I’m fascinated by the creator economy…
And technology. And Crumbl Cookies. And the Mormon Church.
And YES.
I’m fascinated by a lot of things, my loyal 83 readers (half of which have the last name Busacca).
Normally - I would never bring a person’s religious affiliation into The Skinny’s scope.
BUT. The Mormon Church is a business. They think about CAC and TAM and retention in a super unique way. And their members do too.*
Okay.
The year is 2017. And Jason McGowan (a Mormon) starts Crumbl Cookies.
By 2023, he has 750 locations. That growth is insane!!!
There’s all this data around healthy food and fake meat and Bud Zero. And Crumbl Cookies is proof against that trend.
I digress.
The year is 2012. And Jason is a project manager at i.TV. It teaches him the power of technology.
He builds a Facebook app that goes viral. And he meets a software engineer named Bryce Redd. Ancestry.com acquires the app (Jason’s next job). And Bryce leaves to work at Facebook. Your career is long so don’t burn bridges. Bryce is Jason’s first hire at Crumbl.
OKAY.
I have this note in a journal from like 8 years ago -
The days stay the same. But the years make the change. Which like… okay Miss Tortured Artist… but honestly, she has a point. It takes ten years to become an overnight success (Tom Clancy).
Jason starts Crumbl with his cousin Sawyer Hemsley. And its industry is a reflection of Jason’s early years. Crumbl isn’t a cookie company. It’s a tech company.
At first, the cousins start with one shop and one flavor. They literally A/B test their way to the perfect chocolate chip cookie.*
Sales are slow after midnight, so Crumbl introduces a second flavor - the Midnight Mint.
Keep in mind that this is Utah and these are Mormons, so I can’t possibly understand why people who don’t drink or smoke need a cookie at 2AM. But maybe that’s their version of getting silly on the weekend? IDK.
Jason and Sawyer are intentional. Uber Eats is becoming popular, so they open a warehouse and start their cookie delivery model.
Most importantly, they hire Bryce Redd as Crumbl’s CTO.
At first, delivery is elementary.
They take four chocolate chip cookies and four sugar cookies and assign a driver. There’s no way to predict demand or optimize routes. So Bryce writes a “geneticist algorithm,” which mutates millions of different routes to find the best option.
Okay.
After growing to 6 locations, Bryce builds a solution suitable for a million locations. (So smart - build something that’s scalable!!!)
There are all these nuances around “best of breed” software. A company might use Oracle for POS, Salesforce for CRM, etc… but the systems don’t speak to each other.
Crumbl owns everything. And it means greater agility.
Two weeks after the Covid outbreak, Bryce is able to update the app to include curbside pickup. Systems are only as good as the processes we write into them. When a customer gets close, they tap “I’m here” on the app which sends a ticket to the the baker, then a signal back to the customer once their order is ready. That transaction alone touches the app, the POS system, the ERP, and the ticket fulfillment system (all written by Bryce and his team!!!).
The best way to think about Crumbl is that it’s B2B2C - It’s franchised.
Bryce Redd personally owns four Crumbls.
And if you’re wondering how he has time to operate four Crumbls, he doesn’t.
Crumbl has two types of training programs - field trainers and flagship trainers. Field trainers train operators. And flagship trainers train owners of multiple Crumbl stores around management skills and how to hire operators.
Okay.
Corporate gets thousands of pictures every day from customers of their cookies (taken in the app). Every Crumbl franchise has a dashboard with their cookie ratings and trainings and best practices. I truly don’t think successful franchises moving forward will exist without the Crumbl model. It’s a quality control flywheel.
Crumbl’s menu changes every week (6 new cookies).
Their cookie calendar is built out months in advance. And they decide which flavors to produce based on feedback from “testing stores,” social media, and google trends.
Netflix changed the way people watch TV by releasing shows all at once.
But hey - people like shared experiences!!! Instead of watching The White Lotus every Sunday night, we have weekly 6pm Crumbl drops.
Okay.
Let’s address the elephant in the room - social media.
TikTok isn’t built on a social graph. It’s built on an interest graph - which means it doesn’t matter how many followers you have because the algorithm cares about engagement.
That’s really good and really bad. Crumbl’s CCO is in charge of damage control.
When you’re selling a million cookies a day, what’s the statistical significance of one bad cookie? Last year, a customer found a bolt in one of their cookies. That video alone got 9 million views on TikTok and inspired a slew of fake videos saying “their cookies had bolts too.”
Crumbl responds to every bad comment.
They investigate. They resolve. Social media can make or break a company. And Crumbl leans in. They have 7 MILLION followers on TikTok. And the Crumbl app is more used than Starbucks. (That’s just crazy). The average Crumbl franchise makes 500K in profit.
So take one from Jason McGowan. It all works out. It always does. Build scalable systems. And hire the best talent.
And that’s the skinny.
I talk more about the Mormon Church than any other subject. I’m so impressed by what these people are able to accomplish with their PNL sheets. The church tithes at 10%, and their hedge fund (as in the CURCH’S hedge fund) is worth over $100 billion of un-taxable money (since it’s associated with the curch). They transact through 13 shell companies so you can’t see what they’re doing. And their value grew from $40 billion in 2012 to $100 billion in 2019. (They own 2% of all land in Florida, a bougie hotel in Hawaii, and a ton of US stocks).
You really just have to read Under The Banner of Heaven by Jon Krakauer
I literally don’t understand how Crumbl has accomplished what it’s accomplished. I feel like most people outsource production. And yet the Hemsley cousins went through $10K worth of dough to create a chocolate chip cookie that tastes nothing like Grandma’s - ONLY to redo the entire recipe because ingredients mix differently on a commercial scale than in a home kitchen. The men are geniuses!!!!