Advice Line with Seth Berkowitz of Insomnia Cookies

Welcome to the advice line

0:00Hello, and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it.

Scaling Insomnia Cookies

0:37Joining me this week is Seth Berkowitz. He's the founder and CEO of Insomnia Cookies. Seth, welcome back to the show. It's great to be back. It's great to have you back. You were first on the show, I think, in 2024. And of course, if any of you listening have not heard that story, we'll put a link to it in the show notes. Great episode. You got the idea for Insomnia Cookies while you were in college and you had a craving for like a late night treat and the only options were pizza and Chinese food. And you basically started this business delivering fresh cookies from your dorm room to customers.

1:10And eventually you built a brick and mortar and the rest is history. Insomnia Cookies is a national chain. And when you were last on the show in 2024, you had, I think, you had about 300 locations of the stores. And today you've got closer, I think, to 400. And the goal is to get to 1,800. Is that the number? That's right. Yeah, we're going to finish the year with roughly 393 bakeries around the world. And that's our major aspiration, right? We want to open up 1,800 bakeries and really be a global chain.

1:41And what's the 1,800 number? Where does that come from? Honestly, data dive. We're looking at as the business scaled from city to college to suburbs to train stations and stadiums. That's what we ended up targeting based on what we thought could be the U.S. output and then so far what the international opportunity looks like. So that's our goal. One of the things that is interesting, I think you own and operate the stores, right? Insomnia owns and operates all your bakeries. We have four licensing arrangements, an airport and three stadiums, but we operate 390 bakeries around the world.

2:19So basically, you're not a franchise business, right? No, certainly not. But, of course, franchising could get you to 1,800 a lot faster, right? And you know that. It could, of course. Tell me the thinking behind resisting that model. I mean, some of it is just how the system was built. You know, it's a late night delivery collegiate business. Right. These are three things that are, it's highly seasonal, operates off hours, and it's multi-channel.

2:51It's hard. You know, a lot of businesses have become this way, but historically, that wasn't something that people ultimately wanted to do. And we had to kind of bootstrap it and build from the ground up. And that's just how I've always operated it. And as a business that believes so deeply in innovation, having the ability to think of something new, bring it into the store, test it and deploy it, and then roll it out without not a crazy amount of complexity or pushback is pretty special. And we think it's the way that we stay relevant nearly 25 years since our founding.

3:25And you have, of course, control over the quality of the product. Certainly. I mean, for me, I guess it's where I should start, but it's not just top of mind. It's the core, right? It's the only thing that ultimately matters. And so we hold that deeply in our arts. Yeah. You know, when you were on the show, we talked about, you know, some of the near-death experiences, including the very first one. You expanded, I think, to Wisconsin, to Madison, and you had to shut that down and basically had to start over.

3:56Now you are expanding, you know, probably faster than ever. However, what, like, as a CEO, right, what warning signs would sort of make you slam on the brakes, even if, you know, the company was like, let's go, let's go? Given what you know about what happened in the past, is there anything that you would say, you know, maybe we should slow down? I mean, this is my philosophy. Lots of people don't subscribe to this one, but I believe you earn growth. I think you earn the right to grow. Consumer love gives you license, right?

4:28We tried to open, I'd say at this point, far too many stores in a couple of markets at the pace that we went, and the aperture wasn't as wide as we thought. And had we watched the brand awareness metrics in every geography incredibly closely, we could have seen pieces of that. And so you have to earn the love. And if it's there, then you have license to go as fast as you want. Some people think grow and see how it all, you know, how it all plays out. And sometimes it works in some of the most magical stories for business.

4:59It really does work. It's just not how I think, right? I like being in the weeds. I like watching the business grow. I like seeing the community really love what we're doing and then feeling comfortable with it. So I never grow, grow, grow. I always make sure you've earned that growth. Seth, when you, I mean, there's so many, so many great moments in, in, when you were on the show for the first time and told the story of insomnia. I remember, you know, the Syracuse store and like all the, it was, it was a college brand, right? I mean, the idea was expand to college towns and, and it was a really smart strategy.

5:33I imagine that's not your core customer anymore. It's not the college student, late night college student. I mean, it's, it's interesting. They definitely are center of the bullseye because 250 of the 400 bakeries are college. So, you know, it's a regenerative community and it's, that, that part's incredible. And that's kind of how our growth narrative has worked, right? We've gone from college to cities because we were following our insomniacs and many of them left cities and they moved to suburbs and we're following along. So it's become this life cycle brand in our minds.

6:04It's, it starts in college, it works its way as I just described. And then hopefully, you know, if we get to enough scale in suburbs, right, we can start with our children and then it all goes around and around. So like that, that is the hope that is earning the growth that I was describing before. Yeah. Well, I mean, again, if anyone listening is a college student and you are trying to figure out what to do with your life, listen to that story. I mean, you, you started this business in college in your dorm room and it's just, it, it turned into a list, a huge national chain.

6:34It's, it's an amazing story. Are you ready to take a, to take our first call?

Rebuilding a luxury fashion brand

6:38Absolutely. Let's do it. All right, let's do it. Welcome to the advice line. Hello, caller. Please tell us your name, where you're calling from, and just a quick line about your business. Yes. Hi. Hi, Seth. Hi, Guy. Hi. My name is Kaindo Matene and I'm calling from just outside of New York City. My brand is called Kaindo and it's a luxury special occasion wear fashion brand rooted in my Congolese heritage and my African upbringing.

7:08And it's handcrafted by female artisans in Africa to empower the artisan as well as the wearer with bold and colorful special occasion wear. Awesome. Well, thanks for calling in, Kaindo. So, all right. So, Kaindo, this is, you are Kaindo. This is the brand. And it's, basically, it's like luxury dresses, formal wear, all those things? Yeah. So, we started broadly, but now we're doing a pivot to focus on special occasion wear.

7:40So, like mother of the bride, women going to weddings, even bridesmaids. So, any woman who's looking for something unique and colorful and bold to wear to a special occasion. And you mentioned that it's rooted in your heritage. Did you say Congolese heritage? Yes, correct. So, tell me about that. How does that, like, inform the designs or the patterns? Yeah, absolutely. So, I design all of the patterns and prints. And I like to say I want to bring a little bit of Africa to the world.

8:11So, I was born and lived across six different African countries. So, it's very colorful. And I also like educating people about Africa. Because when I came here as a college student, you know, people had these crazy ideas about the African continent. So, I talk about, through my colors, through my print, about different tribes, different countries. And I bring a bit of that to America. Awesome. And when did you start your business?

8:42Yeah, I started in 2017. And tell me a little bit about how the business is doing right now. Yeah. So, it started off really well. 2020, in the middle of the pandemic, that was when I really started to see growth. And I think it was because there was a lot of focus placed on Black-owned businesses. So, you know, my biggest year was in 2023. I did 268K. But literally after that, I lost all of my wholesale business.

9:16So, I was selling to Anthropologie, Rent the Runway, Newly, Shopbop, and lost all of the wholesale business. So, last year, I did 50K. And I nearly closed my business. So, I'm in the process of kind of rebuilding and pivoting to focus solely on special occasion wear. And now your sales are entirely direct-to-consumer through your website? And dropship. So, I do dropship with Nordstrom and Bloomingdale's. Got it. Okay. Before we dive in further, what's your question for us?

9:47Yeah. So, after losing a lot of that business and pivoting to focus on special occasion wear, I need to figure out how to find and grow my customer base with limited time as well as limited money. I'm a solo founder, and I feel like I need to run ads, but I'm not sure if running meta ads, Google ads, is the right way of focusing on other customer acquisition strategies. All right.

10:18So, trying to figure out where to put your focus. I want to bring Seth Berkowitz in. Seth, she's got this brand, and now she's trying to figure out where to focus her energy as she rebuilds. And presumably, Kehindo, you're looking to focus on direct-to-consumer or wholesale or both? Both. Okay. Yeah. Got it. All right. Seth? All right. Well, Kehindo, it's great to meet you. Nice to meet you. So, I was looking on the website briefly. Talk to me about the community that you're particularly like. Is this a, you believe you're going after, because if you say I want to go after Meta and Google, 300 million people in the U.S. alone, right?

10:51It's like, it's such, it's so hard to break through in the apparel industry that's so vast. And the Meta and Google is so appealing because I can turn it on, create content, go. But also, it's unclear to understand how the data is exactly working. Is there, could you activate locally? Can you feature maybe some of the artisans that are making the product? Like, try to do something that is much core to your promise and your original founding than trying to go wider now? Yeah. And that's, like, right on the money because I've been doing pop-ups.

11:24I just had one last weekend in West Village. So, I'm trying to do more of those in-person events where women can try on my pieces, touch and feel the fabric, and where I can tell the story about my brand. So, that is literally the route that I'm going and maybe even doing trunk shows in bridal stores or things like that to connect directly with a customer. What about, like, influencers in the, you know, the bridal space, in the event space?

11:59Is there a connection you can make there? Because their audience and their amplification can be much larger than you're going to get from whatever the cost of acquisition might be on Google and Meta. Yeah. So, in the past, I've dealt with influencers, but it wasn't successful. But to your point, I think if I narrow the search and narrow the focus and deal with, like, special events, yeah, that could absolutely work. Kendo, I have a question for you. Which – do you know which three or four products have generated the most revenue?

12:31Yeah, absolutely. So, it's the Cleopatra dress, Haditha dress, the Eda tunic, and the Egypt pants. So, I even named my pieces after African themes. I love that. Okay. So, you know that. And do you know who is buying those pieces and for which occasions? Yes. And that's why I narrowed to focus on special occasion wear. So, I would get – you know, people would tag me on social when they were either a mother of the bride wearing the Cleopatra dress or attending a wedding wearing the Cleopatra dress.

13:06Yeah, I mean, I think that's really where your opening is, right? It's what are your three to five best-selling pieces? Who bought them, if you can find out, or if you can start to collect that information? What was the event? So, to me, it's like the question is where should you focus your energy? You asked – and I think you were wondering, like, should it be Meta ads or Google ads? And I think your energy should be focused on really honing in on the three to five pieces that are your best sellers and build out from there. It's also an opportunity once you collect that data and once you've got, you know, these proven pieces, that's what you could take to wholesalers when you go back.

13:47As you said at one time, you were at Anthropologie and Newley and in a few other places. I'm not saying go back to those retailers right away, but you want to be able to have data with what you are selling, right? You want to show sell-through rates and return rates and reviews, and that will enable you to go to 10, maybe 20 boutiques, smaller boutiques, because that's a great opportunity to be in these smaller boutiques. But I would really – again, that's where I would focus your energy on really honing in on those three to five pieces and then think about how to build that out and market those.

14:28Yeah, that absolutely makes sense because on my website, you know, there's, like, sweaters, cardigans, coats. So, you know, with this pivot, like, I'm only starting with, you know, five to 10 styles of my best sellers that have worked. And I think also the other issue I had was I was growing with these large retailers, and I wasn't focusing, to your point, on the smaller boutiques. So that's my focus. I'm going to absolutely focus on smaller boutiques.

14:59Seth, any thoughts? Any additional thoughts? I mean, I was just – you know, I mentioned it quickly, but, like, I think there's a way to differentiate your website that really highlights the designers. There's something about it. It shouldn't feel generic in any way. It should feel mission-based, oriented with why you started the business in the first place. I think there's some opportunity there. Yeah, I agree. Thank you so much. Yeah, the brand is called Kahindo Mateen. Thanks for calling in. Good luck.

15:29Thank you. I appreciate it. Thank you. Seth, I know that apparel is not your space, but it's also, like, you've probably – maybe they're the best analogy – but you've probably introduced, you know, cookies or brownies or other treats that just didn't work. And it was not a good use of your energy to be selling those. I mean, I sold frozen yogurt. I sold cupcakes. I mean, I did everything, right? Like, ultimately, what won was reducing the SKUs down to the core. And then once that became incredibly well-known, then you add platforms around it.

16:03So I found, for me, simplicity. Be great at something simple and repeat, repeat, repeat. I think your advice was very wise. We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz. Stick around. You're listening to The Advice Line on How I Built This Lab.

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Elevating the sauna ritual

17:53Welcome back to The Advice Line on how I built this lab. I'm Guy Raz, and today I'm taking calls with Insomnia Cookies founder and CEO Seth Berkowitz. And Seth, what do you say? You ready for our next call? Let's go. All right. Welcome to The Advice Line. I'm Seth Berkowitz, founder of Insomnia Cookies. Tell us your name, where you're calling from, and just a little bit about your business, please. Sure. Hi, Guy. Hi, Seth.

18:24I'm Tara Gilman calling in from San Diego, and my business is Sauna Societe, and we are a premium sauna hat company designed to elevate the ritual of sauna. I found that I wanted to bring a product that was traditionally purely functional and create a more stylish elevated product for the modern sauna goer user. Got it. Okay, Tara, thanks for calling in. So, Sauna Societe with an accent, right?

18:54Very fancy, yes. And you make hats for the sauna. Okay, explain. Tell me. Explain. Please. I would absolutely love to. And it's interesting because there's quite an education gap in why even wear a sauna hat in the first place, though it's catching on quite quickly. So, sauna hats have been around for hundreds of years in Finnish culture, the Banyan Russian culture. So, basically, what a sauna hat does, it protects your hair from high heats, from damage, from drying out.

19:26It also makes for a more comfortable sauna session. The purpose, if you could stay in the sauna for at least 15, 20 minutes, that's when the good stuff happens. So, the sauna hat actually absorbs a lot of the heat, and it allows you to stay in the sauna longer without your heart pounding, and you need to quickly exit. Wow. You know, I've been in saunas, I can't tell you how many times, and now I just did an image search. I have never seen somebody in a sauna hat in the sauna.

19:57That is kind of amazing. And they look like, I mean, yours don't, I'm looking at your website, but they generally look like elf, or what do they call it, like gnome hats, kind of? Yes, exactly. So, part of the design is kind of traditional. They should be a little bit roomier because you don't want it skin tight. You want the heat to have somewhere to go. So, the design, it is kind of a little funky. So, it means it looks a little like a pith helmet, like that shape, right?

20:30But this is, so this is a thing, sauna hats, just to go back to this, that it's designed to protect your hair, but also to keep you in there longer? Yeah, so it sounds counterintuitive, right? That's like, wait, how can I wear a wool hat on my head and be cooler and stay in longer? It's one of those things, you just got to try it, and it's a game changer. You will not go back, absolutely not go back. And was there, how did you come up with this idea?

21:01How did you start? So, I have been a sauna user at a local wellness club, and about maybe two years ago, I started going maybe four times a week for 20 minutes at a time. And I went to my hairdresser about maybe six months into that protocol, and she said, Tara, what have you been doing to your hair? It's damaged, it's dry, like definitely not flat ironing my hair more.

21:33So, oh my God, the sauna. She said, that's it. So, I said, okay, like I've seen one person in my life wear a sauna hat. So, I go on Amazon, go to look for a sauna hat, and one hat was truly like uglier than, I barely could press a button to buy a hat because they were so ugly. So, I ultimately said to myself, what if I could just design a hat that was more aesthetically pleasing for the masses, especially as more people are getting home saunas, infrared saunas, and all these bathing sauna cultures.

22:05And you are selling them on your website now only? It's direct-to-consumer, or are you selling them in shops? Yeah, right now I'm working on, we're close to a co-branded hat at a local property that is luxury right here in San Diego. I'm working on other hotel luxury spas and other sauna chains that are popping up. All right, cool. And so, you've just, I think you just launched a few months ago, so probably, I'm assuming most of your sales are coming through the website or through boutiques?

22:42Yeah, actually, most of my sales have been coming in person. So, I've been wearing my hat almost every time I wear my hat. It's the best conversation starter. How do I get your hat? Oh, you know, here it is. So, I've been selling a ton that way, a few wellness fairs that I've been a vendor at, and a few influencer posts have converted, not a ton. And I just, we're in the Emmys gift bag. So, we'll see how that translates. So, just kind of like throwing darts, honestly, marketing-wise.

23:16But I haven't found the direct-to-consumer in-person, A+. The harder is just, like, ads, websites, etc. Okay, before we dive in further, what's your question for us? Yeah, so, my question right now is I'm wrestling with kind of what marketing channels deserve my focus, kind of, as Seth said earlier, to earn my growth. And really, how to become synonymous with a sauna ritual. So, I know Insomnia certainly didn't invent the cookie, and I certainly didn't invent hats.

23:51I'm really looking to build a brand that becomes synonymous with this sauna culture that I certainly don't own. So, that's really where I'm at right now. All right, great. Seth, I want to bring you in. Seth Berkowitz, please say hello to Tara Gilman. Are you a sauna user?

24:10Occasionally. I mean, the hair piece is irrelevant to me, but I understand the use case for most. You know, the first thing that comes to mind is the education gap. So, like, it took a few minutes here for you to explain it to us. And I'll tell you, people used to say to me, who needs a late-night cookie? That's not a thing. And as you said it, right, creating that ritual requires a ton of hard work. So, not to ask questions, back to a question. Like, how are you feeling about the margin on the product? The margin's fantastic. It's about 85%.

24:41Okay. So, giving this away is not that complex? Not at all. I'm mindful of trying to go to the masses, to go to, I mean, social, certainly, influencer, you know, you can do all those things. But you described it, like, wearing it in the sauna seems to be. That's what sells it. Right? The single easiest way. Because, like, you might see it online and then no one can talk to you and get the answers you just gave us. It's like, I don't need it, but I'm sold that others should use this hat. I think seeing it live is critical. Seeing somebody break down what, I don't know if it's stigma, but just seems like something that they need to be educated on, live would be pretty good.

25:18Yeah, I think you're – it sounds like this is where you are focusing your energy is that your main channel really is in studios and spas and clubs and resorts, right, where there already is a sauna culture. I think that, look, social is tricky. The customer acquisition costs are very high, and they get higher and higher, and I imagine you don't have an unlimited budget to just throw at social. It may be worth experimenting with a little bit, but I ultimately – I think that it's about getting it in as many places as you can locally and getting as much data as you can from those places.

26:01Like, what are customers saying? Like, you may have – maybe have like a little QR code on the hat that people can click for some kind of incentive just to give you feedback. And so – and I imagine, by the way, that this is not going to be the only thing you want to sell down the road, right? Correct. This is the entry point, and ultimately, I would love to make my brand, Sauna Societe, synonymous with the whole ritual of the modern sauna goer.

26:32So, yes. Like, what else – what other things do people – I mean, towels, right? Yeah, towels, robes, swimwear, sauna-safe clothing. So that's, you know, a big new kind of category. But, yeah, I mean, I really want to build the brand, prove out the hats. And so – and with respect to feedback, truly, anyone who's worn my hat has – I've only gotten positive feedback. And people love it and want a gift to other people.

27:04And I think the more I can have people see it and use it, hopefully that just will continue to build. I'm thinking about, like, at a spa, they're probably not going to spend, I thought it was $60 or so on the hat every time they go. Is there a way to make that more accessible on a more of a B2B landscape basis? Like, you can lower price point, right? That's where my head went initially. But it's – is there a $10 version of this one day that is more – and I know it, like, kind of brings your brand down, so that's not quite as interesting.

27:38But if you can get 100 of them into a spa, easier than getting, you know, one to a person you have to educate. Oh, I have a thought. I kind of want to build on that. Sorry to jump in. What if you could get – a lot of these hotel resorts, they have corporate events. They'll have three-day, you know, events where they get 100 people or more. I wonder if you could somehow connect with, you know, some of these folks at the hotels and say, look, we want to – you know, for the gift bags or whatever, the welcome bags, we want to include this.

28:11That could be an interesting sort of weigh-in as well. I love that. And I think that that just gets more people wearing the hat and corporate gifting is another kind of strategy that I'm looking into right now as we approach the holidays because it's a unique gift for companies. I jumped in there, Seth. Yeah, sorry. No, it's – I mean, I think it's a little bit of a slight shift from where my mind was going. But I think the concept is the same, which is – sounds like seeing it, feeling it, wearing it is key to really bridging the education gap.

28:47So any way you can do that cheaply and accelerate the business makes sense to me as well. Tara, thank you for calling in. Tara Gilman, her brand is called Sauna Society. Good luck. Thanks for calling in. Thank you so much. All right. Bye, guys. Take care. Yeah, I actually love Saunas. There's a cool one in the Bay Area. You basically use the sauna and then you jump into the San Francisco Bay. Really? That's your plunge. That's a cold plunge, yeah. Oh, that's awesome. It's right on the dock. It's super cool, yeah.

29:18But now there's hats to protect our heads.

29:22Okay, next up after the break, another caller with another business challenge. I'm Guy Raz, and we're answering your business questions right here on The Advice Line on How I Built This.

Licensing collegiate game day bags

29:46Welcome back to The Advice Line right here on How I Built This Lab. I'm Guy Raz, and my guest today is Seth Berkowitz. He's the founder of the bakery chain Insomnia Cookies, and we are taking your calls. All right, Seth, let's bring in our final caller. Welcome to The Advice Line. You're on with Seth Berkowitz, founder of Insomnia Cookies. Please tell us your name, where you're calling from, and just one or two sentences about your business. Hi, Seth. Hi, Guy. Thanks so much for having me. I'm Carol Deshawn, and I'm in Houston. I'm the founder of the brand called Desden, and we're officially licensed for 90 universities and growing,

30:20and we create clear stadium bags and game day accessories. I always say I design for the female fan that wants to show her team spirit without sacrificing her style. Awesome. Welcome to the show, Carol. So this is a—okay, you make bags. They're collegiate, so they're with college logos on them, and they're designed specifically to bring them into stadiums? Yes, so—and actually, we have a full line of totes and bags, but our core products are the clear purses.

30:51In 2013, the NFL instituted a clear bag policy for most football stadiums, and so people—you know, we kind of had the right bag at the right time. I knew when NFL had gone that way that it was probably coming with college—on college campuses, and so I went ahead and designed one. And we were at market at the time when it was announced, and so the buyers were sort of in a frenzy to find a clear purse. And so we make them cute. It's like a purse that you would want to carry, not because you have to carry it. And so we have several different designs in the clear purses.

31:25I usually redesign every year. I come up with a new one, and then sort of the accessories add on from there, bag straps and charms, scarves, and things like that. And tell me a little bit—I mean, you've got licenses, obviously, I'm assuming, right, from all these universities. How does the business do? Give me a sense of your sales, your annual sales. So our sales, we've actually—this year, we're having a great year. We've grown every year. I mean, we started in 2007. We're actually going to be in our 20th year coming up, and it was just sort of a slow growing.

31:58We started with a handful of licenses and some different designs. I drew the designs. We print them. We actually—I've always been focused on wholesale from the beginning. Last year, we were at $1.4 million to end, or $1,475. And this year, we've already—our fiscal year starts in February. And we are over $2 million. So we're on track to do about, I think, $2.5 by the end of January. And you—you produce the bags yourself, or are they made overseas and brought here? Right, both. The clear purses are made overseas.

32:30We do—we make all of our canvas totes and duffels in-house in Houston. And then we print the bag straps. We make the scarves. We do all of that in-house. So it's kind of a combination. All right. So before we dive in further, what's your question for us? So my question is, you know, after years of focusing on wholesale, and now we've been growing our direct-to-consumer business, we've discovered that the person that's buying our product isn't the same person that's using it. Many of the people that are buying our product are their moms and the grandmothers that are buying it for the daughters and granddaughters.

33:02And so as we decide where to focus our next stage of growth, how should we market a brand when the buyer and end-user are two different people with different motivations? Got it. Okay, Seth, I want to bring you in here. Say hello to Carol. The brand is called Desden. The clear purses, bags for game day for the stadiums. It's a great combination. Yeah. I mean, this is my—like, this is my bread and butter. So, Carol, it's a pleasure to meet you. Thank you. Same. So, college, I know this place a little bit.

33:33So, you mentioned you're curious how you think about what appeals—feels to be a split consumer, end-user and buyer. I would say, this is how I think about it with insomnia, the consumer is the end-user regardless of who paid for it, always, right? They're carrying around the brand. It's social currency for them if they love it. And if they love it, they're going to tell their friends who are going to tell their parents to buy it from you. So, for me, the center of the bullseye is the student. It is always a student.

34:04You have to make sure they think it's relevant, culturally relevant, socially appropriate for them, something that stands out, something that they will take a picture of and post on social media. I'm curious, though. Do you have marketing teams that go to tailgates? Do you set up tents at the games? Are you—how out there are you all? We do a little bit of that. We actually—we started an ambassador program probably about eight years ago, and that's been really great for us. So, we have girls on different college campuses where we send them our product, and they'll

34:34go out on game day and take pictures and share it and, you know, post. And then we do—I mean, I'm doing—I'm actually doing a pop-up in Austin this weekend for the University of Texas game. So, we can do that a little bit, but that might be something that we should look more into as far as getting—I mean, it's a great way to get content for social media and things like that. And that—social media is how we've really grown the direct-to-consumer brand over the past few years, which has taken off. It's also such a distinctive—I mean, you have a clear bag, right?

35:05So, you have the brand of the college being represented simultaneously, but, like, what if every bag was mandated to have an insomnia cookie in it, right? Like, there's something where you can also be featuring—that is a joke—but you can be featuring somebody else's product, which is an opportunity to elevate. Like, partnership opportunities are endless with a clear bag. And then if you feel like, all right, I want to just get this cultural relevance up a little bit with a college student and make sure for them it feels like something that they're excited to share, put something in there that they really care about, and all of a sudden

35:36things start to move. Like, there's—that clear piece is really interesting to me. And that, I think, is really—so, to me, it's like it could be a collaboration with another brand where, you know, you're working together and you're both incentivized to promote each other. And the other thing, I mean, there, you know, there are QR codes. Again, QR codes are tricky, but if there's a way to sort of, say, scan this and to win, you know, 10% off or a chance to win a trip to the college football championship game or

36:07something, and then you can start to collect information about who's buying it, you know, and, you know, because you want to be able to reach them during graduation or whatever it might be. But if you can get something in the bag that then allows you to learn more about the person who's using it, then you can start to figure out how to, you know, how to market to them. Mm-hmm. I love that. I've never thought about that. That's a great idea.

36:37You know, there's a lot of teams where to get tickets, you have to line up and, like, live outside for two days. Or, I don't know, in Duke, it's like a—it's something like a ridiculous amount of time. An opportunity to partner with them at that moment, right? It's—there's so many ways to market this. It's so fun. Mm-hmm. Yeah. Oh, and as far as growth from here, I guess my question is, you know, I've always focused on the wholesale, and so then recently have moved more into direct, and that has been—you know, we've got great margins, being that we're the manufacturer, and that's been really instrumental to growing our business, is growing the direct-to-consumer.

37:12But from there, would you suggest adding more licenses or moving into different licensing or what would—what do you think the best path? You would know the data on, I assume, each license, right? I mean, is there—is it balanced? Is there a certain level of, I don't know, sports success in a given campus that's better than in the others? Because it's a lot—I mean, carrying 90 licenses is a lot. Right, right. And from my standpoint, that seems like a lot to manage at your current scale.

37:43Mm-hmm. No, agreed, yes. But maybe—there's a lot. Pick a team or two in some other sport and see how it goes. Mm-hmm. Yeah. Agreed. Agreed. The brand is called Desden. Carol DeShong, thanks so much for calling in. Good luck. Thank you. Appreciate it. Yeah. Take care.

Reflecting on early founder lessons

38:00Seth, I really appreciate you. Thank you for coming on the show. Before you go, I have a question for you, which I ask all the guests who come on again, which is if you could now go back to when you were just starting out, you know, in your dorm room in toaster oven cookies for people, what advice now, with all that you know about running a business, this business, what advice would have been helpful for you in those early years? You know, there's—follow what the consumer is telling you, right? They are the answer to every question, right?

38:30Every single question is embedded in their behaviors and their choices and the love that they're showing you by buying your product. Cherish that and nurture it. And I think so many people go off their gut and it can lead you in the wrong direction. So, you know, follow your—it's a great question from before, like, follow the consumer. See what they're—see what they need and try to be there for them down the road. That's Seth Berkowitz, founder and CEO of Insomnia Cookie. Seth, thank you so much for coming back on the show. It was a pleasure to be with you again. Thank you so much for having me.

39:02And by the way, if you haven't heard Seth's original, How I Built This Episode, go back and check it out. It's really fun. You can find a link to it in the podcast description, also known as the show notes. And here is one of my favorite moments from that interview. I went to the investors, as I'd been doing for the last three or four years, and like, here's what our loss is for the year. It's less than last year, but it's still a loss. You know, I'm hoping to raise a half a million dollars. And they're like, checkbook's closed. We have no idea what the future holds. The checkbook is closed.

39:32Like, figure out what you're going to do. And so I ended up cutting my team, and I stopped paying myself for 18 months. It was crazy. I mean, honestly, I did compartmentalize that time. Like, I don't really think about it too much. It was so very hard.

39:52Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at GuyRoz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them. You can send us a voice memo at hibt at id.wondery.com or call us at 1-800-433-1298.

40:24Leave a message there and make sure to tell us how to reach you, and we'll put all of this information in the podcast description as well. This episode was produced by Casey Herman with music composed by Ramtin Ederoglui. It was edited by John Isabella, and our audio engineer was Anli Huang. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Sam Paulson, Chris Messini, Elaine Coates, J.C. Howard, Catherine Seifer, Carrie Thompson, and Neva Grant. I'm Guy Raz, and you've been listening to The Advice Line on How I Built This Lab.