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- [00:00]
A
Success is a journey, especially when it comes to your finances. One of the most common obstacles in our financial journey is dealing with high interest debt. It can often leave people feeling trapped, but it doesn't have to. If you're dealing with high interest debt, there is a way forward. A SoFi personal loan could consolidate all your high interest debt into one low interest monthly payment, helping you craft a roadmap to paying down your debt. It even comes with no fees required, getting you a financial win right away. Keep pushing on your journey to financial success. You could even get as soon as the same day funding. View your rate for a SOFI personal loan@sofi.com Guyraz loans originated by SoFi Bank NA member FDIC terms and conditions apply. NMLS 696891 Fast Fund's term apply@sofi.com Guyraz this message is brought to you by Apple Card For a limited time, when you get a new Apple card and purchase AirPods Pro 3 at Apple, you can earn back the cost up to 250 daily cash. New AirPods Pro and up to $250 bonus daily cash back. Now that's music to my ears. Subject to credit approval, limitations and spend requirements apply. Apple Card is issued By Goldman Sachs USA Salt Lake City Branch terms and more at Apple CoAirPods Work can be a little Weird I've had plenty of those moments early in my career, and honestly, even later I remember stretches where I wasn't totally sure what the next step was supposed to be. And that's the thing. Work isn't always a straight line. And that's where LinkedIn comes in. LinkedIn helps you tap into ideas and insights from people who've been where you are, connect with others in your field, grow your network, and access tools that can actually help you find the right next step. Whether you're just getting started thinking about a change or trying to accelerate where you are, LinkedIn is built to support you at every stage because LinkedIn is the network that works for you. Visit LinkedIn.com Hibt to learn more. Hello and welcome to the advice line on How I Built this Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call. And you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one minute message that tells us about your business and the issues or questions that you'd like help with all get to it. Joining me this week is Milk Bar founder Christina Tosi. Christina, great to have you back on the show.
- [03:07]
B
Welcome back, guy. I missed you.
- [03:09]
A
I know you too.
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B
For so many years.
- [03:12]
A
You were on the show back in 2019. It was a live show. It was so fun. I remember that show. It was like jammed. People were cheering. They were so excited to see you. If anyone listening has missed that episode, go back and listen. We'll drop a link to it in the show notes. So check it out. The basic story. Milk bar started in 2008. Christina opened up the first milk bar where they popularized. She popularized cereal milk ice cream, compost cookies, the now famous Milk Bar pie, which is insane. Fast forward to today. Their cookies and treats and ice creams are available at thousands of retailers. Whole Foods and Sprouts and Walmart. And they're so good. Christina. The brown butter chocolate chip, the super crunchy mini cookies are so insane. They've completely messed up my. I'm gonna not do sugar, but a
- [04:00]
B
little bit of sugar did he wrong.
- [04:04]
A
But I can't. I eat the whole bag. That's a problem. I just, I'm like, I just look at it.
- [04:08]
B
It's a crunch.
- [04:09]
A
We're texture hounds, you know, it's so, they're so good. I know you stepped down as CEO of Milk Bar a couple years ago to focus on, on the creative side of the business, which is I think probably the most interesting, the funnest part of the business. And I urge everybody to do that.
- [04:25]
C
Truly.
- [04:26]
A
Can you, can you give us a quick update on what you've been up to these days and, and a little bit about your role at Milk Bar?
- [04:31]
B
I mean, guy, when I think about the time we got to spend in person in 2019, we had no idea that night that the way that we walk through the world would change so dramatically a year from then, let alone we're what, five, six years from then now? Seven years almost. A few years ago I had two babies during I got bored and I like to say Will and I got bored and we started having babies. We got a giant dog and named her Butter. And then when it was time to kind of go back into work in the office, we moved everyone back into New York City and we thought a lot of this does not work for us anymore. And one of my big things was because the milk bar business had been so stress tested through these last years since we spoke I really had to take a step forward and backwards into each side and sort of say, where am I best suited here? Like, I'm every bit as passionate. My tank is full with fuel, but I can't just keep driving down the same road at, you know, the same speed limit with the same map. It's all changed. And my biggest thing was I am shortchanging the milk bar business. Holding onto the CEO seat. I would much rather focus on what I'm specifically and uniquely positioned to do, which is like, the creative, the culinary. Right. Like no one's taste buds or my taste buds or your taste buds. And so now I'm sitting in Nashville, Tennessee, which is where we moved about a year ago. I'm sitting in a garage where I do all my baking. What you can't see off camera is all of the different messy baking experiments I have in my head that might make it to the milk bar menu at some point. I just feel more alive and firing on all cylinders than ever.
- [06:12]
A
So that's so awesome. And I can't wait to see that kitchen. All your. The tubs of ingredients. I could just imagine them perfectly lining with the counters. And yeah, sometimes when I use odd ingredients like milk powder for cooking, I think of you because it's something you don't use every day. Like, you toast it and then how do you use it?
- [06:34]
B
And anyway, chewy brown, buttery notes. My favorite thing about you is that most people don't realize is that you are a baker and a foodie, among many other things.
- [06:43]
A
I wouldn't call I wish. I wish. I love cooking. I love cooking.
- [06:47]
B
If you're talking about toasted milk powder, my friend, you are a baker in my book.
- [06:52]
A
I'm curious. I mean, from a business perspective, right? I mean, you have. There are so many different things that you do, right? You cookbooks and TV shows that you host. But from the milk bar side, right, there's the direct sales. The tins and the cakes and the milk bar pie. But also, as I mentioned, you can go into Whole Foods or Walmart or Sprouts and buy milk bar products off the shelf. Where do you guys see the most potential for growth? Is it having more products on the shelves in big retailers? Is it direct to consumer?
- [07:29]
B
It's so interesting. You know, we've intentionally built our brand in a way that's much bigger and broader than what, you know, the top line revenue of our P and L is. Yes, because that's the challenge. It's the challenge for our sales channels to try and catch the size and reach of the brand. So I would say that our biggest opportunity is to continue to find ways to show up in unexpected expected places. We just did a Krispy Kreme collab that launched yesterday and like, is that bringing money to our bottom line? Pennies, right? Like, it's not about that. It's. It is getting to share like the, the Milk bar spirit with people all across America. And for us, what's economically savvy about it is it's free earned brand and media as opposed to needing your sales channels to drive a revenue that brings enough money to like the EBITDA line that you can invest in marketing standpoint. Because at this point, if you're not running a profitable business in 2026.
- [08:28]
A
Right.
- [08:29]
B
I don't know, like, you know, or that was different in 2019.
- [08:32]
A
So yeah, I think that's such an important insight because a lot of founders, right, and people who run brands don't always want to do the collaborations. They don't always want to focus on the brand sort of building side of it because it feels like a waste of time, you know, and you don't necessarily see the return.
- [08:50]
B
It's not measurable.
- [08:51]
A
Right. You can't measure it, but it opens you up. It sort of creates the foundation to find those, those places where, where you can find the products and, and, and the ideas that will connect in because people already know and trust the brand. And I think that's really important because a lot of people, a lot of brands, I mean, I've been on, on this side of it too with some of the things I do don't want to do the slow and sometimes hard and sometimes not so satisfying things like stand, you know, in front of a coffee shop all day or Whole Foods or whatever it might be.
- [09:25]
B
Yes, that's it in a nutshell, guy.
- [09:28]
A
All right, Christina, we should probably bring in some callers. Are you ready for the first call?
- [09:32]
B
I can't wait.
- [09:33]
A
All right, let's do it. All right. Hello, caller. Welcome to the advice line. You are on with the founder of Milk Bar, Christina Tosi. Please tell us your name, where you're calling from, and just a little bit about your business.
- [09:44]
C
Hello, Guy. Hello, Christina. I'm so excited to be here. My name is Whitney and I am calling in from Park City, Utah. My business is the Beau Collective and we are a fitness and retail hub where locals can sweat shop and stay connected.
- [10:00]
A
Wow. Okay. Well, welcome to the show. Thanks for calling in, Wendy Gargi. So the Beau Collective, as in B E A U like my beau. Okay, so it's a fitness studio and a retail space. So explain. Like you walk in and what is. What does that look like?
- [10:15]
C
Yes, it's kind of like a mullet. Really. You walk in, it's a retail party up front and then fitness classes operate in the back. So when classes before they begin and after they're finished, we have space to dwell and we let people connect and shop and have coffee and hang at the social table before they leave.
- [10:37]
A
Got it. Okay, so and what do you sell in this shop? Is it mostly like workout gear and shirt?
- [10:42]
C
No, it's full scale. All the goods that we love from Lululemon, Marine Layer, things like that, where I've always just wanted to be able to shop before 10am and we're open at 6am when people are finishing their workout.
- [10:58]
B
It's all apparel, Whitney.
- [10:59]
C
It's apparel and gifts and home goods and brands and things that we've loved and we've curated over the last decade.
- [11:07]
A
Okay. And gimme. And the classes are like they began
- [11:10]
C
hit style, always 45 minutes. And then we've kind of evolved into more heavy lifting, more hybrid setups and things like that as well. But everybody can count on a 45 minute, high spirited experience every time they're in.
- [11:27]
A
All right, awesome. Tell us a little bit about the revenue, like how much comes from memberships or people going to classes. How much from the retail shop?
- [11:35]
C
Yeah, it's about at this point, it's 55% from the fitness, 45% from the retail.
- [11:41]
A
And either of those growing more or less, you're seeing trends in either direction.
- [11:45]
C
We're actually seeing the retail as an uptick.
- [11:48]
A
Interesting.
- [11:49]
C
So I think convenience and delight and fun where people can purchase things and a lot of these brands can showcase what they do to all of these people where they already are.
- [12:00]
A
Got it. So, and this is a, this is one location in Park City is just give us a quick sense of the ambition here. Is it, is it a Park City business you want to just. Or what?
- [12:11]
C
Yes. So the ambition and the plan. Right now we're expanding and to my hometown in Phoenix. And I really do believe, especially, you know, it's fitness and retail, but it's really community and connection that we're selling and I really see that every town needs something like this. It's not a bar or restaurant, but it's hospitality in a healthy form and it's getting people to move together to pick up some goods that you don't have to run out in all of the traffic. You can grab at sunrise and is really just a reimagined way for people to connect. That's good for them.
- [12:45]
A
Got it. Okay. Before we dive in further, what's your question for us?
- [12:49]
C
We've run this business for 10 years in park City. It's profitable, it's doing great. So my question is, in the finance world of this, we're in that sweet spot just north of Friends and family fundraising and just, you know, below anything institutional. So my question is about bridge capital. When we're really trying to secure that, how do you really align with people that understand what you're building?
- [13:16]
A
Got it. And this is you're raising money to open the location Phoenix.
- [13:19]
B
Yes.
- [13:20]
A
Okay, got it. And so you've raised some. And just roughly how much have you raised from friends and family?
- [13:24]
C
Friends and family? We've raised about 600,000.
- [13:26]
A
Okay. And you need closer to a million to open this up.
- [13:29]
C
We need about 200,000 more.
- [13:31]
A
Okay, got it. All right, I want to bring Christina in to just launch into it. Christina, welcome. Whitney.
- [13:37]
B
Hi. I am so excited for you. Whitney, just really quickly, will you give me, like, what is the, like, average order value or whatever acronym you use in place of AOV for a customer, whether they're buying from the retail or the fitness?
- [13:52]
C
Yes, Retail. Average ticket is between 60 and 85, and then $200 memberships monthly. We have about 200 members.
- [14:00]
B
I got an idea there for you. Okay, I'm coming back to that. And then what about day parts, night parts? Like, are people coming in and buying in retail at 6am or does that happen during a certain consolidated time of day?
- [14:12]
A
Sure.
- [14:12]
C
A typical day is we open the do 6am classes run from 6 to 10am all of those people call it 80, 100 participants and members. They're able to shop at any point. And then when classes end, the location is in a center, so we just open as a shop. And behind the shiplap wall is just vacant until the classes start again.
- [14:36]
B
And is your vision that you continue to build BO Collective and own and operate it yourself as a private company?
- [14:44]
C
I think we would establish guardians in different markets and cities that have been trained through us, where we own it at a corporate level, but then we have great local people that care so much about the communities that we grow them that way.
- [14:59]
B
Got it. Like a franchise ish model. I mean, my first thought in the fundraising, like, the NIS of your question. Right? Like, how do I complete this sort of like, 200k bridge round? One of my first thoughts. Whitney, as you Were talking about this new community that you're going into. The power of community, the collective. 200k is a lot of money and not a lot of money, depending on who you're talking to on the fundraising round. One of my thoughts is why not pre sell some of your memberships, right? Like knowing what the cost of a membership is, how do you pre sell the access to this really cool collective and community? What could that look like? I think that could be really interesting. I also wrote down, as you said, Park City. Like, let's think about what works in Park City, right? Or what Park City is. It's a pretty affluent area. I immediately thought, oh my gosh, Arizona. Is it gonna be in Paradise Valley? What about Aspen? What about Jackson Hole? Like, people that have the finances to both want to spend on the retail level, have maybe a little bit more free time, create community and that also want to care for their own health and well being. Like, what does that look like? Because one of my questions, how is this, how is this new market going to support you? How do you know how much you need? That's always the question when you're opening a new unit. Is this market the right fit? And then the other thing I'd really inspire in you to do is if you don't already have the space, like really get in there with landlords, because there's a lot of vacant spaces all across America and you can get really great landlord terms. You can get them to pay for your ti, which stands for Tenant Improvements. A lot of them will build out a space for you, deliver the electric you need, the plumbing, et cetera, et cetera. There is a way that you might not even need 200k, or maybe you need less than that and really bring the landlord in. Because it sounds like whoever the landlord is, this BO Collective is an amenity to them, whether it's to the other tenants on the right or the left, or if it's, you know, mixed use and there's commercial or residential above. Like there could be some wheeling and dealing there as you're modeling. Beau Collective.
- [17:09]
A
Yeah, I think it's interesting because you have. And I was thinking about, you mentioned some of these other places, right, Paradise Valley. I look at, you know, I'm looking at photos of the BO Collective. I'm thinking of like Kilauea and Kauai, you know, some one of these really cool places where you've got a bunch of affluent people. And I wonder whether you might want to consider something a little radical, ripped out of the playbook of There's a bagel chain here in California, small chain called Boychick Bagels that got a lot of press in the New York Times a few years ago when they expanded outside of Berkeley and now they're in Southern California, they actually offered a chance for their customers to have some equity, you know, and small checks and maybe it's like a bunch of checks for a thousand bucks. I mean, I'm not saying that's easy, but you know, could you get 200 people or even smaller checks or some might write $5,000 and maybe it's again, it's like a convertible note, a loan, and they get a 10% discount card which they can use in Phoenix or in Park City and they're a member of the club. You know, it's like they're not just a, they're an investor, but they're an insider. I mean, if you've got passionate people are going there, it might be worth literally putting up a flyer and saying, would you be interested in investing in our expansion? And you know, it could be an interesting way to raise money.
- [18:29]
C
I think you're right. In the spirit of our people, we really are kind of like the tailgaters, the people that, you know, went to college and some days miss it a little bit, right? It's a co ed vibe of people that just root for each other. There's such great people that really turning it into, even just on a small scale that they could have a piece of, it could be really fun.
- [18:49]
B
And by the way, Whitney, like what guy is talking about, if you think about it, like, how do people choose, like where they're going to work out or shop? I don't know about you, but for me it's like proximity, right? The easiest. So like, how do you canvas the area closest to your new Phoenix Bow collective? With word of mouth? Maybe you're part of, you know, other local business owners and shops where you're putting up these physical flyers or digital flyers. On top of that, you get these people to buy in. Girl, you don't even have to be stressed out about marketing when you open, right? Because you already have 200 or 400 new customers who are gonna be spreading the word that are excited to come in. And what I'd also say to you, Whitney, is a few things. One, one person's opinion. You wanna take institutional capital as late in the game as possible, if not wait forever, right? Like challenge yourself to never take it. There's a lot of great things that come from institutional capital, but you're on the record. Right. Like they believe in you and your vision and your but there is a lot of extra work in terms of reporting and strategy and board level things that also take you away from the founder entrepreneurial visionary spirit. And there are so many clever, creative ways in nowadays than ever before to not have to go to that. Well, I think a lot of times as early on entrepreneurs I know I was that way thinking that's a sign that I've made it right when I'm able to raise money and leverage that money in and but there's so much else that comes with it. So unlocking this yourself is going to give you the future power of choice on so many different levels while also training your entrepreneurial brain to be smart and savvy and gritty in all the ways that you are going to need for all of the years of BO Collective to come.
- [20:40]
A
I totally agree, Whitney. It's congrats on building this. Good luck. In Phoenix, the company's called the BO Collective. If you're in Phoenix, look out for it. Whitney Kozlowski, thanks so much for calling.
- [20:51]
D
Thank you.
- [20:51]
C
Thank you so much.
- [20:52]
A
Thanks for having you. Yeah, yeah. I mean, now I'm on the website, I'm like, yeah, the brands are cool, the clothes are cool. It's like a nice curated space. And yeah, I mean the site is awesome.
- [21:04]
B
Should we quit our day jobs? I want to both go work for Whitney. Do you want to work out and then have a cookie? I will be your chief of staff, babe. Let's go.
- [21:15]
A
We're gonna take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz, and we're answering your questions right here on the advice line on how I built this lab. You may have heard the best voice in show business, Morgan Freeman, talking about a serious and underdiagnosed heart condition that's often missed. Attr, Cardiac amyloidosis, or attrcm. It's a condition that can greatly disrupt your life with symptoms like severe fatigue, shortness of breath, and carpal tunnel. If left untreated, ATTRCM may become serious, leading to a shorter lifespan. A truby helps adults with ATTRCM live longer and have fewer hospitalizations due to heart issues, so you can focus more on living for what you love. Tell your doctor if you're pregnant, plan to become pregnant, or are breastfeeding, and about the medications you take. The most common side effects were mild and included diarrhea and abdominal pain. If you have attrcm, talk to your cardiologist about a truby and visit a truby.com podcast that's a T T r u B y to learn more. It's time to get busy living. Brought to you by Bridge Bio. You know the challenge I always had with Bitcoin was, well, how do you spend it right? Bitcoin is often talked about as an investment, but it was built to be used with Cash App. You can actually do that. Send Bitcoin instantly, pay at local square businesses that accept it, or move it to your own wallet whenever you want. It works like real money and less like something locked in an account for a limited time. New customers can get $10 added to their balance. Just use code CASHAPP10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's Bank Partnership Bitcoin services provided by Block Inc. Brand for additional information, see the Bitcoin disclosures at Cash App Legal Podcast. Picture this it's late at night and you're scrolling through your feeds when all of a sudden you see it. That one product that you've been looking for. As you're filling in your address, you realize you don't have your card anywhere near you. And that's when you see it. That purple pay button that has all of your information saved and making checking out as simple as a tap of your screen. As a buyer and a merchant, Shopify can accelerate your efficiency. Whether you're uploading new products or trying to improve existing ones, Shopify is packed with helpful AI tools that write product descriptions, page headlines, and even enhance your product photography. And if you ever get stuck, Shopify's always around to share advice with their award winning 24. 7 customer support. See less carts go abandoned and more sales go with Shopify and their Shop Pay button. Sign up for your $1 per month trial today at shopify.combilt just go to shopify.combilt that's shopify.combilt. Welcome back to the advice line on How I Built this Lab. I'm Guy Raz and my guest today is Christina Tosi, the founder of Milk Bar. And we're taking your calls and let's bring in our next caller.
- [25:08]
B
Ooh, I can't wait.
- [25:09]
D
Hi Guy and Christina, I'm Chloe and I'm calling from Leicestershire in the UK and I'm the founder of Cotton Clara. We make beginner friendly craft Kits that are designed to help people discover crafting and making and hopefully find a hobby that they love.
- [25:25]
A
Welcome to the show. Thank you for calling in, Chloe. So Leicestershire is Midlands, right?
- [25:33]
D
Yeah, right in the middle.
- [25:34]
B
Yeah.
- [25:34]
D
Leicester, Nottingham, kind of Birmingham.
- [25:36]
A
Birmingham area. Okay, cool. Awesome. Thank you for calling in. Thanks for listening to the show. So tell us a little bit about cotton, Clara. You sell like craft kits and like describe them.
- [25:49]
D
So they're designed to be beginner friendly. I kind of saw this market, you know, 10 years ago and it felt so old fashioned and I, I felt like there was a gap for design led modern kits that appeal to people that have a kind of are design conscious and want something beautiful in their home.
- [26:11]
A
And what can you get? Like you make, I mean, is it like embroidery or sewing? Like what are the things that you, that you make?
- [26:17]
D
So depending on the kit. So you either create a kind of a little work of art that is framed in the hoop, that you stitch it in and then you put it on your wall, or we. One of our really popular kits is a friendship bracelet making kit. We have paper craft kits, all different types of things. We have a flower press kit. So it depends which kind of craft you choose.
- [26:40]
A
Awesome. And you said you started this 10 years ago? About 10 years ago, yeah.
- [26:44]
D
I mean the, the seed of an idea was 10 years ago, but really the business got serious in 2020. Kind of end of 2019. 2020.
- [26:53]
A
And you sell everything direct to consumer or do you also sell into stores?
- [26:59]
D
It's about 60% direct to consumer and about 40% wholesale. But wholesale is really growing at the moment, especially wholesale to the US okay.
- [27:06]
A
And are most of your customers in the UK and Europe or also you mentioned wholesale to the us where are they coming from, your customers?
- [27:13]
D
Most of our wholesale customers are in the US, but most of our D2C customers at the moment are in the UK.
- [27:18]
A
And where do you sell in the US by the way?
- [27:21]
D
We sell to Barnes and Noble Anthropology and then loads of kind of shops, independent, small, or maybe small in America, but in the UK they're huge.
- [27:32]
A
And give us a sense of what of, of your annual sales. Like what, what do you expect to hit this year? Or.
- [27:37]
D
Yeah, this year we've just had our best year yet. We turned over $1.2 million this year or last year. So that was our greatest.
- [27:44]
A
Amazing. So that's a huge milestone. And before we dive in further, what's your question for us?
- [27:49]
D
So our question is our business serves three different markets, so gifting craft enthusiasts, like your classic crafter and then the kind of wellness movement. And we're not sure which positioning will best drive the scale. We need to build a truly profitable business. So we'd love advice on how to identify the audience most likely to buy repeatedly and how that should shape our product development and our route to market.
- [28:16]
A
All right, so gifters, craftsters, wellnessers.
- [28:20]
D
Yeah.
- [28:22]
A
Okay. Who do you. Where do you go to? Okay. Christina Tosi, I wanna bring you in Crafting. Cool business. Over a million dollars in sales now. Awesome. She's doing great. But there's some choices and decisions to make.
- [28:36]
B
It is so true. I mean, Chloe, first off, congratulations. 1.2 million. That's huge. Second of all, I want everything on your. I'm a crafter. I was raised by women. The granny spirit is alive and well in me. It's definitely how I was raised. In all of the free time we crafted, craft kits did not exist. So you had to, like, raid grandma's basement for, you know, for thread and for old pieces of fabric, the fabric store, the yard sales, that sort of stuff. I also think it's a really interesting moment where you're at where. To your point, like that the business really started taking off in 2020. Right. Like, that shows, like, a macro trend, but an interesting one because I see your business as crafting, acknowledging that gifting and wellness are ways that crafting finds its way into people's lives that aren't just thinking about crafting first and foremost. Well, also, at least in the U.S. what we're seeing, we're seeing a lot of, like, there's a reason Etsy took off, but there's also a reason why craft stores like the big Box. Michaels, Joann. A lot of those crafting first stores have suffered on just like a brick and mortar real estate basis. But also when you look at our other big boxes, like a Target or a Walmart, they're doubling and tripling down into this crafty spirit. You're onto something. You're onto an activity that we picked up in the pandemic that we haven't lost. Right. That we're continuing to find really, really dynamic stickiness with, joyful stickiness with. As a baker, I am a believer that the activities where we get to create and bring things to life, whether we're being serious about it or not being serious about it, are activities that are going to continue to be really powerful for us in an age that continues to be increasingly digital. Right.
- [30:26]
D
We feel like that, like, the potential is massive and huge. Yeah. For kind of this industry.
- [30:32]
B
What do you like, what do you want to do with. With cotton, Clara? Is it international expansion? Is it. How are you thinking about that? I appreciate the, like, what are we? But I am curious the sort of, like, what do you want to be?
- [30:49]
D
Yeah, we want to be a big global brand. We want to get people making all over the world. But I want to be a brand that does that in a sustainable way. So, yeah, we're. We're dreaming really big.
- [31:04]
B
Got it.
- [31:05]
A
Yeah.
- [31:05]
B
Okay. Here are some thoughts that I have for you, Chloe. I wonder if. And this is something my husband and I. My husband's also an entrepreneur. This is a game we play at home all the time. When we're faced with a challenge of like, is it this is it? This is it this. We force ourselves to create one additional option. So when I hear you say, are we gifting? Are we crafting, Are we wellness? I go, what if you're none of those things? What would you be? And if I had to force myself to come up with another word, it's makers, right? Like, what's the why? What is the stickiness? I think it's cause people are making something. Like, when we are at a crossroads at Milk Bar and we're trying to figure out, is this the right product or is that the right product, is this the right language? What's gonna be sticky? We go to our community first, and knowing that you have a 60% DTC customer base, poll them. They may have some of the answers. They may give you some texture that helps give you direction. And then the other thing that I think could just be cool. I have a friend named Elisa. She's actually a neighbor of guys in San Francisco on the West Coast. She fell in love with baking. And for her, baking is about, like, community. She started doing this thing a few years ago called Cake Picnic.
- [32:24]
C
Oh.
- [32:24]
B
She has gotten sponsors and now she throws these things. And people come together in a park one day and they eat cake together. It's literally a party as an excuse to eat cake.
- [32:34]
A
Yes. And people make these beautiful, elaborate cakes. They do it at Golden Gate Park. It's incredible.
- [32:41]
B
So part of me is like, what is the maker's picnic where people come and cross stitch together? Or friendship? I mean, girl, I'm a friendship bracelet wearing fiend over here. Like, you need the idea of making, crafting, whatever it is to get out much further beyond growing your business. I believe that's going to be a secret to your global domination and success and getting us excited about being makers.
- [33:09]
A
All right, Chloe, take it for what it's worth. But I, I have a slightly different perspective, which is I actually think that your customer is the repeat customer. Like it doesn't matter if they're a gifter and they're buying or if it's. I think craft enthusiast probably is the most challenging because they are probably often looking for the best value or lowest price, let's say not even best value, but it's like so. And I think the wellness thing is really interesting. Right. I don't think it's a trend that people aren't, you know, they're looking for ways to find fulfillment, spiritual meaning. And for better or worse, it's a massive exploding industry when you consider everything that fits inside of it. So I mean, I think that, you know, you want to start looking to see who's buying your stuff more than once, who's buying it four or five times a year. What is it about them? Maybe contact them or see if they will talk to you in exchange for a free product and just download who they are, why they're buying it, what they like about it. Because I think every decision you make, whether it's a marketing campaign or social media or whatever you can put into that, it should all answer that question. How do we get people to come back? How do we deepen the relationship with them?
- [34:26]
B
Wait, can I say one thing about the wellness thing? Because I like where you're going in it. My caveat or my sort of like asterisk that I'd say to it is it is wellness, but it's inherently a joyful wellness pursuit. Right. And so how do you think about. About what the right word choice is? Because if you use wellness too closely, it's gonna feel like you're saying eat your vegetables and we as humans are gonna run in the other direction. So what is the wordsmith of this look like as you're. So you have a few different options when you go to talk to your repeat customers and in. Is it about unlocking creativity?
- [35:01]
A
Yes.
- [35:01]
B
Are they creativity kits and not crafting kits? You know, et cetera, et cetera.
- [35:06]
D
Clay. I really love that play.
- [35:07]
A
I think that's a great idea. You don't wanna say wellness exactly. It's like you're hitting people over the head with it. You want to talk about unlocking creativity and you can also start to explore potential partnerships with really big candle brands or products that are sort of wellness ish or adjacent where you might have people interested in doing some kind of cross promotion or collaboration. This leads into this other idea which could be Take some energy, but could be worth it. Like a vertical. Just a business vertical. A completely separate part of your business where you start to work with brands. You know, brands that we've had on the show, like Airbnb or Canva. Milk bar.
- [35:49]
B
I was gonna say, can I get a milk bar crustage?
- [35:51]
A
Yeah. I mean, I'm looking at some of your designs here, and they're cool, like little bento boxes and ramen. And you could potentially. You know, Canva has a giant staff, like, convention every year. Thousands and thousands of people from around the world. Like, could there be some kind of collaboration where you can stitch a Canva logo or something like that, which could be an interesting, totally separate business.
- [36:18]
D
Yeah, no, that's great. All amazing ideas and, yeah, lots to think about.
- [36:23]
A
Chloe, congrats on the business. Cot and Clara, thank you. Good luck. Thank you.
- [36:28]
D
Thanks so much.
- [36:29]
A
Keep going.
- [36:30]
D
Thank you.
- [36:30]
A
Bye Bye. The thing I love about this, these kits is that you can be completely useless. Like, I am really. You know, I have a lot of patience for cooking, but for some reason, like, I just can't get my head around this. But I think. Cause this is easier. This is like, she's got things where it's like paint by numbers. I could get into that.
- [36:54]
B
Also, a friendship bracelet. I mean, I know your kids are, like, cusp. Too old, but, like, I make friendship bracelets all the time. Like, I bring embroidery thread in a little sewing kit on the plane with me. Cause it is just. It's something that I can make for someone else. It makes me feel good. It makes them feel good. Cause once you do it, Guy, you'll be hooked. You'll be like, I can't believe I made that. I'm sure your friendship bracelet era is about to begin.
- [37:18]
A
Something tells me it's about to begin. All right, we're gonna take another quick break, but we'll be right back with one more caller.
- [37:26]
B
Stay with us.
- [37:27]
A
I'm Guy Raz, and you're listening to the advice line right here on how I built this lab. Every business is now asking the same question. How do we make AI work? For us, the possibilities are endless, and guessing is too risky. But sitting on the sidelines is not an option, because one thing is almost certain. Your competitors are already making their move. No more waiting with Netsuite by Oracle. You can put AI to work today. NetSuite is the 1 AI Cloud ERP, trusted by over 43,000 businesses. It's a unified suite that brings your financials, inventory, commerce, HR and CRM into a single source of truth. That connected data is what makes your AI smarter. So it doesn't just guess. It knows how to automate routine tasks, deliver actionable insights, and help you cut costs. From software and IT services to healthcare equipment manufacturing, financial services, and many other great American industries, NetSuite delivers a customized solution for your business if your revenues are at least in the seven figures. And get their free business guide demystifying AI at netsuite.com built the guide is free to you at netsuite.com built netsuite.com built when it comes to your health and well being, the right care can change everything. That's why Cleveland Clinic has been elevating world class patient care for over a century, from the most specialized heart, neurology and cancer treatments to the latest surgical innovations and beyond. And Cleveland Clinic is here for every care in the world. Whether you're exploring advanced care or just looking after your health, all the info you need is waiting for you@clevelandclinic.org. Welcome back to the advice line on how I built this lab. I'm Guy Raz, and today I'm taking calls with Milk bar founder Christina Tosi. So, Christina, ready? Ready for our next call.
- [39:42]
B
Let's go.
- [39:43]
A
All right, let's bring in our final caller. Welcome to the advice line. Tell us your name, where you're calling from, and just a little bit about your business.
- [39:49]
E
My name is Christy Clement. I'm calling in from Washington state and I'm the founder of Vashon Island Coffee Dust. So we make spice blends to flavor your coffee without sweeteners. So there's no coffee in coffee dust, just real spices, cinnamon, cardamom, cayenne, things like that to add to your coffee. And it's a clean alternative to creamers and syrups or if you're a black coffee drinker, it's just a fun way to change it up in the morning.
- [40:12]
A
Oh, awesome. Welcome to the show, Christie. So these are, they're powders, but it's not, they're not sweetened and it's not like a, you know, powderized milk. It's, it's just spices that you add to the coffee. Yeah.
- [40:24]
E
So the whole idea is they're blends. Some people already add some cinnamon or nutmeg to your coffee. Right. And these are super fun blends. So we have a gingerbread blend. We have a couple of spicy ones, a hot mama and a spicy papa that have cayenne in them. And the hot mama, for example, is cocoa and a little bit of cinnamon. Some Cayenne and some sea salt. That's it.
- [40:43]
A
Interesting. And does it. I mean, I'm curious, because if you add that to coffee, it doesn't necessarily dissolve, right? I mean, does it. How does it, like, integrate with the coffee? Do you really get those flavors?
- [40:56]
E
You really do, yeah. So we get our spices ground extremely, extremely finely, and that helps to dissolve in. I'll also hit it with a frother, so you can add it to your coffee after you've made it. Just dust it on top. That's what most people do. You can also froth it with your milk.
- [41:11]
A
Oh, I like that.
- [41:13]
E
You can add it to your grounds, use a little bit more, but you can brew it with your whole pot.
- [41:17]
A
How. How long. When did you start this business?
- [41:20]
E
About five years ago. This is. This is a Covid baby. I used to be an IT consultant teaching software teams to act like startups, but I've never been in the food business. And I was a new coffee drinker during COVID filling, as most new coffee drinkers do their coffee. Full of junk, right? Cream and sugar and things like that. But a friend introduced me to spice blends adding to coffee, and I was able to get off the cream and the sugar using that method. And I just fell in love with it. I started playing around with other flavors, and as work started picking back up at the end of the pandemic, I thought, all right, well, I don't have time for this. I'll just buy it from somebody. Because I was completely addicted at that point. But nobody made it. And so I knew I had to start a business.
- [42:03]
A
All right, Vashon Island. That's the island in the Puget Sound, right?
- [42:06]
E
It's in Puget Sound, right?
- [42:07]
A
Puget Sound. Forgive me. Yep, yep, yep. Near Seattle. Okay, so you are selling these how? Where? Mostly through your website.
- [42:16]
E
We have five different channels. We're on our website. We do a lot of in person markets. We do Etsy. We have a wholesale channel. We're in about 50 independent gift stores and coffee shops across the country, and we sell on Amazon.
- [42:29]
A
Awesome. And how'd you guys do last year?
- [42:32]
E
We did $277,000 in revenue. And we've been profitable from day one and we've been doubling our revenue.
- [42:38]
A
Amazing. Okay, so before we dive in, what is your question?
- [42:41]
E
So I know many coffee Dust customers discover us through gifting and then become loyal buyers for themselves. And that flywheel feels really powerful, but I'm not sure how to deliberately design for it. Christina, I suspect you had a similar challenge with milk bar And I'd love both of your thoughts on how I can intentionally create that gifting loyal buyer loop.
- [43:04]
A
All right, Christina, Fashion island coffee dust. Christy's looking for some, you know, ideas on how to get those people coming back again. Again. Thoughts, ideas, questions.
- [43:15]
B
You know, it's so first of all, Christy, congratulations. 1. I think it's a great concept. Like, people's drink ritual is truly that it's sacred. It's a ritual. And I think because we all love food and flavor, like, the sweet spot of what you're doing makes a lot of sense. You know, when we started Milk Bar, first of all, my goal was to, like, have a bakery and stay alive. I did not anticipate being a gifting experience. I thought I was just selling a warm cornflake chocolate marshmallow cookie out of the oven or a slice of, you know, cake unfrosted on the sides, or a little ding of soft serve. And the DTC part of our business, we launched our care package business just so we could reach someone that was never gonna make it to our New York City bakery. But what we realized really quickly was that it became a thing. If it is gifting, you have to think first and foremost about, of course, the take rate, right? Who is gifting it, and then how do they want it to appear as a gift? How do you make their job as the gift giver as big and brilliant and easy as possible? So thinking about, you know, we chose a. Literally, it's shipping in the mail. It's insane to use a white box, right? It doesn't. Doesn't arrive in pristine white box order. But, babe, in a sea of cardboard Amazon boxes, when that box arrives, that we have social media that's just people being like, oh, my gosh, I can see this white box with a pink milk script in a sea of cardboard, right? Like, how does it show up in a way that gives someone that tingly, joyful, Right? Like, I love that. And I think it's the same thing. If gifting is your segment. Really, really thinking about that, and there's gonna be some tension points, right, between what is absolutely the most efficient and what is going to feel giftable and gifted. Then you're thinking about, okay, so how do I afford nicer packaging? Can I bundle it with a frother? And then it's an even cooler experience, but I can actually charge more and afford for the nicer packaging, because a frother doesn't actually cost that much money. Then when it's being gifted, how is it showing up? In someone's life. For us, it's usually like a high value occasion. It's someone's birthday, it's someone's graduation, it's someone's wedding. For you, it might be a housewarming gift. This is gonna be, it's free marketing for you, girl. It's like a Trojan horse, right? You get to be on their coffee counter. So what should that look like from a coffee counter standpoint? You don't see my coffee in my house. Cause no one has figured out how to make the coffee experience look pretty enough to sit on the shelf of my kitchen. And so it gets tucked away in a cabinet. Is there something beautiful that's also efficient in the way that it is used that can enhance someone's coffee station? Like those little things I think are really important. Look at me, I'm like in and so excited for you and gonna try all these dust. But I'm also going, I drink coffee in the morning, but my evening tea, I want the healthful cinnamon, turmeric, ginger, nutmeg, I want that in my tea at night. And so that's the other thing that I would just. You didn't ask for this advice, but I'm gonna give it to you as a very impassioned consumer. I have beverage rituals that extend beyond coffee and I believe that your dust could extend there too. And that could be an interesting way to expand and grow business. While you absolutely do.
- [46:34]
E
And we, and we do tend to, when we first explain it, it's, it's really about the coffee. But we do, when we send it out, send a little info sheet on what else you can use it in because it is other beverages. But it's also, you know, add a little cocoa column, which is cocoa and lavender, to your whipped cream and with some strawberries. It's amazing. I had a customer one time tell me they used Captains on chicken as a dry rub. Like, blew my mind.
- [46:57]
B
Right. It sounds like you have a fair amount of UGC user generated content, anecdotally or otherwise. Right? Like, did you know you could use captains on your next chicken bake? You know, did you know you could, you know, add this to hot water and get an incredible tea. You can steep this in your hot chocolate, et cetera, et cetera. Like you can really test and learn what's sticky for your regular customers without it feeling so direct of like a repeat ploy as opposed to giving them more reasons to come back because they hadn't thought about using your product in a different way.
- [47:32]
A
I was thinking about what you were saying, Christina, and I totally agree, because I'm looking at this product and I'm thinking, okay, you want to focus on making it really easy and frictionless on how to use it. And you had mentioned, Christy, that you sprinkle it on froth coffee or something. Because I just figured people just mix it in the coffee. Initially I was like, well, maybe, maybe you should have a QR code with a video. Maybe you do that already when people get it. Like, here's a video, here's me making it, here's how I love to do it. But actually, the frictionless side of this is to think about how do you make this so easy? Right. Like a K cup. Right.
- [48:10]
D
You don't.
- [48:11]
A
I looked this up. You don't need a license to make a K cup. I guess the patent or whatever expired over 10 years ago. Anybody can make a K cup shaped pod where you just stick it in and that's it. You've got it. You've got all the flavors and the, and the benefits, et cetera.
- [48:28]
E
That's great. I love that.
- [48:29]
A
I mean, it's not easy to do right away and. Sure. In the meantime, you know, you want to figure out again how to, how to create repeat customers. Right. Because you want people to use this every day.
- [48:40]
B
Yeah.
- [48:41]
E
Yeah.
- [48:42]
A
Chrissy Clement, Vashon Island Coffee Dust. Thanks for calling in. Good luck.
- [48:46]
E
Thank you guys so much. It was a pleasure. I appreciate it.
- [48:48]
A
Yeah, thanks, Christy. Christina, you are like, wow, you're a business school professor because your practical advice is so good.
- [48:57]
B
You too, school of hard knocks, right?
- [48:59]
A
Yeah.
- [49:00]
B
To run and grow a business over the last 18 years. Right. Like, you learn a lot about what you don't know, and then you learn to stay super duper curious and passionate about what you don't know. You know, truly.
- [49:12]
A
Before I let you go, I want to ask you one final question, which is if you could go back 18 years to, you know, in those early days when you built out milk bar, what would have been helpful for you to know back then that may have made it a little easier or better or maybe not. I don't know.
- [49:28]
B
You know, I spend a lot of my time these days reflecting. Probably because I'm waiting for a batch of, you know, cookies or cake, whatever it is to bake. It's not the early day advice, believe it or not. It's probably like the year three, year four, year five, all the way to like maybe year 10 advice. And it's really simple. It's, you know, what? You know better than anyone Else, do not lose the way. As the founder, as the entrepreneur, you know what you know about your business better than anyone else. So stay open and curious, but do not ever shortchange what you know. You may not have a business degree, right. You may not have all these other things that these other collaborative partners or mentors have. But I'll tell you the one thing you have that no one else has, and it's what you know to be true right here.
- [50:19]
A
Yeah.
- [50:19]
B
And I, I, that's one thing. I, I, I'm saying it to you because I remind myself of it every single day. Once I learned it, I thought, ooh, I'm never going to forget it.
- [50:29]
A
Yeah. Christina, thanks for coming back on the show.
- [50:32]
B
Ah, I had so much fun with you today. Thanks for having me, Guy.
- [50:35]
A
It's great having you. That's Christina Tosi, founder of Milk Bar. And by the way, if you haven't heard Christina's original How I Built this episode, you've got to go back and check it out. Really great episode. Super fun and funny. And here's one of my favorite moments from that interview.
- [50:50]
B
I just remember my BlackBerry kept buzzing and buzzing and I was like, what is going? Like, did the bakery catch fire? Is my family okay? What could this possibly be? And I had all these voicemails, and I have a, my favorite voicemail was from this woman in Kansas City who I think maybe was someone's grandma. And she was just like, well, I heard, you know, Anderson Cooper talk about this crackpot, and I just, I'm never gonna make it to New York. So, like, would you mind shipping me one? And it was like, are you gonna tell her? Are you gonna call her back and tell her no? Because I was not gonna call her back and tell her no. And we now have an online business where you can email us. And that is like, when opportunity knocks, what are you gonna say? Like, not today. When it's time to rise to the occasion, you rise.
- [51:40]
A
Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free@guyraz.com or on substack. And of course, if you are working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them. You can call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you. And we'll put all of this information in the podcast description as well. This episode was produced by JC Howard with music composed by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Jimmy Keeley. Our production team also includes Alex Chung, Karla Estevez, Casey Herman, Elaine Coates, Chris Masini, Kathryn Cipher, Kerry Thompson, Sam Paulson, and Neva Grant. I'm Guy Raz, and you've been listening to the advice line on how I built this lab.
- [52:40]
B
It.