Today's Guest

Kristina Schlegel is the founder of Make Bake and the creator of 100% edible Stickies™ – that's right, stickers you can eat! Kristina was a product designer in Silicon Valley who took a detour to pastry school and is now on a mission to bring delight to your kitchen. Kristina is a creative product & marketing strategist with a 20+ year track record of creating category-defining products and customer experiences that deliver strategic, measurable growth for businesses. In today’s episode, Kristina takes us behind the scenes of how she broke into a new category, the challenges she faced with packaging, and how she sourced her manufacturing.

Resources Shared

• Make Bake
• Thryv

Episode Transcript

(Please excuse grammatical errors due to transcription)

Gordon Henry:                 Hey, hey. This is Gordon Henry at Winning on Main Street, the show that's here to help your small business win. And this week we have an inspiring entrepreneur. Welcome, Kristina Schlegel.

Kristina Schlegel:             Hi. Thank you so much for having me on.

Gordon Henry:                 Great to have you and welcome to the show. So quick intro on Kristina. She is the founder of Make Bake a consumer package goods baking and food craft brand. Her patent pending edible sticker system is a game changer for busy parents baking at home and professional bakers alike. She started Make Bake to create fun, easy to use and 100% kid-friendly baking products that anyone can make treats that surprise and delight.

                                               She is a creative product and marketing strategist with 20 plus year track record of creating category, defining products and customer experiences that deliver strategic measurable growth for businesses. She's worked with William Sonoma, Pottery Bond kids, Thumbtack, Walgreen, Spiro and change.org among others. She left her corporate life in Silicon Valley to attend the New School of Cooking and then founded Make Bake in 2019. Make Bake provides edible vegan food and stickers in over 150, it's probably more than that by now, independent retailers and growing in the US and abroad. She lives in the San Francisco Bay Area.

                                               What should you our listeners get out of this episode? There are all sorts of small businesses and something simple like a love of baking can lead you to launch a startup that becomes successful, leverage your skills and what inspires you to identify your next business. This show is brought to you by Thryv, small business runs better on Thryv. So Kristina, how did you get into baking?

Kristina Schlegel:             Oh, that's a good question. So I actually went to culinary school when my daughter was about one. As you mentioned, I worked in Silicon Valley for a number of years and after my daughter was born, I sort of needed a sabbatical. It's a common term in Silicon Valley when you're sort of like, I need a break from this high intense career. And I had always loved baking, but I wasn't like fantastic at it. And so we were living in LA at the time, time and there was a culinary program there that was a professional pastry program. And I said to my husband, now is the time I got to do this, right? It's like a six-month full-time program. And so I went to baking school and it was a very interesting experience.

                                               I didn't go with a lot of expectations, but I was about a few days in when I realized, and this is where my kind of professional experience keeps kind of coming back to me, but I sort of realized, wow, it's really hard to be a novice at something, especially when you've kind of been a professional at something for a long time and have good skills. So here I was doing this thing that kind of seemed simple, but for me was really hard and it just got me excited about it. And so I went to culinary school, went to baking, didn't think I was going to open a bakery or anything afterwards, just wanted to do this experience.

                                               And then when I was done, kind of went back to my Silicon Valley career, but then my daughter got older and we were baking a lot together and that's when I sort of saw this kind of confluence of events where I had this background in product design and marketing and I was trying to bake with my daughter and I just wasn't finding the kinds of products that were engaging for her. And so that kind of product design mind started to kick in and I was like, could we do something different? And that's sort of how I ended up baking and then transitioning into starting a baking company.

Gordon Henry:                 Interesting. And just to give us a full picture what your Silicon Valley career that you described, broadly speaking, what were you doing?

Kristina Schlegel:             So I was doing something that if you are not familiar with the industry, you might not know, it's called user experience strategy and design or design thinking. For listeners who are not familiar with the term, it's really just a fancy way to say, my job was to really understand customer needs and then create products and brands and marketing that met those needs. And I did that primarily for software, hardware and some kind of service design experiences.

Gordon Henry:                 And I imagine those skills probably play some role in how you come to market with your product today.

Kristina Schlegel:             Totally. One of the questions that people sort of ask me frequently is how do you go from 15 plus years of software development to making a CPG product and a food product? And there are lots of things that I'm learning and doing for the first time, which I think is one of the hardest things about entrepreneurship is that you're constantly having to be a novice at something. You get your business set up, that's kind of like the first hurdle and you think, okay, I've gotten good at the basics, then your business grows and then you need to develop new skills. And so you're kind of always starting over in a certain regard with your expertise.

                                               But there were a lot of things, a lot of skills that I developed working in Silicon Valley that really translated to me starting my business. And I think one of the most valuable skills is the time that I spent as a researcher and a designer, which means that I have spent hundreds and thousands of hours talking to customers. And I think as small business owners, especially people who don't have that background, it's not something we talk a lot about, how important it really is to talk to your customers constantly in the beginning, in the middle, ongoing and the kinds of insights you can get from those conversations that can be really business changing. And I had that experience with Make Bake. I learned things talking to my customers after we were in market that have changed the trajectory of what I'm doing.

Gordon Henry:                 Yeah, 100%. Any business really. In our business, we talk about it all the time, you need to get out there and be speaking to real live customers or listening to them on the phone so you stay close to them. So did you invent edible stickers?

Kristina Schlegel:             That's a great question. The answer is a little yes and a little no. So what I did was I was looking at the market and I wanted products that would be really engaging for my daughter to bake with me and I didn't really see anything. And so there's stuff out there, but like I said, I was looking at kind of the modern mom and the aesthetic and I thought there's some white space here for a brand looking at the incumbents. So I kind of went on this deep journey into the baking industry and one of the things I became familiar with is a food technology called Edible Images. It's not a new technology, it's been around for 40 plus years.

                                               Actually. Fun fact, Keebler is the first company that had a patent on some version of this technology back I think in 1981, but it's basically not really been touched. And so in almost 40 years the product really hasn't changed and you and I probably think of edible images as like a kid's superhero picture on a grocery store cake or your parents' wedding picture on their 40th anniversary. So that technology's old. But when I started looking at it, what I saw was a design platform in the same way you have companies like Chasing Paper who are bringing design aesthetic to reusable wallpaper or Minted who's bringing design to cost effective invitations and note cards.

                                               What I saw was a very underutilized food technology that could be applied to a modern consumer. And so I went down this product development path meeting with manufacturers trying to understand if what I was seeing in the marketplace was a limitation of the technology or a limitation of imagination. So could they taste different, could they look different? Could the image quality be better? Could they be kiss cut and look like a sticker instead of just one big image? And I heard a lot of, yeah, I guess we could do that, but the notion in the industry was that this was a commodity, that people were not going to pay a premium for this product experience and that it was unusable by home consumers.

                                               And so again, where that innovation background came in is me sort of being like, well, I don't think that's the case. I know what modern moms want. I am one. I've worked for Baby List and Baby Center, this is my demographic. I know what this group of people is working on. And so we basically reinvented, I would like to say not invent, but when I reinvented the technology for a modern application and the changes we made were substantial enough that we were able to file for a patent on it.

Gordon Henry:                 And did you get the patent?

Kristina Schlegel:             We are in process. As you are probably aware, the patent process is a very lengthy process, and my attorney has warned me to brace myself for a five-year journey. So we are in the process and I hope that in the next couple of years we'll get to resolution on that and get that protection.

Gordon Henry:                 Yeah. Whenever you hear the word patent, you then hear the word pending. It's always pending. It never...

Kristina Schlegel:             Yes, it is always patent pending.

Gordon Henry:                 Patent pending. Did these products or foods need FDA approval?

Kristina Schlegel:             Yeah, so anytime you produce a food, it needs to be in a licensed facility. So I am not a manufacturing expert. I had to source and identify manufacturers who had a similar capacity and could they kind of convert what they were doing for our needs? So our products are made in a facility that is FDA approved. It's got all the HACCP requirements, their kosher, these are very much made the same way that Sprinkles might be made in a similar kind of facility. Again, because what we were doing is using kind of existing old technologies, we were able to leverage those with our manufacturing partners who were already set up to do similar work.

Gordon Henry:                 Makes sense. So who are your customers? Is it the mom, is it the kid? Is it the mom who wants to keep the kid happy?

Kristina Schlegel:             That's a great question. And as a customer researcher, that was one of my first aha's was I had originally designed these a little bit more with the mom in mind because she's the purchaser. But once we got them into people's hands, I started to see how they were really being used. And I would say that we have two core customers. Our first customer is what I call the arts and crafts mom. This is the mom that is really focused on making memories, traditions, experiences with their kids. They like to do interactive things. They're buying arts and craft kits in other categories and they're willing to spend money what I say is on success.

                                               So when I talk to people, I say, we don't sell edible stickers. We don't even sell baking. What we sell is mama for the win. We sell moms having that experience of like, oh, we had this great experience decorating cookies this year because of this product. So that's our first, our best customer. And then second to that I would say is a mom who is usually around a birthday party or an event is either a little bit more budget conscious or has some other constraint and she needs to be making cupcakes or cookies for their kids' birthday party or class parties and she's looking for a super easy solution. And so those are the two types of customers that we have and our products are designed with them in mind.

                                               So we have some that are really cute pictures that can go on a cupcake. And then we have some our gingerbread house kits that are doll parts where kids can really create their own experience. But those would be our two best customers. And everything that we do is really focused on staying close to those customers and making products that really meet their needs. So they keep coming back to us for more and more experiences.

Gordon Henry:                 Terrific. So let's get a little more into the business and how it runs. First of all, did you raise money to launch it? How did you fund it?

Kristina Schlegel:             That's a great question. So far my husband and I have been bootstrapping the business. We are quickly getting to the point though where we are having to say no right now to opportunities because we're not properly capitalized to scale. And so the goal for this year is to kind of figure out how are we going to make that transition from going to independent retailers to being on national retail shelves because candidly we have those opportunities, but as you know making that leap is just a very big financial commitment. So for the last four years we've been bootstrapping it. And then so now the conversation is how are we going to make that leap? Do we need to raise money? Do we have financing tools that we can leverage for inventory financing?

                                               And these are all concepts that are very new to me despite having kind of grown up in Silicon Valley professionally, I never had my own startup, so I have not raised money on my own. And so I'm trying to navigate those waters again as a novice. Going back to I know my stickers now, I've been doing those for four years, but now I have this new phase of growth in my business where I'm kind of starting over and trying to figure out how do you do business with a national retailer with 2,000 stores? What does that even look like?

Gordon Henry:                 Right. And can you give a sense, I mean when you talk about bootstrap, is it like 10 grand, 50 grand, 100 grand?

Kristina Schlegel:             Over a hundred thousand dollars.

Gordon Henry:                 Okay, so six figures?

Kristina Schlegel:             It's definitely been a six figure investment over several years. And to say nothing of the opportunity costs of me not working my own career. So sometimes I try not to think about that math, but we were fortunate that we had the resources being a little bit more established professionally. And having worked for so many years, this was really a strategic investment. And I do want to say that it wasn't that much money out of the gate. So I was very judicious. We started, when I first launched Make Bake, the most money that I spent in the beginning was on product development and branding and legal. I wanted to make sure that we were protecting our IP, that we had fantastic branding because branding is so important. Even if you have a great product, if you're not well branded and talking to your customers in the right way, no one's going to pick you up.

                                               But the first product we launched, I just did one skew, it was for Valentine's Day. I also want to point out, we launched 12 weeks before the pandemic hit, which was super fun, but I just launched one skew. I was like, I just want to see, am I crazy? Is this something that I think is cute but no one else is going to pick up? And we had such an amazing response to that Valentine's Day product. Then I pulled the trigger on six more skews. And so I sort of slowly built up our process and our skews so that especially doing something that's kind of like a new category, there's a lot of risk there. I didn't know would people buy this? Would they understand how to use it? Would merchants know how to sell it?

                                               And so I had this bucket of money that we had allocated for this process, but we had milestones. So we're kind of like our own investors. We were like, okay, we're going to allocate this much money to get to step one. What are the metrics we're looking for? If that happens, then we have this much for step two. And so I think the overall number sounds big, but it wasn't like we wrote a check for $150,000 on the first day.

Gordon Henry:                 Over time. And how have you been advertising or promoting the business? I noticed you're on Amazon, obviously you're selling through your own website, but how do you get the word out?

Kristina Schlegel:             It's never been easier to start a business. It's also never been harder to get people's attention. There are a lot of people and a lot of businesses big and small trying to get attention. And so I think each business has to find the channel that works best for them. So a lot of small business owners, I had a little bit of an advantage from having come from Silicon Valley knowing how paid advertising works and e-commerce and newsletter marketing, but I only had small business resources now. I was no longer at companies where I could make big decisions and they would magically happen. I had to figure out how to do them.

                                               So in the beginning, I kind of tried a lot of stuff just like anybody else to see what would stick. And what ended up working for us is sort of a combination of focusing on our wholesale business, so that's to independent retailers, search engine marketing. And the last thing that we do spend money on is press. And that has actually really been helpful in getting the word out. We are active on social media, but I can tell you that most of my customers don't come through there. Once they find us, then they connect with us on social media. But where we're acquiring customers is during their trigger events.

                                               So if you're a marketer, this idea of people might be primed to buy your product, but they're not going to buy it until something happens. They have a problem to solve. So I've really focused, again with that research background, trying to find those trigger events and frame our press and our content marketing and our SEO and our SEM around those moments where moms are like, I have this problem to solve. And they're actively looking.

Gordon Henry:                 Right. So what is the biggest trigger? Is it Valentine's Day, birthdays? What are the key days people [inaudible 00:17:45]?

Kristina Schlegel:             So the biggest triggers for us are holidays and birthdays. So oh, Halloween is coming. What's the fun baking activity I can do? So I'm on Pinterest searching, I'm on Amazon searching, I'm on Google searching. And so we're kind of thinking about that language and mindset. The other one is definitely birthdays, which is easy unicorn cupcakes, easy dinosaur cupcakes. And so you start to learn the language of your customer and the problem and then try and frame your marketing to be about that particular problem in that channel. So that's kind of what I've been trying to get better at.

                                               But a lot of our business is actually through wholesale. So our D2C business is growing and I think it's a great channel for us to grow into as our product assortment grows. But in the beginning when I only had a few products, it made more sense for us to be in retail. So I really, again, as a marketer focused on what is the story I want to tell to that shop owner who's got a shop on Main Street, some cute gift shop, a bakery, how are we helping them surprise and delight their customers? Small shops like to be the curators and the first to find new products. So we really played that angle and that outreach.

                                               And so thinking about B2B marketing is very much B2C marketing where you're trying to see what is that shop owner trying to solve? They're trying to be the new trendy, nowhere else kind of retailer. And so that was a lot of what I did over the last two years was cultivating and finding retailers that would carry us and figuring out who was our best retailer, what kind of stores were the best stores for us to be in to get good reorders.

Gordon Henry:                 And are those bakeries, are they independent bakeries? Who are they?

Kristina Schlegel:             So currently we're only in independent retailers. Like I said, that's going to be changing soon. We're in conversations with some more national retailers, but we kind of have this really interesting mix. So around seasonality like Halloween, Christmas, Valentine's Day, we get picked up by bookshops, gift stores, kids' clothing, kids' toys. So we have a lot in that category. And then year round we also are carried in sort of gourmet mercantile food shops, independent grocery, bakeries. We have a lot of bakers that do kits around the holidays where they include our stickers in a decorate your own cookie type of kit.

                                               And so I've been able to identify a couple of verticals for year round stocking and then a lot of baking companies, a lot of our business is seasonal, so that assortment of who carries us gets really big during the seasons and goes down a little bit in between.

Gordon Henry:                 So tell us a little bit more about the business. First of all, do you have any employees yet or is it just you?

Kristina Schlegel:             So because we don't manufacture it means I can run a really lightweight operation. So we actually have partners for 3PL Logistics for manufacturing. All of the artwork and branding that I do is in partnership with independent illustrators. So I work with some really talented illustrators to create the artwork for our product. So we license that product from them. And then I have freelancers who work with me to help support me with email marketing, wholesale outreach, and all of our packaging and graphic design. I have relationships with other basically small business owners, independent service providers that allow me to leverage those relationships without having to have the overhead of a full-time staff yet.

Gordon Henry:                 Sure, makes sense. So are you profitable at this point or still getting towards profitable?

Kristina Schlegel:             This is going to be the first year that we're profitable. We are already in our forecasting with our pre-orders for a holiday that we will be profitable this year. So it took a few years and I like to give myself some grace because the pandemic was in the middle, but really we launched to wholesale in earnest last year, and that's when we went from 50 stores to almost 200 stores in that 2022 period. This year's really the first year where I feel like we have that momentum and that kind of analytics to be able to compare year over year, like 2022 was the first year that I feel like we have a good set of data and now that's our benchmark for measuring progress.

Gordon Henry:                 And so then the shipping of this product is done by the manufacturer.

Kristina Schlegel:             We self ship kind of our D2C stuff because that's where we do more experimentation with trying new things and then we leverage our 3PL partner for bigger wholesale kind of orders that they are able to palletize and box and do stuff for us.

Gordon Henry:                 Got it. So now that you're in your it sounds like third or fourth year and you're heading towards profitability, do you see yourself going beyond the edible sticker? What's the next product set?

Kristina Schlegel:             Yes. So I'm already working on some new products that take us a little bit outside of the edible sticker concept, but keep us in, what I've really come to understand is our core competency, which is arts and crafts, but for food. And that was actually a decision I had to make a little bit ago was thinking about were we going to be an edible sticker company and across kind of consumer verticals? Right now our core customers are mom with kids ages three to 10, three to 11, but we could ostensibly make graduation stickers and sorority stickers and bridal stickers. So we could be kind of a deep vertical company or we could be a lifestyle brand, which is moms who like to bake with their kids. And I chose that direction for a couple of different reasons, but that is the direction we're going in is so we'll be moving past into other kind of arts and crafts type concepts for food that we'll be working on to release in 2024.

Gordon Henry:                 You made the journey from corporate to entrepreneurship and it sounds like from your earlier description that just naturally you had moments where you thought, boy, I gave up that big salary to do this startup. Was that the right thing to do? So tell us how that journey has gone for you. What's been going through your mind, your husband's mind? Were you full on board the whole time? Did you ever have moments of doubt?

Kristina Schlegel:             D) All of the above. So when I started, there was a bit of circumstances that all came together. I actually started Make Bake shortly before we got pregnant with our second child. So I had this kind of, again, natural gap where I was consulting at the time. So I was kind of like that my consulting was kind of dialed down a little bit, so it wasn't all from the beginning. I was sort of tapered back on my work life a little bit, devoted some of those hours to Make Bake. Then after my son was born, that's when I sort of got to the place where we had a working prototype and I was going to not work anyways for a year. I was planning on taking some time off. So I thought, okay, this will be a good thing to keep my momentum going.

                                               But really is when we got that first kind of skew out there. So that was the first time where we said, okay, maybe we should devote a time box to this. And so we sort of looked at it as trade-offs. What would be the benefit of me doing this long run? What would be the trade-offs would be giving up? And so my husband and I kind of made a business plan for our family. We were self investing and so this was our business plan, this was our risk tolerance, how much we could invest and how much time we were willing to give.

                                               Now the pandemic kind of screwed all of that up, candidly, but I just kept looking at those milestones and I've had manufacturing issues. We've had lots of difficulty with consistency in part because of the pandemic, but also because of our manufacturing process is so unique. And there have been several times where I've sort of stopped and said to myself, is this worth it to keep going? Is this going to be something that is a good financial investment for my family? And made sacrifices along the way kind of changed our lifestyle a little bit, trimmed back, but it really has been something that I try and consciously every six months to take a step back and say, are we meeting our milestones? And if not, what's the reason? So part of that was the pandemic and being patient to wait it out.

                                               But I can't say that I haven't thought about quitting multiple times because it is very hard. But I will say that entrepreneurship is very different than I thought it was going to be. Even coming from the world that I did where I saw a lot of early stage startups, doing it for yourself and doing it bootstrapped and giving up your own savings and giving up your own paycheck, it's a very different experience and the stress levels of how you make decisions is so different.

                                               So anybody who's attempting this, I feel like one of the pieces of advice I'd give my sort of younger pre entrepreneurial self is really assess what your risk tolerance is and whatever your assumptions are about what you think are going to happen, build in a lot of buffer, financial buffer, time buffer, emotional mental health buffer, you're going to need a lot more of all three of those resources than I think we realize when we're doing this for the first time. Or at least for me, that was my experience.

Gordon Henry:                 Yeah, very important lessons. What would you say is the goal for the company? If you could sit here and say, what I want to happen is in five years, 10 years, whatever your timeframe is, what is it? Is it to sell the company? Is it to pass it on to your kids? What do you want to happen?

Kristina Schlegel:             That's a really great question, and I think if you had asked me that question when I started Make Bake, the answer would've been different. Today, I would say that my goal is to build a sustainable business that I'm really enjoy working on that provides financial value to my family and it's sustainable for me as a person in the way it kind of intersects with the other parts of my life that are also important to me. And that's my partner, my husband, my kids. And I think also too, in an era where the nature of work is changing so much for so many people, my greatest hope for Make Bake is that it will be all of those things, but that it'll also be a great place to work for other people. And so I'm not looking for a fast flip. This isn't a fixer upper that I'm trying to flip over to a private equity firm or an acquisition.

                                               I mean, those are great outcomes if and when they happen, but I'd really like to build a business that I'm proud of and that delivers the financial security that helps us get through the rest of our life. And I have a almost 10-year-old daughter who is watching me do this from up close and seeing what she is taking away from this experience just by osmosis for me is so incredibly valuable. I want to be a good role model for her. So it sounds kind of wide-eyed, but they really are sincerely the things that I think about when I make decisions.

Gordon Henry:                 Yeah, that's terrific. Well, it's been great having you here, Kristina. Where can people find you and learn more about Make Bake if they're interested? Maybe somebody listening is either a customer or could be a retailer for you. Where should they find you?

Kristina Schlegel:             If you want to buy direct from us on our website, you can visit us at letsmakebake.com. That's also our social handle, so everywhere there's a social platform, Pinterest, TikTok, we're mostly actively on Instagram. We're also at Let's Make Bake. If you're a retailer and you'd like to stock our products in your shop, you can visit our website and visit our wholesale section. You can also find us on Fair, which is a wholesale platform for retailers to buy products for their shop.

Gordon Henry:                 Awesome. Didn't know that. Well, I want to thank you for coming on our show. Great story. Great to have you here. And tons of good luck to you.

Kristina Schlegel:             Thank you so much. I appreciate you letting me share my story and I hope it's helpful to somebody else who's thinking about kind of taking the leap into this world.

Gordon Henry:                 Yeah. Very good. I want to thank our producer, Tim Alleman. Our coordinator is Diette Barnett and Daniel Huddleston. And if you enjoyed this podcast, please tell your friends, colleagues, and family to subscribe and please leave us a five star review. We'd really appreciate it. It helps us in the rankings. Members, small business runs better on Thryv. Get a free demo at thryv.com. Until next time, make it a great week.

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