The Business Plan Is: Stay In Business | Tiffany Chen & Leon Chen | TEDxUTAustin

Summary

The founders of Tiff's Treats recount their journey from a small university-based cookie delivery service to a successful company employing nearly two thousand people. They emphasize the importance of luck in their success, but stress that luck favors the persistent. They share their early struggles, including financial losses, kitchen space issues, and legal battles over their brand name. Despite these challenges, they persevered, and their luck turned when they secured a new location and an investment that propelled their growth. The story serves as a testament to the power of perseverance and seizing opportunities.

Takeaways

• 😀 The founders attribute their company's success to a combination of perseverance and luck, emphasizing that luck favors those who persevere.
• 🏢 The company started small, with just two founders, and has since grown to employ nearly two thousand people, demonstrating significant scaling.
• 💰 The company is now worth over five hundred million dollars, showcasing substantial financial growth.
• 💵 They have raised over one hundred million dollars in funding, highlighting their ability to attract investment.
• 🎓 The founders began their entrepreneurial journey as 19-year-old college students, delivering cookies from an apartment.
• 🍪 They faced numerous hardships, including financial losses and the loss of their kitchen space, yet continued to operate.
• 💧 A literal flood in their kitchen, caused by faulty plumbing, was one of the many challenges they had to overcome.
• 🚫 Legal issues with the name 'Tiffany's Treats' due to trademark infringement by Tiffany & Co. forced them to rebrand to 'Tiff's Treats'.
• 🏠 They faced the challenge of finding a new location when their landlord gave them a 45-day notice to vacate, which was a critical moment for the business.
• ✅ A stroke of luck with the city permitting department allowed them to quickly secure a permit and renovate a house into a commercial kitchen.
• 🤝 A critical investment of 1.2 million dollars from a chance meeting helped them secure a new location and continue their growth.

Q & A

What was the initial size of the company when it started?

The company started as a small operation between two people.

How many employees does the company have now?

The company now employs almost two thousand people.

What is the current worth of the company?

The company is worth over five hundred million dollars.

How much funding has the company raised from investors?

The company has raised over one hundred million dollars in funding from investors.

What does the founder attribute the success of the company to?

The founder attributes the success of the company to luck, but also emphasizes the importance of perseverance to be in business when those lucky breaks come.

What was the age of the founders when they started the company?

The founders were 19-year-old sophomores when they started the company.

What was the nature of the business when it first started?

The business initially involved delivering warm cookies at night out of a Hyde Park apartment.

What was the financial situation of the company after the first year post-graduation?

After the first year post-graduation, the company had lost thirteen thousand dollars.

What was the impact of the tornado on the company's kitchen?

A tornado caused a flood in the kitchen, leading to a fountain of water and sewage spewing from every floor drain, which required extensive cleaning and sanitization.

Why did the company have to change its name?

The company had to change its name due to legal pressure from Tiffany & Company, who claimed trademark dilution.

How much did the legal fees cost the company to settle the trademark issue?

The legal fees to settle the trademark issue cost the company about twenty thousand dollars.

What was the role of Mike Joyce in helping the company secure a new location?

Mike Joyce, one of the company's first mentors, helped them lease a 1940s home near campus, which they renovated into a kitchen and storefront.

How did the company manage to get a building permit so quickly?

The city of Austin permitting department staff took pity on the founder and walked them through every department to get approval, resulting in a building permit in one day.

What was the turning point that led to the company's growth?

An investment of 1.2 million dollars from a person the company's accountant knew, which served as a springboard to their growth.

Outlines

00:00

🍪 Founding Tiff's Treats: A Journey of Perseverance and Luck

The speaker recounts the humble beginnings of Tiff's Treats, starting from a small-scale cookie delivery service between two university students to a successful company employing nearly two thousand people. Despite the company's current value of over five hundred million dollars and substantial funding, the speaker attributes much of the success to luck, emphasizing the importance of being in business when fortunate opportunities arise. The early years were marked by hardships such as working hundred-hour weeks, incurring significant losses, and facing eviction from shared kitchen spaces. However, the founders' perseverance through these challenges allowed them to eventually capitalize on their luck.

05:00

🚨 Overcoming Obstacles: Legal Battles and Location Changes

The narrative continues with the challenges faced by Tiff's Treats, including a legal dispute with Tiffany & Company over the use of the name 'Tiffany's Treats'. The speaker describes the stress of rebranding to 'Tiff's Treats' and the financial burden of legal fees. Additionally, the company faced the loss of their kitchen space due to the landlord's decision to reclaim the property. Despite these setbacks, the founders managed to secure a new location and, with the help of a line of credit, transform a 1940s home into a commercial kitchen and storefront. The speaker highlights the role of luck in these events, such as the city permitting department's unusually swift approval of their building plans.

10:02

🌊 Riding the Waves of Luck: Growth and Investment

The final paragraph details the company's continued growth and the role of serendipity in securing a crucial investment. The founders, facing the prospect of not being able to afford a new lease, were fortunate to meet an investor who provided a significant capital injection after a single meeting. This investment was pivotal for the company's expansion and success. The speaker concludes by reflecting on the importance of perseverance, suggesting that while luck plays a part in success, it is the ability to endure hardships and remain committed to one's vision that ultimately determines whether one can seize those lucky moments.

Keywords

💡Luck

Luck is defined as success or failure apparently brought by chance rather than through one's own actions. In the video, luck is presented as a critical factor in the success of the 'tif treats' brand. The speakers humorously attribute their company's growth to 'pure luck,' highlighting that while luck played a role, it was their persistence and ability to capitalize on fortunate breaks that truly drove their success. For instance, they mention getting a building permit in one day, which is an example of good fortune that helped them significantly.

💡Perseverance

Perseverance refers to the act of persisting in a course of action even in the face of difficulty or with little or no hope of success. The video emphasizes that while luck is important, the ability to persevere through hardships is what allows one to be 'in business' when lucky breaks occur. The founders recount numerous challenges, such as financial losses and the loss of their kitchen space, which they overcame through sheer determination and hard work.

💡Hardship

Hardship is a state of severe trial or distress. The video's narrative is filled with instances of hardship that the founders faced, such as working hundred-hour weeks without pay and dealing with the loss of their kitchen space. These hardships serve as a backdrop to the theme of resilience and the necessity of enduring tough times to achieve success.

💡Misfortune

Misfortune is an unfortunate event or circumstance. The script mentions 'wave after wave of hardship misfortune and loss,' illustrating the continuous challenges the founders encountered. An example of misfortune in the video is the mild tornado that caused a flood in their kitchen, which was a setback they had to overcome to keep their business afloat.

💡On-Demand

On-Demand refers to a business model where products or services are provided or made available immediately after a customer requests them. The founders mention that their 'on-demand bake-to-order warm cookie delivery' was a novel concept when they started, highlighting innovation as a key part of their business strategy.

💡Trademark

A trademark is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others. In the video, the founders face a legal challenge when Tiffany & Company claims trademark dilution over their original name 'Tiffany's Treats.' This situation led to a rebranding to 'Tiff's Treats,' showcasing the importance of intellectual property in business.

💡Investment

Investment in the context of the video refers to the act of putting money into a business with the expectation of making a profit. The founders describe how an investment of 1.2 million dollars from a single meeting was a turning point for their business, illustrating the impact that financial backing can have on a company's growth and survival.

💡Lease

A lease is a legal agreement outlining the terms under which one party agrees to rent real estate from another for a specified period of time. The video mentions the challenges of signing a lease for a new location without the means to pay for it, which led to a critical moment where the business's survival was at stake.

💡Growth

Growth, in a business context, refers to an increase in size, value, or profitability. The video's theme revolves around the growth of the 'tif treats' brand from a small startup to a successful company. The founders discuss various stages of growth, including the challenges and the lucky moments that contributed to their expansion.

💡Failure

Failure is the inability to do something successfully or the lack of success. The video acknowledges that failure is a part of the entrepreneurial journey. The founders recount losing money in their first year and facing the potential failure of their business multiple times, emphasizing that it's the ability to learn from failures and keep going that leads to eventual success.

Highlights

The company started as a small venture between two individuals and has now grown into a large enterprise with almost two thousand employees.

The company is valued at over five hundred million dollars and has raised over one hundred million dollars in funding.

The founders attribute much of their success to luck, emphasizing the importance of being in business when opportunities arise.

The founders had to persevere through hardships, including financial struggles and the loss of their initial kitchen space.

They initially operated out of a shared kitchen space with a struggling baked potato shop.

The founders were just 19-year-old sophomores when they started the business, delivering warm cookies at night.

They lost thirteen thousand dollars in their first year after graduation, working hundred-hour weeks without pay.

The founders had to convince their landlords to rent them the entire kitchen space on a month-to-month basis.

A mild tornado caused a flood in their kitchen, forcing them to clean and sanitize the entire space.

They faced a legal battle with Tiffany & Company over their original business name, Tiffany's Treats.

The company had to change its name to Tiff's Treats after spending twenty thousand dollars on legal fees.

The founders were given a 45-day notice to vacate their kitchen space by their landlords.

They found a 1940s home to renovate into a kitchen and storefront with the help of a mentor.

The city of Austin permitted department granted them a building permit in a single day, a process that usually takes months.

The new location turned out to be more beneficial for the business, bringing them closer to downtown and increasing visibility.

The founders signed a lease for a new location without having the funds to pay for it, risking the business's survival.

An investment of 1.2 million dollars from a new acquaintance allowed the company to continue growing.

The founders emphasize that luck is a significant factor in success, but perseverance is necessary to capitalize on it.

The analogy of surfing is used to describe the need to stay afloat and be ready to catch the wave of opportunity.

Transcripts

[Music]

thank you

so what started here at this great

university between just the two of us

has now become a company that employs

almost two thousand people

is worth over five hundred million

dollars and we have raised over 100

million dollars in funding from

investors

we're going to share with you all today

what we feel is most responsible for the

success of the tif treats brand

and that is

luck

pure luck

that's right if it weren't for some

lucky breaks we wouldn't be standing on

this stage right now

but the trick is you have to still be in

business when those lucky breaks come

along

you have to survive wave after wave of

hardship misfortune and loss

you have to persevere long enough to get

lucky

when we first started we are just 19

year old sophomores going to school

during the day delivering warm cookies

at night out of my hyde park apartment

by the time we graduated we were sharing

kitchen space with a struggling baked

potato shop right here on the drag in

the old scientology building

when we first graduated we weren't

making anywhere near enough money to pay

ourselves or to grow the business but we

knew we felt there was something special

about to happen with the brand and we

wanted to be a part of that we also of

course knew that on demand bake to order

warm cookie delivery it didn't exist

when we first started we'll share some

of our early hardships and and and go

over with you all that in that we'll go

over with you all in the beginning

there's just a lot of hardships and a

lot of loss

that's right a lot of loss

so we lost money

the first year after we graduated we

were working hundred hour weeks and at

the end of the year we had our books

done and we had lost thirteen thousand

dollars

we used to dream of ways that we could

have spent thirteen thirteen thousand

dollars and maybe had a little more fun

like driving down the road with the

window down and just throwing dollar

bills out as we went

but instead we had spent it working the

most grueling year of our lives not

paying ourselves a dime and owing

thirteen thousand dollars at the end of

it we had no business staying open my

personal checking account was regularly

under 50 and i had no savings

but still we kept going with nothing

more than a feeling that this was going

to work

we lost our shared kitchen space just as

we felt like we were maybe getting our

feet under us the owners of the baked

potato shop they sat us down to tell us

that they're going out of business they

literally moved out overnight

so the next day tiff and i we went to

the landlords to see if maybe they would

rent out the entire space out to just us

after much pleading they agreed to do so

but only on a month-to-month basis they

said at some point they're going to want

to have the entire space back for

themselves we did however convince them

to give us 45 day notice before they

wanted their space back so we didn't

know if we were going to be able to stay

for six months a year or longer but at

that point we were just ecstatic that

the business was going to survive

another 45 days at least

not having the security of a long-term

lease definitely kept me up at night as

did the stress of not knowing the

viability of the business if and when

that 45-day notice would come

we lost our

so now that the kitchen space was all

ours we went about making it our own we

painted a hand painted sign with our

name on it and we installed a walk-up

window so customers could come up and

order cookies

and then came the flood

on this particular day it was actually a

mild tornado and what we didn't know was

that the plumbing in the building was

installed incorrectly and when the water

rose too high outside the sewage system

started working in reverse and coming up

the floor drains inside

imagine a fountain of water spewing out

of every floor drain in the kitchen and

when i say water it also means sewage

it was so intense that at a certain

point i turned a bucket over sat on it

and it whisked me away

we ran around the kitchen trying to turn

off the ovens before the water reached

the outlets and we called all the

customers to let them know your cookies

are not coming

finally the storm passed and we spent

the rest of the day just mopping the

water out of the space and we even had a

customer come up and try to order

cookies as we were mopping water out

and then we spent the next few weeks

just cleaning and sanitizing and tossing

everything that got wet and dirty

we lost our name

so one day i checked the mail come back

to the store

we registered a trademark apparently for

our name at the time which was tiffany's

treats

and that caught the attention of the

legal team over at tiffany and company

the famous jewelry brand

they wanted us to stop using our name

tiffany's treats or any form of it they

were claiming trademark dilution which

basically just meant that they felt

their brand was so famous that it didn't

matter what industry we were in it did

as long as

you know there's another brand using a

name that was similar they didn't want

to have anything to do with it so

we knew that we had to do something

about that every law firm wanted to

fight this case because at that time in

order to win a trademark delusion case

tiffany and company would have had to

prove actual monetary damages which

would have been next to impossible

it was a dilemma for us

we could have decided we had to decide

whether to fight for what we thought was

legally all right or just figure out a

way to keep the business going another

day

so we hired a law firm it was a

trademark law firm downtown and we knew

about them because they ordered cookies

from us non-stop

and in that law firm was an attorney who

wasn't out there just to make a name for

herself

by taking this case directly to court

but even settling with tiffany and

company was really stressful because it

was going to cost us time and money that

we didn't have but still we fought to

shorten the name to tiff's treats and

eventually came to an agreement with

them that we could do just that after

spending about twenty thousand dollars

of borrowed money on legal fees

but ultimately we like the name better

it was shorter and easier to say and a

funny aside about this the whole legal

situation actually changed my name so

before this almost everybody called me

tiffany and just a handful of very close

friends would refer to me as tiff and

these days i still introduce myself as

tiffany but almost nobody calls me that

anymore

we lost our location

just when we were finalizing all the

legal issues literally changing the name

on our sign

the landlords they said they gave us our

45-day notice to vacate

the scientologists they wanted their

space back and they needed us out

we knew this was coming we knew this was

coming so the year before we hired a

real estate agent we went everywhere

looking for a space that might be

suitable for us to move into

we quickly realized there weren't very

many suitable and even if we found a

place

the chances that a landlord would rent

to two struggling kids in the financial

situation we were in well it wasn't good

and so this was really time to panic

even if we had options 45-day notice to

just to be able to find a location to

permit it to build a commercial kitchen

that was nearly impossible that process

would take us today nine months to a

year

at this point we thought the business

was probably going to fail

but then we started getting lucky

we stumbled upon a 1940s home near

campus and thought maybe we could

renovate this into a kitchen and a

storefront we knew we would need help

leasing the space and we were introduced

to one of our first mentors named mike

joyce through the landlord of a failed

sixth street walk-up location we had had

he eventually got this landlord to agree

to rent to us even though our financial

state did not support that at all

and in another weird lucky break we had

just signed a hundred thousand dollar

line of credit from the bank which in

those days they were giving out with

nothing more than a signature backing it

so with that money we had what we needed

to be able to turn this into a store

so our next challenge was to actually

turn a house into a commercial kitchen

which meant that we would need to go

through permitting so we sat down and

drew out by hand what we wanted to do

with the space and then we rolled up our

little elementary school style project

drawings and marched down to the city of

austin to get ourselves a permit

another stroke of unbelievable luck

for whatever reason that day the people

working in the city of austin permitting

department

they took this drawing this is the

actual drawing that we submitted for

permits and they took me and they walked

me through every single department

stamping it for approval basically

giving us a building permit in one day

this process would take four to eight

months today i don't know why to this

day they took pity on me they probably

saw the desperation in my eyes

or they took one look at me and thought

there's no way he's gonna pull this off

so they're gonna do it anyway but for

whatever reason they did and those

people changed everything for us they

made something that was impossible

possible because of this we were able to

build so quickly we just had to close

down for one day in between moving and

moving to this new location being forced

to move this new location actually ended

up being the best thing for us this

location was closer to downtown while

still being within walking distance to

campus and by being closer to downtown

that enabled us to be closer to the

corporate clientele that was growing for

us this location had much better

visibility and it had a parking lot

within a year we really started things

started to turn and the brand really

started to grow

and then a few years later we got

ourselves into a little pickle

we signed a lease for a north austin

location with absolutely no way to pay

for it we had assumed that the banks

would continue to loan us money because

that's what we had done in the past but

things were different now and banks were

no longer lending money for things like

this

without money for the lease and

construction that we were already on the

hook for once again we were at risk of

going out of business

but then we got lucky our accountant

knew somebody who was looking to make

investments in business and she

encouraged us to sit down and have lunch

with him

after one lunch meeting he agreed to

invest 1.2 million dollars into our

business without ever even going to look

at a store

we learned later that this is not how

investment meetings usually go

but we lucked out meeting just the right

person just when we needed him most

and that investment was a springboard to

our growth and is largely responsible

for where we are today

but we wouldn't have had any of this

luck if we hadn't fought and clawed to

stay in business along the way

so while the secret to success may be

luck the only way to get lucky is to

persevere

it will be hard

and it will be daunting and you will

fail and you will fail again but fight

for what you want and if you think

you're on to something keep it going

until that next lucky moment

i think of it like surfing you're out

there you're treading water you're

waiting for that wave to come you have

to be patient because the wave will come

it always does your job is to stay

afloat long enough until it arrives and

when it does you gotta catch it you see

it's not just those lucky moments that

determine whether or not you're a

success it's what you're willing and

able to do

in between those moments while you're

waiting to catch your lucky breaks

thank you so much for having us

[Applause]

you