On this episode of Gimlet Media’s newest business show: an entrepreneur thinks he has the solution to sports-related concussions.
Two suitcases, a tiny boat, and a $25 billion industry.
ALVIN MELATHE: How much did you pay for the cup of coffee you’re drinking?
AMALYA SCHWARTZ: This is the bougiest most expensive coffee that I am willing to buy. This one was $5.17.
LISA CHOW: Recently producer Alvin Melathe went to a coffee shop in Brooklyn, to find out what’s the most people would be willing to pay for a cup of coffee. A lot of people put their limit at around 5 dollars. It is New York. But last summer, a high end coffee chain called Blue Bottle sold a cup that makes 5 bucks seem like a steal.
ALVIN: Can you imagine paying like $16 cup of coffee?
AMALYA: A 6 dollar?
AMALYA: Holy [bleep]. A $16 cup of coffee? That’s like a cheeseburger at a really fancy restaurant and fries and maybe an appetizer. I don’t think could do 16. I don’t think it could do it.
ALVIN: What do you think a $16 cup of coffee would taste like?
AMALYA: It better taste like caviar. Gold! It better look like gold.
LISA: Can you talk to me about the price? I mean, so $16 a cup.
JAMES FREEMAN: It’s really really expensive.
LISA: James Freeman is the founder of Blue Bottle. He started his company in the Bay area, and with the help of a lot of VC money, he’s been opening up new stores around the country.
LISA: So when you guys priced it to be 16 dollars a cup. What were you thinking?
JAMES: What were you thinking? That’s what a lot of people on the internet wanted to know. From my perspective, I don’t care how much it is as long as people think it was worth it.
LISA: And people did. The 16-dollar-a-cup coffee sold out in less than two months. It didn’t look like gold or taste like caviar … but James says it’s one of the best coffees he’s ever tasted.
JAMES: It was really just a transcendent coffee. It just had a beautiful brightness. Plump without being portly. It’s it’s like you’ve been given a gift.
LISA: From Gimlet Media, I’m Lisa Chow. This is Startup. James Freeman doesn’t think about coffee the way most people do. He talks about it kind of like some people talk about wine. This is the world of specialty coffee … super high end coffee where stuff like where the coffee is grown, what elevation it’s grown at, how the coffee cherries are picked, dried, and stored … all of those details matter. And this is the fastest growing part of the U.S. coffee market. In the last 15 years, it’s tripled in size … to more than 25 billion dollars. Making a super-high-end specialty coffee requires precision engineering … and that 16-dollar cup was virtually perfect. Which is surprising, because it came from a place where precision is really hard to achieve: an active war zone in the Middle East. The company that made this Gucci of coffees is an early-stage startup called Port of Mokha. How did its founder pull it off? And can he do it again?
LISA: The first time I met Mokhtar Alkhanshali, he was wearing a tailored suit and wingtip shoes. He’d traveled to New York for a meeting at the United Nations. Before that, he was in Egypt and San Francisco, and he was about to head to London — all to talk about his hot new coffee company. But only four years ago, Mokhtar didn’t know much about coffee. Back in 2013, he was just a 20-something, struggling to finish community college.
MOKHTAR ALKHANSHALI: I felt really stuck. And I wasn’t reaching my full potential. And in my heart, I really wanted to do something big with my life.
LISA: Mokhtar was taking classes, but also working odd jobs to support his parents and siblings. He’d grown up in San Francisco, the oldest of seven kids. His father was a bus driver, his mother, a stay-at-home mom, and the nine of them lived in a one bedroom apartment in the Tenderloin. It was crowded. And Mokhtar would sometimes get sent to spend time in Yemen with his grandparents — a year in middle school, another in high school. Like many people in Yemen, his grandparents grew coffee, and Mokhtar remembers helping his grandmother pick coffee cherries as a kid. But he didn’t drink it much … the only coffee he’d had was bad diner coffee in the U.S., which he thought tasted like burnt popcorn. But one day, when he was in college, feeling stuck, he walked into a cafe and bought a cup of specialty coffee from Ethiopia.
MOKHTAR: And I tasted it. And I said this is amazing it tasted like blueberries very tea-like it was $5 which I thought was expensive for a coffee at the time. $5 for the cup but once I tasted it I was like this is absolutely worth it.
LISA: And that cup was a revelation. Suddenly Mokhtar saw his family roots in coffee in a new way. He started asking coffee people about Yemeni coffee, and he heard the same thing from all of them.
MOKHTAR: The best cup of coffee I had was from Yemen like 10 years ago 5 years ago.
LISA: They talked about it with an almost religious fervor. Like it was the Holy Grail of coffee. But they also said it had all kinds of problems. It was hard to get. The quality was inconsistent.And it had weird defects. The only way to produce reliably great coffee from Yemen was to be there, overseeing production.
MOKHTAR: And the issue for them was they just couldn’t go to Yemen. It was dangerous, the language barrier. There was no infrastructure for them to go to. And me being from Yemen and being from here I thought I could fill that gap and be that bridge.
LISA: And if he did, Mokhtar thought maybe this could be the way to do something big with his life. He could help thousands of farmers back home—farmers like his grandparents—make a better living for themselves.So Mokhtar quit school and moved to Yemen in 2013 to figure out how to produce the perfect cup of coffee. He got advice from experienced coffee buyers, farmers and other experts. And for two years, he traveled all over Yemen. He went to remote villages, high up in the mountains, places where he’d sometimes have to travel on foot. And he studied every part of the process … the harvesting, drying, storing … even the transporting… and right away he started seeing the problems he’d heard about.
MOKHTAR: One time I had a coffee come in and I tasted it and it tastes like gasoline and it had a particular smell, diesel actually. And so I went outside, and said can I see the car that you brought, and it was this big flatbed truck that they had it in. And as soon as it turned on a big puff of diesel smoke came from the back of it right into the flat bed where the coffee was stored.
LISA: Mokhtar started working with farmers to tweak their process. Told them not to let truck exhaust near the coffee. Banned smoking, since it could make the beans taste like cigarettes. And suggested they store the coffee in a cool dry place, on wooden pallets, not on the ground. But the biggest thing Mokhtar did: he asked them to pick only ripe red cherries. Coffee beans come from coffee cherries, and the riper these cherries are when picked from the trees, the better the coffee is. But handpicking only the ripest cherries is incredibly time consuming, so Mokhtar paid farmers a lot more to do this. He paid them so much more that farmers who were planting other crops, like khat — a strong stimulant that’s popular in Yemen — started replanting their fields with coffee for Mokhtar. By 2015, Mokhtar had what he believed was Yemen’s very best coffee, and he was ready to put it to the test back home in the United States.There was one obvious place to start: Seattle, Washington.
MOKHTAR: There was a big coffee conference. And it’s like the Coffee Olympics. Over 100 countries attend. And so my goal was I was going to have a marketing event at that conference so I had told these farmers you guys worry on quality and producing great coffees. I’ll figure out how to sell those coffees.
LISA: Mokhtar was all ready to go, and then, two days before he was scheduled to leave…
NEWS ANCHOR: In Yemen’s capital, devastating airstrikes from Saudi Arabia. A new offensive to drive out Iranian-backed rebels who seized control of the capital and key military sites.
LISA: Yemen had been sliding into civil war for months, between the government and Houthi rebels, and now Saudi Arabia and a coalition of neighboring countries had jumped in to back the government.Mokhtar was sleeping when the airstrikes started.
MOKHTAR: I woke up. And I heard these explosions going around and I went outside and I saw like it looked like laser beams. It was these anti-aircraft machine guns. The blast was so strong that some of the metal on the door was bent inwards.I was terrified. I just stayed in a corner and and waited it out.
LISA: Nearly 20 people died that night. Mokhtar needed to get out, not only for his own safety … but also because he had to get to that coffee conference in Seattle. But the airports had been bombed or closed, and when Mokhtar asked the State department for help, they said the U.S. wasn’t evacuating its citizens.
MOKHTAR: It was a feeling of being abandoned by your own government and not knowing what to do. Because other countries were taking out people. China and russia were taking out 100s of people out a week. India and Pakistan. I knew it was really bad when one day i saw a headline that said Somalia is now evacuating its citizens out of Yemen.
LISA: Mokhtar heard that some countries were taking their people out through a port called Aden, so he threw his coffee samples in a car — two suitcases with about 30 pounds of coffee in each — and drove there hoping to catch one of the ships. But the situation in Aden was intense. Militia groups were fighting in the streets. And not long after Mokhtar got there, he was captured and held by a militia group. It was traumatic…and Mokhtar doesn’t like to talk about it. After several days his friends negotiated his release, and Mokhtar made his way to another port … Port of Mokha … where he’d been told a boat was waiting to take him and his coffee across the Red Sea to the Horn of Africa. But when he got there, the only boat ready to leave was tiny. Like scary tiny.
MOKHTAR: It was a little dinghy, small 18-16 feet, with a single 40 horsepower Yamaha motor, which means if it goes in the water and it dies for whatever reason you can’t move anymore, you’re stuck in this ocean.
MOKHTAR: I had never thought about like death but I saw the water and saw the boat, and i was like, i need to text my family just in case, i wanted them to know how i felt.
LISA: Do you remember what you said specifically?
MOKHTAR: Just that i loved them, and that to forgive me for anything that i’ve done in the past and things like that. And then, I got on the boat.
LISA: The trip took hours. But Mokhtar made it, and he got on a plane to head back home to the U.S.
ARUN RATH: This week we learned of a harrowing story about getting stuck in the middle of a civil war and a truly great escape. Mokhtar Alkanshali is a Yemeni-American from California…
MOKHTAR: In my Uber on the way to the conference center in Seattle. I hear myself on NPR and that Uber driver. He was like man this guy is really amazing. He’s helping these farmers in his work. But he’s he’s crazy though for him to do that you know. And I’m like yeah he’s nuts.
LISA: Mokhtar’s coffee was a hit at the conference … and it attracted the attention of Blue Bottle, that fancy coffee chain. They asked him to bring some over so they could try it.
MOKHTAR: It was the first time a roaster had tried our coffee and I was already really nervous about that. And so when I showed up I noticed there are a lot of coffees on the table and I was a little confused. And then I realized they had other coffees.
LISA: Blue Bottle had brought in some other coffees they were also considering buying.
MOKHTAR: These were amazing coffees too. And so in my head I’m like, ok great. There’s no way I’m going to do well. Mine’s like the underdog. No one’s heard of it.
LISA: Eventually the buyers from Blue Bottle … some of the most discerning buyers in the business … started tasting the different coffees, tasting them blind … meaning they didn’t know which coffee belonged to which seller.
MOKHTAR: People were have their notes out and saying, this coffee started really amazing but then it fell apart at the end. this coffee was too wine-y or tarty. This coffee had a wood taste to it, very baggy old kind of crop. Then they were like, this coffee was absolutely amazing. It was a fruit bomb of flavors, a bouquet of flowers. It had a sweet lingering taste to it. Papaya, mangosteen, and I’m like oh my goodness. And at the end of all that, then they reveal which coffee was which. It was my coffee.
LISA: Across the industry, coffee is rated from 0 to 100 based on things like aroma, acidity, and flavor. Specialty coffee rates above 80. Mokhtar’s coffees rate in the 90s. The buyer at Blue Bottle asked Mokhtar how much of this coffee he had. He said about a half a ton. Blue Bottle wanted to buy all of it.
MOKHTAR: I walked out and I just like I got really emotional. I just stopped and tried to take it in. Wow I actually have something that’s good. All this work all this thing that happened like me risking my life and the farmers and I can I can actually you know fulfill my commitment to them It was like to know that you have something that’s great and then to hear people tell you that and then tell you they want to buy it like it’s like they wanted me they really want me.
LISA: Just a couple of weeks earlier, Mokhtar had been on a tiny boat in the Red Sea, fearing he might die … and now he was about to sell a half a ton of coffee to one of the fanciest coffee chains in the U.S. He sold that first batch for more than 50 dollars a pound… which became Blue Bottle’s 16 dollar cup.
MOKHTAR: I didn’t know my coffee was going to be 16 dollars per cup. Actually, I was really shocked. I was actually shocked.
LISA: What did you think about the price you were paying Mokhtar?
JAMES: I thought it was so expensive
LISA: James Freeman, Blue Bottle’s founder, says he was willing to pay that price because Mokhtar’s coffee was just THAT good. And on top of that, it was rare, and had an amazing story behind it. All of those things were about to lead to a huge opportunity for Mokhtar. One day he was at a cafe, with a friend, talking about his company.
MOKHTAR: A girl joined the conversation and said, you’re pretty cool you should give a talk at my job. And I’m like where do you work at, and she’s like I work at this venture capital firm, and I thought she said Founding Fathers. I don’t know anything about the VC world, so I told Ibrahim, and he’s like, I never heard of them. Ahmad Ibrahim was brought on to be Port of Mokha’s COO and CFO after the Blue Bottle deal. And he remembers Mokhtar telling him about this encounter at the cafe.
AHMAD IBRAHIM: So, he’s like hey, i met this girl, She works at a VC called founding fathers. And i was like oh, i haven’t heard of them, but that is a really great name for a VC. And then there’s an email intro, and I was like Oh, founders fund, are you kidding me.
MOKHTAR: He was like bro, this is huge.
LISA: Founders’ Fund is Peter Thiel’s fund … which has invested in massive tech companies like Facebook, Spotify, and Airbnb.
CYAN BANISTER: I invested in Port of Mokha without even tasting the coffee.
LISA: That’s Cyan Banister, a partner at Founders Fund. She knew the specialty coffee market was blowing up … and she thinks more and more people will start treating specialty coffee like expensive wine — something to savour.
CYAN: You know when you go to a fine restaurant it should be on the menu. When you have a special event it should be something that you serve. You know when you have like a wedding dinner and you get the crappy cup of coffee at the end, why does it have to be that way. You get the good champagne and the crappy coffee.
LISA: Cyan gave Mokhtar and Ibrahim a quarter million dollars, and they raised another million from other investors.
CYAN: Is this a multibillion dollar opportunity? I don’t know but if it ends up being a $250 million to $500 million opportunity I think that’s incredible. I think he has he has a chance.
LISA: So now Mokhtar has investment from big time VCs, and it was sending him back to Yemen … a country in the middle of a civil war … to build a half a billion dollar company. After the break … Mokhtar finds out just how hard it is to do that.
++++++++++++++++ BREAK ++++++++++++++++
LISA: Welcome back to Startup. So before the break, Mokhtar had created one of the highest-quality specialty coffees on the market and landed more than a million dollars in VC funding. And then he headed back to Yemen. Where things are still incredibly unstable, and there are all kind of challenges for a small business like Mokhtar’s. Getting money in and out of the country is difficult, because the central bank keeps moving. Plus flights are sporadic, and visas are really hard to get.
TAPE: Mokthar speaks to one of his managers.
LISA: Because travel is so hard, Mokhtar works mostly out of Oakland, California, which means he wakes up everyday at 3 am to talk to his managers. And because Mokhtar can’t always inspect the coffee in-person, Ibrahim says they both end up texting with the managers throughout the day.
IBRAHIM: Like for example they’ll send a picture of dried coffee cherries and they’re very black which is great. But then we’ll be like well does it glisten in the sun like does it does it have a sheen or does it like you can’t tell that from a picture for example. And so they’ll they’ll take a video and then they’ll shine a light over it you’ll see how the light reflects off of things like that. You have to improvise. But obviously these things would just be like a non-issue, non… it wouldn’t even be a thing if you were just there.
LISA: Late last year, the guys had their second shipment ready to go: four tons, which was a lot bigger than their first shipment. And they gathered together to test it … basically to see if it was as good as their first batch… the now-famous 16-dollar-a-cup batch that brought those big VCs on board. Ibrahim says he was feeling the pressure.
IBRAHIM: We didn’t want to be a one hit wonder. It was very important that we got this next shipment out, that it increased in quantity and quality.
LISA: To test the new batch, they set out 12 cups of coffee, each one grown in a different region and by different farmers. Some cups represented a small amount of the four-ton shipment, others a large amount. And the guys tasted the coffees blind to assess their quality.
MOKHTAR: We got there and all the cups were set out. And before we even tasted it, I smelled it. I smelled something weird.
LISA: And when Mokhtar tasted the cup on the corner of the table …
MOKHTAR: It was harsh, had a bad lingering aftertaste, um, flavorless, you know, not sweet, and like there was clearly something wrong with this coffee. Like this coffee needs cream and sugar.
LISA: Ibrahim could also taste that something was off… in that corner cup and a second one, as well.
IBRAHIM: You start thinking about which coffees they could be. But you still don’t know, but that’s what’s racing through my head. I wonder which coffees those are. And in the back back of your mind, you’re hoping, they’re not the big ones and we do the reveal, and we both cried that day.
LISA: Those two cups … they were the big ones.
MOKHTAR: My stomach turned, 85 percent of our volume for the shipment, over 3 tons was from that one region. Those two cups.
LISA: The bulk of their shipment fell short of the high standard they were going for. Mokhtar and Ibrahim scrapped most of it. They sold it off in the local market in Yemen, at a loss of a quarter of a million dollars.
MOKHTAR: I’m like, can I still do this project. It basically destroyed this house of cards i built. And so for me, it was going back to the drawing board and going back to every single step of the process. Where did we mess up at. What point did the coffee get ruined. And why did that happen?
LISA: Mokhtar needed to figure it out, and fast. He had a vision for his business: pay farmers a premium to grow super specialty coffee, command high prices from buyers and generate big returns for investors. If the coffee quality wasn’t there, the whole thing would fall apart.
MOKHTAR: I checked everything. I asked about where it was from, how it was bagged, how it was stored, who. Every little part of it.
LISA: Nothing seemed weird or out of whack. But then he noticed something strange about the moisture levels on those two coffees compared to all the others he’d produced.
MOKHTAR: Every single bag of coffee from those two regions was really low. And so I knew that that was the reason.
LISA: Mokhtar knew that a coffee’s moisture level was important … but it was only in this moment that he realized just how important it is…if the moisture tips too much in one direction, fungus can grow … too much in the other and a coffee can lose its flavor.
IBRAHIM: There are multiple opportunities for the coffee to lose moisture. Was it during drying? Was it during storage? and so the takeaway was like we need to control all of that.
LISA: So Mokhtar and Ibrahim rebuilt their process: They stopped having farmers dry the coffee cherries themselves, and started drying them in their own facilities. They also invested in special storage bags to retain the coffee’s moisture. And they doubled the number of quality-control tastings they do, so they catch problems earlier. About a month ago, I met Mokhtar and Ibrahim in a warehouse in Oakland. We stood around a high wooden table where cups and wide tasting spoons were laid out.
MOKHTAR: So this is the last tasting we do before coffees are shipped out. They’re really in the bags, ready to go.
LISA: It’s been about six months since Mokhtar and his team tasted that second coffee shipment, and realized something had gone terribly wrong. Now they’re getting ready to test their THIRD shipment …
MOKHTAR: I’m nervous because they’ve gone through the whole process. We’ve been filtering out all these negative coffees and these are like the cream of the crop.
LISA: He wants Port of Mokha to prove again that it can produce one of the world’s best coffees.
The company has upped production since the last shipment. These samples are from 10 tons of coffee ready to be shipped from Yemen… more than double what they produced last time. Mokhtar starts to grind the coffee. He, Ibrahim and another taster will sample 11 coffees, each representing a different portion of the batch, just like last time. Mokhtar and Ibrahim pour the hot water and let the coffee brew for several minutes … and then they start slurping up the coffees with spoons.
MOKHTAR: The more your mother would disapprove the better. You have to slurp very aggressively so like the coffee can be in all parts of your tongue, and you can taste everything from aftertaste, to flavor, to acidity levels, mouthfeel.
LISA: They move around the table quickly … slurping, jotting down notes, and keeping straight faces so they don’t influence one another. They taste each coffee several times, to see how it changes as it cools. I keep looking for some reaction, some sign of whether the coffee is good, great … terrible? I don’t see any. Finally, Mokhtar asks the other testers what they think, starting with their least favorite.
MOKHTAR: Lowest for you?
IBRAHIM: Tie between 8 and 9.
MOKHTAR: 8 was mine. Harshness at it at the end, at some point I tasted like a cigarette.
MOKHTAR: Ok what about highs.
NASSIM: Number 1 was my number 1.
MOKHTAR: Absolutely. Number 1, even when I smelled it, as it cooled. Mango, papaya. Sweet sweet lingering aftertaste.
LISA: It’s time for the reveal … Do they have a lot of that coffee they all think is the best?
MOKHTAR: Do you know which one was number one?
IBRAHIM: Yeah, it’s like our biggest coffee.
LISA: The best coffee of the tasting … makes up the biggest portion of this shipment. It’s a success. There are no high fives, no big celebration, but the guys look happy. I take a slurp of my own … of this number 1 coffee. I’m having a hard time tasting the fruit flavors Mokhtar’s talking about.
LISA: I guess I taste some fruit in it. I’m trying to think is it mango. Do you taste mango?
LISA: I turn to the other tester, a guy named Nasseam Elkarra.
NASSIM: I don’t taste mango but it’s definitely fruity. The next question is is it tropical, stone fruit…
LISA: This conversation all sounds so serious… And it is serious, the guys have a lot of money on the line, but Mokhtar and the others can still laugh at all the crazy ways people describe these high end coffees.
MOKHTAR: The first time i went to these tastings, it was pretty intense. Someone said pink starbursts, someone said baby carrots. One guy—I still remember him till today—he said this coffee it’s too passive aggressive for me. That was the best one.
LISA: Ibrahim chimes in.
IBRAHIM: part of me is like, did someone really say that? And then mokhtar did a presentation one time, and this barista walks up to him and says I can’t believe you remembered my flavor descriptor.
LISA: Now you guys are all certified coffee tasters, but do you think the average person would be able to taste that. That difference.
MOKHTAR: Absolutely. I think so we all have the same amount of same taste buds same thing we’re just able to identify them more. When people hear about you know our caffeine in what the next couple 16 that’s one cup of coffee and they have it. I give you an example. one guy came in to the Rockefeller Center in New York and I was there and he goes he was six for a cup of coffee that’s expensive, I wanna try it out. And then the barista’s like Sir I’m sorry. It’s $16. he was. That’s ridiculous. It’s outrageous. He was from brooklyn. Why would someone pay $16 a cup of coffee, that’s ridiculous. And then he kind of felt he felt embarrassed because now everyone’s looking at him, so he’s like ok, oh ok, i know what’s going on in the country, what they’re going through right now in Yemen. So I’ll buy it to support them. So he buys it, and I find out he makes an effort to go back after work. And he apologizes to the barista, and says, this is the best cup of coffee I ever had.
LISA: Because of Ramadan, the tasting started late … after Mokhtar and the others finished fasting. So now it’s close to midnight. Mokhtar is clearly relieved the tasting went well.
MOKHTAR: I can go home and sleep you know and now I feel like a huge weight. You can say a 10 ton the weight has been lifted off my shoulders. I feel like much more confidence. I’ve done this thing. You know I scaled the production and the quality. Both are really amazing. So. You can say that I’m emotional but in a different way than the last shipment.
LISA: Mokhtar’s third shipment arrives in the U.S. next month. He’s sent samples to buyers, and so far, he says he’s getting good feedback. Next year, the plan is to increase production from 10 tons to 40 tons. Then 150 tons the year after that. But to get there … and to reach the half billion dollar valuation that Port of Mokha’s investors talk about … a lot more of us will have to get excited about the idea of spending 16 dollars on a cup of coffee.
LISA: StartUp is hosted by me, Lisa Chow. The show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Special thanks to Hebah Fisher and Sherina Ong.
The idea for this story came from an episode of Kerning Cultures, a Middle East podcast telling stories from the region. Their episodes can be found at kerningcultures.com. That’s kerning with a “K”.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. For full music credits, visit our website.
Andrew Dunn and David Herman mixed the episode. You can follow us on Twitter @podcaststartup. Also this is our last episode for the season. In the meantime there’s a new podcast from Gimlet that we think you’ll like. It’s called Mogul, and it tells the story of hip hop through one man’s life. Chris Lighty… an executive who worked with stars like Missy Elliot, 50 Cent and Mariah Carey. When the show starts, Chris is a young hustler, carrying crates for the legendary DJ Red Alert:
DJ RED ALERT: “I sensed something about Chris from his character. You know, about how he come across with a business sense. And when him and I talk I listen to his lingo. And when I listen to his lingo, I’m like, “This guy’s got something here, more than you’d expect.”
LISA: To find out how Chris Lighty made it to the top, and what went wrong once he got there, search for Mogul on Apple Podcasts, or wherever you like to listen. That’s it for Season 5 of Startup. We’ll see you soon.
Clarification: The episode stated that Port of Mokha lost a quarter of a million dollars, selling off most of its second shipment in the local Yemen market. That figure included overhead.
A Gimlet update.
CALLER #1: Hey there Alex. My name is Andrew. I am a long time StartUp listener.
CALLER #2: Hi Alex. My name is Shawna Sweeney. Forgive me if I’m a little out of breath I just finished jogging
CALLER #3: Hey Alex. It’s 1:20 in the morning. I just finished listening to some old StartUps and I thought I’d give you a call.
ALEX BLUMBERG: Hello, and welcome to StartUp. I’m ALEX Blumberg, sitting in as I do from time to time for regular host Lisa Chow. Because today, we’re trying something new.
CALLER #4: I wanted to know whether some of your worst fears were realized. And if they were, what did you learn from them
CALLER #5: I’m wondering if you could go back to day 1 before Gimlet even had a name and redo one thing, what would you do differently?
CALLER #6: My question is, what’s the breakdown of time that you feel motivated vs the time that you feel overwhelmed
ALEX: A while ago, we sent out a call to listeners. What questions do you have about Gimlet, the podcast network making this podcast, Startup. And many of you responded. Now quick background for people who may have not have been listening to Startup since the beginning and may be wondering who the hell I am … this show started out documenting the formation of Gimlet Media. And I hosted it. It was a podcast about someone starting a podcast company, which, as we said many times back then, was meta, we know. Anyway, since that time this podcast has expanded its topics beyond simply the parent company. But I come back, from time to time, with regular updates on Gimlet’s continued evolution. The drama does not stop once you raise that first round people, let me tell you. And we decided to do this update in a new way, we decided to go right to you, our listeners, and ask you what you are most curious about. And today, I will be answering your questions on the show. It’s a sort of podcast version of an AMA, “Ask Me Anything”. And it gets into a lot of stuff, growth, diversity. And, this ABC sitcom that is currently being made about me, and Gimlet, based on the first season of StartUp. That’s all coming up. And just a quick heads up, there’s one mildly bad word in the episode.
ALEX: All right. Let’s start here:
TONY: Uh, hey there, Alex. My name is Tony I live in LA. I had a question. Because I work in the industry and I have noticed that Gimlet has used some of its shows as IP to get other things started.
ALEX: So Tony is calling with a question that came up a lot, although Tony’s using some entertainment industry terminology. He’s asking about how we’ve used our IP — intellectual property — to get things started, as he says. And one of the things he’s referring to is this:
TAPE: “ALEX Inc” trailer
ALEX: This is a trailer for an ABC sitcom that’s coming out this winter, called ALEX Inc., which is based on season one of StartUp. And it stars Zach Braff, as me.Many of you might have seen that trailer bouncing around. But Tony because he works in the entertainment industry, noticed some other developments that were reported in the trades. Our first fiction series, which we launched last fall, Homecoming, was optioned to be a TV show. A couple stories that aired on Gimlet podcasts were also optioned to be movies. All this optioning activity, that is what Tony’s question was about.
TONY: Uh, I was curious if that was something that was part of the original biz plan. Is that something that sort of occurred to you at some point. Uh did it just fall in your lap when a producer called? Uh curious about that and how that’s playing out and what you’re involvement is in all of those projects.
ALEX: So, were all these film and TV projects part of our original plan, that’s Tony’s first question, and second, what’s our involvement in all of them. Well, to help us answer those questions is the person here at Gimlet who knows most about these deals, who’s led the way in setting all of them up, Chris Giliberti, one of the first people hired at Gimlet:
CHRIS GILIBERTI.: I was number 13 but I sometimes tell people 12 because the whole thing about like if there’s a building with lik…
ALEX: Because you’re superstitious.
CHRIS: Yeah exactly.
ALEX: OK good.
CHRIS.: So I’m actually number… And you don’t want to downgrade yourself to 14. So I’m 12.
ALEX: You’re tied for 12.
CHRIS: No I’m not tied.
ALEX: OK. OK. You’ve just erased whoever 12 was.
CHRIS.: I’m 12. Yeah.
ALEX: Chris and I spent some time in the studio talking about how this whole Hollywood thing started in the first place. And it started with an email we received from a producer in Hollywood named John Davis. And he was inquiring about optioning the rights to season one of StartUp. Now, optioning, for those not familiar with the way the entertainment industry works, is a very standard thing that studios and networks do. They’ll option books, magazine articles, radio stories, and yes, podcasts. And what it means is, they pay a little bit of money for the exclusive right to take your book or article or podcast and turn it into a tv show or a movie. Options usually last a year or two, and if whoever acquired the option decides they want to go forward and make a pilot, they have to pay you more. And they actually go and take it to series, they pay you even more. And if someone wants to option one of your works and you negotiate a lot in the beginning, you can set yourself up for making a lot of money if the thing ever actually gets made. But when John Davis, this producer, reached out to us, Matt and I told Chris, do the opposite of that. Don’t negotiate.
CHRIS: Yeah I remember you and Matt telling me like don’t spend any time on this.
CHRIS: Just you know like whatever if you you know want to take a call every now and then.
CHRIS: Answer an email that’s fine but just don’t don’t let it be a time-sink.
ALEX: This turned out to be bad advice. For reasons I’ll get to in the moment. But I had my reasons for giving it to Chris. It all goes back to what I did before Gimlet. For over a decade, I was a producer and a journalist at This American Life. And during that time, I was regularly approached by people from Hollywood saying they wanted to turn some story I’d worked on into a TV show or a movie. We’d end up having a bunch meetings … that ultimately went nowhere. So, I told Chris, learn from my experience, do not get sucked into the Hollywood meeting vortex. Take whatever money they’re offering up front, don’t spend any time negotiating extra money for pilots and series that will never ever get made. And Chris took my advice. But then, a series of increasingly unlikely things happened. First, John Davis, that producer, actually got a big star on board, Zach Braff, who said, yeah, if you make this, I will act in it and direct it. So then, with Zach Braff on board, they approached the big networks and got ABC to order what’s called a pilot script — ABC basically paid them and said, you write a script, and then we’ll decide if we want to shoot it or not. Then, they wrote the script and ABC said, yes we do want to shoot it, we want to turn it into an actual pilot. And then, perhaps most unlikely of all, when ABC saw the pilot that they made, they said, yeah, we want to pick it up and put it on the air. And that happens very rarely. So all of this could have been a huge windfall for Gimlet. If only our initial advice to Chris Giliberti hadn’t been so totally wrong.
CHRIS: It’s a very small money. This first deal was.
ALEX: Yeah the ALEX Inc. The thing that became ALEX Inc was just.
CHRIS: Was not…
ALEX: Single digit thousands of dollars.
CHRIS: For the option and then you know tens of thousands for you know the subsequent purchase price and series sale bonus. And you know in total Gimlet will make a six figure amount on all of this but considering that we are the point of origination for an entire broadcast TV franchise I think we’re.
ALEX: That’s called Alex Inc.
CHRIS: That’s called Alex Inc. I feel like we’re probably under under compensated but not and not in some way where anybody ripped us off or anything.
ALEX: No no…to me the directive was like if it becomes Seinfeld it would be great if we had like we we had some sort of like participation in that.
ALEX: And short of that. I don’t I don’t want to like have to think about it very much.
ALEX: And not only were we not making much money, we also don’t have a lot of influence over the show that was being made about us. We’re not involved in writing it, or shaping it in any way. Which is totally fine, right, like that was my explicit instructions to Chris — don’t spend any time thinking about this. But now that it’s happening, it’s changed our thinking.
CHRIS: I think you know after the StartUp deal I think we thought OK, we’ve learned a bunch. It’d be great to pursue an arrangement where we could have a bit more input.
ALEX: So, Chris, working largely on his own, went out and tried to make more deals. He didn’t wait for things to come in through the inbox, but rather took ideas to Hollywood himself, to see if people were interested. And it turns out they were. To date, he has sold 3 more projects — 2 movies and a TV shows. And Gimlet is much more creatively involved in all these deals, and the money’s a lot better too. If one of them actually gets made, we could be making seven figures, not six. Chris has acquired a nickname, HC, for Hollywood Chris. And part of the reason for Chris’s success is that the television landscape has completely transformed since my This American Life days. In addition to the networks and the cable channels, you’ve also got Hulu and Netflix and Amazon, and Youtube. And all of them are looking for source material to make their own prestige series. They’re all looking for something that could become their own House of Cards.
ALEX: How big do you think this line of business could be.
CHRIS: And in my mind it’s massive. Like in my mind it’s the thing that could turn Gimlet into a unicorn. And beyond because if you look at I mean there are many many many examples of multibillion dollar film and TV production companies and studios. There there aren’t any of the audio companies. And so I think you know there are precedents for this like you look at Marvel which was just a comic book company and you know it’s the same sort of model of originating characters and worlds and stories in a low-cost experimental format. Transitioning it to a higher investment higher return format.
ALEX: In other words, transitioning this character — me — in this world — the low-cost podcast environment you’re listening to right now — to this higher return format.
TAPE: Alex Inc.
ALEX: All right. Next question.
CLIFTON: Hi Alex, this is Clifton Corbin calling from Toronto, Ontario. You’ve been radically transparent by doing the StartUp podcast and basically outlining how you make money and what you do to make money. But I also know as you get bigger that transparency would become harder. My question is how much transparency do you think you can continue to have given the scope and the size of Gimlet as it continues to grow and do you think transparency has anything to do with your success.
ALEX: So there’s two questions here. First, did transparency help us? Absolutely. I don’t think the first season of Startup would have connected nearly as well with people if we hadn’t been as honest about what we were going through. And without the success of that first season, I don’t think Gimlet would be where it is today. But then there’s that second question. Can we be as transparent now that we’re bigger. And here it gets a little tricky. We can still be very transparent about a lot of things. I did an episode last season where I played a lot of tape from a session between me and our executive coach, Jerry Colonna, that was one of the rawest and most transparent things I’ve ever put out in the world. But when it comes to covering the company as a whole, it’s different. we can’t just roam around with microphones as much anymore. In the beginning, when it was just 10 or 15 of us, we all felt like part of this small band. Now, there’s associate producers who’ve never met me. If I come up with a microphone and ask them to talk about something for Startup, what are they going to say? They don’t want to say anything bad. But also, maybe they get the sense we want them to say something bad, because it’ll be better drama, but then, if they do, maybe they’ll get in trouble with their direct supervisor or with their colleagues. The bigger we get, the more reporting on ourselves puts our people in complicated uncomfortable positions. No one felt this more acutely, perhaps, than the regular host of Startup, whose chair I am now occupying, Lisa Chow, who was often the one going up to regular gimlet staff with a microphone and asking them to be on startup. It was awkward for her to be reporting on her colleagues.
LISA: I mean there were definitely people who didn’t want to talk. So that was weird.
LISA: People in your own company not wanting to talk to you about the thing
ALEX: I don’t want this on the record.
LISA: Yeah. Like talking on background to your colleagues
LISA: It was very weird. Yeah I mean
ALEX: Tell me more about that like who wanted what like what was the thing that you wanted to talk to somebody about…
LISA: It’s not on the record. I can’t talk about it.
ALEX: No no I’m not saying who was it or what…. But like what was the context?
LISA: Oh the context. The context was when shows were getting canceled.
ALEX: Oh I see.
LISA: So, when shows were getting canceled, um… and we talked about doing an episode on whatever show it was you know and talking to the people who were on those shows. Yeah. Then
LISA: Yeah. That was normally the context.
ALEX: It’s weird reporting on your colleagues.
LISA: Yeah it’s really uncomfortable.
ALEX: Well, there’s also the other issue there’s one other issue which was like the kind of thing that happens at all companies that like it’s just like it is like just confidential employee stuff, you know.
LISA: Right. Right.
ALEX: You know, the decisions that we did make like we did we did we did cancel some shows and like the idea of like bringing tape recorders into that room as I’m sitting down and having those conversations it just felt like, that seems crazy.
LISA: Yeah yeah yeah.
ALEX: And cruel.
LISA: Yeah. That would be I think very cruel.
ALEX: Hey, I’m going to break this news to you by the way.
LISA: I’m recording.
ALEX: I’m recording.
LISA: For StartUp.
ALEX: You just can’t do that. That just feels like you know insane. Like they didn’t they signed up to work at Gimlet, they didn’t sign up to work on a reality show.
ALEX: So this is an ongoing conversation we’re having at Gimlet — how can we be as transparent as possible while still being fair to the people who work here.One way… do more episodes like these — where we can talk about ourselves without having to put our employees in awkward situations. Coming up after the break, more of your questions answered. We’ll talk about diversity here at Gimlet, a band from the 1990s and what it’s like to live the future I never could have imagined. That’s all these words from our sponsors.
ALEX: Welcome back to Start-Up, this is our AMA episode. On to the next call.
ELLIE: Hi, my name is Ellie I’m calling from Bellingham, Washington. Um, I really loved the StartUp segment that talked about the challenges of hiring a more diverse workforce and did the diversity report on Gimlet and what that looks like for you guys. And I would really love if you revisited that topic and things you’ve worked on since then and what’s worked and what hasn’t.
BRITTANY LUCE: Ellie from Bellingham, Washington.
ALEX: What better person to bring in for a follow-up discussion on that than the person who was in the first episode of the diversity report episode that we did a long time ago, Brittany Luse.
BRITTANY: I’m here. I’m back. I’m back.
ALEX: Uh she’s basically asking for an update. Essentially right.
BRITTANY: Yes. When we had this conversation the first time.
BRITTANY: The thing that struck me was that we had 27 employees at that time.
BRITTANY: And only three of them were nonwhite.
BRITTANY: And I was the only black person here.
BRITTANY: Which I knew at that time but now I mean gosh, I think that we have eight black people at Gimlet now. And six of them I believe are full time employees. Yeah. And that’s different from when we did the first episode on diversity. And back then, not only was the majority of our staff white, the vast majority of our shows were hosted by white people. Mostly white men. Today, things are a little different. We have a number of podcasts hosted by women and people of color. Including Brittany’s newest project, a podcast about black culture called The Nod, which she and her co-host Eric Eddings are launching in just a couple of weeks. And as Brittany has pointed out, she’s no longer the only black person on staff. We’ve hired quite a few more people of color over the last couple of years. But we’ve also hired quite a few white people as well.
ALEX: Back in the studio with Brittany, my producer, Simone Polanen pulled up the overall percentages to share with us.
SIMONE POLANEN: So, like you mentioned, last time there was a diversity update there were 27 people at the company and three were not white. Which is roughly 11 percent of the company. Do you have any guesses as to what the percentage is now.
BRITTANY: Ooh. OK let me think so. OK. A full time how many employees do we have just to tell me that number.
SIMONE: 70. We have 70 full time employees.
BRITTANY: OK, if I had to guess I would say that we are 20 percent nonwhite.
SIMONE: So, we’re at eighteen point five-ish percent.
SIMONE: Nonwhite which which comes to 13 people.
BRITTANY: There’s only 13 non-white people here working full time.
BRITTANY: I mean you know what it is I think because I was there in the days when there were 27 people and I was the only black person like and like adding three to me I’m like oh this is basically an episode of Master of None. Like this is like…Wow that’s actually fewer than I thought.
ALEX: Actually, since Brittany and I recorded that conversation, that number has changed a little bit. Our full time staff now includes 18 non-white people and 55 white people. So things have gotten a little bit better. What have we done? Well first of all, we hired an Human Resources director, Katie Christiansen. We call her a Director of People Operations. And one of her main responsibilities is to ensure that diversity is a big consideration in how Gimlet hires and operates. She makes sure that people from the company attend recruiting events at places like Howard University, or the National Association of Black Journalists and the National Association of Hispanic Journalists. We’ve created what we call a mix group, it’s a team of 20 or so Gimlet employees who meet every couple of weeks to strategize about recruitment … And also how to retain diverse talent once we hire people. We want people to feel comfortable at the company, and like their voices are heard. She’s also helping us expand the conversation around diversity beyond race. If you remember the original diversity report episode, a lot of what we talked about was other kinds of diversity — sexual orientation or religious affiliation. And that kind of diversity can be harder to measure because, unlike with race and ethnicity, it’s not numbers that we collect when we’re hiring, people don’t check a box about how much they go to church or whether they’re straight or gay. So we’re sending out a voluntary, anonymous survey to all our employees to see what other measures of diversity we should be focusing on, and who we should be actively recruiting. But definitely, a big area of focus for us is on racial and ethnic diversity. And on that front, even though we have made some progress, Gimlet still has a lot of work to do. The company now is three-quarters white … it’s actually in line with the national population. But when you look at young people in the United States, the company is much further off … for people between the ages of 18 and 34, only 56 percent of them are white.
That group is the future and that’s where we need to be headed as well. Another sign of how far we still have to go in our diversity efforts … if you look at the nonwhite employees at Gimlet, most of them are in junior-level positions. The higher up in management you go, the less diverse we get.
BRITTANY: So… I’m about to host a show called The Nod — co-host the show with my friend and colleague Eric Eddings. And it’s a show about black culture and I right now my editor is Annie-Rose who is a white woman and I have like an editor emeritus in Jorge Just who is a Puerto Rican man. And I admire them and I adore them and I think they’re both fantastic. I love working with both of them so much. But there’s still something that we’ve I think we’ve all discussed internally which is that like at the end of the day the show still needs to have some sort of black editorial presence ideally a black editor and like we still don’t have one.
ALEX: We’ve been trying to hire a black editor for a while, and I’ve been thinking a lot about why we haven’t succeeded,what’s taking so long. And I think part of it goes back to me, in a certain way. Let me explain. Editor is a key hire at Gimlet. It’s a very specialized skill-set. An editor can make the difference between a show succeeding or failing. And for a position like that, as core as that, you want to hire someone that you know, or someone who’s been vetted by people you trust. And so you tap your network. But my network? Like the data says about a lot of white people, is pretty overwhelmingly white. I had this realization recently about just how white my network was when I was looking at all the photographs on my walls in my house. There’s this one picture in particular that stood out to me, that I told BRITTANY about.
ALEX: There was like a picture of like from when I lived in Chicago. Chicago! And it’s like and it’s like you know like it’s this whole group of friends of us and we’re all… we had this like weekly basketball game like a very friendly co-ed basketball game. All my friends and there’s a big picture of like who was like really fun. On like the fifth year of us doing it we did a big portrait.
BRITTANY: That’s fun. 5 years.
ALEX: But it was like it’s like 30 people all white.
BRITTANY: All of them.
ALEX: All white. Yeah.
BRITTANY: That’s See that’s like interesting to me because like… I was at dinner with my friends a couple weeks ago. You now everybody’s like laughing, drinking having a good time. It was like… I mean there was a whole bunch of us. I probably say there were maybe I don’t know 15 of us. And somebody said something that caused everybody else to kind of like bust out in laughter. Like, I kinda like paused for a second and like looked around the table. You know like every once in awhile when you’re having a good time, you kind of like look around the table and you’re like, oh man this feels so good. And I just kind of like looked around and I was like, well shit. You know we had people different ethnicities, people of different colors, different religions. We had, you know, white folks, black folks, latino, asian. Like, a college recruiter would kill for this moment. Like they wish they could sit at the table. Like take a photo of this
ALEX: Look at this–
BRITTANY: Like that’s their dream. That’s their dream. But like but you know, I paused for a second to kind of take that in. It doesn’t happen all the time. But like on that night, I was just like, oh.
ALEX: And it’s interesting that… so that’s like a mental snapshot that you have. And if you were to compare that mental snapshot to the actual snapshot that’s on my wall, there’d be a pretty striking difference, right?
BRITTANY: I think maybe so.
BRITTANY is firmly part of the coming America. The America where talented professionals from all kinds of backgrounds are accessible through her social network.
ALEX: Clearly, I’m not. And so a big part of diversifying Gimlet at the leadership level is diversifying my own network. And I’ve been working on it. Been reaching out to people I admire who are doing interesting work. I’ve been meeting up for coffee, having lunch, forging relationships. And that’s led to projects like Mogul, this hip-hop miniseries we did with a podcast host named Reggie Osse who hosts a show called The Combat Jack Show and runs a company called the Loudspeakers Network. When it comes to Brittany and Eric’s new show, The Nod, we still don’t have a black editor on staff … but we’ve recruited a small group of black editors in other media to take on an advisory editorial role on the show. I know that’s only a short-term solution, and we have to find a more permanent one. In going through this process, something that I continually remind myself of is that there’s a tendency, especially I think on the part of white people, to think about diversity as the responsibility of the non-white people on staff. And of course, that’s not true. To actually make the kind of progress we want, everybody has to be working on this — everybody at Gimlet. And Brittany and I talked about that.
BRITTANY: It can’t just be like 10 percent or even it’s probably less than that. You know it can’t just be 5 percent of the organization who is like we have to do something about this. It has to feel like it’s something that everybody has to do.
ALEX: That’s the thing. Yea.
BRITTANY: And I think that there’s like a fear in making something like obligatory but … and I guess I could see like like when you call something obligatory then it’s just like ugh.
ALEX: Yeah that scares me because I feel like…the easiest way to make me not want something is to tell them they have to do it. But I feel like I feel like there is like lots of there’s lots of there’s lots of space between sort of the status quo as it is right now and sort of like this is a mandatory everybody has to take somebody of a different race out to lunch once a month.
BRITTANY: Which is like definitely not what we want to be doing. But yeah I think that there’s definitely like yeah the way things are now is like it’s a little better but I still think we have a ways to go as far as like making it an utmost priority.
ALEX: Ok, we’ve now arrived at the last question of the episode.
YOSSI: Hi Alex. My name’s Yossi, I’m calling from Tel Aviv. I’ve been listening to the podcast ever since you started. My question is this: How does the reality of Gimlet now with all the different podcasts and things that you guys are doing, like, differ from the expectation that you had when you first started, when you first conceived of this idea, and how to you look back on those expectations that you had at the beginning.
ALEX: That’s a good question Yosi. It’s a question I’ve asked people many times. Although it’s harder to answer than it is to ask. In some ways things have gone pretty much like we expected they would. We set out to launch a few shows and get them to audiences in the hundreds of thousands of listeners. And we’ve done that. But what’s strange is how completely surprising it still feels almost everyday. I remember this moment in the very very beginning — before the company existed, before I met Matt — I was pitching this investor and the investor said, you know like just imagine 3 years from now you have a sales team and a marketing team. And I remember thinking like I can not imagine that. I literally can’t imagine it. It never crossed my mind that there would be sales and marketing. And it was one of these things that obviously if the company goes the way I’m saying it’s going to go, it will be, but it just was something that I hadn’t even thought about. And today, we have a sales team and a marketing team. we sit on the same floor. They’re 15 ft away from my in the office behind me. And I guess that’s one of the most unexpected things about this whole thing, is that it’s basically gone the way I said — I said we were gonna launch a bunch of shows, generate audiences of 100s of thousands, and we’ve done that. But even though it’s gone more or less the way I said, it feel like almost every day, there’s something happening that I could not have possibly could have imagined. Or I’m feeling a feeling that I couldn’t possibly have predicted. Sometimes it’s anxiety, sometimes it’s fear. And sometimes it’s just pure, blissful weirdness. For example, this experience I had a few weeks ago. I was going to something called the ABC upfronts. Upfronts are these things where big TV networks present their fall slate of shows to a room full of press, advertiser and other assembled fancy people. And I was there because ABC was going to be presenting, among all their other shows, Alex Inc. — the show about me and the first season of startup. And so, these upfronts, they take place in this really ritzy room. They have network stars coming out and giving speeches, they had the entire cast of Scandal up there taking bows. There are people performing songs all the way through. It’s this big huge production. And then it ended in this really bizarre way. Which, when I got home that night, I told my wife Nazanin all about.
ALEX Blumberg: So four hours ago I was at my first ever network TV upfront. And then the the this woman who’s the head of the head of programming for ABC comes out and just sort of like walks walks us through the whole the whole slate. They talk about like how Scandal and Grey’s Anatomy and How to Get Away with Murder are doing great. And then they talked about their new this other new contest show that they’re starting called Boy Band. Which is a contest show about creating the next boy band. And then they were like in celebration of that we have like one final. One final performance for you. Guess who the last act was. Guess.
NAZANIN RAFSANJANI: I can’t guess because you already told me. Well you sent me a picture. It was the Backstreet Boys.
ALEX: The Backstreet Boys.
NAZANIN: I think they’re like they like they’re like in their mid mid-40s.
ALEX: Oh no they look like they were like they look like cops who were like two years away from retirement.
ALEX: They looked like they looked like old men. They look like, they look like the Rolling Stones. It was wild. Wild.
ALEX: How old the Backstreet Boys look now is just one of a long list of things I could never have imagined in the very beginning. But if I’m honest, that weirdness that is what makes me the most excited. It is legitimately thrilling to live every day in a future that you couldn’t have imagined.
ALEX: Next time, on StartUp. The story behind one of the most expensive cups of coffee.
TAPE: It was a fruit bomb of flavors, a bouquet of flowers. It had a sweet lingering taste to it. Papaya, mangosteen.
ALEX: That’s next week. StartUp is hosted by Lisa Chow — and occasionally by me. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. Additional music by the band — I finally get to say the name again — Hot Moms Dot Gov. For full music credits, visit our website, GimletMedia.com/StartUp. David Herman mixed this episode. To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. You can follow us on Twitter @podcaststartup. Thanks for listening. See you next time.
The saga of Slamball.
LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is StartUp, the show about what it’s really like to start a business. Mason Gordon has heard a lot of pitches for new sports over the years…
MASON GORDON: Somewhere along the way I became the patron saint of misfit sports. Somebody came and pitched me a baseball with two mounds and two batters boxes and the whole idea was it was fast. So he called it fastball and that was the beginning and the end of the pitch.”
LISA: People come to pitch Mason not because he’s a big-time investor. They come, because back in 2000 … Mason created a sport of his own. An over-the-top full-contact version of basketball … with trampolines… It’s called Slamball.
ANNOUNCER: And here comes another break. Campbell with Williams…Campbell…Williams! Are you kidding me ?! [Laughs] Now that’s high-flying, baby.
LISA: At one point millions of people were watching Slamball on TV. But Mason dreamed of something even bigger … Slamball spreading all over the world… being played in both neighborhoods and Olympic stadiums. But creating a new global team sport like this — it hasn’t been done in more than a century… since basketball was invented in 1891. And when you set out to do something this ambitious it takes over your life. Which is why when anyone comes to Mason these days with ideas for a new sport, he always gives them the same advice…
MASON: Run screaming in the other direction and find anything else in life that will make you happy because this is not about like making you happy. This is about spending years and possibly decades banging your head against a brick wall and getting up the next day and coming back after it with the same amount fervor. If you’re built for that, then yeah you might you might be able to make a sport.
LISA: Mason considers himself one of those people who’s built for it. Which is why he’s done exactly what he’s advised everyone else not to do. He’s been fighting for Slamball for almost 20 years … and he’s still at it. On this episode of StartUp, what does it take to convince the world that the sport you’ve invented is the next big thing? A quick warning, there’s some swearing in this episode. Our producer Emanuele Berry takes us from here.
EMANUELE BERRY: Jennifer Constantine is Mason’s wife. And the first time she heard about Slamball, she and Mason had been dating about a year and she brought him home to meet her family. Her Mom had cooked this big holiday dinner…
JENNIFER CONSTANTINE: And my mom was trying to set the table and she couldn’t set the table because Mason had commandeered it with like 100 post-it notes and all these drawings and bullet points and outlines. And I was like dude what are you doing. And he’s like I’ve got something. I’ve got something. And at one point he just turned around and he said what if there was a sport. And I was like oh boy.
EMANUELE: Mason played a couple years of basketball in college. He’s tall. Over six feet with broad shoulders. And the sport he was about to lay out to Jennifer was something he’d been thinking about for years. It was a combination of his two favorites: football and basketball. He loved the aggression of football, but hated the slow pace of the game. With basketball he loved the speed, but he hated the constant foul calling. So he’d always wondered, what if there was a way to combine these sports, taking the best elements from both. He even had this vivid recurring dream where he’d see a moment of the game playing out in his mind …
MASON: There was this big athlete that kind of just rose into the frame and then another athlete just came in from an opposite direction and they just collided and then fell out of frame. And I would just see this over and over again and I’d wake up and that would be what I would remember from my dream.
EMANUELE: But when he shared this dream with Jennifer she wasn’t sure what to make of it.
JENNIFER: I thought it was like equal parts crazy and equal parts genius. Like I really did. I thought like this is an insane idea and whoever launched a sport. And I remember literally racking my brain while he was telling me how you know how his thought process was working like how is he going to do this. Like where do you start.
EMANUELE: Mason knew that getting people on board to create a new sport would be tough. So he turned to someone he thought could help him…. his former boss and mentor Mike Tollin. Mike is a TV producer and director. He’s worked on projects like Varsity Blues, Keenan and Kel and a handful of sports documentaries. Mike, like Jennifer initially thought the idea was crazy, but Mason was persistent. And eventually Mike got on board. He came up with an unconventional strategy to launch Slamball…
MASON: Mike was like well you can’t launch a sport, that’s impossible. But what you might be able to do is you might be able to get it on television. And if you can create that mass awareness maybe you can back your way into a traditional league model. And I thought that was brilliant because it was somebody telling me yes instead of no.
EMANUELE: If you look at a sports with a traditional league model — basketball, football, baseball — they’ve all evolved in more or less the same way: First, people play the sport on courts and fields around the world. Then the sports grow into leagues… stadiums pop up and eventually they end up on TV. But with Slamball, Mike thought they should start with TV first. So Mason had a plan. Get the sport on TV, build a fanbase, and inspire people to play from there. But what Mason didn’t have yet … was any idea how to actually play his new sport. Or even a PLACE to play it. Remember: it’s basketball but with people flying up to 15 feet in the air. To make that possible, Mason knew he would need to build a special court. So he rented an empty warehouse in a rough neighborhood in East Los Angeles, because it was cheap and no one would ask questions. His first idea to get players up high in the air was to get a spring floor, the thing gymnasts use in floor routines. But he didn’t have any money to just buy one … so he had to resort to other measures.
MASON: So, I would go around to these different gymnastic centers and I would tell them like hey you’ve got a new gymnastics floor and an old gymnastics floor if you got rid of that old gymnastics floor. You could put in a pommel horse or something.
EMANUELE: And the crazy thing is – he actually got people to give them to him. But the spring floors didn’t work the way he expected. For players to jump as high as he imagined, he needed trampolines. So he drove around L.A. trying to get trampolines, plywood. Anything that would help him build the court.
MASON:So I built the first slam ball court out of spare parts and that was not a great idea because I wasn’t a tremendous engineer by any stretch. I had a lot of ideas. I had very little technical background.
EMANUELE: Which became clear when some friends … who he played basketball with around L.A…. gathered to test out the court.
STAN FLETCHER: It was a … it was kind of like a makeshift slamball court. It wasn’t put together pretty well.
EMANUELE: This is Stan Fletcher, one of Mason’s pickup buddies. He was one of the early slamball players.
STAN: The court was maybe about six feet off the ground. So guys would be flying off the court…sometimes.
EMANUELE: Stan remembers there wasn’t a lot of padding … so guys were basically crashing down from 15 feet in the air onto hard surfaces. He also said people were getting splinters from a section of the court made of particleboard. For the first few days, playing the game was rough. Not just because of the makeshift court, but also because they were figuring out how to play as they went along… The game had only been in Mason’s head before this — so there were tons of questions …When is tackling allowed and what’s a legal block? But it was also exciting because all of a sudden someone would make a new move on the court … and everyone would realize: this is what Slamball should look like. Some of the biggest innovations in the game came from Stan Fletcher.
Stan’s 6’4, not the biggest guy on the court. And so he was always looking for new moves—to help him get around taller players. Like this one move he invented called the chaser.
STAN: I would jump into a single spring bed and just take the bounce straight up and then I would toss it kind of to myself
MASON: Like Stan threw the ball to himself recollected it after the bounce and dunked all over the defender and literally everybody just turned to me and said is that is that legal. And I’m like, Hell yeah.
EMANUELE: Stan also invented another passing move called the shake-down and he was constantly coming up with big theatrical dunks. It was pretty clear — he was Slamball’s big star.
MASON: The joke around slamball that quickly developed was that Stan was an alien from the planet that already had slamball and he was just coming here to dominate and have a good time.”
EMANUELE: So they had a court, some idea of what the rules were, and a rag tag team, including Mason…yes Mason was playing too. And that was enough to work out a partnership with Warner Brothers. Warner Brothers basically gave them seed money … to fix up the court and hold a big scrimmage for media executives. The goal was to get someone to pick up a season. And so in the spring of 2001 … eight players stepped onto the court and played an exhilarating game. One of the executives who was there watching was Albie Hecht.
ALBIE HECHT: It was like Space Jam. It was like people slam dunking and jumping up and throwing full court passes from 20 feet in the air and other people were jumping up and blocking things that were five feet over the basket. And it was like it was like chaos really.
EMANUELE: Albie was the former president of Nickelodeon. And he’d just taken over the The Nashville Network also known as TNN, which was undergoing a format change and relaunching as Spike TV. And Albie wanted Spike to be a network for dudes … think the TV equivalent of Esquire.So Spike was airing things like a prank reality TV show, action movies, and also a Stan Lee animated show starring Pamela Anderson called Stripperella. Yes, that is a show about a stripper who is also a superhero. Remember … it’s a network for dudes. But what Spike was missing was sports. The NFL, the NBA… They’re tied down in big multi-year contracts with other networks. And so when Albie saw Slamball … he thought it was original and exciting and exactly what he needed.
ALBIE: I thought it was kind of fantasy element to it. You know what what you could do with a basketball on these trampolines. That was exciting that it took the game to another level.
EMANUELE: Albie made them an offer.
MASON: We got a contract right there in the warehouse for a national TV deal for a sport that was about two months old.
EMANUELE: The deal with Spike was for one season. They held tryouts to field six teams, which included veteran Slamball players like Stan and Mason, as well as new hopefuls. Many of the prospective players were former college athletes like Jelani Janisse. He’d played basketball at Kansas … but he wasn’t NBA bound.
JELANI JANISSE: So when I came back from Kansas I started playing for the Ontario warriors, which is an ABA team here in California.
EMANUELE: The ABA—American Basketball Association—is basically minor league basketball.
JELANI: We had maybe about 20 fans. 20. Not 20,000. Not 200. But about 20 fans in the stands when we played in our games.
EMANUELE: When someone told Jelani about Slamball, and that it paid $1,500 a week, he figured why not give it a try? So he went to tryouts in L.A.
JELANI:“ I fell in love. It was something that I would never imagine doing, but just having that feeling of flying through and dunking on someone’s head and being able to talk trash to them on the way down and get 15-17 feet in the air. Who wouldn’t want to do that. So that’s what I fell in love with.
EMANUELE: In the end, dozens of people, including Jelani, made the cut — forming six teams. The Rumble, The Mob, The Slashers, The Bouncers, The Steal and The Diablos.
ANNOUNCER: You’ve got to be kidding me. You’ve got to be kidding me are you seeing what I see the triple windmill across the lane with attitude. That was for the country of Holland …The Windmill factor on that.
EMANUELE: When I was a kid, I remember my dad flipping through TV channels and always stopping on Slamball. It was literally just dunk after dunk. My dad and I both played basketball in college, and it was really fun seeing crazy moves performed with such ease. The types of things you dream about being able to do.
ANNOUNCER: Here comes Fletcher, what a move by shakes. Oh that’s Fletcher esq. Look at the body control. The half hook round house and then just sweetly off the glass
EMANUELE: Mason made the media rounds. There were celebrity coaches like Ken Carter. Yes, Coach Carter from the movie, he coached slamball. They got veteran commentators who’d worked in the NBA, NFL and extreme sports. NBA players like Shaquille O’Neal, Shawn Marion and Jason Richardson would give commentary courtside. Slamball got renewed for second season. Here’s Jelani again.
JELANI: I really felt like Kobe Bryant at the time. Like I am the king of LA.
EMANUELE: So that first season happens, second season happens … does it feel like this is going to be, like, your career ?
JELANI:Yeah I already counting the millions of dollars that we were about to have. I had already spent the money and everything. I knew where we were going to live and all that stuff. I just knew that this is it. We done made it.
EMANUELE: But they hadn’t exactly. Albie from Spike TV said the ratings were fine but without a major marketing push, he was concerned that they would never get beyond that. Because at the time the sport was airing on Spike, there were only a handful of places to play it.
ALBIE: Soccer is the most popular is the most popular sport in the world because what you go give us soccer ball you go to a piece of grass you can play you don’t even need any equipment. Right. Slamball you could go and create a court… that’s safe You’ve got to be supervised you got to be trained.
EMANUELE: Albie thought that without organic growth, Slamball wouldn’t be able to build a lasting audience. Mason’s plan all along was to have courts around the country, but it just hadn’t happened yet. At the same time Mason says he wasn’t happy with the direction Spike wanted to take the sport. He says they wanted it to be more like pro wrestling, more entertainment less sport. So, after 2 seasons on Spike TV the deal ended. Mason and Mike Tollin decided to shop Slamball around to other networks. But they ended up in legal limbo for 3 years, trying to get the rights back from their original partner Warner Brothers. And during that time, Mason and Slamball were just trapped.
Mason picked up other jobs. He built websites and consulted for sports programs, and he kept working on Slamball. But still, he says these 3 years were pretty dark for him. He was emotionally invested in Slamball, but there wasn’t a lane for him to run in. And it’s during this time that people started telling Mason: give it up.
MASON: Everybody that loved me and cared about my sanity would basically be like what are you doing.
EMANUELE: Like who?
MASON: My family, my friends.
EMANUELE: Even strangers were telling Mason: just let Slamball go.
MASON: I remember this guy and he said to me like oh Slamball I really I really loved Slamball man that was an awesome thing. You know what a great thing it’s over now but it was really cool for its time and I was like well what do you mean like I’m still doing it. Dude dude I’m still doing it.And he literally looked at me goes what’s wrong with you like why would you keep pushing that. That you know sisyphus boulder up the hill like you got two seasons on national television. Just take the win and move on.
JENNIFER: I 100 percent can see how people would think that Mason is just insane for staying committed to this thing through that period.
EMANUELE: Mason’s wife Jennifer again.
JENNIFER: And I might be one of the only people that can understand that you know how they say like the definition of insanity is repeating the same thing over and over again and expecting a different result. Well I’m a firm believer in the definition of success can be repeating the same thing over and over again and expecting a different result and then ultimately getting one because using gymnastics as an example, you repeat the same trick over and over and over again. And you miss it and you miss it and you miss it and then it clicks and you land it. And so who’s to say that you’re not going to land it. And so for me the analogy was there in terms of not giving up on the sport. He saw what it was capable of doing so he wasn’t just going to give up because he had a few years of bumpy roads.There was something about having invented a new game, and tasting success … like this new sport really COULD be a thing … that had taken ahold of Mason. And it wasn’t just him, the players were holding out hope for Slamball’s return, too. Here’s Jelani Janisse.
JELANI: I was applying for different jobs. I applied for the Los Angeles Police Department and they called me to give me my academy date. I said hello. You want me to start when. Monday. OK. I’ll call you back. My wife says they called you for the job. You’re going to start the Academy on Monday. Yeah I told my call but would you tell them before because I need to see slamball is going to do what you but I can’t believe you got us live in here and you don’t tell me that you’re not going to start working for the police department because you’re waiting on Slamball. I can’t believe you’re doing this. I believe in Slamball. I really do and I believe in the vision of where it’s headed. So after carefully thinking about it. I called them back.
EMANUELE: Jelani became an officer for the LAPD. But he and the other Slamball players did end up putting their Slamball uniforms back on … Only this time on the other side of the world. Coming up after the break, Mason makes the biggest pitch of his life — to the Chinese government.
EMANUELE: Welcome back to StartUp. It was starting to look like Mason’s dream of making Slamball a global sport … wasn’t going to come true. But in 2007, he caught a break. He finally managed to get out of legal limbo and get the rights to Slamball back. Mason shopped it around again and even got another season on American TV. But once again it didn’t last. So Mason was back to square one.
MASON: The only assets that I had available to me were a pile of highlight DVDs and a bunch of frequent flier miles, so I started jumping on planes
EMANUELE: Mason says he didn’t see a way forward for Slamball in the U.S. right then. So he set off on a one-man world tour—visiting media outlets in other countries to see if he could drum up interest. Sports channels in Australia, Italy, and Spain all went for it and they started airing old Slamball games from the U.S. And then in 2008 … through a contact at IMG, a sports management company … Mason got the chance to pitch Slamball to CCTV 5… China Central Television. It’s like the ESPN of China. And Mason went to China for the meeting. But before he could make his pitch the IMG executive told him…
MASON: Look you’ve really come all this way for nothing. I’ve been setting up this meeting for a year. I have an hour to present seven properties. And that’s the priority. And I will give you five minutes at the end and that’s if they don’t just walk out and you’ve never been in a pitch meeting like this before in your life. It’s going to be very very quiet. It’s going to be very very stark. You’re going to walk in and there’s going to be a bunch of white people on this side of the table and a bunch of Asian people on this side of the table and nobody’s going to say or react to anything and then Run Wei who is the executive from CCTV is going to be sitting at the top of the table and all he is going to say this is interesting that’s the only word that he will say the whole time and we will find out a month later whether they’re going to buy any of our stuff. And in the three years I’ve been here we’ve sold nothing. So I’m not really happy about you co-opting my meeting but you came all this way. So I’ll give you a few minutes at the end. So they go to the meeting and it’s exactly like the IMG executive said it would be.
MASON: People are watching these incredible like mass produced videos. You know they were put together by this slick agency for you know airplane racing and beach volleyball and it’s like beach volleyball is going to take over China and they are everybody always looks at Run wei and Run wei goes interesting. Just no reaction whatsoever. Right. And so I’m sitting all the way at the end like there’s nobody talking. There’s a whole bunch of IMG guys and then I’m the dummy at the end of the long conference table and there’s this little like projector at the end of the table and the IMG guy he just kind of slumps his shoulders and he says OK well. Mason Gordon has come all the way from Los Angeles in order to meet with you and he wants to talk about slamball or some shit and he just kind of sat down and “take it away, Mason.” And so while he was giving me that stellar introduction I unplugged the data cable to the projector. I’m like can I get the video. And they couldn’t play the video. And so while somebody was trying to fix it I was like never mind I’ll just show them on my laptop. And so I got up from the table and I went around to Run Wei with my laptop and I was like hey guys you can’t see there. Get up from the table. Everybody gather round gather round so everybody gathered around, and then I was like go ahead press press play and they like played this little two minute clip and it was awesome. They were like they were high fiving each other. I was like stirring. I was like stirring the pot in like egging him on I was like guys is that amazing. They were blown away. And then Run Wei it was like I want this all I want on my channel. And the IMG exec was like just looking at me like “Fuck you, dude.”
ANNOUNCER: Ladies and gentleman are you ready … Chinese … now introduce the players and the coach ….
EMANUELE: This is Slamball, China style. CCTV 5 starts airing Slamball as part of their program Basketball Park, sort of a hodgepodge of basketball games and interviews. And Slamball is a hit. Whenever a game is on, the network sees a huge spike in ratings. A Chinese executive named Michael Sun notices this spike. Sun was there in the room when Mason pitched Slamball. When he sees the numbers Slamball is bringing in, he thinks … this sport could be more than a TV show.
MASON: His whole thing was wow if you could double down on the grassroots side of this because that’s what I felt like you didn’t do right in America is give people a chance to play. So Michael said I’m going to find some investment for this and we’re going to launch Slamball Asia.
MICHAEL SUN: China was the perfect experiment ground for such thing.
EMANUELE: Sun thinks this for a of couple reasons. One: China has massive manufacturing capabilities. So they can build courts quickly. Two: China is obsessed with basketball. And remember, Slamball has the most exciting elements of basketball. Dunking, blocking and fancy passing. And lastly, China has been going through a kind of sports boom. Until recently, there wasn’t much of a sports culture in China. At least not organized sports with youth leagues, the way it works in the U.S. China wants to change that, and that’s created a huge opportunity for new sports like Slamball to take hold.
MICHAEL: China didn’t really have all that baggage of all this traditions in sport. You know where like say in the U.S. you know all these mainstream sport. You know it’s so hard to to bring something new to the U.S.
EMANUELE: At this point it had been 8 years of ups and downs for Mason and Slamball. And now Michael Sun was coming in and promising to do something Mason had only dreamed of—build courts all across the country. So Michael Sun started pitching investors and built a factory to build Slamball courts. He and Mason convinced universities in China to start teams and build out big slamball centers. The first slamball center opened in 2014. As Slamball Asia started to grow Mason and Michael realized they needed to figure out how to teach people to play the game. And Mason thought he knew the perfect person for the job. The alien from planet Slamball… Stan Fletcher.
MASON: I was like hey, I’m looking for somebody that can come out here and really teach this and Stan was like don’t even ask anybody else. It’s like I want this I want I want to be the guy.
STAN: Initially I signed to come here for six months and now it’s been three years.
EMANUELE: Stan’s wife and kids moved with him from Los Angeles to Shanghai. In his new job, he runs training programs. And he starts with the very basics.
STAN: You know in the U.S. well our kids they have trampolines in their backyards. You know they never touched a trampoline here. It’s like foreign land it’s like they’re walking on the moon you know so I get here and it just like face planning on a trampolines and stuff. And it’s so funny and so funny.
EMANUELE: But he says people get the hang of it. And soon they are landing big moves and dunks just like Stan used to when he played in the U.S.There are 4 Slamball centers in China today. The newest one is in Nanjing …where this year’s college Slamball Championship was held.
EMANUELE: This is the Wuhan Sports University Slamball team getting ready to play a tournament game. The Slamball center is nothing like the court Mason built in that East L.A. warehouse. The building is big with a white domed roof. The courts have that shiny, just unwrapped look, with four giant heavy-duty trampolines under each basket. There’s a plexiglass wall surrounding each court … so no one is flying off. On one court … the Wuhan team is clad in blue and yellow jerseys. At Wuhan the sport is offered as an elective subject, and it’s so popular there’s a waitlist for the class. On the other side of the floor is Wuhan’s opponent Shanghai Jiao Tong Univeristy, in white and blue.
STAN: The team that plays the smartest that handles the ball, keeps possession of the ball, doesn’t turn the ball over that’s the team that wins.
EMANEULE: That hoarse voice… that’s Stan Fletcher … he’s coaching the Shanghai team.
STAN: Shanghai on 3 …. 1, 2, 3 Shanghai.
EMANUELE: There are about 50 people sitting in courtside bleachers watching the game. It’s a mix of players from others teams clad in two toned jerseys, and fans gasping with each dunk.
GULI AIER AI LIE: I’m coming here to support Shanghai team, I am a big fan of it.
EMANUELE: This Guli Aier Ai Lie. She traveled three hours from Shanghai to watch the tournament.
GULI: I learned more about Slamball through school club and become interested in it. Now I always go to watch them training or competition. Really love watching this sport. Everything was so fascinating that I also got a chance to go up and tried it myself. Eventually I fell in love with this sport.
EMANUELE: She says she learned about Slamball through a school club, and had a chance to play. She fell in love with the sport and now goes to games all the time. Mason is here at the tournament too and seeing these games and hearing these kinds of things from fans. It’s exactly what he’s always wanted.
MASON: The excitement level of the players is just through the roof and for me to come to the other side of the world and see that kind of enthusiasm and people playing the game with that kind of passion. It’s really kind of humbling.”
EMANUELE: By the end of the tournament … 25 teams have played dozens of games… And 250 thousand people have watched online. The heavy favorite going into the tournament …. Wuhan Sports University…. Wins it all. Slamball Asia plans to open 10 new Slamball centers by the end of the year, and more after that. But despite how far he’s come, for Mason … this tournament and China … are just one step towards a much grander vision:
MASON: I don’t think the olympics are out of the question. I think we’ll have a world cup format every few years. I think you’ll see teams from over 100 countries involved in that.
EMANUELE: When you say stuff like that. Like olympics …
MASON: Do I sound crazy?
EMANUELE: You’re just so optimistic.
MASON: I’m an optimistic guy. I mean that’s that’s really the only way to be. I mean why would you go through life like looking at the negatives. I’m getting to do something that nobody else has accomplished in 75 years. Nobody’s put a team sport on the map with any type of global relevance in that period of time in a long long time. If somebody would have told you in 1975 that skateboarding would be in the Olympics. Snowboarding would be in the Olympics if people told you that in 1975 you would have thought they were crazy but somebody had to see it. Somebody had to fight for it. Somebody had to do the hard yards and somebody had to sacrifice for it. For Slamball, you know I drew that straw. Mason believes that to make Slamball a global sport, the next step is to bring it back to the U.S. And he thinks the experience in China shows it can work here. But the U.S. is not China. The culture and media are different. The U.S. has big established sports, and Slamball will have to compete with basketball, baseball and football for players and audiences. And they will still need to build infrastructure for people to play the sport. But Mason’s undaunted. He made his first successful pitch of Slamball in the US 17 years ago And now he’s back. Pitching media executives, hoping to bring Slamball games to the U.S. by the end of the year. Also this time around, he’s trying to create places where regular people can play so that Slamball fans can do more than just watch.
LISA CHOW: Emanuele Berry is a producer of StartUp. To see photos and videos of people playing Slamball, follow us on Twitter at podcast startup. Next time on StartUp, we listen in on a familiar scene…
ALEX BLUMBERG: So our old friend is back. The microphone. So you know why I’m doing this?
NAZANIN RAFSANJANI: I think it’s because… I think it’s for StartUp
ALEX: [laughs] Yes, that is correct. That’s correct. It’s for StartUp.
LISA: Alex Blumberg returns with an update on Gimlet. That’s next week. StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. Additional music by White Flowers, Jupyter, Kevin J Simon, Kid Prism, Rosasharn, and the wonderful Bobby Lord. David Herman, Andrew Dunn and Ian Scott mixed the episode. Special thanks to Lisa Delpy Neirotti, Yuhan xu, Yang Zhou , and Rebecca Kanthor.
To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.
Thanks for listening. We’ll see you next week.
Where are they now?
LISA: From Gimlet, I’m Lisa Chow. This is Startup, the show about what it’s really like to start a business. We’ve reported on a lot companies and founders in the nearly three years since this show launched. We’ve updated you on our own company, Gimlet Media, but we’ve never reported back on any of the others we’ve followed. So on this episode, that’s what we’re doing. Returning to some of the founders who let us in as they raised money, built their companies, and shifted business models. A lot has changed for all of the people we’ll hear from in this episode. When we met them, they’d embraced being entrepreneurs. It was the identity that fit them best. But now years or months later… we’re checking back in to see — does that label still fit? And just a quick warning, there is some swearing in this episode.
LISA: One of the companies we followed in Season 3 … the season about endings and almost endings … was Bento. An on-demand food delivery company founded by two guys named Jason Demant and Vincent Cardillo. Molly Messick reported that story, and she has this update.
MOLLY: When our episode ended it was just over a year ago, and Bento’s founder, Jason, had just left me this message.
JASON DEMANT: It’s, uh, Wednesday, 3:15. As of 2:39 PM, our round is closed. Got the last 10K, pushed us over 100K. Yay!
MOLLY: A hundred thousand dollars was the amount of money Jason thought he needed to get the company to profitability. At the time he told me that it was the last raise he planned to do. By then Jason had been through a lot with Bento.He pitched the company as the restaurant of the future. A restaurant you’d never have to visit because its food would come to you. Delivery would be extremely fast, because as soon as you placed your order in the Bento app, the app would ping a driver nearby. Drivers would have ready-made dishes there in the car, prepared in Bento’s kitchen. And they would put together your order, grabbing the food from special bags designed to keep it hot or cold. Jason envisioned that someday Bento could be as ubiquitous as Chipotle, without the expensive storefronts. But it would be more than a restaurant. It would be a scalable tech company. At the time Jason and his partner Vincent started Bento, that vision seemed very possible. Venture capitalists were pouring tens of millions of dollars into on-demand food startups like theirs. Companies like Spoonrocket, Sprig and Munchery. Jason and Vincent were able to raise 1.5 million. But within a couple of months of launching, they struggled. They ran into problems managing their kitchen and controlling delivery costs. At one point they were losing $20 on every bento box they sold. After one especially rough day, Jason recorded this conversation with his wife, Sharon.
JASON: Next week is going to be awful. Like really, really awful… And so I think we may shut off tomorrow.
SHARON DEMANT: You mean like close Bento?
JASON: Not close Bento. By the way I’m recording this.
SHARON: Okay… Can you please explain more what you’re talking about, because it sounds like you’re closing down Bento.
JASON: We’re not closing it down. We’re basically, like, becoming a catering business.
MOLLY: Bento pivoted. By the time its transformation was complete, the company was selling its meals through third-party catering startups instead of delivering them directly to customers, and Jason’s co-founder Vincent had found a job outside the company. Jason had cut his own salary, and he was dipping into personal savings to cover basic expenses … which was kind of stressful because Sharon is a stay-at-home mom and they have two young kids. Jason needed more money to keep Bento’s doors open. And when we left him last May — he’d pulled off that 100 thousand dollar raise. He was optimistic. But turning Bento into something sustainable seemed like a long shot, and I felt nervous for him. After the episode aired, I stayed in touch with how Bento was doing through a monthly email that Jason would send out. It was meant for investors, but he’d added me to the list. And for a while it seemed like things were going the way Jason hoped. Catering orders picked up, and the company got closer and closer to profitability. But then came the September email —
JASON: So where do you want me to — you want me to just start at the top?
MOLLY: Yeah — yeah, if you wouldn’t mind just starting at the top.When I called Jason back recently, I asked him to read it to me.
JASON: Ah unfortunately this is not a positive monthly update. In the span of four days we lost 40 percent of our recurring revenue.We recovered half of the lost revenue, but that’s not enough. We have not fully paid September rent…
MOLLY: It lays out what happened in painful detail. In late August, Bento hit its magic break-even number — more than 20 thousand dollars in revenue in one week. But then came a fateful order from a big catering partner. It was an order for sushi burritos, and the partner sent them back.
JASON: They rejected our delivery because the burritos weren’t at the proper temperature. They had every right to reject. Our contract specified the delivery temperature and the burritos were not there. On top of that, two other catering startups that had been getting food from Bento slashed their orders. Jason started looking for opportunities to merge or get acquired by another company. But one by one, potential partners dried up, and by December Jason faced a choice. Keep going on his own, or close Bento.
JASON: I looked at all of the options that I was thinking about and I was basically out of them. And so that was the point I decided to shut it down and told my employees you know two days later and shut down a week after that, and that was pretty much it.
MOLLY: Were you taking a salary at the time Bento closed?
JASON: Yeah, 40 thousand dollars so not a sustainable salary. But you know, had I been more optimistic about the future I think we could have continued but I just didn’t know where that growth was going to come from anymore.
MOLLY: Right. You don’t have to answer this question, but I’m going to ask it.
MOLLY: How much of your savings did you ultimately use to keep running Bento?
JASON: I’m not even sure I know the answer to that. I think ignorance is bliss when it comes to that. Uh, a good portion. It never got so low where I felt like I was putting our family in jeopardy. But obviously, you know the history of us having the conversation of “I think this is the last one” and then me continuing to take money out. So it went much lower than I thought I would go. But never to the point — where I felt like I was taking a humongous risk.
MOLLY: When Jason says “us having the conversation”, he’s talking about conversations with Sharon, his wife. They were at home at their apartment in Oakland when I called, and they’d just put their two young daughters to bed.
MOLLY: I’d actually love to chat with Sharon if she’s there and handy. Is she available?
JASON: Yeah, she’s here.
SHARON: I’ve been cleaning the house the whole time and listening.
MOLLY: Hi Sharon, how are you?
SHARON: Hi! Good, how are you?
MOLLY: I wanted to hear what Bento closing meant for Sharon. Because she’s been in this with Jason, experiencing the ups and downs along with him. And she talked to me about how isolated she felt while he was working long hours at the company.
MOLLY: Do you remember when he told you he was going to close the company?
SHARON: I remember him telling me a few times just because I feel like I’d heard it so much I didn’t believe him. So it’s like when he actually did decide to close it I kind of just said, “uh huh, okay.” And then when, you know, when he gave me like a date. I think that was when I really started to believe him.
MOLLY: And what did you what did you feel in that moment?
SHARON: Um you know obviously it was bittersweet but it was more sweet for me. Um. The emotional aspect was I don’t want to see my husband’s company shut down. You know the one that he worked so hard on and took so much out of our family and… It was kind of you know it doesn’t feel like a waste of time but it kind of just feels like I don’t know how I would put it. I don’t know if there is a phrase for that that’s not as negative as a waste of time.
MOLLY: The whole time Jason was working on Bento, Sharon had her sights set on a house. Someplace with a garage and a yard where the kids could play. Using up their savings so that Jason could keep running Bento really stressed her out.
SHARON: As a person who is obviously an important part of his life but not in the business, I felt kind of stuck. Because on one hand I wanted to be 100 percent supportive because that’s just how our relationship is. But on the other hand, you know, we’re losing this money that we’ve been saving and just knowing that it was being taken out with every time every time we went grocery shopping and every time we went to Target… I don’t know, it just kind of felt unfair that I wasn’t the reason why it was coming out. But then I was also supportive and I never told him to stop. So it was also you know I was also not making anything — doing anything to make a change.
MOLLY: After Bento closed Jason scrambled to find a new job. He landed one pretty quickly, working in sales at a small startup that uses consumer data and machine learning to customize websites.Sharon says the change has helped her feel less stuck and stressed. Money is still tight, but Jason comes home earlier than he used to, and that means she gets out of their apartment more often. Sees friends, goes to the gym. But Jason still hasn’t left Bento behind, at least not completely. He’s still in the process of winding things down … and sorting through what he’s learned.
MOLLY: Some of what you said made me think that. Had you known how things would go, you might have made the decision earlier to stop.
JASON: Oh yeah.
JASON: I mean you want to go even more what-if scenario. Like sometimes people ask “Would you do this business again or do you regret it.” I don’t know what the best way to phrase the question. The — I would… I am grateful for everything I learned and experienced through Bento. But if I could do it all over again I would not start Bento. I would much rather gain that experience and learn those things with a different business.
MOLLY: Wow that’s a big statement.
JASON: The the thing, the truth is I have zero percent chance of success with the business that I started. There was no possible chance I could have made that work. I truly believe that now. Now, had I started with the catering business, I could have made that work but that wasn’t a business I was interested in running. I would have never started with a catering business.
MOLLY: And you’re saying like you just learned through experience that there was no way to make the economics work if you were selling directly to customers. The model was just not going to work.
JASON: No never. It literally never had a chance.
MOLLY: Jason believes that not only because of his own experience, but because of what happened at other startups that tried to figure out on-demand food delivery. A company called Maple that had the backing of celebrity chef David Chang and raised a reported 50 million dollars in venture funding struggled with some of the same problems Bento did. Keeping costs down, and keeping meals affordable. It closed last month. So did Sprig, which raised 57 million dollars. Jason says one big takeaway of Bento for him is that he’s not good at setting rules for himself. He’s not good at saying “Okay, if we haven’t gotten the company to this level of revenue by this date, we’re done.” If he starts another company, he’ll want to do a better job of that. But on the other hand, he’s also glad he stuck with Bento and tried as hard as he did to make it work.
JASON: Jason Calacanis, my my biggest investor and probably one of the most important people that was involved with Bento in terms of the investor side you know he greatly admired my persistence. He literally we were having lunch and this was a quote from him. I shared it with Sharon of course. And he said of the people that he’s invested with and failed I tried the hardest.
MOLLY: (laughter): There’s honor in that, yeah…
JASON: I’m the king of the losers. But you know it’s — yeah I mean it was it was still it was still a compliment, right?
MOLLY: For now Jason is focusing on stability… building up some savings. He says he thinks about starting another company, but it will be a while before that happens.
LISA: Molly Messick is senior producer of StartUp. Coming up:
LAUREN KAY: There is going to be a billion dollar company that provides on-demand dates. And Dating Ring is going to be that company.
LISA: That’s Lauren Kay from Dating Ring. The company we followed for all of Season 2. Where she and her cofounder Emma Tessler are now… that’s after the break.
LISA: Welcome back to Startup. Dating Ring, the company we followed in Season 2, had a bold plan to reinvent online dating. It wanted to take an ancient practice — matchmaking, and scale it. Which meant we sat in a lot of meetings like this:
EMMA TESSLER: So, alright I’m looking at your profile here. How’s it been going? John: I’ve only been out with one person. Okay, and — which one? Melissa.
LISA: This is Emma Tessler, cofounder and Dating Ring’s chief matchmaker, in a meeting with a client named John. She took notes as he told her about himself. He liked to run in Central Park. He had a rescue cat. He was looking for a woman who wanted kids. But at some point during the conversation, he said he’d been feeling discouraged by the whole dating process.
JOHN: Yeah, I mean I feel like I’m a little undateable.
EMMA: You are not undateable! Oh, I promise you, you’re not.
JOHN: I don’t know, I think when I go on a date I emit or give off a certain vibe that repels girls away from me.
LISA: After John left the room, I sat with Emma, to get her professional assessment.
EMMA: So I wrote, um, sponsors cats and dogs at the ASPCA. Is way sweeter than he looks, likes tall girls, athletic, smart, devoted, committed, wants a friend, he has a strong Staten Island accent, leaves his shirt unbuttoned really far, he wears a lot of hair gel. Them’s my notes.
LISA: What did you think about the — so you don’t think he’s undatable?
EMMA: No! Definitely not. To be fair, you would be hard pressed to find someone that I did think was undatable. I really do think there’s a lid for every pot.
LISA: Beyond listening in on meetings like this, we followed Dating Ring as they tried to raise money, as conflicts flared between the company’s cofounders, and as growth stalled. About a year into the company, Lauren, the CEO, was burnt out. She’d been getting rejected by investors, again and again, and this triggered a period of depression for her.
LISA: I just tumbled and tumbled and tumbled until I hit rock bottom. And I was just sitting at my computer, my fingers resting on my keyboard. And it was one of the first times I was working with employees who started working for Dating Ring. I was watching them work and I was thinking “Wow, i’m a useless person. I’m supposed to be the CEO. They haven’t worked around me before and I’m just staring, like, doing nothing.” Then almost a year later, Dating Ring came very close to running out of money. The company’s matchmakers were nervous about what would happen next. I talked to one of them, Shearly Markowicz.
SHEARLY MARKOWICZ: I never started looking for a job, I mean I’m going to tell you, everyone told me to look for a job, everyone was like, you are nuts cause I’d be like, they’d be like, how’s your company doing, and i’d be like ew, terrible. My company is doing real bad. You know, like, no new members coming in. It seems like we’re really like, getting down there.
LISA: By early 2015, Lauren and Emma had decided to quit fundraising, and turn Dating Ring into, what is known in Silicon Valley as a lifestyle company … a company that isn’t trying to grow rapidly, but is more focused on becoming profitable. That’s where we left them. And to be honest, when I stopped reporting on Dating Ring, I sort of expected they’d limp along for another couple months before shutting down. But that’s not what happened…A couple weeks ago… I made a visit to Dating Ring’s office in downtown Manhattan.
SHEARLY: Oh my god it’s so good to see you, come on in.
LISA: The company is still operating out of the same coworking space it did two years ago. But its founders — Lauren and Emma are gone. Shearly, the matchmaker though, she’s still there.
SHEARLY: My name is Shearly, and I’m the CEO of Dating Ring, currently, which is very exciting.
LISA: Shearly is now running Dating Ring, and the company has stopped hemorrhaging cash. It’s profitable, with nearly 30-thousand free and paying members in New York, San Francisco, Los Angeles, Boston and Washington DC. And the way Shearly’s made Dating Ring profitable is by cutting costs. She’s now the only full-time employee but gets by with the help of seven part-time matchmakers. She draws a salary but doesn’t have much equity in Dating Ring. Lauren still owns the biggest stake … but that doesn’t stop Shearly from pouring all of her energy into the company.
SHEARLY: It does feel like a baby to me and I care about it a lot and I feel invested in it and it’s definitely a weird feeling to feel invested in something that is mine but not mine. And that the people that we were in it together. Are not that they don’t have the same feelings about this baby anymore.
And I get this. For me, it was hard to imagine Dating Ring continuing to exist without Lauren or Emma. I wondered how they felt about it — about this thing — their baby — continuing on without them…
LISA: so how have you been?
LAUREN: Uh, Yeah. No I’ve been doing really well.
LISA: I called up Lauren, Dating Ring’s former CEO.
LAUREN: I left Dating Ring not too long after we finished recording and just entered a completely different phase of my life. Much calmer, ah much happier, and definitely not as exciting.
LISA: Lauren told me she left Dating Ring because running a small company that’s not pushing for growth just wasn’t something she was particularly interested in doing. And she knew that — because she’d already run one small business. Her first company, a childcare service called Smart Sitting, which she started in college. But Lauren said that even though she wanted to leave Dating Ring — not running a business felt really strange to her at first.
LAUREN: You know I started my first company halfway through college and then my second company while I was still working on my first. I was very I was always very busy, very type-A working on a million things. And all of a sudden I had a lot of free time and it was it was weird. And I was happy but I felt I felt really confused about who I was and what I was doing and you know my friends and family very much saw me as an entrepreneur and everyone would always say oh what are you going to do next.
LISA: This period of confusion lasted a year. Lauren considered applying for law school, business school. And she interviewed for a handful of full-time jobs, but her heart wasn’t really in it. She kept her spirits up by running and cooking. She was also tutoring students in math and test prep, something she’d always done, and she was making good money doing it.
LAUREN: And I was meeting with Emma, telling her that I was still unsure you know what would I want to do next. And she was like Lauren you’re you’re tutoring you’re you’re doing well financially you’re really happy. Why can’t you just do that? And I think it was really my conversation with her that sort of sealed the deal that that made me stop looking for anything else because I realized I was happy. Other than feeling like other people thought that I should be doing more.
LISA : And what do you think. I guess, was there something about the life of being an entrepreneur. You know when you did your first company and then dating ring. Was there something about it that you just didn’t want to return to.
LAUREN: Yes. So I was a very stressed and anxious person and I still am. But it came out a lot more throughout my life as an entrepreneur. And that’s not to say that I think it’s a bad job. I just think it really depends on your personality type and your anxiety levels how sensitive you are. And I just realized like there are definitely parts of my personality that I think made me great at running start ups and there are parts of my personality that that made me bad at it. And the most important thing is there were parts of my personality that just made me unhappy doing it.
LISA: And did it take leaving Dating Ring and having a moment where you didn’t have anything on your calendar to realize that? Or do you think you were realizing that even while you were working at Dating Ring?
LAUREN: I mean I knew that from from before Dating Ring I just I think I just sort of accepted it as this is how life is. I’d always been on track of like try to externally succeed as much as possible. And you just deal with the stress and anxiety and hours. But after leaving I realized no that’s that’s not the case. I don’t have to continually put myself into positions where I’m working 100 hour weeks and complaining about that and being anxious and being a bad girlfriend and being a bad daughter. And that’s been a huge other change. I mean I see my family almost every week now. I’ve formed relationships with my brothers as an adult with my parents. And before that it was just you know phone calls when I had time saying I was stressed and getting back to work.
LISA: But despite all of this, Lauren doesn’t regret her years spent trying to build the Uber of dating.
LAUREN: I think regardless of what I do with the rest of my life I’m I’m really happy that I had those experiences. I think I learned a lot in a very short amount of time. Um, I think sometimes people stay in their career for decades before realizing they’re unhappy and changing like I had my midlife crisis at 26. So I was able to fast forward a bit and focus on what’s important and spend more time with my family and you know get healthy. And, you know, save myself a decade or two there.
LISA: Lauren’s co-founder Emma, on the other hand, had never identified as an entrepreneur before Dating Ring. But she had dreamed of being a matchmaker — and so when she got connected to Lauren — who had just started the company — it seemed kind of meant to be.
EMMA: I loved being a matchmaker. I think what we did and what Shearly is still doing was so cool. And so I miss that for sure.
LISA: But Emma says after Lauren left Dating Ring…she realized she had some unfinished business to do. Emma had dropped out of college when she was 20 … She’d been depressed. When she was a sophomore, her sister had died of leukemia. Emma told me she also wasn’t very good at school…she hated being constantly evaluated. She’d skip class, not do her homework. But running Dating Ring had given her a new confidence and she felt like now was the time to go back. At first she says — she thought she could do both.
EMMA: I decided, “oh I’m gonna start school and I’m going to do Dating Ring part-time and school full time.” Because I’m like some kind of moron. And I couldn’t do it. Unsurprisingly… I mean everyone was like there is no way you can do it. And I was like fuck you, I can do anything. But no they were right and I couldn’t.
LISA: Emma officially left Dating Ring about a year after Lauren did, and is on track to graduate in January. She plans to get her masters, so she can practice therapy in New York.
LISA: When you left, tell me how you felt about not being involved in Dating Ring kind of day to day.
EMMA: I felt and still feel, it’s the same feeling, hugely hugely guilty. It feels super weird to birth a company and put every ounce of your energy into it and do that for four years and then have nothing to do with it. You know it’s like sending a four year old off to boarding school and you’re like OK bye bye! Like, send me some emails. Like you don’t do that. It’s a 4 year old…That was a lot of my identity was running that company and not having that is a huge loss.
LISA: But Emma says … there are a lot of things about startup life that she doesn’t miss.
EMMA: that sort of constant level of not knowing what’s in front of me and having my future be uncertain that not knowing is this company going to survive if it is going to survive. What is it going to look like is it going to be recognizable to me.
EMMA: you know I’m a student. Nothing is more planned than studenting. Right. I know when every final is going to be I don’t want every homework assignment is due and going from such a deep uncertainty to having everything planned for you is is a really big change in my stress level and you know how well I’m able to sleep and things like that that I just I didn’t take into account.
LISA: So you have no interest in running your own business?
EMMA: No no. did it sound like maybe I was gonna throw up like I had a small stroke you know. I mean that’s obviously not entirely true. Right. I want to go into therapy there is a certain level of autonomy in that where you. You have your own practice you make your own schedule or what Lauren’s doing right she has her own tutoring thing like both of us have have sort of held onto that idea of autonomy which I think is very appealing to us. And both of us like being our own boss but you know the idea of running a business makes me want to jump off a bridge.
LISA: I asked Emma and Lauren about their relationship to each other post Dating Ring. They both said they see each other….but much less frequently. Here’s Emma.
EMMA: It a little it feels like someone who you went to war with. You know she and I will be connected in a way that I have never been connected to anyone you know and we went through something and we built something together and we were married. But I think that both of us sort of reacted in like a traumatic way we’re like, oh, we do want some distance from that life.
LISA: Our next founder is struggling to find that distance. We met Mary Going in Season 3. By the time she’d started her custom suit business, Saint Harridan, she was already a serial entrepreneur. She’d started a website design firm just as the internet was taking off, and ran a successful hot sauce company for five years before selling it. Then she moved on to an idea that was particularly close to her heart… making clothes for masculine women and trans men. Producer Luke Malone has this update.
LUKE: Mary’s never been comfortable wearing women’s clothes. Back when she was a kid growing up in South Carolina, she would cry every time her mom tried to put her in a dress. She preferred pants, and a little sheriff’s outfit if at all possible. She has this particularly vivid memory of the time her mum made her wear a dress on her first day of school.
MARY: I screamed and cried and by the time we got to the school and I was dressed in this gross, yellow, frilly dress, I was screaming, hanging on to the edge of the doorway begging her not to make me wear that to school. Not to make me go into that classroom and let people see me in that dress.
LUKE: Mary’s pretty butch. As an adult, she started shopping in the men’s department. But she quickly discovered that men’s clothes don’t always fit her properly… shirts, for example, are tight across the chest or loose around the biceps. When it came to buying a suit for her wedding, she knew a men’s suit wouldn’t work…She tried on a bunch… but men’s suits are cut for men’s bodies, and the dimensions weren’t right. So she spent $1,800 getting a bespoke suit made. And it was a game-changer.
MARY: You know, the day of our wedding when I got to get married, I wasn’t distracted by hating my clothes, or feeling like I looked weird or bad or short or swallowed whole, which is what I usually felt like I looked like. I got to be me… And I also thought, I have to do this for other people, like I have to do this for other people. I can’t keep this to myself, it’s too good. And, so I wanted to start a company that allowed this to happen for people.And so she did. She started making custom-fit suits that were affordable…. closer to $800 than the $1,800 she spent having her own wedding suit specially made. She opened up a store in downtown Oakland and an online shop where her customers could buy shirts and jackets. She made it so that butch women and trans guys could go online and click a button just like anyone else. But Mary struggled financially. She had customers, but making suits is expensive, and there never seemed to be enough money. Last year, Mary cut her own salary… sometimes taking nothing, sometimes paying herself just enough to cover the rent. She and her wife… maxed out their credit cards. But the company kept taking on water, and Mary’s faith in herself was shaken.
MARY: At this point, we are into our 4th year, we’ve done three whole years we’re into number four, I feel like we’ve plateaued and I am the one who is standing there.
LUKE: When Mary was on the show last May, she didn’t know what was going to happen. After our story aired, she was focused on raising more money. But then, an investor … who had promised Saint Harridan fifty thousand dollars … pulled out. Mary called in favors to cover the loss. But as she sat at her kitchen table one night, looking over the company’s books, it hit her. The risk was just too high. Her investors—who now included her friends, family, and customers—stood a good chance of losing their money. And it wasn’t just that.
MARY: In order not to lose their money, in order not to make the whole thing fail I was going to have to work my ass off from morning to night. I was really going to have to do things that I’m sad to admit this. But I feel like I didn’t have the energy to do it. I was too tired. You know it’s like our business had been running on my adrenaline for five years and I was spent. After all of that hard work, all that adrenaline: she made a decision. It was over. She was going to close Saint Harridan. It felt like shit. It felt awful. I mean you know we can talk about crying like a little bit of tears you know I couldn’t breathe crying. It’s kind of like I have failed I have failed crying… sadness. You know?
LUKE: She told her customers, put a note up on the website, and filed for bankruptcy—both business and personal. Mary took it hard. She got depressed, and she started to gain weight. Which felt like another slap in the face. Because it meant the one part of her business she had left — the clothes she had made — no longer fit. Her Saint Harridan pants are too tight to wear right now… and she can’t afford to go to a tailor and get new ones. She’s back to feeling like she did when she started the business… frustrated that she can’t just go out and buy something off the rack that fits right. It’s a feeling she knows her customers can relate to…
LUKE: I mean because obviously that’s not a situation unique to you. There’s a lot of you know women and trans guys who feel the same way. So what do you think this loss the loss of St. Harridan has been like for them.
MARY: Some people have written to me and talked about what a big loss it is what a… You know that they’re so proud when they wear their shirts or their pants or their suit. Um, a person wrote me to say she’s so scared she’s going to spill something. It’s a loss. It really is a loss.
LUKE: Mary closed Saint Harridan five months ago. She landed a temporary job teaching a business class at a small college… and she’s spending more time with her wife and kids; she tells me she’s putting some space between the minutes. She’s also been looking for full-time work… but it’s been a bit of a struggle. Not the finding work part… but what having a full-time job would mean for her. Mary hasn’t worked for someone else in almost a decade and she finds it hard… Because her mind is somewhere else.
MARY: Everything I think, everything I read, all of it gives me ideas for businesses to start. And makes me want to start another business. That’s the hard part. That’s the hard part. Having to become somebody that doesn’t really feel in alignment with who I am. Because I have to be practical and make money for retirement.
LUKE: When Mary closed Saint Harridan she lost more than just a business. She had to turn her back on something that feels like a key part of her identity… running her own company, and being an entrepreneur.
LISA: Luke Malone is a producer of Startup. And before we go, we have some news about someone else who’s been on the show. Mike Hallatt from Pirate Joe’s. He made a business of driving Trader Joe’s groceries across the border into Canada and reselling them at higher prices out of a rented storefront in Vancouver. He’d been fighting off a lawsuit from Trader Joe’s for years… And last week … struggling to raise money to cover his legal costs … Mike agreed to close his store. When we caught up with him a couple of days ago, he told us that customers were still stopping by, hoping to snag one last container of sea salt chocolate almonds. But Mike himself… is over it. Sort of.
MIKE: I’ve had so much Trader Joe’s stuff over the years that you know there’s…part of me is like if I never have another Trader Joe’s product that’ll be fine. But you know I see the veggie burrito and I’m like “Oh, I could probably have another.” That’s a pretty damn good burrito. Oh and there’s the chile rellenos…yea I should mic up a chile relleno. God those are good…
LISA: But the days of incognito trips to buy thousands of dollars worth of gluten-free pancake mix and triple ginger snaps… they’re over. Next time on Startup… when you pitch an idea, confidence is key. And Mason Gordon definitely has confidence.
MASON: I kind of jumped up on his couch and I said, “The whole league is gonna be full of guys that dunk like LeBron James and Dwayne Wade. It’s gonna be INSANE!” And he was like get out of my office, you’re a maniac, and never talk to me again.
LISA: What it takes to create a brand new sport. That’s next week.
LISA: StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe.
Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.
Additional music by J-poetic, Get Better, Hot Moms Dot Gov, and the iconic Bobby Lord.
David Herman and Mark Wilkening mixed the episode.
To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.
Thanks for listening. We’ll see you next week.
Lisa is co-host of StartUp. Previously, she was a senior editor at FiveThirtyEight and a reporter at NPR's Planet Money and WNYC. She has an MBA from Columbia .
Alex is the host of StartUp, and CEO and cofounder of Gimlet. He 's an award-winning radio journalist and former producer for This American Life and the co-founder of Planet Money.
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