Creating the "Rolex of Cookies" with Matt Jung, CEO of Last Crumb

Matt, welcome to the show.

Thanks for having me.

Yes, it's exciting to have you back. Uh, we're out on the show previously, great chatting with you. Uh, we've chatted a lot since then, and you started to join a different company since then, Last Crumb, which I'm excited to talk about today. And for people who don't know Last Crumb, how do you even describe it to them, Matt?

I think that the easiest way I describe it, which usually causes more questions than answers, is we're trying to build The Rolex of cookie companies.

What? Go ahead. You have to. What does that mean?

I think that it's like you know we're building. I think the world's first ultra premium luxury cookie brand, and I think that we're doing it in a really interesting way at kind of the intersection of luxury fashion, consumer packaged goods, you know sweets. gifting, and really kind of creating this like really amazing community of people who are— we're kind of calling them our Cookie Monsters that are fanatical about this amazing product that we've created.

It is quite the product. I've probably watched like 3, 4, or 5 unboxing videos to get a feel for that experience even more from other people and like what their reactions are. And from that, even the experience of it to go through all the cookies. I think one of them took like an hour just like going through them, unboxing those. There's a dozen of them and they're huge and they're so unique. And one of the things I wanted to talk about was with those names and also how you selected like the cookies themselves. Tell me more about that in terms of the names and also even to get to those 12 flavors out of, I'm sure, many other possibilities. How'd that happen?

Yeah, so I joined the company in February and I think it's a unique situation. I bring this up because this isn't normal, I think, in most direct-to-consumer brands is that I'm not the founder of the company. They brought me in kind of as a CEO to like go to market and build the strategy and launch the company and build the team. But the founder, Derek, had spent basically a year working on perfecting which of the 84 cookies that he developed he wanted to release, testing them, seeing which one made the most sense. And where we— where he ended up was 12 cookies that are really nostalgic flavors. That someone is gonna like one of them, and the idea being that you know you send a family a box of these cookies, and you know dad or mom or sister or brother or grandma or uncle might like one of them, and might might just like teleport them back to that like oh I love X or Y. And I think that that was like there was a really there was a lot of intention in like choosing those, and then. I think he did 2 really great things that, and really thinking about what cookies we were going to release first prior to launch. And then the second being that he over-indexed on really working with amazing people to develop the brand and the voice. And so he worked with an agency called Truffle in Santa Monica who did the brand development and an amazing copywriter named Cole who lives, I think, in Ohio. Near me, uh, and who's amazing as well. And like, I think that, you know, one of the things that I think about a lot is that in a world where people are trying to spin up these brands really quick, A/B test, you know, we did the exact opposite, which is they spent 8 months developing the brand before ever releasing anything. They spent months going over the like cookie names and descriptions and copy which no one does. Then they hired me to kind of really build out the go-to-market strategy. And we spent months on that before we ever actually even sold a cookie. And so there was really like, I would say more than a year, but a real year of really intentional work that went into actually like developing the brand. And, and it was, and that is seen across everything that you see. I mean, that's why I, you know, I don't, you say you watch the unboxing video, but I think the thing that's really unique about the brand is that I guarantee that you would be blown away if you got a box and still unboxed it yourself after watching 3 hours of unboxing videos. And I think that, that, that's the kind of like the pillars of our values that we kind of developed after I joined was the customer experience is the most important thing. You know, both the unboxing, the packaging, and the actual cookies have to taste good, which they do. The second is like brand, you know, is our brand being like, you know, shown in the most appropriate, luxurious, like way that pays it off? And then the last being kind of sales. And our belief was by approaching it with this like customer and brand first approach and then kind of really finding like the right sales channel, which for us ended up being drops, it had an organic flywheel that was like beyond, I think, what we expected in the early days. Because we just, we paid off something.

Yep. And there's a lot I want to unpack with that. One thing is going back to what you mentioned was around, even in like in the beginning, you did so much research beforehand, thought of the brand, thought of the messaging. How do you think of that versus the test everything, see what works? Like what goes into that decision? Obviously, it worked out for you. But I'm curious as to, you know, why maybe that decision was made, or what other founders could think about between kind of those 2 options.

Yeah, I've done both, and I've done more of the latter than what we're currently doing at Last Crumb because it takes a, it takes a lot of guts to have a position that's untested and so polarizing.

Yeah.

And so ridiculous and basically just say, we're gonna do it and we're not gonna ask customers what they think it should be. We're not going to ask them what they think we should charge for it, and we're going to create a market, and we're going to move the needle, I think, in a really meaningful way. And I think that for me, I think what I've learned is that I almost think it work— it can work better for the right products and the right brands. It won't work for like a commoditized like product, you know, because like you're a commodity at the end of the day, and you're trading on like price. And I think that You know, one of the things that I learned at a past startup was kind of this concept of like you want to have like a competitive edge, you know, like either community or distribution or something. And I think that for us, we had no edges going into this. I mean, we had 700 Instagram followers, we had zero emails, we had no website when I joined, and we had to create some sort of a competitive edge. And for us, it was like brand. And we really over-indexed on like building that out. And I think that other founders, you know, when you A/B test everything, you kind of end up being nothing sometimes because one, people don't know what they want, even if they kind of do. Yeah. Also, people give you bad information, specifically the people closest to you. And I think that it's hard. I mean, even We struggle with that. I mean, we have close advisors and investors who tell us to actively do the opposite of what we're doing. And it's hard to silence that voice sometimes because they don't know what they're talking about. And then if we just— the funny thing for me is that when we do it our way, they totally fall into line and they're like, oh, that's really great. I want to buy that. And you're like, okay, well, We almost literally blew up this whole business because of like an offhanded comment that you made. And I think that derails a lot of— I guess that kind of takes me to like my, like biggest point that I think, and the biggest key learning is that this has worked because we had a position and we were disciplined and focused and stuck to it even when we thought it might not work, even when we thought it might be crazy. And we held that line. And I think that it's funny because looking back, like looking at it today, I'm like, wow, this is a smashing success. We've built this amazing business with this crazy waitlist and all this demand, and it's all come organically. We've never spent money on marketing. And I think that it didn't feel like that the 3rd week or like the 6th week. It doesn't feel like that thinking about next week. And I think that it's funny because I think a lot of founders, myself included, often look at all these other companies and what they're doing. And we think that there was some silver bullet. And the reality is that there isn't. And what's working so well with Last Crumb rather than this A/B testing is that we had a position that we were willing to be wrong on. We stuck to our guns, we stayed super focused and disciplined and didn't waver from that path. And we let it organically compound. And we were great with that compounding growth and it accelerated dramatically. Whereas I think you try to do everything too early and you end up doing nothing.

Yeah, take me through that go-to-market strategy though. I know you obviously sent out I don't know if you mentioned before, but you sent out some of these to different influencers and stuff. But like, tell me what you were thinking about in terms of how you would go to market with this, knowing you had this great product, great branding and everything, but then actually going to market. Take me through some of that.

Yeah. So like we, when we launched our first drop, we sold out authentically and we actually sold out without any of our really friends or family buying because we accidentally imported all of their data into Klaviyo wrong. So they put like an embargo on it for like 2 weeks. You know how they do that?

Like, this is spam.

And it was It was like this, oh God. And so we, we had like the perfect, like pure test. And so the way leading up to the launch, which was in like the middle of April, what we did was we did 2 things. We realized that emails were going to be our most important asset because— and we were going to drive the drop or the sale through our email list and we weren't going to announce it anywhere else, which sounds counterintuitive, but actually created a really focused funnel. And then the second thing we did is we realized that we didn't have the bandwidth or the resources to be in all channels. So we were only going to focus on Instagram exclusively. And we had a very focused way we were going to work with Instagram with really beautiful food porn type content on our feed. And then like really like engaging the community and reposting on the stories. And everything that we were doing was trying to drive people to the website. Which was like bare bones and still basically the same website we have now, which then asked them to sign up for our waitlist. And we spent 4 weeks leading up to the first drop. We sent it to some influencers. We sent it to people like you or me, founders, like people who I just wanted to get their hot take. Do they think this is cool? Do they think this is lame? What was their initial reaction? And I would say we sent it probably to about 100 people in that 4-week period. So not a ton. Yeah, we were at the same time stress testing like kitchen ops, like figuring out like shipping, figuring out like some of these early like operational things that we hadn't yet had to really deal with, actually build a website backend because we had nothing. And so there were like get emails going for the first time. Like there was a lot of moving parts and we, my My and the team's approach was how do we do the fewest things that are the most important ones, and we do them well, but we don't try to overdo it. And we not doing something is better than doing it badly was kind of my like mantra for a little while. And I got really good at saying no to everyone because you know obviously there's a million great ideas like TikTok. SMS, like all this stuff. And these are all just distractions until you're ready for them or you have a reason. And so I would say our Instagram in that prior to even doing the influencer seeding, we started to like post a little bit more. I wouldn't say like move the needle. I mean, we maybe went from like 700 followers to like 1,800 followers in like 3 months or something like that. And then we started to have people post and People posted and they reposted and they shared content in like a really specific way, unboxing it. And we, we kept reposting the things that we felt were like the most in line with how we wanted the brand to be interpreted and like be on the internet. And I think we had 200 emails when we launched and we sold out. And it was kind of like this Fuck, we never told anyone what the flavors were.

Yeah.

We never told anyone how much the cookies cost for our first drop. We had no idea what was going to happen, if people were just going to like come to the site and be like, this is dumb, or if they were going to actually do it. And they did it. And then the next week, what we then found, and this is where the flywheel— so our theory, and I would say that it was a theory, and our thought was that we built a— we could build a flywheel around Order confirmations, order rejections, like sold out, the box getting to your door, unboxing the box, and then tasting the cookies as like 5 distinct flywheels where people could engage and share the brand in a really organic way, which would then drive people to the top of the funnel, which was Instagram, which drove them to the website or straight to the website where they signed up for the waiting list. And what we found after that first drop was these people who, you know, we still continued to send a few influencers, not like hundreds. There was a big misconception in the early days that we were a fake brand that didn't sell cookies, that just was giving away cookies to influencers and like trying to create this hype, which couldn't be further from the truth because all we wanted to do was sell more cookies. And, and we kept like winding down the people we would send them to. And have continued to do that. And what we found was that influencers were way less impactful than regular people were, like you or me, because our audience is hyper-engaged. I, you know, you post the cookies and I ask you, oh my God, what did you think? How did you find those? How did you get a box? And you're just like flexing on me like they're the best cookies I've ever had. You're never going to get them because they're always sold out. And now all of a sudden, you know, a couple hundred people from each of the people we sold a box to would start to sign up. And I would say it worked, but it wasn't like lightning in a bottle immediately. And this is, I think, the magic of our discipline and the focus was, you know, I think we went from like 200 to 350 to like 500. It wasn't like, oh my God, we figured it out. Like, we still are worried, like, are we going to sell out every week? Do these people actually care? Do we have enough, like, critical mass?

Yeah.

And I would say that there was an 8-week period where we just held the line. We did. We kept doing exactly the same thing. We kept repeating and like, like reposting and sending. And we got a couple of wins. Like, we had Chrissy Teigen posted about the cookies. And that gave us like a bump. Like we had a couple other celebrities post about the cookies. Those gave us little bumps. I wouldn't say they were like life-changing bumps that like changed the course of our business by any way, but they were like they were nice and they like helped. I think they helped us internally realize that the program was working and we just needed to keep staying the line. And then I would say about eight weeks in. We all looked at each other like we have something here. This is crazy. We have like we have captured some lightning in the bottle and how we're building this brand because then it's been like a rocket ship. So like now our waiting list is well over 100,000 people. It's all organic. It grows ridiculously day over day, week over week, and the more cookies we keep selling. The more it keeps working. And I think that that's been like a really exciting thing. So I guess that's the short answer for how we launched.

There's so much to dive into with that. And mentioning that growth, you know, with the huge waiting list and the growth you've had already, take me through some of those logistics on the back end of pulling that off. Obviously, you, you want to match out selling out but not having too few. And also you don't want to necessarily have too many, but matching that supply demand, how has that been? How have you kind of approached that so far?

Well, we've been a little bit lucky in that the demand has far exceeded our ability to grow supply. So that's made it really easy. But it's something that like we think about a lot in how we build this brand is that, you know, how do we maintain that balance? I mean, I can tell you confidently that based on the way this— the demand has grown and continues to grow, Honestly, if we could quadruple our supply, 10x our supply, I don't think we're in any way, shape, or form going to catch up to the demand for the next like 18 months. But we still— I think it's still really important. I think that, you know, we're a unique business in the direct-to-consumer landscape and there are others and I applaud them because it's hard, is that we're building a direct-to-consumer brand. We also manufacture and make our own cookie in-house. So we're building a cookie factory. We don't work with a co-packer or like someone else that we, you know, can make 100 million cookies in a day. They do this all day. We just gave them a recipe. Like we make our own cookies, we make our own dough by hand. People make our product. And then we also fulfill and logistically like set all of our cookies out. So we're basically building an in-house cookie factory and 3PL. While building a direct-to-consumer brand. And I think that we've done it. I think I'm very proud of the team in the way that like we've been able to do all of that because it's really difficult just building a direct-to-consumer brand. If you have a third-party logistics provider and a factory that's like perfect, that knows how to make your product and can scale up. So all you have to do is create demand. And I would say that we've not only created more demand than I've ever seen, and I think most other direct-to-consumers ever have in their first 6 months, We've also, I think, really, really, really well, like, started to scale our kitchen operations and, like, learn about how do you grow a factory at the rate that we need to. And, you know, every week for a while we had increased production and we kind of leveled off and realized that there was a cap to the, like, commissary kitchen that we rent and we rent. We're in the process of hopefully we're waiting for our final permit Moving into a facility that's eight times bigger, which will allow us to really be in our own. Like I kind of describe it as like our own you know cookie factory, and we really the way we thought about operations from April, I kind of built. I've been building in like six month plans, and so we just finished our like 2022 six month plan, and I kind of describe it this way: We were a mom and pop roadside. bakery cart that exploded and needed to turn into an early-stage cookie factory. And now we're transitioning from an early-stage cookie factory to an actual cookie factory. And then the next decision will be, are we an international cookie factory? Are we a multi-location cookie factory? Or do we just get more efficient in how we make the cookies in our own? And that'll be, you know, maybe the back half of 2022. But I think for right now, you know, we think a lot about how do we scale our ops because our goal is to sell people cookies and provide an amazing cookie. So like we've, we've actively limited our production when we know that we don't have enough people to make them at the highest quality. We've, you know, so, you know, the thing I think we try to remember is that most of the people getting our cookies are getting a box for the first time and they need to be delighted and like excited and blown away just like everyone else who's gotten a box before them. And then the pressure really comes on when people start getting their second box.

Yeah.

Because now all of a sudden the expectations that are in your head maybe are different than what reality is. You've now created like a, you know, a fantasy of what you remembered it to be like, and it might not meet those expectations. And that's something like, well, how do we meet them? How do we make sure that we're consistent so that there's no possibility that that happens? And then how do we continue to improve? So, you know, we had a box for our first drops that was good but not perfect. We then created a second version of our box because one, we were running out and our demand was— I mean, our supply was going so fast that was better but worse in different ways, but like great. And now we're actually finishing up our third version of the box that we're going to release in hopefully late December, early January. That takes things to another level. Like I've described it as like the Apple version of our box. And I think that that's like a really rare thing in that most direct-to-consumer companies, as they start to scale, start to cut corners. And we're spending more money every time to try to provide a better customer experience so that it actually is even more worth it when you get your first box or second box of Last Crumb. And I think that That's a really rare thing in the first— I mean, we've only sold cookies for 6 months and we're actively like iterating on making things better and better and better.

Why do you think you're able to pull off that strategy or go with that strategy? Is it because that is going to separate you? So for the future, you have emails and you have this lifetime value will go up. Like, how do you think through that in terms of being able to spend on that and improve quality constantly at Last Crumb?

I think that our brand— I think this is what goes back to the brand is that we believe we're We know we're a luxury brand.

Yeah.

We are like very indulgent. It is, it is our brand to provide the greatest customer experience in box, in product, in cookie bag. I mean, we send a 44-page magazine with every box. Like, that seems ridiculous, but it's not ridiculous because that's the expectation. You don't like buy, you know, a Bentley And are like, oh cool, I'll take like the vinyl seats. Yeah, so I think that's the way we really think about it is there is no substitute. And I think that we've over-indexed on customer experience over paid media. I mean, we don't do paid media. So, you know, spending more on a box is a lot easier when you're not spending $300 to acquire a customer on Facebook. And I think it goes back to like product market fit is that we, we over-indexed on really building out the brand and developing it so that our brand, our marketing was the box, was the unboxing, was the shareability, was all of these other things that then took— replaced in this early stage, you know, paid media.

Where does this go from here? I know you raised about $1 million in funding, at least from what I've read online. But where does this go from here then, Matt?

I don't know. I think that there's— I mean, I do. I have a lot of ideas.

I'm curious now, whatever you want to share.

I think that there's a lot of really amazing opportunities for us in the future. I think that I stand by like our discipline and focus right now in that until we've sold all the people who just want to get this first box of cookies a box, Like, why, why distract our team, ourselves, our production, our customers with like all this other stuff that they can't get? We are working on like some really interesting, like super premium, like we're working on a really cool Black Friday, Cyber Monday thing for 20, you know, this kind of membership's not the right word because it's not a subscription, but like kind of membership to something we've been testing. That for 2022, that includes like new flavors of cookies, access a cookie concierge, like some really exciting stuff that like some of our most like diehard customers are like begging for that we've been testing with like some investors and celebrities and different people over the last few months to see how people would interact with. You know, we— so I think that's our initial focus, you know, the next 18 months is like Just continuing to get really good at what we currently do and building on that and finding ways that we can continue to delight and augment the customer experience. Now, dreamer Matt.

Here we go.

Entrepreneur Matt. We talk about Omakase Cookie, a cookie restaurant in Tokyo to try to get a Michelin star. We talk about doing bakeries. Kind of Supreme did retail. Like, could we do 5 outposts in like, you know, London, Paris, New York, LA, Tokyo that are like the crème de la crème, most ridiculous thing of all time? We talk about expanding more cookies, you know, doing like different offerings. I think there's a lot of opportunities for the brand to go in a lot of different places, specifically international. But, you know, The operator in me is like, yeah, but only if we can get to the like next six months, and only if we can get to the six months after that. And I think that an issue or like a mistake I think a lot of brands make is they start diversifying before they've hit really any sort of scale, and it starts to detract from everything that they do because it adds either too much complexity to their business. Or confuses their customers. And I think that for us, we make the most luxurious box of 12 cookies on earth. And we just want to continue to do that more and more. And I think that— see where things go from that.

And I'm excited to see if Rolex will partner with you too, as well, at some point.

Yeah, Rolex, if you're listening, we are ready to do a custom watch. with a box of cookies and auction it for like $100 grand. So call me, Justin will give you my email address.

Absolutely.

Yeah, I think like those are the exciting things that I think we look forward to too, is that like there's a lot of really fun brand partnership collaboration. We get a lot of inbound stuff that I think we're working on in the future that makes the brand like exciting and like different and like unique. And we're pumped.

Awesome. I know you can find Last Crumb at lastcrumb.com on the website, also on Instagram. It's pretty insane what you guys have done. Matt, thank you for coming on the show today.

Yeah, thanks, man. It was great to talk.