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In this episode of The Profit, “The Soup Market,” Marcus Lemonis visits a Milwaukee-area soup shop.

The store has been reasonably successful, but with grand plans to expand its footprint from 5 stores to 50+, and a co-owner who died unexpectedly, owner and soup chef (“soupier”?) Dave Jurena needs Marcus’s help.

Within a few minutes of stepping inside one of The Soup Market locations, meeting Dave in person, and tasting a few soup samples, Marcus already has a few thoughts. The inside of the shop, he says, looks like a hospital cafeteria. The soups themselves are a little thick, not the light fare he expects when ordering soup. And he’s concerned that the calorie count of these thick soups isn’t posted anywhere, nor does Dave care to know how caloric his soups are.

Marcus also hates the sloppy presentation of the soup and bread on a plate, thinks the bread smells like it’s not fresh, and is concerned the shops aren’t collecting data at the point of sale for which soups sell best and worst. Dave estimates soup makes up about 60% of the shop’s revenue, but doesn’t know what the second-best selling item is.

Marcus asks Estephanie, one of the shop’s young, friendly assistant managers, to step outside to ask her a few questions without Dave hovering. When he asks Estephanie who she reports to, she squirms and says, “Dave…?” It’s obvious to Marcus, and the audience, she’s hiding something. There’s clearly an underlying issue, but it’s above her pay grade. No one can blame her for not getting in the middle of whatever it is. Estephanie grudgingly mentions someone named Grace, but says she’s unsure of Grace’s role at the company.

Next, Marcus pokes around in the kitchen at another TSM location, getting to know some of the other employees including Kevin, who is introduced as the director of operations. Kevin, in front of Dave, mentions Grace as well. Dave quietly says to Kevin, “Don’t mention Grace,” and then tells Marcus Grace will be leaving the company soon. Dave is red-faced and clearly uncomfortable talking about Grace.

Marcus smells something fishy–besides the cioppino. Unwilling to let the Grace thing go, he also asks Mayra the kitchen manager, outside of Dave’s earshot, who she goes to if she has a kitchen problem. “Grace,” Mayra says without hesitation. When Marcus asks if Grace reports to Kevin, Mayra says, “I really don’t know,” with the same awkwardness we saw from Estephanie and Kevin earlier. He revisits the issue Kevin, who describes the relationship between Grace and Kevin as “brother-sister,” and “dysfunctional,” before Dave interrupts them.

Upon visiting a third store, Marcus is confused to see Dave’s wife, Jill, again. He had met her at the first store that morning, but since she’s not technically involved in the business he thought it odd to see her twice in one day. When he asks Dave why she’s here, he says it’s “to support me.”

“Is that really the reason?” Marcus asks. Dave says: “And to keep Grace away.”

When Marcus prods, Dave is as cold as gazpacho and says three or four times, “I’m not going to talk about it. Next subject.” Marcus won’t let it go, and finally Dave says, “I wish you would go. I have no interest in your services,” and storms out.

Marcus reaches Dave on the phone an hour later. Dave explains there was a “blow-out fight” between he and Grace, and they mutually agreed to part ways. Marcus is satisfied, for the time being, and agrees to set the Grace thing aside. For now.

Marcus and Dave go over the numbers together. We see the little cartoon infographic we get every episode, this one specific to increasing the margins on a cup of soup–though Dave himself doesn’t know how much it costs him to make a cup of soup–from 52% to 70%.

And finally, here’s Marcus’s offer: factoring the $85,000 TSM is in debt, Marcus is willing to pay $315,000 for 50% of the business. Before agreeing to take Marcus’s money, Dave wants to know “what that looks like” in terms of how Marcus intends to spend money when it comes to improving the look of the stores, which Marcus hates. Marcus says no, he’s 100% in charge and won’t agree to any such conditions before making the deal. Dave, who pretty much has no choice, agrees. And with a handshake, Dave and Marcus consomme-d their relationship.

Marcus has Dave to bring a few of his soups to a lab to test their nutritional content and, surprising to no one, they are found to be heart attacks in a bowl. (As if this episode didn’t already smack of Seinfeld, the lab scene calls back Jerry, Elaine and Kramer having the “no-fat” frozen yogurt tested.) Marcus suggests tweaking some of the recipes to make them healthier. Dave wants no part of it, suggesting Marcus should stick to business and let Dave stick to soup.

Later, who makes an appearance at the store but Grace. She blows past the counter and walks to the back room. Marcus tries to stop her, pretending he thinks she’s a customer, but he knows what’s up. Her explanation is, “I’m Grace,” and she keeps going. Since Dave isn’t around, Marcus takes the opportunity to ask her what the deal is.

Grace says she is “kinda freaked out, I’m shaking right now.” Grace tells Marcus she is the director of operations–not Kevin–and that Dave requested she be invisible during the episode. She very much still works at TSM and still draws a paycheck. After a little more Marcus-style prodding–he’s like the Howard Stern of small business reality shows–Grace finally says she thinks Dave’s wife, Jill doesn’t trust her, and that she has become a problem in the Jurenas’ marriage, though nothing has ever happened between she and Dave.

The plot thickens–much like Dave’s African peanut soup.

As Marcus leaves the store, Dave’s wife, Jill, is skulking literally around the corner from the store. Is she keeping a lookout for Grace?

Marcus confronts Dave about Grace. Again. Dave says she’s a great worker who really stepped up when his business partner died, and that he developed feelings for her. He says he told his wife about it, and that nothing actually happened between he and Grace. Marcus considers walking away, but decides to power through for the sake of the employees. What a guy.

Marcus forges a deal with a pretzel company to supply TSM with a better bread option. And Dave even agrees to make a healthier soup to appease Marcus. Marcus is simply inspiring, not unlike chicken soup for the soul.

Marcus goes home to Chicago, then comes back two weeks later for the grand re-opening of one of TSM’s locations, having spent $60,000 renovating the shop and installing a point-of-sale system. People are lined up at the door. Dave gives an emotionless speech about how excited he is for the re-opening, and everyone files in for free soup. Dave’s wife, Jill, says she’s very proud of Dave. But wait…

Marcus spots Grace hanging around outside the store. Marcus brings Dave outside to take one last shot at ironing things out between Dave and Grace. He mediates, Dave apologizes, and Grace accepts. But Marcus is still pissed that Dave, against his wishes, excluded Grace from the opening. Marcus is again questioning his decision to partner with Dave. Perhaps he should have chosen salad instead.

Ten days later, while back in Chicago, Marcus gets a call from Grace. Grace says Dave fired her for insubordination, and when she refused to leave, Dave had the police escort her out. She also reveals that two years ago she filed a sexual harassment complaint with the Equal Employment Opportunity Commission after Dave made a sexual advance toward her. While that’s messed up, and Dave is now coming off like a scummy weirdo, I kinda feel like this is something Grace might have mentioned to Marcus a little sooner.

Marcus goes back to Milwaukee to confront Dave and sees that the new menu board, fresh produce display, and POS system are gone. The pretzels are missing, too, and TSM is now selling ice cream.

Marcus, now stewing, questions Dave, who tells him he doesn’t like any of the ideas Marcus implemented. They bicker, but it’s all beside the point. Marcus whips out his trump card, the paperwork from Grace’s EEOC complaint. Dave goes back into red-face mode, says the complaint is “being taken care of,” and that he doesn’t think he and Marcus are a good partnership. Marcus, class act that he is, wishes Dave good luck, shakes his hand, and walks out. After taking about a $100K hit on this failed investment, Marcus may be eating ramen tonight.

“I saw his true colors,” Marcus concludes. “I’m outta here.” I can believe he walked away from the deal. What I cannot believe is that he didn’t even attempt a soup-related play on words to end the episode. Personally, I would have gone with, I ultimately decided that Dave’s bisque was simply not worth the risk.

This was an entertaining hour of TV but it leaves me with one question: had Dave been more flexible and cooperative with Marcus, would Marcus have been willing to stick out the partnership despite Grace’s sexual harassment claim? How much of a role did ethics play in Marcus’s decision to walk away, and how much was simply because Dave was a pain in the ass to work with?

What do you think?

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I wasn’t a lemonade stand kind of kid.

Instead, when I was 8 or 9 years old I told my mom that when I grew up, I was going to own an entire fleet of ice cream trucks. Back then ice cream was the most valuable currency I dealt in. So, naturally, my dream job involved having unlimited access to it.

I would sit in an office above an ice cream distribution center—where the ice cream men went to fill up their trucks on in the summer—and do whatever one does in an office when one owns an entire fleet of ice cream trucks. (This was before the internet and even before computers were ubiquitous, so I imagined some sort of hopper for my papers and maybe even a paperweight.) And the best part, I told my mom, was that she could come visit me at work whenever she wanted and I’d give her free ice cream.

More than two decades later, shockingly, I do not own a fleet of ice cream trucks. I do not have an office above an ice cream distribution center. Hell, I barely even eat ice cream anymore. As best laid plans of third graders often go, this one sort of fell apart after I got really into Teenage Mutant Ninja Turtles.

For Alex Blumberg, the host, producer and subject of the new podcast StartUp, there’s a little more at stake than free ice cream.

Blumberg is best known for his work with public radio, including the program This American Life (producer) and podcast Planet Money (founder, co-host). But he recently quit both those gigs to start his own project: he’s starting his own media company which will focus on producing and distributing high-quality audio content via podcasts. Oh, and the best part–for us, anyway–is that he’s letting listeners in on the process. Here’s how Blumberg describes it on his website:

This show follows what happens next – my difficult journey from man to businessman. It’s a classic start-up story, but one that’s recorded in real time. I’ve documented disastrous pitches to investors, difficult conversations with my wife, and tense negotiations with my co-founder. The result is an honest, transparent account of something that happens all the time, but that we can rarely listen in on: starting a business.

StartUp is not a prescriptive how-to guide to starting a business from the ground up (this, despite several episode titles beginning with “How To”). It’s quite the opposite. It’s a show about a guy who knows very little about starting a business, and what happens along the way as he starts to figure it out.

The weekly series, which premiered on September 5, is just seven episodes in. So far Blumberg has taken us through a failed investor pitch, the process of taking on a business partner (after realizing he couldn’t do it alone), figuring out how to share equity with that business partner (a very cool insider’s look at emotional side of the process), assigning a value to a company that doesn’t make any money yet, and even picking a name for the company.

As I’ve written about previously on this blog, I’m big fan of ABC’s Shark Tank. On that hit reality show, entrepreneurs come to the sharks (i.e. potential investors) with a fully (or partially) formed companies asking for investments in exchange for shares of their businesses. Some entrepreneurs get deals, others are sent packing. On the show it all seems so simple.

StartUp is, in many ways, a prequel to Shark Tank.* As of episode #7 Blumberg’s company, Gimlet Media (for the origin of that name, check out episode #5), is still “pre-revenue.” On Shark Tank most pre-revenue business don’t get a deal unless the idea is very, very novel.

 *If StartUp is the prequel to Shark Tank, then shows like Hotel Impossible, Restaurant Impossible, and The Profit–all of which deal with businesses gone bad–are the sequels.

For those of us who have dreamed about owning their own business—for the record the ice cream thing is still on the table, though I haven’t figured out what I’d do all winter yet—and those who haven’t, StartUp gives listeners a fresh look into those steps between concept and actually taking those steps towards turning that concept into a living, breathing, (and hopefully) profitable thing.

The most interesting stuff for the listener tends to be that which is most gut-wrenching to Blumberg–from figuring out how much equity to give his partner (episode #3), to the constant self-doubt that comes with starting a business in your forties when you have a wife and two young children to consider every time you make a decision about anything.

In episode #2 Blumberg debriefs with his wife on the phone after an investor, Matt Mazzeo, in Los Angeles. Blumberg has been out to L.A. before, in episode #1, to meet with Mazzeo’s business partner, Chris Sacca. Mazzeo and Sacca are venture investors and business partners at Lowercase Capital. They have successfully invested in the technology space. After talking with Mazzeo, Blumberg is left with a pit in his stomach:

I’m feeling the same shitty way I’m feeling the last way I was out here. … It just makes me feel like I don’t know what I’m doing. … This is the thing: I’m sitting there talking to this guy and I’m describing something that feels like the biggest thing I’ve ever done, a scale beyond my wildest imaginings, something that I can’t even tell if I can pull off, and it’s totally not big enough. Like it seems small to him.

This is a really important insight, and one that I suspect a lot of startup business owners face when pitching investors. Especially in the tech space.

Can you or I invest in companies like Gimlet Media?
Episode #7 was about crowdfunding Gimlet Media. According to the episode, the 2012 Jumpstart Our Business Startups (JOBS) Act allowed for Americans to invest in private companies like Gimlet Media, which they were formerly not allowed to do. This means that through companies like Alphaworks, would-be investors could go online, find a company they wanted to give money to, and in exchange they’d receive equity in that company. (This is different than sites like Kickstarter, where you “donate” money but don’t receive any equity.) A Shark Tank for the Average Joe, right? Wrong.

Due to current Securities and Exchange Commission regulations, only “accredited investors,” i.e. those who make $200,000 a year and/or have a network worth of $1 million, may do so. (Alphaworks covers this in their FAQ.) If you’re an Above Average Joe, invest to your heart’s content. Otherwise you’re out of luck until the SEC loosens those regulations. Fortunately for Gimlet Media, they had enough friends in high places–in part thanks to attention the StartUp podcast has been getting–to get to their investment goal.

New episodes of StartUp are available about every two weeks. Whether you’re a future ice cream magnate or not, I recommend you give it a listen.

You find the StartUp podcast here: http://hearstartup.com/ – or you can use a podcasting app on your phone or tablet and search for StartUp. Happy listening.

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From the time I moved to the post-college paradise that is Hoboken, New Jersey, in 2006, until the day I moved out of the oft-flooded mile-square city in 2008, I’d never heard of Buddy Valastro.

I also didn’t know much about his bakery, Carlo’s Bake Shop, though I’d walked past it hundreds of times on Hoboken’s main drag, Washington Street. With its picturesque storefront window and classic gold on maroon signage, Carlo’s always felt very upscale from the outside; it was the kind of place that someone like me, who routinely ate mac and cheese with cut-up hot dogs for dinner, should walk right past without a second glance.

But what I also didn’t know was this: that behind that fancy storefront window I’d been so intimated by, Buddy Valastro was busy building an empire.

Having his cake…
It was my fiancée who introduced me to Valastro’s cable reality show, Cake Boss, in 2009. The show is about a family-owned bakery in Hoboken starring the son of the bakery’s late owner, Bartolo “Buddy” Valastro Sr.

Buddy Jr.’s supporting cast is made up of the other people who work in the bakery, many of them related to him by blood or marriage. They play innocuous pranks on each other, bicker like family often does, and produce elaborate works of edible art in each episode.

Even since the TLC show debuted, I would guess the bakery still sells more pastries like cannoli, cupcakes, and lobster tails than it does its $25,000 masterpieces. Yet it’s the higher profile clients and cakes that the show centers around; they represent a new challenge to Buddy and his bakers in each episode.

CB_roulette

Always bet on red…velvet! Am I right??? (Photo credit: http://www.mediaglare.wordpress.com)

Cake Boss, which begun its sixth season this past Memorial Day, is a lot like the storefront window at Carlo’s in that it’s been a showcase for the talents of Buddy and his staff. They’ve made everything from a wedding cake that was fitted to house two live doves, to a roulette table and wheel cake for a local men’s social club. (For Cake Boss‘s “Top 5 Most Impressive Cakes,” click here.)

Upon each cake’s delivery on the show, often by Buddy himself, the client thanks the Cake Boss effusively for using his artistic medium, cake, to transform their vision into a gorgeous and delicious homage to the person, place or thing they’re celebrating. And Buddy, always modest and deferential, seems to understand that the client isn’t really a customer, but a patron of the arts who allows him to make a lucrative living doing what he loves to do.

…and Eating It, Too
For many of us, it would have been enough to propel our family’s mom-and-pop bake shop into a multi-million dollar business with its own accompanying reality show. But Buddy, so it appears, is far more ambitious than his goofy, avuncular, PG-rated disposition might suggest.

The Next Great Baker, his competition reality show, just wrapped up its third season in February 2013. From 2011 to 2012 he hosted two seasons of yet another TLC show called Kitchen Boss, a cooking show where Buddy traded in eggs, sugar and flower for tomato sauce, pasta and meatballs, and shared his family’s Italian food recipes.

Meanwhile, after opening up another facility at the Lackawanna Center in Jersey City to keep up with the high volume of national orders–more voluminous thanks to Cake Boss‘s popularity–he has since expanded, opening a second Carlo’s Bake Shop in Ridgewood, New Jersey. He’s also got a small shop in Times Square. I get the sense he won’t stop there.

Sure, A&E’s Duck Dynasty may have stolen some of the cable reality headlines recently. The hit show has emerged as a ratings machine, beating everything in the Wednesday 10 pm time slot including broadcast network programming.

Like Willie Robertson, the CEO of Duck Commander born into a family whose patriarch started a modest duck call business, Valastro has benefited by being at the right place–and in the right family–at the right time, as the oldest son of a baker with his own bake shop. And yes, if you asked Valastro he might tell you how blessed he feels to be where he is today. But it hasn’t been all roses for Valastro, who lost his father in 1994 and whose mother, as documented on Cake Boss, was recently diagnosed with ALS.

Yet the Cake Boss machine rolls on, all Buddy’s hard work seemingly less about avarice than about honoring the family tradition he was destined to carry on.

Taking His Talents to Upstate New York
Despite everything on his cake plate, Buddy is apparently still up for a new challenge.

Joining Restaurant Impossible‘s Robert Irvine and Hotel Impossibles Anthony Melchiorri, Buddy Valastro is looking to become the next star in reality TV’s small business renovation sub-genre. After all, if you needed advice on running your family-owned bakery, wouldn’t Valastro be the first guy you’d want to talk to?

In the premiere episode of his latest TLC show, Bakery Boss, last Monday night, Valastro visited Friendly Bake Shop upstate in Frankfort, New York. (About 200 miles away from Carlo’s, Friendly is safely outside Valastro’s customer base. For now.)

Friendly Bake Shop after the Buddy treatment.

Friendly Bake Shop after the Buddy treatment. (Photo credit: herkimertelegram.com)

With three old, tired men at the helm of Friendly and their three grown children working devotedly (but fecklessly) for them, it seemed that the former were lacking energy to keep the bakery going, while the latter were lacking the know-how. Buddy’s visit was their last chance to turn things around.

As you might expect with any episode in this genre–as we’ve seen so many made-for-reality-TV miracles performed by Irvine and Melchiorri before–Buddy shapes up Friendly Bake Shop in just a few days. He demands a full cleaning of the shop and its equipment, revises the menu with some of his own best-sellers and shows the staff how to make them, and renovates the storefront to look more like Carlo’s than a crappy dive bar in the middle of nowhere.

Early reports say the shop is now flourishing since the episode aired, though Yelp has just one review from someone in California.

Success Story or Sell-Out?
Former New York Yankee great Yogi Berra once reportedly said about a popular restaurant, “Nobody goes there anymore. It’s too crowded.”

Many of us can relate to the idea of liking things before it was cool. Our favorite indie band gets mainstream radio airplay, and suddenly we can’t get tickets to their concerts. Our favorite TV show, which so aptly captured the zeitgeist of people our age, suddenly got popular among the masses and became prosaic beyond recognition.

So should we stop rooting for guys like Buddy, who was once a great upstart story but has since saturated the market with pre-made cakes sold in grocery stores, a line of baking equipment, and enough TV shows to start his own cable network? There’s no right answer to that, of course, but for me it’s always felt strange rooting for the underdog only until they’re not the underdog anymore.

En route to our Memorial Day weekend away at the beach, my fiancée and I stopped off at Carlo’s to get some treats before getting onto the New Jersey Turnpike.

Arriving on Friday morning, we hoped they would still have plenty of their signature coffee cake–my fiancee’s mom’s favorite–with the crumbs the size of small boulders. Our only concern, with a tight schedule and a long drive ahead, was the length of the line.

As it turns out we were right to be concerned. We had apparently showed up just a few minutes behind a bus full of tourists who had made a special trip to wait on line at the famous bakery from TV. They were queued up along the sidewalk, blocking the path of Hoboken residents whose formerly cute little local Italian bakery was now a nuisance to walk past.

We chose not to wait. In that moment we would have loved to have pulled up and seen no line so we could get in and out. I’m sure Buddy would disagree.

I’ll still be rooting from Buddy from afar, like a high school friend I don’t speak to but keep up with all the goings on in their life via Facebook. In the meantime there’s no shortage of up-and-coming reality stars to latch onto, perhaps even the next Buddy Valastro.

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