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Hey, really quick before we start the show, we have an announcement about a really exciting new thing we're launching, a newsletter.
And like our show, the newsletter is designed to be interesting, informative, inspiring, and most importantly, fun.
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We put a launch date for December of 2015.
Come second week into December, they call me and they say, hey, we are not going to let you use this recipe, this formula.
You can use another formula with chicory root fiber as the bulking agent.
And immediately I knew what they were telling me was, we're going to give you a recipe that's actually not digestible.
That's going to blow up people's stomachs.
That manufacturer took the recipe and ended up going on to launch a product themselves.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.
I'm Guy Roz and on the show today, how Tara Bosh built and sold her $360 million business, SmartSweets, in just five years.
So I'm just going to come out and say it.
I have a bias against young founders on this show.
And wait, wait, wait, wait, wait.
Before you take that pitchfork out and yell, okay, boomer, just know that I love young founders.
I love their energy and spirit and hustle.
And yes, I know Alexander the Great was just 20 when he became king of Macedon and conquered the biggest empire known to man by age 30.
I know that. But this show isn't just about how someone built something from nothing.
It's also about life and the hard-won lessons you learn simply by living life.
So generally, even with founders who cashed out at 21 or 22, I still prefer to catch up with them once they've reached at least 35 or 40.
But then, of course, like all annoying rules, there are exceptions.
Like today's founder, Tara Bosch.
Tara started her company SmartSweets when she was just 21.
She had very little money.
She had no experience in food or candy making or entrepreneurship.
And she was about to drop out of college in Vancouver.
So not someone you'd necessarily bet on.
And yet, five years later, at age 26, she sold a majority stake in her brand for a whopping $360 million.
So this story is almost like a remarkable how-to guide for anyone who doubts they have what it takes.
Because Tara didn't come from money.
She didn't have connections.
And she truly didn't know what she was doing.
But she had an idea and she was determined to make it work.
And it started by buying gummy bear molds on Amazon.
And looking up recipe ideas on YouTube.
She wanted to create gummy candy that was low in sugar but still delicious.
Tara grew up an only child in Vancouver, in Canada.
She says her drive to become an entrepreneur started when she was a kid.
Especially because she watched her mom deal with financial insecurity.
So when I was 12, is when my dad left the picture.
And my mom really kind of having her security and self-worth that was so tied to that marriage swept under from her.
Unfortunately, she got into a abusive relationship.
So it's me, mom, and this abusive person living in this home.
So when I was 13, I went and got a job at McDonald's.
I was like an illegal worker at the time per year.
Because I saw really how her having dependence on someone else impacted her so greatly.
It's illegal because I think the working age is 14, right, in Canada.
Yes, it is. It was illegal for a year.
And then also shortly thereafter, got a job at Domino's.
So work really became my life.
I really wasn't athletic.
I wasn't academic. I felt lonely a lot of the time.
And at the same time, I became obsessed with the idea of entrepreneurship through watching Shark Tank and Dragon's Den.
This is in the early, I guess mid to 2000s, right?
I mean, you were basically a teenager in the 2010s.
Yes. And so you were going to school, a teenager high school, but working at fast food places, basically.
Yeah, fast food places.
Yeah, fast food places first.
And then the coffee shop.
I'd go open the coffee shop at 4 a.m.
before school, go to school, and then go at that time work at a bakery afterwards.
Did you have a lot of friends as a teenager?
I had a couple close friends as a whole.
I really just felt like a misfit who people thought was kind of a dud going nowhere in life.
And I mean, you kind of raised yourself up watching Shark Tank and Dragon's Den.
I mean, I love those shows.
They're so, you know, the drama and the way they sort of edit them and it's super entertaining.
Like, what was it about those shows that seemed to resonate so much with you that you loved?
I felt in my teenage years so trapped by such negative energy in the situation I was living in.
And so for me, I think it was just seeing like, wow, these people have such a deep sense of purpose and did it.
They had this courage that was so mystical and inspiring to me because I was so insecure and had such low self-esteem.
And just seeing people do that was so wildly inspiring to me.
All right, so you get to university, I guess in 2012.
And I mean, even though you were inspired by these entrepreneurs, it sounds like still at that point, you didn't think this was something maybe you could do.
Maybe you would go and work somewhere one day.
I guess while you were in college, you got a job at like a supplements store, like a chain, right?
Yes. And at that time, were you yourself getting into like fitness and nutrition?
Yes. So my boss hired me because she saw I had McDonald's on my resume.
And she became really, aside from my grandmother, the first figure in my life that helped me to see that food is not something that you have to have a tumultuous relationship with.
It can be something that can really nourish your body and your soul and just finding those smarter choices.
So for me, I began making gummy bears at home.
Then I was eating those every day and I felt good about it.
And so that replaced the candy.
Tell me a little bit about your relationship with food a bit more.
I mean, what kind of effects did it have on you?
Yeah, I think, especially as a kid, I think I had pretty severe body dysmorphia.
So I remember when I was eight years old, standing in the junior Jacobs change room, trying on pants and the salesperson was like, come on out, let's see the pants.
And I remember thinking, I can't come out.
I'm like, I don't want her to see how big I am, which I wasn't big at all.
But I grew up in a family where my grandmother was always pretty overweight.
And people would make comments in public that I'd hear.
And we loved enjoying all sorts of amazing foods together.
She's German, so very hardy food.
It's a lot of carbs. And so at a young age, I think I really adopted the thought that like, oh, food means something that you feed your body with, it means something about your identity, your weight, all these kind of complex things around it.
I guess at a certain point, your grandma, did she at one point in her life said to you, she really regretted the amount of sugar she ate.
Did she ever develop diabetes or any conditions connected to sugar?
Yeah, she, it was related to her whole life.
Really, it felt like to her, I think, a fight between her body and food and herself.
And just the weight that she had that impacted her because she wasn't able to walk very well anymore.
But I really think it just kept her in this place of feeling poorly about herself.
And so we're sitting down at her table one day and she knew how much I loved candy.
We enjoyed it so much together.
It was just such an emotional thing for us.
And she, yeah, had shared with me like, you know, over the years, I regret having so much sugar because now at my age, I feel so limited in what I can do mobility wise.
I still feel poorly about myself.
And I just wish I had done things differently and had developed a relationship that was a peaceful one with food.
So that was shocking to me at the time because I thought magically you grow up and all of a sudden just have a harmonious relationship with food and yourself and all the things.
Yeah. And I mean, the thing is, is that sugar, right?
As delicious as it is refined sugar is it, it's connected to increasingly connected to diabetes, cancer, heart disease, even Alzheimer's over the long term.
And most people in certainly in the Western world consume so much of it.
Yeah. A hundred percent.
I think the key word for me is like excess sugar consumption and just really going down that rapid hole after that conversation with her to exactly what you're saying where I was really became aware of like, wow, excess sugar consumption is this silent epidemic happening.
And it was shocking to me just how intentionally it's happening.
And so that really ignited the passion within me to think, hmm, this silent epidemic is happening.
And why can't you feel good about candy?
All right. This is around 2013, 14.
And it's still, it's around the time, you know, people, more people are adopting paleo diets and keto diets.
And so there's more awareness growing around sugar.
I think it's much, much bigger today.
And you are at the time a student at UBC.
And how, how was your student life?
I mean, did you, did you find anything about university appealing at all?
So really the gift, I think, of university for me was really just finding out more things that I wasn't passionate about.
However, I began to have this confidence that I could act in an idea.
And it was called the Caled Out.
It was vinyl and chalkboard wall decals for students and home renters.
Decaled out. Yes. Like a decal.
Yeah. Yeah, exactly. So it was vinyl and chalkboard wall decals for.
Oh, vinyl, like a chalkboard, but like a decal, you know, a vinyl that you could put on the wall and write chalkboard on instead.
Okay, got you. All right.
Yeah, basically for students and home renters who didn't want to damage their walls.
Ah, okay. And so, oh, that's a good idea.
And, and, but it seems like something you could just buy on Amazon, like, you know, or like.
Alibaba. Alibaba, yeah.
Yes. So there were more kind of generalized things available.
They are, I was doing really specific ones with different quotes and things like that.
So I would design them and then I found a manufacturer in China.
And then just started selling them directly to students and had a little site.
And what do they say on them?
Because you said there are quotes.
Um, they were, yeah, there are all these quotes that I found really inspiring and an uplifting.
I know one of them was like a Steve Jobs quote.
It was like, have the courage to follow your heart and intuition for it already knows what you want to become.
Things like that. You'd go, you'd go door to door, like dorm room to dorm room or apartment to, I don't know, maybe people just go to people's houses.
I would do a fair at UBC and then I'd reach out to all the different student groups.
Um, and connect with them, but it really, it really didn't resonate and really get traction.
And so ended up, I was living with my grandmother at the time, ended up having her apartment filled with all these vinyl and chalkboard decals.
And inspiring quotes. Inspiring quotes, yeah.
And, and did you, um, uh, was it that, was it, was it expensive to start this up?
I mean, I'm assuming you were, you were saving money because you'd been working since you were 13.
Yeah, I was super scrappy.
I just put 800 bucks into it.
And then just like what I made reinvested margins were insane because the decals would cost me less than a dollar than it'd be selling them for like 30 to $50.
So I just put the money back in and, and just, um, really kept it scrappy.
Wow. Why did it fail? I think I really didn't pause to think, hmm, what is the real value here that I'm creating for the consumer?
I was really creating a product for a problem that I wanted to solve for myself and made the assumption that it was the same problem other people were having.
But that, it seems like that really gave you some confidence maybe to keep going, to try something different.
Yes, it was the biggest blessing because the failure of that, all of the little golden nuggets that I collected from, why it didn't work were really the stepping stones that allowed me to have the confidence and insight for my next idea, which was about two months after I made the decision to shut that down.
At this point, it's 2015.
The summer is coming up.
I would be going into my third year university in the fall at this point and practically failing out of university anyways, because I had just started to take German classes.
So I was like, at the very least I'll speak German with my Oma, my grandmother, if nothing else works here with uni.
So you, all right, at that time, what was your, did you have a job?
Because you mentioned you had a job at a supplement store.
Were you working at that store at the time?
Yes, I was. And it was coming up on the summer and one of the jobs I had as well, I worked at the border for Canadian customs on the commercial side.
And so I, it was really, it was like $18 an hour, which was like an amazing wage.
You were just working in our office there?
Yeah. Yeah. So if someone wants to import anything into Canada, I would be the person collecting the fees and validating the fees on what they wanted to import.
So all sorts of things, whether they wanted to bring in kangaroos, dogs, commercial shipments from Sephora and stuff.
Okay. All right. So you have this job on the border doing the customs for $18 an hour, Canadian dollars, but still pretty good.
It's, that's, that's not bad.
Yeah. So I remember specifically a phone call where they had called and asked if I want to come back and called my grandmother and I'm telling her about this.
And she's like, you should do it.
That's such a stable and reliable sorts of income.
It'd be a really great thing for you to do.
And at the same time, I had just had this conversation with her where she had shared with me that she regretted having so much excess sugar and something was stirring in me.
And the idea for smart suites was really beginning to bubble up to feel like something I was viscerally pulled to.
So I remember having the call with her and then sending the email and declining that job and feeling like I'm going to act on this thing.
You declined the job because you wanted to spend as much time as you could working on this idea.
Yeah, I declined the job because it was the first time in my life I felt like I had a purpose.
I felt like I was being pulled viscerally by something larger than myself towards this idea.
And just after going down that rabbit hole on sugar, I really, really felt that, wow, if I can bring to life this mission to kick sugar and keep candy, that at a larger scale and a global level, we can help move the needle in the sugar reduction movement.
And to me, it was shocking that this didn't already exist in different verticals in the grocery store.
Almost every vertical by then, there had been innovation in the ice cream aisle, halo top creamery was blowing up at that time.
In chips, there were all sorts of things, but nobody was innovating candy.
It was the same thing that we were enjoying that our grandparents were in the 1930s when all the brands were created.
All right. So you start to get, go down this rabbit hole when you decide to basically stop working and you decide to drop out of college, I should mention.
You decide you're not going to go back to college.
Yes. You're probably what, 22, 21?
21, yes. I had the, in the worst case scenario, could I go back to college?
Sure. At the same time, I was on the brink of failing out anyways.
So if I hadn't dropped out, I may have failed out.
Great. Okay. How much money do you think you had saved by that point?
I had probably at that point around $8,000 from just saving since I was starting at McDonald's back when I was in my early teen years.
It's pretty good. I mean, you, as a 21 year old, you could live off that for a while.
Yeah. I felt like I had a good little nest there.
All right. So at this point, you decide, I really want to figure this thing out and like candy was the thing that you wanted to try and tackle.
Yes. Because sugar was the thing, right?
And you could go in a million directions.
You go to beverages. You could go to cookies.
You could go to bagels. And that was, it was clear to you.
Candy was the thing that you wanted to try and figure out.
Yeah. It was, you know, that show Extreme Makeover Home Edition.
Yeah. I watched that as a kid and I would always be like, my dream is to have a Willy Wonka candy room.
Any projects I had at school, I'd be doing the, we had to make a map of the world map in something creative.
I did Candyland World Map.
Candy was just my thing.
I had so much joy in it. And so same with my Oma.
And so candy was the thing that I wanted to be able to feel good about.
And in your mind, did you, you had a kind of candy you wanted to do?
Yeah. So originally in my mind, I was like, okay, gummy bears.
Everyone at some point in their life has known and loved gummy bears.
It's pretty universal.
And this was me probably going back a little bit to finding what resonates for all consumers and artists yourself.
Nobody was doing a snackable marshmallow at the time.
So I thought, hey, marshmallow is in a snackable format.
Could be interesting. So it was gummy bears and marshmallows.
So as you started to kind of try and understand how gummy bears are made, what do you then do?
Like, do you like buy a mold of gummy bear?
I think I've seen YouTube videos on this before, but like, you know, gummy bears are basically a form of jello, but like a hardened jello.
Yeah. Kind of. I'm over simplifying it.
But how did you start to, like, go about the process of seeing if you could make them?
So the tricky thing about candy is really that it's 99% sugar and 1% everything else, flavoring and coloring.
And so when you're looking at, okay, how do I take out 99% of what something is, you're really, really starting from zero.
So I was looking at, you know, what are the alternatives to bulking ingredients that exist?
What hypotency sweeteners that we can, can we use that don't have an aftertaste?
What exists for natural flavoring that is actually truly natural?
What kinds of, what kind of ingredients were you talking about?
All sorts of bulking agents.
So all sorts of different fibers.
When you say a bulking agent, the agent that would turn it into a gummy form?
Yeah. So when you think of corn syrup, corn syrup is really what makes up the viscosity of candy, what really makes up the bulk of what candy is.
And in the sugar side, I mean, by this point, stevia, was the sweetener you were going to land on?
Yeah, there was stevia, there was monk fruit.
Stevia worked really, really well in creating the mouth feel and the sweetness without that aftertaste.
When it comes to stevia, there's like hundreds of variations of stevia.
And so when you, when you get into like the rabbit hole of an ingredient and the variations of it and how that impacts all of, all the things in the candy making process, that's where the raw material suppliers were really helpful.
All right. So take me into your apartment kitchen.
You were like cooking up all these ingredients, you were heating them up, dissolving all the things, all the powders and fibers in a pot, maybe with some water or whatever liquid you were using and adding extracts of flavors and then what, like, is that what you were doing?
Yeah, exactly. Had my candy thermometer because cook temp is really important for your candy.
Cook candy has a really high cook temperature.
So at one point, there would be steam going outside my basement unit and my landlords thought I was cooking weed gummies or something illegal.
How high, how, like, what is the temperature?
Like over 200 degrees? Oh yeah, the soft and hard boiling point.
It's beyond a regular boil point of, let's say you want to boil potatoes in water or something like that.
It's very, very high. And then there's different boil points for soft candy versus if you want a hard candy boil.
And then as soon as it reaches that point, you have to remove it right away.
I would use my eyedropper, put it in the molds and then let it set at room temperature over to kind of let it naturally cure.
And then 72 hours later, I would see how it had set.
I'd see, you know, is this, is this even staying together?
Is it coming out? Is it moldy?
Sometimes it'd be like jello.
Sometimes they'd be hard or they'd have a jello like inside, but they'd form this harder crust on the outside.
They really didn't come out in any shape or form that looked like a promising candy until hundreds of recipes down.
And while you were doing this, I mean, were you talking about what you were trying to do with anybody?
A few of my closest friends I shared at a high level the idea with really the only person other than my boyfriend at the time that I shared with on an in-depth level was my grandmother to which her response was, you know, you're crazy.
Why are you throwing away a university to be making candy in your kitchen?
Have you gone nuts? Have you gone off the rail?
What's wrong with you? You know, they're really just German direct because for her, she never had the opportunity to go to university.
So for me to throw that away to her was just kind of unfathomable.
But at that point in my life, I had gotten pretty used, I think, to feeling underestimated or misunderstood.
So I pretty easily discarded the thoughts and opinions of others that didn't serve me well.
My grandmother's words I always took to heart though.
So I know I remember being like, you know, one day she's going to understand and she's going to get it and I'm going to do right by her and she's going to be proud.
When we come back in just a moment, how Tara gets her homemade gummies out of her kitchen and onto a few store shelves.
Stay with us. I'm Guy Raze and you're listening to How I Built This.
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Hey, welcome back to how I built this.
I'm Guy Razz. So it's 2015 and Tara's testing candy recipes and educating herself on how to be an entrepreneur.
But she still needs investors and a business plan.
I didn't have a timeline panned out of, you know, this is when this is going to launch on shelves so much as I had clarity of vision.
So from day one in my kitchen recipe testing, I truly remember having such clarity in my mind that, you know, SmartSuite was the global leader in revolutionizing candy.
It's all happened and now I'm just reverse executing on it.
Okay, step one, need to get a product.
So help me like understand, you are every day all day doing research, cooking up batches for like several months?
Yeah, this becomes my life equally so I became so aware from different podcasts like Oprah's Super Soul Sending on YouTube how I built this.
Your podcast had just launched and became like Sarah Blakely's episode I listened to at least 30 times that summer.
Like I just really immersed myself.
There's certain books I would like rip out the page from and just read it over and over.
So just as much time as I spent in my kitchen, I spent on like immersing myself with the mindset of people who had built something that I aspired to go down a similar path because I could get so paralyzed in fear and my own thoughts and being like, who am I to do this?
At what point did you feel like you would be able to start to go to people to raise money because you to raise money, you'd have to have a decent product and a good enough recipe, but then you'd need it manufactured?
Did you do we're even thinking that far ahead yet?
I was still just thinking product, but what I did know that I needed was I knew that I wanted to find people who had brought to life a product in the CPG world before and that I could talk to you and get golden nuggets from.
So I began googling and LinkedIn people who I really admired and just being really clear and being like, hey, really admire your journey.
This is what I'm doing. 10 minutes of your time would be infinitely grateful.
And I was actually shocked how many people responded.
And shortly after that, I found an accelerator program for young entrepreneurs called the next big thing from Ryan Holmes at Hootsuite.
This is an incubator that Ryan Holmes had created to help early stage entrepreneurs get connected and get mentorship and maybe even give you a little bit of money too, I think, right?
Yes. So if you were accepted, you got to work out of their offices with all the different people in your cohort and they had different fireside chats and things like that.
So you got it and was it based somewhere in particular?
Or could you do it from Vancouver?
Yeah. So I remember the very first day of the incubator.
It was all tech and beauty companies.
And then I was the girl recipe testing gummies in my kitchen.
And I remember just walking in and just in the imposter syndrome, just being like, who am I to be here?
I don't belong and having to go in the washroom and pull out my phone with the quotes on it.
I'm just like, you are capable.
You are deserving all the different quotes, the cheesy ones that I had written down.
All right. So you start in this incubator, and which is awesome because now all of a sudden you've got these connections to people.
But meantime, how long did it take you in your kitchen to get to a recipe where you were like, huh, I think I might have gotten it.
I think I might have nailed it.
Yeah. It really wasn't until about three months after I started intensely recipe testing where I was like, okay, at a bench top level, I have verified and validated that this can exist and that this actually tastes good and has it was a two week long shelf life.
This validates that now I need to find a manufacturer that I can scale to launch this with.
And what was it? I mean, how did you know that it was right?
It was at that point really just doing taste tests, mainly with my peers in the accelerator program.
I'd bring these little bags with all the different gummy bears and like a, be a little gummy dealer around the office and get everyone to be the guinea pigs.
And thankfully, they were all happily willing.
And what kind of feedback were you getting?
It was really that, like, wow, yeah, this actually satisfies the craving that I have for candy, which felt validating.
There was a whole slew of, you know, the textures like a little bit too chewy.
This sweetness doesn't really come through after like the first five seconds of me chewing the gummy, the sour coating is a little bit too tart or a little bit too bitter.
But what I heard through that all was the baseline of yes, this actually is satisfying my craving for candy.
And so all the other stuff I knew I could iterate on.
So at a certain point, you were confident enough to feel like you could make a batch of this stuff.
And for the first production run, how many bags of candy did you want to make?
There's all guesstimates, you know, of how much do you make and that sort of thing, making these forecasts that were just me throwing guesses at a wall of numbers and that sort of thing.
And based on my estimates in my mind, the very first run, I wanted to make 13,000 bags of each flavor.
So these would be like a little snack bags that would sell, you know, by the register or something?
Yeah, in the candy aisle by the register, the kind of concept was one bag, one serving, because with candy, I would always eat the whole bag and then turn the bag around and be like, oh, that was 2.5 servings.
Well, that contributes to how I feel about having eaten that whole bag now.
So each bag would be one serving?
Yeah. Got it. And 13,000 bags, how much was that going to cost?
For the first kind of run and then packaging, my guesstimate was that I was going to need around 100 grand to be able to do that.
Okay. So you had the name, Stevie, at this point, Stevie Suites, right?
Yes. And then you had a logo or design.
Did you do that? Did you get somebody else to do that?
So I wanted to feel kind of whimsical and evoke the emotions of joy that candy brings and nostalgia.
So I found a local graphic designer and then was kind of just like, this is what I'm able to pay.
Are you able to do it? At that point, I was pulling from the savings I had in my bank account and she said yes.
And so we met at a coffee shop and she hand drew the logo and we iterated on that and that became the Stevie Suites at that time logo.
And does it look similar to what Smart Suites looks like today?
It's the exact same logo.
Yeah. Just the words are different.
Yeah. Okay. So you had a logo and in terms of finding a manufacturer, how did you find one?
How did you get into one?
There was two main things that I realized quickly.
One was that all candy manufacturers, their machinery needs sugar in order for their products to be able to be made because sugar is 99% of what is candy for it to run on the machine.
The other thing that I learned quickly was that the minimum runs and the quantities were very significant for what would peak a manufacturer's interest.
So it really focused on sharing the vision of what Smart Suites will be, what's in it for them and this is happening in the candy industry, whether you move on it or not.
And there was one manufacturer that said, yes.
So we put a launch date for December of 2015.
Come second week into December, they call me and they say, hey, we are not going to let you use this recipe, this formula.
You can use another formula with chicory root fiber as the bulking agent.
And immediately I knew what they were telling me was we're going to give you a recipe that's actually not digestible, that's going to blow up people's stomachs.
That manufacturer took the recipe and ended up going on to launch a product themselves.
So at that time, pretty much overnight, I was like, oh my gosh, I need to find another manufacturer to launch this product.
Went back to another manufacturer that had said no and went to them in person this time and really focused on specifically sharing the vision, specifically painting for them, my forecasts that I had made up and had no idea what those actually would be.
You find this new manufacturer by going to Toronto.
Yes. And presumably you had enough money for their minimum, right?
I did not, no. You did not.
How much money did you need?
So for this manufacturer's minimum, their payment terms were also different.
So they needed the money upfront, their minimums were higher.
And I was going to need a 105K upfront to be able to just move forward with them.
To pay them that upfront even before you sold one bag of candy?
Yeah, I ended up working with them on the terms.
And so I was able to kind of shimmy it down from that.
But yeah. How'd you get the money?
So what I did at this point, this is like just before Christmas in December of 2015.
And I realized, okay, I'm going to need to raise money.
I don't have this saved up.
I start LinkedIning cold emailing investors on LinkedIn.
And thankfully, graciously, a few of them did reply.
Nobody was interested in trying the product because of the name Stevie Sweets and the negative connotation at that time to the negative aftertaste of Stevia.
But it was the biggest blessing because it caused me to pause and be like, oh, Stevie Sweets is not the name.
And that's what gave me the smart sweets evolution.
How did you come up with that name?
I was just spitballing in my mind different names and that sort of thing and this concept of just like smarter choices and my own journey with food.
And it's just smarter choices really resonated with me.
And I also wanted a name where you could read the name and you could get the nuance that they're trying to do something better, but also that it doesn't lean so far that it feels like it's like health niche.
So once that name came, that's when I was like, okay, I'm not going to get money from investors at this point in time.
I'm going to need to get debt financing.
Yeah. I mean, investors were not going to give you money because you had no product to show for and you had no track record yet.
Like they probably would have wanted you to make the batches on your own and then sell them and see how they worked.
But nobody was going to give you anything.
So you had to get debt financing, but you're 22, you have no assets.
How are you going to get debt financing?
Yeah. So I have one asset, a 2009 Honda Fit Hatchback.
Nice. I don't know, 10,000, 12,000, 15,000 bucks.
Yeah. That's a gracious probably valuation for it.
And so I applied through one program called Future Prenuer and BDC, the bank development of Canada.
And then at the same time, I approached another lender.
They were a bank called Van City.
So I went to the one bank and said, Hey, I'm talking to this other bank.
Went back to that bank said, Hey, I've progressed in the conversation with this bank.
In the meanwhile, I'd share them updates like, Hey, I'm talking to this retailer and this retailer using my projections and just really focus on the vision and just really being like, if you take a chance on me now, I promise you that like I will not squander this opportunity and it worked.
They both said yes. Both these banks.
Both these banks said yes.
Yeah. And was it debt financing?
Was it a loan that's tied to a government program like the Canadian government encourages loans to small startups?
Yeah. So Future Prenuer is a program that's kind of has that ethos around it.
And so the thing that I had to do was to put up my Honda Fit and had to take out life insurance.
And so the loan was tied to me personally, of course.
And they gave you the money needed the hundred thousand Canadian dollars?
A hundred five. Yeah. Wow.
And in the meantime, were you also calling retailers asking if they would carry the product?
Because you were going to have what 13,000 bags of this stuff?
Yeah. So there were basically two things that were the front of my priorities every single day to wake up with my like bull horns and run at one was the debt financing to sort the manufacturing stuff.
The second was get the distribution, get the access that consumers can actually reach this product with.
So I always felt clear that Ecom, I think for us was going to be a surprise and delight, but that candy is an impulse purchase and people are going to want to have a sweet tooth and pick up the bag in store.
How did you know that? I think it was really just like probably from listening to other people's journeys and how they think about navigating, creating value for the consumer and like honing in on who is she because our consumer was female primarily.
And where is she going in her day to day life?
And very quickly, I realized like, oh, she's not going to be having the forethought to buy this online two weeks in advance for her sweet tooth that's going to come two weeks later.
All right. So you get the money to make the first batch of these and you've got some stores that are committed to, they've agreed to carry it when they're ready?
Yeah. So by the time we're in the kind of spring of 2016 of bang down the doors and got the first few yeses for stores and they were primarily in the natural channel.
In Vancouver? Yeah. And we were going to launch at the same time in my mind, social media and just the power of at that time, Instagram was really powerful.
So I had the hypothesis that, you know, it's actually going to be less frustrating for consumers if we launch and create accessibility at a national level than if we launch regionally because now with social media, we can reach people all across the country in such an effective way.
So it's going to be more frustrating for them if they know about us but they can't reach us.
So my true goal was to find a national partner that we could launch with.
So how did you, I mean, even getting into a regional market, right?
The stakes were really high.
You put $100,000 of debt into making these.
So I have to imagine that every time you would, you know, cold call and then get a meeting with one of these retailers was kind of terrifying because there's a lot on the line there.
Like you needed them to agree to sell your product.
Definitely. There was a lot on the line.
I think the minute that I'd step into the room with the retailer, the phone call with the retailer, I stepped almost into like a different version of myself where I spoke with such conviction and always focused on what's in it for them.
And for the retailer, I focused on, you know, we're a higher ring per bag.
They're going to make more money on smart sweets than they are traditional sugar, penny candy in a bag.
Because the price points higher and the margins are higher, their take is higher?
Exactly. Yeah. It's like two to 300% an increase from traditional candy on their shelves.
Because people, your bet was healthy consumers would be willing to pay a little bit more for an indulgent treat that wouldn't spike their blood sugar.
Yeah, exactly. Higher precision consumers as you know, traditional candy is an occasional treat with smart sweets.
We're creating the ability for candy to become an everyday snack if people also choose for it to be.
Got it. Okay. And I guess around this time, you managed to get two Canadian stores, chains, one's called Choices, the other one was Bed Bath and Beyond, which of course is not just in Canada, but the one in Canada.
They agree to put your product on their shelves, but they wanted it fast in like a couple of months.
And I guess you needed, like you were still on your own, so you needed somebody to help you.
And I guess it was around that time where you hired your first employee, right?
Yeah, Beth Richie. All right, so you hire Beth, but I mean, you were spending all, you had to spend all the money making candy to fulfill this order.
How did you, how are you going to pay Beth?
I basically wasn't for the first year.
And then I paid her 30 grand and gave her equity.
And when you finally got the products and you were ready to launch in July, how are you going to promote it?
What was your, I mean, again, you had no market, no marketing budget, no money.
What did you do? We didn't have money, but I really didn't feel like we needed money to create brand awareness.
I really felt like through the scrappiness and just the blessing that existed with social media, that through the sheer grunt work and just hammering it out on our phones, we could do it.
So what that looked like really was you sat down and thought, you know, okay, like who is this product creating the most radical value for focusing on that niche and then expanding through niches.
And that was the kind of hypothesis I adopted for what we were going to do.
So what did you do? How are you going to reach that even that small tribe of people initially?
Yeah, so one of the first communities that I was like, okay, this is going to create the most radical value proposition for are people who can't have candy because of diet choice, because of whatever it may be, they haven't had candy in years.
And so focused on those groups at the time, I changed my Instagram name to smart sweets founder.
I would message people from that account really authentically.
It wasn't a part of the message was copy and paste, but it was really authentic and being like, hey, I think that you actually might really like this product.
Can I send you some? And that worked.
And so slowly, I remember with the Weight Watchers community as an example, within three months, smart sweets seemed like a huge brand to that community.
So, I mean, this is like a very methodical strategy.
You were going person by person and hoping that they would then promote the product on their social media pages.
Yeah. And then coupled with that at the same time, we were finding other brands like Halo Top.
I remember when Halo Top responded to us and we had a call with the director of marketing.
We were like, oh my gosh, I can't believe this is happening.
He just hopped on a call with you just at a courtesy.
Well, we had messaged them about like partnering together to like push out a giveaway and with their email lists and social and yeah, they responded to us.
We would often not message the brand's pages or the founders, but we would message like the director of marketing, the director of finance, the director of ops.
Easier to get. Yeah, just less noise to move through the sea.
It's so smart and scrappy.
And so that starts to create awareness, right?
Because most people going through the checkout aisle at Bed Bath and Beyond might see smart suites and not know.
Although on the package, I think from the beginning, it did say just three grams of sugar to whatever it had, right?
Yeah. That was inspired by Halo Top's packaging.
Like the notion of three seconds or less consumers have to understand what you're doing and be compelled enough to pick it up off shelf.
Were you worried, you mentioned that your first potential co-manufacturer that didn't work out, they were launching their own competing brand.
Were you worried about that as a brand that could really hurt you guys?
I always tried to not operate out of fear, but to balance that with the dance of running like hell knowing that 10 people are probably behind me working on this and that other people are going to be running at that too.
And so it kind of used it as like a motivator to just continue to run like hell, but to not get stuck in the fear of looking backwards at what they're doing.
In year one, you sold roughly a million US dollars in revenue in Canada in sales, which is pretty great.
Were you profitable in year one or were you just all the money that all your sales going right back into making more product?
Year one, we were like pretty much almost at break even, but we were not technically profitable.
And so I never planned for what if things go really well and things went really well.
And so I realized there's going to need more cash to do a larger manufacturing run to continue the train and keep the momentum.
It maxed out on the debt financing available to us at the time.
So I was like, okay, shoot, now I actually am going to really need investors.
And Beth was doing demos at a Choices Market and met this woman, her name's Shelly.
And right away she was like, I get it, I want to be involved.
I met with her the next day at this restaurant.
And then kind of like in the cheesiest way possible, she wrote on a napkin that she was going to give me 80 grand.
And she signed the napkin, I signed the napkin, and we agreed we would sort out the terms at a later date.
And so that was a huge blessing to get us to our next run.
That same year, 2017, you applied for and got selected to go on Dragonsten, the show you watched as a kid, as a teenager, the Canadian Shark Tank, which actually started before Shark Tank.
And that was going to presumably be huge because all of a sudden you'd be exposed to a national audience instantly.
Yeah, I had applied back when I was recipe testing in my kitchen, but hadn't heard anything.
And then one of the producers kind of serendipitously ate the product or something.
And so they had reached out and were like, could you come to Toronto next week?
And I was like, absolutely, I'm planning to be there actually anyway, which I was not, of course.
So you go on Shark Tank and I read that you got all the sharks wanted to invest.
They all wanted to invest, you think you get 10% of the company for 100 grand.
And so you get offers from all of them.
And what happens? Did you close the deal?
They all offered a deal at double the valuation I had gone in there for.
On air, I had accepted a deal off air, chose not to go through with it just because it didn't make sense anymore.
But I was like so grateful that they all saw what I saw in terms of vision and potential.
And it got you a lot of attention.
It did, yes. And I think it led to Whole Foods approaching you about selling your products.
So it was a couple of months after that, a producer from Fox Business in New York reached out to me on Instagram and she was like, hey, I'd love to do a feature on your story in Smart Suits.
Would you like to come to New York?
And go to New York, film the segment, the segment airs.
And three minutes after the segment airs, I get an email from the global candy buyer at Whole Foods saying, hey, would you be interested in a global candy launch with Whole Foods?
And I call Beth and I'm like, I just got a spam email, but that would be amazing if that was real.
Can you imagine if that was real?
That would have been so cool.
Reply to him, fully thinking this is spam.
And it's not spam. And we ended up doing a global, it was our entrance to the USA national from day one, about eight months after that.
Wow. When we come back in just a moment, as Smart Suits growth starts to explode after Whole Foods picks it up, and why Tara starts to question whether she should even be running the company at all.
Stay with us. I'm Guy Razz, and you're listening to How I Built This.
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Hi, guy. This is Zach Rollout from Brooklyn, New York.
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My favorite episode of how I built this is with Jim Cook, founder of Samuel Adams.
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Hearing Mr. Cook's journey to launch Sam Adams and the Kraft Beer Movement was eye-opening.
I even share the episode with my strategy class.
Mr. Cook's journey of drive, humility, having the courage and the desire to find his life's purpose, all filled with his humor, is full of wisdom.
Love the show and thank you so much for all that you and your team do.
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And thanks so much. We love you guys.
You're the best. And now back to the show.
Hey, welcome back to How I Built This.
I'm Guy Razz. So it's 2018 and Tara has the Whole Foods deal, but immediately hits a few obstacles.
For starters, she needs more cash to make more product.
She's also got manufacturing problems and she has to make the launch of the product in the U.S.
work. So you're now in the U.S.
And of course, nothing against Canada.
I love Canada, my wife, and children are Canadian.
But if you want to be a really scaled company, you've got to get into the U.S.
market. Yeah, totally.
Just population-wise, the whole population of Canada I think is less than the population of California.
Yeah. And so yeah, when Whole Foods, when we're like, okay, we're doing a national launch with them, simultaneously at the same time, the first manufacturer that we had, sketchy things start happening.
There's metal that's starting to be found in some bags.
There's, I get a call from the place that was packaging our product, because at that point it was manufactured in one place packaged in the next, saying, hey, someone just came in here with a GoPro camera filming our facility.
And then they ran into a getaway minivan and sped off.
And I learned that was the manufacturer.
Wait, what are they, the manufacturer was filming?
Uh-huh, trying to get the intel to figure out how they could set up packaging in their own facility.
Oh, I see. Okay, wow. So I realized, okay, we have seven months to like find a new manufacturer, change and evolve our branding to be able to meet this national launch with Whole Foods.
But how did you resolve this, the challenges of like metal being found in the bags?
How did that even happen?
The manufacturer and their QA protocols were not what they really presented them to be.
Their quality assurance protocols.
Yeah. Did any of those bags get to Whole Foods?
Those bags did not. So I knew I needed to find a new manufacturer.
I was like, okay, I'm just going to go show up at this small town manufacturer who had been running the business for generations.
And so the dad, the grandfather sit down and I'm talking with them and they get the vision and they say they'll take a chance.
And that ends up being the manufacturing partner that we launch at Whole Foods with and that takes us through to scale.
All right. So back to the timeline.
You now are in Whole Foods in the United States and all over Canada.
And I think this year, 2018, but you get, you applied for a fellowship and got it.
This is the famous Peter Teal Fellowship, the obviously one of the founders of PayPal.
He created a fellowship many years ago that basically said, hey, if you're under 23 and you drop out of college and you are starting a business, I'll give you 100 grand of strings attached.
You get this in 2018. You get this fellowship.
Tell me a little bit about it and why you wanted to do that.
At that point, you were already kind of starting to crush it.
Yeah, I think really through that, just like mindset of like, you don't know unless you try, you know, even if never in a million years, I think I would actually get that.
And the reason why I wanted to try was because it's strings free cash at the end of the day, which when you're a startup, you can always use strings free cash and mentorship from Peter Teal to yeah, and mentorship from Peter Teal.
And the most powerful thing about that was the peer group.
Similar to the first accelerator I was in, all of a sudden I was around these people where I was like just so wildly inspired and just like it really feeling my feeling my mind to even be more expansive and be like truly anything as possible.
And it really helped me to level up my mindset for the next step in the journey.
So that year, you also really raise significant cash at least for, you know, for the first time.
I think you raised $3 million in 2018.
And I have to imagine by that point, you're two years in, it was a little bit easier and you could probably raise money on really good terms.
Yeah, it was interesting because it didn't feel easier.
I was still getting, they weren't necessarily outright knows, but there were no's in the sense of it was a yes with, okay, I need this preferred share, I need it to be structured this way, I need this valuation, which made it a note to me because I was very clear in my philosophy of what felt congruent for me and what was honoring team and how I wanted our cap table to be
structured. I had the blessing of meeting two people who became my two formal advisors.
And so once they supported me, we closed the round in two weeks and had a really clear philosophy about this is common shares.
So there was never any preferred shares and that was it.
And we didn't share financials or anything beyond just like the four page deck that we had.
Wow. That year, a year and a half after you launched, you sold 11 and a half million US dollars worth of product.
So you are well on your way to building a really significant brand.
At that point, I think some other competitors start to come out of the woodwork.
Earlier you mentioned that you weren't, it wasn't that you were looking at the competitors worried, but that it did set like light of fire under you to accelerate, to keep moving fast.
Because your competitive advantage would be your brand name, especially if like Hershey's or Nestle or a big company, all of a sudden decided to do the same thing, which they could have done very easily.
Yeah, there were kind of two filters that I always had.
And one was just being obsessed with are we always out exceeding the value proposition for the consumer?
The answer was always no.
And so I never felt the need to dig further.
And then secondly, the other filter was, are we creating a customer experience that can't be replicated?
So we were obsessed with making sure that our consumers felt like our friends.
How did you do that? When it was just Beth and I, it was easy for us to have quick response times.
And as we scaled, it had to be really intentional.
So across the board, we always had a 12 hour response time for social media, whether it was whether it was DM in our comments, hashtags, posting photos of smart suites, when we came to emails, it was 24 hours, we were obsessed with making sure that our friends, we called them our friends, felt seen and understood at the end of the day by us.
And it sounds like such a simple thing.
But as we scaled, maintaining those KPIs became really hard to do.
And so as you are, you know, hitting 2019, that year, you're growing to like 30 people.
Did you, I mean, it started out with just you and Beth, right?
Who were the kinds of people you were hiring?
And more importantly, you had never before that time been a supervisor, right?
You'd already always worked in fast food places or in shops or you'd always been working.
And then you started this thing on your own.
How did you learn how to do the management side and to be a boss of people?
In the beginning, it was really just finding people that could wear all the hats.
So that we're really generalized.
Like we had our first five were like a marketing, sales, ops and finance.
And it was really people who got the vision, who like left their ego at the door.
And most importantly, I think we made sure to be really clear about the what's in it for them.
So everyone had equity in the company, but those first five people, they all had at least 1%.
To your point of never being a supervisor and that sort of thing, I was really, really good at inspiring people.
But I wasn't that great at knowing how to keep people engaged and inspired and motivate them weekly one-on-ones and that sort of thing drained my soul to its core.
Not because I didn't care, but because it just wasn't a strength that I had.
So you realized that your strength was, you had a vision, it was creating a vision, it was coming up with this inspiring idea and that could inspire people.
But where you weren't strong was in sort of building and maintaining a company culture that wasn't a strong suit of yours.
Yeah, I think always applying the filter in like a non deprecating way, what do I suck at?
Yeah. And then how may I be holding the business up?
And where do I serve best?
And combining those three answers to kind of like indicate where I best show up.
And that ebbed and flowed throughout the business in different stages.
That's such an important point because I think a lot of people, and I've talked about this too, focus on culture, that culture, obviously there's a famous quote, culture eats strategy for breakfast.
But culture building and culture maintenance is a full-time job.
Very few CEO founders can be that and also maintain the culture on their own.
Oftentimes you do need a COO or somebody else who is the keeper of culture.
And I think that is a very self-aware thing that you have and have, which is you knew you weren't, it wasn't a core strength of yours.
Yeah, I think not having any attachment to have my role in the business just to having a really strong attachment to the mission and just to how I best served, I think was a really helpful lens.
As you started to bring in some outside money and your revenue started to grow, because I think by 2019 you hit close to 40 million US dollars in sales, within a couple months, you got the pandemic of 2020, many companies like yours actually had incredible banner years because all of a sudden people are at home stuck looking at their computer screens and being bombarded
with ads and social media ads and things like that.
I have to assume that your direct consumer side just kind of really took off that year.
Totally. Yeah, and I think candy is such an emotional source of joy and comfort in those times.
And so Smart Suites became something that was really an emotional support for some people through that time period.
That is also a pivotal year because it was announced towards the end of the year that you sold a majority stake of the company to TPG, a big private equity company.
Tell me about that decision.
Of course, it was a lot of money.
It was over $350 million for a majority share.
You still kept a minority stake, and I think you're still the largest single shareholder.
It's an incredible amount of money, obviously, to get.
But also, what did that, in your mind, instead of just staying independent and turning it into a billion-dollar company on your own, why did this make sense at that point for you?
Yeah, I think from day one, I had clarity of the vision, which was to be a global company, Revolutionizing Candy, and to be the go-to candy brand that our grandchildren are enjoying.
And I always felt at some point in our growth, it would make sense to tap into a larger, multinational companies, manufacturing and distribution systems, and to execute with a faster pace on that vision.
And coming up on 2020, we crossed over the $100 million mark in revenue and really just began to felt like a different stage of...
Lesson four years in, you're crossing $100 million of sales.
Unbelievable. Yeah, just when we entered into that fourth year, it was the first time that I was like, I don't have that same gut instinct that I feel like I have had so far on what do we need to do and what is around the bend to navigate that next stage of growth to get from 100 to 200 to 300 and then to grow outside of North America.
At the same time, there were...
The low sugar space began to really grow and become something that was...
It was exciting because I was like, the vision is being validated.
Like low sugar is here to stay.
But a lot more competition.
Yes, and I was like, we need to be pouring fuel on the fire to really actualize that vision of being the global leader.
And so that was really what informed, okay, this makes sense timing-wise to bring on a partner.
And so we began that process and started that journey.
At the same time, my grandmother, who was the reason I started my company and my why, my whole life, she was starting to go through her end of life.
And she had the fortune of seeing the journey through, but because I was so intensely in building, I really wasn't showing up for her in the way that I wanted to time and energy-wise, but I really didn't feel like I would be doing her and my relationship right if I didn't honor the freedom of time and energy to show up for her the way she showed up for me, my entire life.
So that was also a factor in timing too, where I was like, I need to show up for my OMA now.
So you, at that point, you stepped down as CEO, but what did it mean for your role with a company?
I knew you kept a board seat, but did you really, day-to-day operationally, you were 2020, you were going to start to wind down?
Yeah. So originally, that really wasn't the intent.
Originally, I was going to be still in like a full-time capacity in like one week after I signed the papers, slowly, slowly, slowly over the course of the next few months, my health starts to decline pretty rapidly.
What was going on? I didn't know.
I thought, you know, Adrenal fatigue, burnout is real.
I had gone to naturopaths, we validated this, had been in the hospital from severe chest pains, and then six months after that, I find out that I'm not slowly dying, but I'm six months pregnant and I'm going to have a baby in three months.
And so that was why I took a larger step back originally than I had intended to from being operational pretty quickly after their transaction happened.
So here you are now, a couple years later.
I know you're still sort of an ambassador for the company and still a shareholder, and you still retain a board seat, right?
Yeah. And I think today, SmartSuite is the number one selling sugar, low sugar candy in North America.
Tell me about your life now.
And so, I mean, you started this so young, you had such a smart, and I think lucky vision already in your teens, and you really pursued it.
And here you are, you know, in your late 20s at this point, in this position where you are extremely wealthy and it's public, like people are aware of this.
This is not a secret. Tell me a little bit about what that's meant for your ability to, I don't know, to make friends or to trust people or to, because I think you're a single mom, right?
Yep. If I'm not mistaken.
Does it complicate parts of your personal life, just even knowing who to trust?
When it comes to trusting people and that sort of thing, yeah, I've gone through a lot of navigating for sure that has, I think, been a practice to not taint the inherent belief I have of like, people are good.
I think what it just means is that just like, I really try and just root down in the gut feeling about like, is someone being authentic?
And then when that's famous saying of like, when someone shows you who they are, believe them.
And trying to just always ground back down to like the gratitude.
And I have such gratitude for like the exact same feeling I had when I got the idea for SmartSweets of like, how am I so lucky to somehow have this idea to be in service of others in this way?
How am I so lucky to have freedom of time and energy to be able to create whatever impact I'm able to?
And so I'm grounded in such gratitude for that.
And I don't know where I meant to serve next.
And I trust in the universe and whatever that path that leads me to do.
When you think about the journey you took and, you know, I mean, for some people, there's a million ways to read the story.
Wow, you know, rags to riches in three and a half years or something like that.
It's obviously an oversimplification.
But it was, it is remarkable.
I mean, you know, started in 2016 and you got a big buyout in 2020.
How much of where you got to and where you are, do you attribute to the hard work you put in?
And what about, what about luck as a factor?
How much is luck? I truly feel like it's like the mishmash of like the right timing, the right idea, the saying, you know, the harder you work, the luckier you get.
But above that all, the serendipity was like a swear jar world when we were building because there's use so much.
Now I use the word God, but that like there is something bigger than us out there.
And if we let ourselves listen to that whisper in our hearts, it will guide us to where we're meant to go.
That's Tara Bosch, founder of SmartSweets.
By the way, Tara loves all kinds of candy.
But if you were to ask her what her favorite is?
Oh my goodness. I love sour candy.
I love those live. I don't know in the States if they're called live wires, but they're like kind of like licorice that are infused with white cream.
I don't think we have those.
You don't have those? No, we might, but there's some nuance between Canada and US candy.
You know, you guys have those honeycomb violet crumbles.
Oh, I love those. Yeah. So good.
Manufacturers, they'd always asked me to bring down ketchup chips and coffee crisp for them.
Coffee crisp. That's the other thing.
Oh, so good. Yeah. My blood sugar is just rising, talking about it.
I know. I know. It's going up.
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This episode was produced by Carla Estevez with music composed by Ramteen Erebleu.
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