twenty fourteen. Yes who was that just insane to you I mean wow you started the set of farm stand nineteen seventy two hundred million dollars to. Did you even imagine that that's what it would go for. No you know it went for like twice for what I originally thought and I remember the closing over the telephone. I was in my own office. Everybody's on the phone and then it was over it was done and everyone's like okay. Yeah thanks bye and hi welcome to my office and I think I went home and made dinner. I don't know I was so you know kind of another deer in headlights moment. I mean I wonder Given the fact that you grew up in a pretty modest environment right watching the sort of the rich and famous come to the Hamptons You Know Uh when you were a kid. Suddenly you had a lot of money like you sort of become one of those rich people in in the hamptons right well. I didn't become that but other people thought I became that I thought I lived before. Really haven't changed the way I live Because I liked the way I live like I'm all about freedom and time. Yeah you know I can. I can donate more and I can be more generous. which is great great? The one nice thing is that I was able to buy my dream property of childhood that I never thought would have ever been an opportunity in my lifetime but other than that everything else is the same I like to ride. My bike highlight to wear jeans and a t-shirt I like to watch movies on my own. TV in a lot of stuff. You know it it creates a burden. I don't anything I can't use. I don't want anything afterguard. Just doesn't interest me I mean Kathleen. Think about this. For a moment you sold. His company majority stake in two thousand fourteen for one hundred million riverside. Four years later sold it to Mondays. the Orioles Zoe for half a billion dollars. Your brand this brand that you kind of reconstitute from the ashes is of this terrible disaster. Yeah I mean the the the irony of the crisis that you went through in two thousand is that without. You would've never built built tate's and you. You may not have become the kind of person who could build a company like tate's right. Yes that that that is true. I you know the the big disaster of my life was really became the greatest gift of my life and like when I started tate's weights. I said I'm not giving blood for this company because I did that already for Kathleen and I ended up standing there with nothing and the thing I regretted added. Losing the most was my youth. I worked my youth away. You can't get that back. You can't buy that back. It was quite an eye opener to realize lies. We are a society of feeling like we have to give up everything and sacrifice everything and work day and night in order to achieve and get ahead ahead but in the big picture. It's really not true. You have to do it for a period of time but the key point is knowing knowing when to let it go yes to create something from nothing requires that kind of occasion of day and night but a lot of it is is self driven of. Nobody's as good as I am. Nobody can do it as good as I can. And that keeps you trapped because you're too focused on all that emotional national attachment that comes with creating something from nothing and you were able to shed that emotional attachment with the disaster of the first business. I guess yes because I was basically stripped of everything when you think about all the work you put in sacrifice that you made and you no you talk about kind of giving up your youth like you had to kind of give that time up Given what happened in the exit and the incredible success that you that you saw do you regret it. You regret any of that. Because I think a lot of people listening would say no. It was all worth it. Would you say that's the case. No I've asked myself that Several times and sometimes when I see young people working like really really really hard like in the in the corporate circle going round and round I say to them you know. Try to always keep the balance because if I had to ask myself if I would do it all over again would i. I still don't really have an answer. Do you feel Kathleen like what happened to you. And and the success accessory company is due to the work you put into it. You're just relentless hard work or do you think that it had more to do with luck No it's it's not luck. I think it was more At worked really hard putting it together I never gave up. I never let its success. Get the best of me if anything not luck I think sometimes it was my destiny. I know I know Kathleen that to your folks pathway recently But they did get to see you achieve incredible success from from this cookie stand. Yes they didn't see the MONTO lease sale but they sort of the riverside sale. Put a think I mean. What did your parents think? I mean you were selling these cookies farm standing as a dairy farmer. What did they think about this? It's very funny you you know because you know I sold. It was in the paper and they never said a word about money. Not Out of word they just were like. Oh congratulations. I'm proud of you. To cockatoo. They were they never once mentioned and the money. My father always told me as I was being coming successful. Never forget where you came from being must. They must've been so so proud of you. They really were that's Kathleen King founder of Kathleen Bake shop up and tate's bake shop. Kathleen still likes to be cookies at home and she loves spotting tastes cookies out in the wild in fact a while well back up bike tour of the natch is trace parkway at what point or guide stopped to take a break. He reached into his backpack. Pulled out a mega tate's handed one to Kathleen and asked. Have you ever tried these cookies. They're amazing and please do stick around because in just a moment we're going to hear from you about the things your building but but first a quick message from one of our two thousand nineteen lead sponsors of how I built this Hiscox Hiscox Taylor's its policies to fit every business's very reese specific needs which may explain its ninety seven percents customer service rating. Get a quote or by at H. I. S. C. O. X. DOT COM Billy Irish low NAS EX and LIZ. Oh dominated the year in music but there was a lot more from twenty nine thousand nine that you might have forgotten. I'm Robyn Hilton. Join in pure music all this month is we look back at the defining artists trends and milestones from the past year. Listen to new episodes each week on. NPR's all songs considered bittered. Hey thanks so much for sticking around because it's time now for how you built. That and this week story starts at a restaurant in Denver where toss outhouse house was giving his wife a gift for their ten year wedding anniversary and I gave her the bag and she opened it up into goes. Where did you buy these? And at this point Thomas wasn't quite sure he got her the right gift and I said to you like him. It was a bracelet and a pair of earrings into goes. Yeah they're really cool. ooh Hoo so far so good into goes. So where'd you buy. I said I made them. He made them out of a tin can a bracelet and a pair of earrings. Thomas made for his wife ever tin can and to be fair. Thomas really meant this more as a gag gift but his wife. Emily actually liked the look the rings and she appreciated the Thomas made them in his garage just using a hammer and pliers and some tin snips out of a a lid. I cut it in half so there were two half circles. I've folded in the edges again. So they wouldn't be sharp folded them in on each other so they created. kind of a prism shape. Emily liked them so much that she wore them all the time and she started getting so many comments that she encouraged Thomas to try selling l.. Ing Them so we said how about we make a go of this canned goods thing. And that's why we call it. That's what emily mentioned right away. She said I think you're GONNA call your company canned goods at this point. Emily had a full time. Job and Thomas was a stay at home dad so in a spare time he worked on designs lions for more jewelry and he started to gather more raw materials. I'd walk through the alleys and candidates dig through people's recycling and fine nine different cans. WanNa buy anything new. He was really into this idea repurposing used cans and so after he hauled his neighbors cans back his garage. He began to realize that on the inside. They didn't all look the same like tomato cans as a brilliant copper color. There is a white color that is from coconut milk in. There's of gold all. These different colors inspired Thomas so he hammered out some bracelets and earrings brings different styles and shapes was a ribbon loop another was kind of like a fan and when he had about ten of them. He pitched them to a boutique owner in Denver. I I said okay for each piece we so give a can of food back to charity. And he said I'll take hundred visas the earrings and bracelets started to self help word spread and then Thomas began selling more jewelry in local stores and online and this year he and his wife expect to make about one hundred thousand dollars dollars and to donate four thousand cans of food to charity and since Thomas started canned goods about six years ago. He's made over ten thousand pieces at this point. I've touched every piece that we've sold. Thomas is still working out of the garage but he's hired four people to help them and helps to hire even more sin blow year from now we want to be in every major market around the country. And we're knocking on some national stores as upscale as Nordstroms if you want to hear more about canned goods or here previous episodes head to our podcast page how I built this. NPR Dot Org. And of course if you want to tell us your story go to build dot NPR dot org and thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there please do give us a review you can also write to us at H. I. B. T. at NPR DOT org. And if you want to send a tweet it's at how I I built this or at Cairo's our show is produced this week by Casey Herman with music composed by RUB teen Arab. Louis thanks also to Candice Limb Julia Carney Neva of a grant and Jeff Rodgers. Our intern is Sequoia Carrillo. And before you go a chest remind you to please consider donating to your local public radio station by December thirty. I because your gift helps bring public radio two listeners. Like you donate to your public radio station at donate dot. NPR DOT org slash built. And you've been listening to how I felt this this is n._p._R..

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