Graham Winfrey (2:40)

This week. How to Scale in the Right Way with Fanny Gerson, Sarah LaFleur, and Ariella Sapphira. So we're going to get right into it. We're talking about scaling. Just about every founder wants to scale his or her business eventually. But trying to scale can feel like you're on a knife's edge because you don't want to try to scale too fast too soon, while at the same time scaling in the wrong way can also be disastrous. Sarah, tell me about M.M. lafleur's bento boxes. I feel like that was born out of maybe trying to grow too fast or too soon or both.

Sarah Lafleur (3:28)

Yeah, actually, I would say it was the thing that we stumbled upon when we couldn't figure out how to grow. Um, when we first launched the business, you know, it was kind of the heyday of direct to consumer businesses, and it felt like everyone made a product and then launched a website, and then the next day you were making millions. And I thought that's what it was going to be like for me. And, you know, and we launched the website and very quickly realized, wow, it's really hard to sell things online. And we. But we could always sell clothing in person. When we were doing trunk shows, you know, we would literally bring, like, a rack of our clothes to a hotel suite or someone's apartment, and customers would always buy in person. So we had a lot of confidence that the product was good, but it turns out how you sell it online is just as important. And what we noticed was so much of, like, the decision paralysis that often happens when you're online shopping. You know, you put a bunch of things in your cart and you're like, oh, I don't know, is that the right size? Do I want to get this color? Am I going to wait for something else to come up? And so really, the way we ended up launching Bento, which came from a moment of desperation, we were, like, surrounded in a room full of inventory, not knowing how we were going to, like, make next month's rent. And I remember turning to my. My then cmo Annie, and I was like, you know, Annie, what if we just, like, emailed a bunch of our customers who came to these trunk shows and said, like, we're going to just ship you a bunch of dresses, like, keep whatever you like, return whatever you don't like, and see if they keep anything. And we did that and we, we sent this email and we ended up making more money in that one week through that box, which we ended up calling Bento eventually than we had any month leading up to it. And it was this Moment where customers were like, oh, thanks for reaching out. Yeah, I've been meaning to order. I just, like, haven't had the time. Like, sure, send me whatever. And it was like, she didn't have to think about, like, what color she was gonna buy or what size she was gonna buy. We were doing all the thinking for her. And then Annie eventually was like, you know, there's something really that's working here. I wonder if we should try this with customers who've never actually ordered from us before. And so we then sent them a survey, only really asking them questions that were, like, easy to answer, like, you know, what. What's a brand that you typically shop from? What size do you typically wear with them? Do you like to wear, you know, bright colors, dark colors, what have you? And then based on that, we ended up sending them a box of clothing. And that was like the. You know, people talk about, like, what does product market fit and what does it feel like? I can only describe it for myself is like, that was that moment where suddenly, like, making money, which up until that point, had felt so difficult. And trust me, there have been many, many moments since then that have felt incredibly difficult. But that was the moment where I was like, wow, it's like, money is just, like, coming through the door.

Fanny Gerson (6:17)

It clicked.

Sarah Lafleur (6:17)

Yes, it clicked. So, you know, I think my lesson there was, like, it's not good. It's not enough to just have, like, a good product. How you sell it, especially online, which can be so, so difficult, is just as important.

Graham Winfrey (6:31)

Fanny, scaling up Paletas is a lot different. Can you tell us about that?

Fanny Gerson (6:35)

Well, it's a very different industry, but I think it's also very competitive. And how do you stand out and how do you. So for us, you know, at LA New Yorkina, so we have the seasonality, which has always been the hardest part, because we also choose to do it in New York. I always say if we had the business, you know, somewhere else, like, you know, in California or something, we wouldn't have to do all these different things. And so we've tried a lot of, you know, different revenue streams and different avenues, but the big sort of, sort of kind of like what you were saying before, like, the dream is to, you know, seems to always be, well, you have to grow, right? And so one big sort of thing in our industry is getting your stuff into Whole Foods. And so for us, it was like, oh, we gotta get the Paletas in Whole Foods. So first I was like, we can't compete with the Ice Pops that are there because they're made in huge factories and I will never have the price point. So I said, what can I do to differentiate? And so he said, let's do the mini minis, right? And so there's nobody, there was nobody at the time making minis. Did a box that was square rather than rectangular because most of them are thinking, oh, I'm gonna stand out. And then Whole Foods was sort of the goal, right? When you get into Whole Foods, then it can open a lot of doors. And then we were able to get into Whole Foods first, not that way, but through freezers. I said, oh, great, we're gonna have a freezer like I've seen other companies do with other products. And that way it's gonna be a branded. It's gonna stand of competing in the shelf with other companies. But then the pandemic happened and so our freezers were filled with other things that weren't ours. And of course then there's the upkeep of the freezers that we didn't anticipate and, you know, a lot of things that you don't know. And fast forward a few years later, then we had finally our Paletitas. But guess what? They didn't like. They don't like the fact that it's a different box because I think the consumer is going to like it because it's cute and it's, you know, and it's going to stand out. It has these mini pops, which if you are, it's like the perfect treat. Whether you're, you know, you're a mom and you're, you know, you want your kid to have just a little treat, or as an adult that you're like, you just want a little indulgence. And so they were like, no, but it doesn't fit. And so that's why most of the ice cream are similar, you know, shape and everything. And then we were starting to realize that we were actually losing money being into Whole Foods. So this whole idea of chasing, you know, this thing, and we hired some financial advisors and we knew we kept at the time also looking for a co packer. Now I'm a chef by training, so the idea of somebody else making my product was very difficult, but we couldn't find one that the one thing we were not willing and will never sacrifice is quality. And so when they said, you need to pull out of Whole Foods, I was like, what? But it took me years to get there. And now they want us. We're trying to figure out how to make it nationwide because of how we make it, because everything is, I mean, we have a machine that helps us freeze it faster than a regular freezer, but that that's it. And that we would have to charge so much and we have to sell it to a distributor that then sells at wholesale to Whole Foods and then Whole Foods to the customer. So we end up getting a really tiny bit. And so when we told the kitchen, okay, we're going to pull out of Whole Foods, they were like, but it represents like a third of our production. What are we going to do? And I said, I don't know. I'm also scared. But if we are producing and losing money, then. And guess what? Like, so we pulled out and then that opened up all of these other, like, caterings and sort of more local opportunities. So I think, you know, kind of like to your point, sometimes, you know, you're just, whether it's. You are focused on this one thing or you think this is the avenue, like in fashion, you know, you thought this was gonna be and it isn't.

Graham Winfrey (11:05)

We're take a quick break, but when we're back, we're going to learn how Ariella managed to scale her company by making a pivot from a brick and mortar concept into a virtual one after Covid got in the way.

Sponsor/Announcer (11:18)

Simplify business travel with IHG Business Edge. Enjoy guaranteed discounts, flexible booking, and automatic IHG1 rewards Silver Elite status after your first stay with access to 20 IHG hotels and resort brands worldwide. Discover how effortless and rewarding business travel can be. Visit businessedge.ihg.com to learn more.

Graham Winfrey (11:43)

Ariella, you pulled off an early pivot with your original brick and mortar plan. But before we get to that, can you just talk about the name change that your company was originally called? Real. And I'm sure that a name change is a lot of work. Talk about what that entails.

Ariella Safira (12:00)

Sure, it is certainly a lot of work and way more work than I realized we were signing up for. Transparently. When we went through the name change, we felt that the company had gone through not just the pivot of brick and mortar to digital, but the pivot from a direct to consumer company and business to a B2B business we sold to employers. And that came with so much more change than I thought it would as well. And so once we had our foot in the door in this employer business, felt a real sense of this is now a different company and one that merits a new name. Never change your name. Wow. Please pick the most the name you want to keep for life. At birth. Because, you know, it's really, I learned live how, how long it takes to build a relationship not just with your specific customers that's easy and controllable to maintain, but rather with the general world. Like, what is brand awareness? And we did face a lot of confusion from people at the time asking, oh, were you just acquired? You know, and like, what does that mean for the product you're delivering or the relationship or contract we have with you? Are the same people still there? And I would have never guessed that that name change would have driven as much confusion as it did. And I don't think I appreciated how, how much brand awareness we had built with Reel and how much was tied to the name Reel. So my quick advice for people would be, don't change your name. And wow, if you do, you need to give all the love in the world to your head of marketing who is doing that job. Because ours, Olivia, deserves a trophy for the work it took to do that. And it's such an example of work that is underappreciated. There's just so many little things to do. Remember to change your logo here and reach out to that one piece that you were written about here. And it's really pretty thankless. So the cut to is don't change your name.

Graham Winfrey (14:09)

Okay. And tell us just a little bit about the pivot from brick and mortar when the pandemic turned everything upside down for you.

Ariella Safira (14:17)

Yeah, so, I mean, that was years ago now, but we originally were building a brick and mortar business and the idea was that we'd have brick and mortar locations that offered a monthly membership model largely powered by group therapy. And in doing so we would enable preventative care. You come always on a monthly basis, not just in moments of crisis. And in being group based, one, it'd be more affordable and two, you know, we believed, and I still believe the community element, community is needed to really improve mental health and like the loneliest epidemic we're living in. So, you know, we raised around. We built a beautiful location on Fifth Avenue, all set to open in April20. I'm 25 years old, excited to launch my first company. And the pandemic hits and investors are texting. I don't think it's going to open. I'm trying to make sense of. We're changing our therapist training from in person to virtual. Trying to make sense of the world while not leaving my own apartment for days on end. And what we ended up doing at the time was launching what we thought would be a one month offering of free digital care. And really there was no brilliant hypothesis that this would pivot the business. This was like, you know, bank accounts getting closer to zero. Oh shit, what are we gonna do? We have a full staff of clinicians in a moment of need. Let's offer care. And it was certainly thoughtfully organized and created on the back end, but the assumption would be this was just a one month offering and we delivered that and we ended up learning things we would have never learned in person. Namely that a phenomenal a majority of people preferred group therapy over one on one. Which was a hope, but a surprise because at that point I think even now most people don't really know what group therapy is. Or they associate it with AA and only aa. But not only were they preferring group over one on one, they also were joining anonymously with their videos off and with their names hidden, which was certainly not marketed as an option. They were sort of just self selecting into that and when we would survey folks to understand.

Sponsor/Announcer (16:32)

Simplify business travel with IHG Business Edge. Enjoy guaranteed discounts, flexible booking and automatic IHG1 rewards Silver Elite status after your first stay with access to 20 IHG hotels and resort brands worldwide. Discover how effortless and rewarding business travel can be. Visit businessedge.ihg.com to learn more. Every success is worth savoring. Celebrate with the extraordinarily smooth taste of Glenfiddich, the world's most awarded single malt Scotch whiskey. Glenfiddich offers exclusive white glove concierge services. Let real personal assistance add a human touch to your corporate gifting, private event tasting or other hospitality needs. Simply contact conciergelenfiddich.com that's Concierge L-E-N-F-I- Dash-I C-H.com unmatched legacy extraordinary Taste Drink Glenfiddeich Single Malt Scotch Whiskey responsibly Copyright 2025 imported by William Grant & Sons, New.

Ariella Safira (17:38)

York, NY why are you joining anonymously? This is a little weird of an experience for our therapists for other clients or members, and they'd share. I want to hear how these issues show up for other people. And I want to hear how a therapist advises, I work on this. I just don't want anyone to know I'm here. I don't want to admit that I'm facing recurring nightmares, suicidal thoughts, an affair. And it really unlocked a new insight that was. Or a question that was can we give people the benefits of group therapy without them having to show their face and admit their issue and not only can we do that, but. But can we do that? Would that be clinically effective? Would that treat depression? Would that treat anxiety? And it ended up pivoting our business entirely. And we set off what really felt like a multi year research effort to understand like what are different forms of this anonymous group therapy and how do we build an engaging experience so people want to come, but also one that drives clinical outcomes. And then came real to zyra consumer to V2V and a lot of mistakes along the way.

Fanny Gerson (18:51)

How big were the therapy groups that you were facilitating?

Ariella Safira (18:54)

Yeah, so I'll answer that, but for the sake of maybe knowing what, thinking, what I'll also say is we got way too scientific about it. We really. And I'm someone like I'm obsessed with mental health and I'm obsessed with people and all I want to work on is that I do not spend nearly as much time in like distribution. And a lot of the side of the business that like a McKinsey brain would love. It's like not my thing all to say we got too deep into what are all the different combinations and how large can this get. And in doing so we did find that we were able to make the experience fully one to many. Right. Where there was essentially recorded content, audio content, and people were able to benefit from hearing the stories of other members, the tools from therapists without live joining a session. And I still, you know, I'm so in awe and proud of the outcomes we found and delivered on, but I now find myself certainly questioning or analyzing how we could have done that better and maybe been a little less obsessed with the scientific study of it all and maybe a little quicker to act on scale and the more like brass tax business things.

Fanny Gerson (20:13)

That's interesting.

Ariella Safira (20:14)

I'm curious for you both, you know, have Sarah go first if you. We all learn so much in this founder journey about scale and far more things. If you can go back to day one of building the business and tell that Sarah, your journey up until now, what would most surprise her about what that journey looked like? Oh boy. No pressure.

Sarah Lafleur (20:40)

No, I've had so many lessons. Like I feel I am having this like weird and probably rare experience of getting to build my business again with kind of all the lessons of the past decade. Because Covid, in many ways like we were this like incredibly fast scaling business. We raised venture. It was also the time when venture capital firms were investing in consumer businesses. And then Covid basically like essentially came and destroyed that overnight.

Ariella Safira (21:17)

Yeah.

Sarah Lafleur (21:18)

And our revenue, I mean, I think dropped more than 60%. We had to close all of our stores. We, between 2020 and 2021, end of 2021, ended up doing, like, three rounds of layoffs. And it was like, it's just so painful. Almost like taking this castle that you've built and like, dismantling it piece by piece. And then in 2020, we were finally able to turn a profit. And since then, it's kind of been stacking them on one brick by brick. And also not without its challenges. Like, I shared this actually in Fast Company last year, but, like, we had this incident where our lender went under last year and just like, completely, like, I wanna say, like, out of the blue, we had no idea that this was coming and essentially, like, faced a capital call situation where I had to raise $3 million in under three weeks.

Fanny Gerson (22:19)

Oh, wow.

Sarah Lafleur (22:20)

And so, like, you know, there have been a lot of obstacles along the way, but I am still getting this incredible, I think, second chance to do it the right way, I guess, in many ways, which is really not relying on enormous venture capital money, really focusing on the bottom line constantly. I mean, that's really all I think about. Someone said to me recently, revenue is vanity. EBITDA is reality. And I was like, truer words have never been said. And so it's really given me a different muscle. I think if I was chasing skill and growth really leading up to that point, I am a fundamentally different operator now.

Graham Winfrey (23:14)

That's all for today's episode. We're gonna pick up this founder group chat with Sarah, Fanny and Ariella again next week. Week. Stay tuned to the Business Model feed on Monday, when my colleague Ali Donaldson will be circling back on one of the biggest stories in the world of business with an Ink journalist. Be sure to subscribe wherever you get your podcasts and on INK's YouTube channel at YouTube. Com Inc. Magazine.