Practice makes perfect
CEO Joel Clark was barely making ends meet before the Shark Tank premiere. Joel borrowed $250,000 to keep Kodiak afloat, took on side hustles and even left his leadership post for a while. Clark and COO Cameron Smith found out May of 2013 that they had been chosen for Shark Tank, which filmed in June. This might be an opportunity for the company to turn things around!
The build-up for the Shark Tank premiere was nerve-wracking. The duo spent months preparing and practicing pitches for the show and even did a mock run-through with a hired PR company. Their plan was to stay true to themselves and their company instead of making it into a game. After all, that is what helped their company get to that point in the first place. But would the Sharks like their product?
Shark Tank debut
Joel and Cameron went on the show in April of 2014 to present their product: a healthy pancake mix that offers a delicious way to get the beneficial nutrients of whole grains. The judges liked the product, but not Kodiak Cakes’ offer. Joel and Cameron asked the sharks for $500,000 for 10 percent of their company. The sharks found this outrageous but saw some potential in the homegrown pancake company.
The judges thought Kodiak’s original offer was too much for something competing with the likes of Aunt Jemima. Kodiak Cakes was still a small company but was projecting sales of up to 20 million. The Sharks thought this was over the top. Joel and Cameron were offered $500,000 for 50 percent of their company. Would they take the deal?
Up, down, and all around
Joel and Cameron ending up walking away from Shark Tank empty-handed. Fifty percent of their company was more stake than they were willing to part with. The Shark Tank rejection wasn’t the first conflict for this company, which had been in operation already for 23 years.
Like any start-up business, there were a lot of ups and downs. What helped Kodiak Cakes succeed was the determination of CEO Joel. Even when things looked bleak, Joel stuck with Kodiak because of its family ties. He decided he wouldn’t need Shark Tank to help Kodiak grow and took a new route to success: a new product, that packed an even healthier punch than the original Kodiak pancake mix.
Protein to the rescue
In January of 2014, Joel and his new COO launched Power Cakes, the protein-packed version of their original product. This protein-happy pancake mix helped to boost them in their market because people are always looking for new ways to get protein. The product did so well, it got on the shelves of one of the biggest stores in the U.S.: Target!
The mixture of this new product and the airing of Shark Tank sent people running to Target to get themselves some Kodiak Cakes. They were selling out in Targets all over the country and working overtime to refill and restock the shelves. Aunt Jemima who?
Hot cakes or hot mess: How did pancake mix become the recipe for a multI-million dollar company?
While the company first got national exposure after facing rejection on Shark Tank, it was founded long before in a family kitchen in Utah. Back in 1982, Penny Clark sent her 8-year-old son, Joel Clark, into the neighborhood with a red wagon full of pancake mix to sell. When he returned with an empty wagon they knew they were on to something.
The eldest Clark brother, Jon, started the company. After a couple of years, Jon wanted to spend more time with his family and gave the company to his brother Joel. Later, Joel brought on Cameron Smith as COO. It took some time for Joel to get the company to where it is today but he didn’t give up. He took some very important steps to make Kodiak work. Scroll down to find out his keys to financial success.
Pay your dues
Success doesn’t happen overnight. It took 16 years for Kodiak Cakes to hit a million dollars in sales, and 20 years before their television debut on Shark Tank. When Jon initially started the company, he was doing it as a side hustle. When Joel was handed the reins, he was balancing his work with going to college and then getting his MBA.
Both brothers stuck through the company even though they had other things going on. Joel took over when the company had already been going for a long time and was still a small company. Even though there were a lot of screw-ups, bankruptcy scares and turnovers in that time, dedication was never a problem. Although Shark Tank didn’t work out as planned, the appearance helped Kodiak out in another way…
Joel told Inc.com that Kodiak’s turnaround was due to the combination of the Shark Tank publicity and the release of Power Cakes. Kodiak’s TV appearance turned viewers onto a healthy version of the pancake — who would have thunk such a thing existed? When the increasingly health-conscious consumers found out about Power Cakes, Kodiak found themselves busy restocking their shelves!
Any publicity can be valuable; you need people to know about your product. Your product won’t be for everyone, so you need to find the right niche. A show as big as Shark Tank is bound to reach someone that will appreciate a particular product. Besides brand outreach, being true to your brand is important. More about that below.
Stick to your guns
When they went on Shark Tank, Kodiak Cakes imagined that its company would be worth around $20 million and were willing to give up 10 percent ownership. Now, the company is worth five times that — Joel and Cameron are probably glad they kept it in the family!
When the money finally comes knocking, a lot of companies will change anything at the drop of a hat to get that cash flow. The mission behind Kodiak was never compromised; it continued to be a rustic, family, health food company. There were loans, and debt and changes and all of the hell that comes along with starting your own business. Turns out there were lessons to be learned from the failures.
Fail, fail again
Since their episode aired on TV, the company has grown 80 percent each year and is worth 100 times the amount it was on the show. I can only imagine how the sharks feel after seeing that Kodiak Cakes is the number one selling baking product at Target.
Kodiak eventually earned an investment from Sunrise Strategic Partners, which was just the support they needed. Gaining investment is crucial for any new startup, and there are many practical ways that new businesses can hope to find someone that believes in their vision. Kodiak was able to focus on more than just pancakes. Find out what else they created below.
Made some money? Cool, make more
As sales continued to rise, expansion became possible. Thus, the birth of Kodiak cookies, brownies, muffins, and cornbread. After so much struggling, the company finally had the freedom to do what it wanted and pursue other aspects of the business, like the waffle market!
It’s crucial when some monetary success arrives to keep investing, expanding and rebranding to keep your business current. As Kodiak accumulated earnings and success, they used it to make their product even better and to put more out there. A variety of products meant a variety of customers. They then decided to put their money towards good.
Social goods are the new thing
Kodiak Cakes markets their company as wholesome, hand-crafted and sustainable. They decided to not only talk the talk but walk the walk. Kodiak took on the goal of protecting wild lands and grizzly bear habitats in their local area – hence, the angry bear on the front of their original pancake mix boxes.
If you are thinking about starting your own business or are trying to decide on the next company to back, consider exploring sustainable projects, which can be both promising and lucrative. Some notable companies that have had success with this approach are Warby Parker and Toms. These now-huge companies are supporting projects all over the world. Customers love sustainable companies. We’ll tell you why next.
Sustain the sustainable
Today, most people want to spend their money on products that will also support a cause that’s important to them. Not only are people more health-conscious (which Kodiak caters to as well!) but also more socially-conscious nowadays. Kodiak’s branding of their products as hand-crafted and sustainable is no small part of their success. People want products that align with their values.
Most millennials spend their money on products tied to causes. Sixty-six percent of consumers reported that they’d spend more money on a product from a sustainable brand. As the world progresses and people become more aware of the products they consume, sustainable brands are increasing in demand. Knowing what your clients want is important and also WHEN they want it. More on that soon.
Timing is everything
All this success seemed to happen overnight. However, as with most success stories, there is more to it than it looks. These guys had a few things working in their favor that helped to make things happen for them. Most entrepreneurs will tell you: Timing. Is. EVERYTHING.
In Kodiak’s case, the pairing of Protein Cakes’ release and the airing of their Shark Tank debut worked strongly in their favor. Add consumers’ burgeoning interest in healthy foods and sustainability, and you have yourself a match made in heaven! Joel and Cameron had in mind all the moving parts of their company and who they were catering too. Determining your audience can be a tricky thing — we explain how they did it next.
Know your market
When Kodiak Cakes first started, the market wasn’t quite onboard with its product yet. Joel stuck with Kodiak until the market evolved into a place where a healthy pancake could sell. While low-fat and fat-free foods were trending in the 90s, few people really cared about healthy, wholesome food.
Still, Kodiak kept believing in their product and stayed the course through all the rising and falling of trends until their company was able to flourish. They knew the brand through and through and saw something in it when nobody else did. Also, being able to strike when the iron is hot is essential for reaching your customer base. That’s all great and good, but how do you know when the iron is sizzling?
Strike while the iron is hot
With changing markets and trends, it’s imperative for new startups to recognize their opportunity, and strike while the iron is hot. Kodiak managed to take advantage of the current trend toward healthy food and build a customer base that would continue buying their wholesome product. Going on Shark Tank during this ongoing trend helped them reach their consumers.
Other companies might captivate their customer base by acting when the time is right. Getting an early jump on your market is better than getting to the party late. If the market becomes saturated with similar products, the chances of success diminish. Beyond knowing when’s the right time to strike, you have to have a great product. What qualities do you think a product must have to stand the test of time?
Know your product
The fundamental goal of any startup is to solve a problem or fill a void in people’s lifestyles. While having a product that can prosper in a small market window can be encouraging and earn you an income, having a product that can withstand market change is vital. If it’s timeless, anyone can enjoy it at any time!
Kodiak Cakes was able to survive those years before the health food craze because of two factors: 1) People LOVE pancakes and 2) Kodiak pancakes are tasty and healthy. Examine your product and analyze its ability to withstand and thrive through rising and falling markets. Business can be tough, but your product has gotta be tougher. Beyond longevity, there are a few other ingredients it’ll need…
Throw in a pinch of originality! Like other companies, the Clark family put their hearty spin on foods that we know and love. Their whole grain snacks appeal to an outdoorsy and active crowd, and with some useful market research, the two brothers were able to disrupt the static pancake mix section. Now health conscious folks could enjoy delicious pancakes without the guilt.
New business ventures might have some similar success if they can identify an unmet need and relate to their audience. It sounds easier said than done, but there are many ways that new businesses can overcome obstacles just as Kodiak did. It takes some of the skills we mentioned before: knowing your market, knowing your product and striking when the iron’s hot! It won’t just take luck, more on that next.
You’re going to need more than luck
Knowing whether the world is ready for your product or service can be difficult to determine, and it’s probable that many failed ventures would have succeeded in another time with another group of people. It turns out that this pancake mix company knew when to take their chance.
While luck might be a factor in any great success, one of the main reasons the Clark brothers are multi-millionaires is because they adjusted to their market and pivoted their way to profit. So don’t feel like those that are successful are “just lucky,” they work really hard and so can you! But we know, it’s hard to stay determined. How do you keep on the path and your eyes on the prize?
Keep your eyes on the prize
Being able to adapt your business model is, more often than not, a make it or break it skill when trying to get your company started. Advancement is always possible and should be a goal for every aspect of your business. Just remember: 99 percent perspiration and 1 percent inspiration!
For new companies to successfully switch their approach, they need to have a finger on their target market, seek out trends and be adaptable. If you’re not willing to change, chances are your goals are not going to be able to be met. There’s something else that aspiring entrepreneurs should keep in mind throughout their process, something that Facebook, Microsoft, and Kodiak all have in common…
Don’t fear change
All of these companies changed their business models during their development. It’s important not to get too attached to the strategy you’ve created because entrepreneurship and pivoting go together like pancakes and syrup. Don’t fear change, embrace it and you’ll soon be on the road to success.
Change is good! Don’t be afraid to switch it up when things are already working because markets are always changing, so you have to change with them. A little change here and there might even breathe new necessary energy into your company! We already knew that pancakes were awesome, so then, how did this sweet new venture take off the way it did?
Persist, persist, persist
It’s probably getting annoying, but persistence AND adaptability in the face of rejection – from not just Shark Tank but the market as a whole – is Kodiak’s secret. Behind these two things were support and a lot of it. A secure network of people backed Kodiak from the very beginning.
Successful businesses are not one person jobs. Behind every successful company is a team of people full of ideas, encouragement, and strategies to keep the venture going. Many roadblocks could have ended Kodiak. However, there’s something that Joel and Cameron and the rest of the hardworking people at Kodiak did everyday…
Every day I’m hustlin’
The ability to drop everything you are doing and start a business is rare unless you’re already a millionaire. So, in comes the side hustle. You either are side hustling while you start your business or your business is a side hustle for your regular job – until it takes off.
Kodiak’s CEO flipped houses, bought and sold cars, and even started a couple of storefront baking companies to help support the business. He made and lost a lot of money while trying to keep the business afloat. He knew that he had to work and work hard because it wasn’t going to be a short nor easy road.
It’s a marathon, not a sprint
The business was lent money time and time again, and with each time it happened came added determination to pay it back. At one point, Joel’s neighbor loaned him $13,000, and his only thought was, “I have to get him his money back.” And so, that’s just what he did.
Every time there was an issue or a problem to solve, it was quickly and diligently handled. The resiliency of this 20-year-old startup is inspiring. They bounced back from every hurdle they encountered. They didn’t do it quickly, instead, they took baby steps and soon walked down the road to success. Here’s why that’s important:
Baby steps, one more time
The other essential key to the success of this pancake wonder company was setting goals and then meeting them. Every six months, there was a new goal to reach. If the goal wasn’t met, Joel was going to go and get a real job, but he met his goals every time and never threw in the towel.
Baby steps are pivotal when it comes to building a business. Start with smaller goals and then aim for bigger ones, but always be working towards something new. You’re not going to have everything you hoped and dreamed for fall right into your lap. Things take time! You have to believe in your product, in your dreams.
If you don’t believe it, no one else will
Early on in the journey, Kodiak was turned over to another company to run. The minute Joel saw the authenticity and value of his product being compromised, he hopped right back in. He couldn’t let his brand and his mother’s recipe be altered into something that it wasn’t.
The passion behind Kodiak is exhilarating and endearing, bringing even more authenticity to this family brand. Joel is a living, breathing version of his product. When starting a business, it’s important to get behind something you believe in – it makes it easier to sell your product and yourself. In order to do that, being genuine is super important! We’ll tell you why next.
Most people believe that if you care about what you’re doing, then you’ll provide excellent service and who doesn’t get inspired by someone working their butt off to turn their idea into a reality? Everyone has a story, and brand authenticity is something that can’t be faked.
For your company to develop a brand that people feel is genuine and credible, it needs to focus on what you believe in and the benefit you believe people can gain by having it in their lives. Be able to fully get behind what you’re slanging or else you’re not going to be genuine. However, you can’t be totally narrow-minded when it comes to designing a product for the market. Why do you think the phrase “the customer knows best” exists?
The customer knows best
Today’s consumer cares more about the company and the human being developing the product that they are buying. In a world where customers have access to so much information, it’s important to be conscious of the message you send.
Careful consideration of your life and journey as a business owner can provide interesting insights that might help you tell the story of your company and allow customers to connect with your brand. You can’t hide behind computers if you want your business to sell. You are the product. Even when you think you’ve reached one milestone, there’s more you need to go through in order to create a brand with longevity. More on “the journey” below.
The journey is never over
Kodiak Cakes journeyed long and hard before and after Shark Tank. There isn’t a single thing or person that can be traced back as the cause of their success. It was an accumulation of progress. We’re sure Joel and Cameron can say they’re proud of all that they’ve achieved because they stayed true to their product.
Most importantly, they had an honest product and a strong captain driving their ship. Defeat was never an option, even when the big dogs on Shark Tank shot them down. After years and years of hard work, they finally achieved success in all aspects of their company. Guess they didn’t need you after all, Shark Tank!
Follow your passion
Monetary gain can’t be the only driver behind a product and business; there has to be passion. If you do not have love and desire behind what you do, your company won’t persevere when things get a little tricky. No one succeeds without failure and failure is okay – as long as you keep pushing past the hard times.
Kodiak Cakes wanted to be successful and make money, but most importantly, they wanted to offer the world a healthier version of pancakes. The authenticity of the company never faltered. The product was loved and made by family, and the essence of that was preserved through and through, and that is why it became a success.
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