Great Businesses Aren't Built on Shopify

July 30, 2020

Related Listening: The Indie Hackers Podcast, Writing Code to Sell $200K/Month of Cookies (Listen Here)

This is my favorite podcast in a long time.

The subject of the podcast is Sam Eaton, co-founder of Crave Cookie, a hyper-local cookie business in Fresno, CA. Crave Cookie offers one product (cookies!) in one market (their delivery radius is only 10 miles!). So why are software engineers talking about a cookie business?

The key takeaway: Owning the entire product experience (not outsourcing anything!) forces you to build better products.

Sam seems to eschew all typical advice for founders and used barely any off-the-shelf software to start this cookie business. In fact, Eaton mentions repeatedly that he joined Crave Cookie as a knee-jerk reaction to hearing his sister suggest starting the business using Shopify.

Why would anyone not leverage existing tools? Well, by owning the fully vertically integrated product experience, Sam was able to create a really unique product experience, especially relevant for the niche he picked.

For Sam, building his own tools at the business's start meant not only initial savings, but long-term benefits.

Build eCommerce Platform → Realtime delivery slots

Cookies are best warm and crumbly. Door delivered cookies simply won't be as good if delivery is unpredictable! Operating in a very finite delivery area with delivery slots makes sense for the cookie business.

Ironically, special delivery needs weren't Sam's reason for building an in-house eCommerce platform. At $60/month plus service fees, Shopify and other existing alternatives seemed too expensive! To skip platform costs, Sam runs Crave Cookie on a single server with SQLite (upgraded from single JSON file, which was built in 2 weeks).

Build Delivery Fleet → Unique Delivery Experience

  • Gift messages (written on each box!)
  • Every delivery driver wears Crave Cookie outfits

Build Warehouse Platform → Admin Delivery Platform

Sam's brother in-law-law was Crave Cookie's first delivery driver. Because the business didn't rely on Postmates or DoorDash to distribute its goods, it had to build out a full delivery servicing admin platform. As a result, Sam was able to build a highly tailored platform, with the freedom to make changes in the future and nothing he doesn't need.

Only Supported One Flavor on the Platform → Flavor of the Week!

Crave Cookie's initial platform could only support one flavor of cookie, but this limitation inspired the team to get creative. The result was offering a "Flavor of the Week." Customers loved it! Here, a clear net negative on the product side forced marketing ideation.

Takeaways

There seems to be a mantra in the startup community that you should only build your core competency; outsource all the rest. But by doing so, you can miss amazing opportunities for product exploration or vertical integration that just wouldn't be possible otherwise.

What do all of these things have in common? Because of an obsession with keeping the initial product cost-free (or as close to free as possible), Sam noticed unique parts of the product experience in a way that would not have been possible if he had simply outsourced to platforms like Shopify, Postmates, etc..

That being said: why does this work?

Kept iteration times low.

The first iteration of the software (from first LOC to paying customer) was 1-2 weeks!

Extreme focus.

Features like mailing cookies or additional delivery warehouses were deprioritized even though founders knew they would make money on them. Crave Cookie doesn't let you mix-and-match cookies within a box (only one type per box), which lets the team forecast demand and package orders really efficiently.

By being so focused on a single product in a single marketplace, there's a ton of room for improvement that you just can't get by leveraging platforms like Postmates & Shopify.

So what are some of the outcomes for Crave Cookie?

  • 35-45% margins (compared to optimistically 15% for typical restaurant businesses)
  • $200K/mo revenue after Covid (📈 growth)
  • In 3 weeks, collected 10,000 emails locally! Only in the community he lives in.
  • Opportunity to white-label software and sell B2B!

Tl;dr

  • Niche products and markets can still be made really really efficient with software. Even if its just cookies in Fresno, CA.
  • Saving money by building tools internally might not feel right at the beginning, but it leads to better product outcomes.

I like writing about podcasts, follow me on twitter @jeffbarg to read more!

© Jeff Barg 2020