Kavya Desai Devon Chen Emmiliese von Clemm

Princeton University, Lean LaunchPad December 12, 2012

Initial Idea: DIY Cookie Cafe

• Warm, freshly baked cookies provide a sense of love

• Cupcakes recently experienced a boom in popularity; could cookies be next?

• Baking as bonding and entertainment for family and friends

• Assumptions- People appreciate:• Dessert, more specifically cookies• No mess/cleanup• Customization

Initial Canvas

Feedback: Customer Interviews • Tested various value

propositions through conversations and surveys: • Baking as an activity: families

with children are somewhat interested, but low among other groups

• Hassle free, no mess: not as highly valued as expected; many consider the trip to be a hassle

• Customization: Customers got really excited about customization!

Trip to NYC• Explored dessert scene in NYC and learned about their business models• Learned about cupcake trend• Branding, individual portions, atmosphere, focus• Georgetown Cupcakes, Baked by Melissa, Levain Bakery, Insomnia

Cookies, Rice to Riches, Molly’s Cupcakes, Babycakes

Pivot: Customizable Cookies

Step 2: Pick Mix-Ins• Milk Chocolate Chunks• Dark Chocolate Chunks• White Chocolate Chunks• Butterscotch Chips• Macadamia Nuts• Reese’s PB Cups• Dried Coconut• Potato Chips• M&Ms• Craisins• Twix• Pretzels

Step 3: Pick Toppings• Nutella• Caramel Drizzle

Step 1: Pick a dough• Original• Double Chocolate• Peanut Butter• Oatmeal

Halfway Canvas

Key Interview: Loren Brill• Founder of Sweet Loren’s• Product: All-natural, frozen,

ready-to-bake cookie dough and brownie batter that contains the finest unrefined ingredients

• Target Audience: Upscale grocery store customers

• Insights:• Her customer discovery process

and pivots • Co-packers• Simplicity of break and bake

dough• A need for packaging that jumps

off a shelf

MVP: Website• Testing: Web Channel• Allowed for online ordering• Results: • Limited programming

experience/time prevented us from having a more trustworthy looking site

• Had trouble getting people to pre-order cookies for our Demo Event

• Moving forward, a more interactive online ordering process is key

MVP: Demo Day• Testing: Physical Channel• TapRoom Café, Campus Club• 8 hours long• 130 cookies sold• $145 in profits • Price: $2.50 per cookie

• Positive feedback on customizability, deliciousness of cookies

• Negative feedback on wait-time• Complicated operations

Key Interview: Modern Cookie Co.• Failed customizable cookie

business in northern California

• Insights:• Conveyer belt oven• Minimizing wait time is

critical • High foot-traffic location is

necessary • Barriers to marketing

cookies as “healthy”• Need for consistency in

product offered

AB Testing• Tested different value props through 4 campaigns• Facebook Ads• Google AdWords• Splash pages

• Indicates out customer acquisition costs will be high• Low click through rate for all• High cost per click• Very few sign ups

• 251 page visits to 4 pages between Google & FB Ads• Caveats:• Customizable cookies are a new concept• Very low word count: other methods may be more effective

AB Testing: AdvertisingCampaig

n1 2 3 4

Company Name

Cookies to Crumbs

Cookies to

Crumbs

Cookies to Crumbs

(Crowdsourced)

The Cookie Laboratory

Order Size Min

2 Dozen ½ Dozen 1 Cookie 1 Cookie

CTR .25% .22% .28% .26%CPC $.52 $.42 $.41 $.52

Campaign 1 2 3 4

Advertising Angle

Holiday Convenience

Customizability The Cookie Laboratory

CTR .0063% .0043% .0049% .0073%

CPC $.81 $1.27 $1.01 $.79

Cost Analysis: Summary• Prices:• Retail: $3/single cookie, $16/half-dozen, $30/dozen, $1.50/milk• Web-based: $30/dozen (+$5 shipping), $50/2dozen (+$8

shipping)• Breakevens: Year 1 / Future Years

CHANNEL SINGLE COOKIES

½ DOZENS DOZENS GLASSES OF MILK

DOZENS (WEB)

2DOZENS (WEB)

Retail Only 100 / 95 12 / 10 6 / 5 50 / 48 - -Web Only - - - - 25 / 16 8 / 2Web w/Partner

- - - - 16 / 12 8 / 6

Retail & Web

85 / 77 9 / 7 4 / 3 44 / 36 16 / 11 6 / 4

Cost Analysis: Highlights• Human Labor: • Web Developer ($10,000 retail vs $50,000 web)• Employees ($85,000)• Insurance ($7,200)

• Major fixed costs:• Utilities ($7,800 retail vs $10,000 web vs $16,000 both)• Commercial ovens ($2,000 retail vs $10,000 web)• Freezers & Fridges ($3400 retail vs $5,200 web)

• Variable Costs:• $0.98 per cookie (retail), $0.33 per glass milk, $1.30-$1.58 per

cookie (web)

Key Activities

Customer FlowCustomer

Places Order Online

Receive & Organize Order

Customer Orders in

Person

Mix Dough with Mix-Ins

Bake

Cool and Package

Notify Customer for pick-upDelivery

Service

Shipping

Revenue Flow

Customers

Suppliers of Mix-Ins, Beverages,

Delivery Service(i.e. Seamless)

Pay for CookiesServes

Cookies

Pay for Delivery

Pay for Ingredients

Co-packer

Overheads (Utilities, Rent, Salaries, etc.)

Pay for Doughs

Shipping Company

Pay for Shipping

Most Recent Canvas

Is this a Business?

• Great potential: Overall concept, customer interest, value propositions, and partner possibilities

• Considerable hurdles: High start-up and fixed costs, wait-time in retail channel, driving web traffic

• YES, this is a business. Roll-out needs to be strategic though.

Is this a Business?• Start web-based with a baking facility partner

• Cut major costs of rent and equipment• Focus on developing a marketing campaign, branding, and a great

site for sales• Move into a retail location that doubles as a processing facility

• Split time between operating physical channel and web channel out of the same location

• Use pre-existing website to facilitate sales• Both channels can grow off each other in terms of building brand

• Depending on performance, invest more in web, retail, or both.• If web channel is overflowing with orders, invest in processing

facilities and hire more employees to fulfill orders• If retail location is building popularity, consider franchising into

similar locations, malls, etc

Moving Forward: Next StepsImmediate:• Establish critical partnerships• Baking facility to use in part-time for web channel• Co-Packer

• Build a fully functional, aesthetically pleasing website• Online ordering capabilities

Next Steps:• Explore different levels

of customizability- crowd-sourced “cookie of the month” flavors

• Build a mobile app