Video Transcript

00:08 Weisul: So can you tell us a little bit how--you've mentioned data a couple times, how you use it to run your business because I think, you know, a lot of people could think oh, bakery, kind of old fashioned, a little loosey-goosey, but that's not the way to grow. So how do you do that?

00:21 LaMontagne: I think, you know, especially in the food business, a lot of people tend to try to shoot from the hip, but there's no reason to because with the point-of-sale systems nowadays, you can get so much data on what you're selling in terms of for us the breakdown of flavors, you know, by time of day, by day of week, by time of year. And that is extremely helpful as you plan, you know, your labor, as you plan your production. And we also use it to drive our expansion plans. For example, we started shipping our cupcakes probably a year after we started our business. We didn't ship at first. We had customers saying oh, I want to send these to my friends in Texas or my cousin in Louisiana. And we said sorry, we don't ship. But they would just put the pink box in a FedEx pouch and mail it themselves. And they were getting there all tousled. And so we said we got to figure out a way to do this. And so we spent a lot of time and we did that. And we shipped cupcakes nationwide and we used that data, where we were shipping them, to determine where were going to open our future brick-and-mortar locations. So we were shipping a lot of cupcakes to New York City. Despite all of the bakeries in New York City, people wanted to order Georgetown cupcakes. And so we opened our first outpost outside of the DC area in SoHo. We opened Boston and Los Angeles and we're opening Atlanta next. And we really used that shipping data to determine where our customers are, where our fans are. And we don't say well, I feel like opening in Honolulu because I would love to open one in Honolulu. You know, we don't have the data to justify that. So I think a lot of entrepreneurs make that mistake. They do what they want to do versus what they should do. And sometimes it's a very hard decision to make or a hard pill to swallow, but, you know, your data's telling you something that you don't want to hear.

01:52 Katherine Berman: (Inaudible).

01:53 LaMontagne: And in our case, like we were--we love all of the cities we're opening in, but for businesses, there are some businesses that make that mistake. They fly in the face of their own data even when the numbers are staring at them black and white on the page and they choose to ignore them. And you can't. You know, the numbers speak volumes. You just really have to use that to guide your growth and your business and your planning.

02:13 Weisul: So one thing that I can't resist asking you about, of course, is your reality TV show, right, because I, you know, I'm doing research for this and I Googled your last name and the first thing that comes up, I don't know how you feel about this, is that you announced your pregnancy on a reality TV show and then the next thing that came up was that there was a spat between two different lifestyle publications about who you gave the print interview to. And I was like well, in some really weird way you've arrived. But, I mean, has this--what has the effect of this been like on your partnership, on your business? I mean, this is the kind of thing that people like dream about and fear intensely.

02:56 Berman: I think that in the beginning when we started DC Cupcakes, we were a little fearful of, you know, about how it was going to be--

03:05 Weisul: How did they even know about you?

03:06 Berman: It was actually a television producer from New York City who is now one of the producers of Bethany's show, but did Anderson Cooper, did Dr. Oz, he did a lot of--he did Rosie O'Donnell's show, was in line, you know, at our first bakery in Georgetown. And when he got to the front of the line, he was like this is a cupcake shop? I thought they were giving away something for free in here. That's why I got in line.


03:28 Berman: And so he saw us. We were covered in flour and sugar. My mother was screaming at me. It was like--it was just complete chaos. And he said wow, this would make a really good show. You know, we didn't think anything of it. He asked if he could come and film for a weekend. And at the time Sophie and I had been doing lots of interviews with people, things would end up on YouTube.

03:45 LaMontagne: (Inaudible)

03:46 Berman: You know, yeah, it'll end up online somewhere. We had no idea about the TV industry and how he had a production company. They actually took the footage to TLC. Before we knew it, they picked up a first season of DC Cupcakes.

03:54 LaMontagne:  And now the show is shown I think in almost like 200 countries around the world. And we have people from all over who watch the show. And for us, the show really is a totally positive experience because we have a lot of young girls that our fan base, we have a lot of young 9-year-old girls who want to become entrepreneurs now because they watch the show and they're like, you know, I'm going to start a business with my sister. And for us, it's a very family-friendly show. Anybody who's seen it knows like the most drama that happens is a cupcake batch gets burned or something falls. And so it's not salacious in any way. It really is a family show. And it's been a really positive experience doing it and we love sharing our story as two female entrepreneurs. And at the beginning of each episode, you know, we say it’s not going to be easy. And at first when we said that line, we're like okay, it--but it really does ring true.

04:33 Berman: Ring true.

04:34 LaMontagne: Every single day, it's not easy. And I think anyone who owns a business who watches our show takes comfort knowing you know what? I'm not the only one who's struggling. It's hard for everyone. You're not in it alone, because I think when you're an entrepreneur, it's very easy to get very down on yourself thinking I'm the only one going through this. Nobody understands. Why is it so hard? And I think when you see other people, you know, and us five years in still having the same struggles. Everyone is going through the same collective experience. Sharing that, it resonates with people and it makes you feel less afraid and better about where you are because it is, it's a very scary thing, owning a business.

05:05 Weisul: What has the impact of that show been on your sales?

05:08 LaMontagne: I think it definitely increased our--the awareness of our brand outside of the DC area. So we were very popular in Washington, DC, but now that the show started all over the world, we have people coming in from literally every single country now, like we get people emailing us like from the Maldives saying do you deliver to the Maldives? And I'm like no, but I'd like to. But--so it's been a very positive thing, but it also is more stress to us because when people see your business on TV, they have a certain expectation of it. And so when they walk in the doors, we have to meet that expectation or exceed it. The worst thing that could happen is that they walk through those doors and say you know what? That place isn't as cool as I thought it was on TV. The cupcakes weren't all that and the employees weren't as nice. And so for us, that is we want to meet or exceed their expectations every--

05:48 Weisul: That is pressure. That's pressure.

05:50 LaMontagne: It is. It is a lot of pressure. And so--and we instill that in our employees. We let them know, like these kids and families are coming in from all over. We have moms who drive with their daughters from Nebraska to DC doing road trips just to go to DC Cupcakes because they see it on TV and they want to visit. And for us, we want to make sure that that experience is so magical and amazing that they're like you know what, that was worth that road trip from Nebraska. I'm going to tell my friends and we're going to do it again next year. And so for us it's really important to meet that expectation.

06:16 Weisul: So I wanted to ask, you know, both of you obviously had careers before you did this, but I think that this has brought your leadership skills and capabilities to a different level and maybe made you rethink a little bit about what it means to be a leader. So how would each of you describe your leadership style?

06:34 Berman: I think that I love to lead by example. You know, some of my previous jobs that I've had, my employer didn't know my name, would come in and I was just another face. And so for me, it's very important to get to know our employees. And I, you know, we have over 400 employees now. And believe it or not, I'm pretty good at naming almost everyone. Sometimes I get them wrong, but I--it's very important to me to know that, you know, to know their names and to know who they are. And I like to show them that you know what? I am not above, you know, getting down on my hands and knees and cleaning out the fridge, which I did in Boston, you know, and I think that it's important to lead by example because, you know, your employees look up to you and they want to see that you know what? You're no different than they are.

07:15 Weisul: Okay. But when you show up into Boston and the fridge needs to be cleaned out, aren't you pissed? Aren't you like why did someone not clean the fridge?

07:21 Berman: (Laughter) I am, actually.

07:22 Weisul: I mean, I'm not saying that you should be not--I mean, that's crazy.

07:25 Berman: I know. I--no, I do get upset when there is a milk spill in the fridge and no one's cleaned it up. And I'll point that out. But I'm not above getting down on my hands and knees and cleaning it out, you know, with them, but--

07:37 LaMontagne: Yeah, that's important. I'd say--and I think it's because--probably because I'm the older sister and it's one of--a characteristic that my style is more structured in that I feel especially when you have a business with multiple locations and as you scale, you need to have a structure to your leadership style and organization because everyone needs to kind of fall into line. And it is kind of like running a little army because if someone's not in synch with everyone else, everything can go wrong. And sometimes in a business when one thing goes wrong, it's a chain reaction. And so I like to take a very structured approach to really every day, like everyone has, you know, knows exactly what they should be doing, there's no uncertainty. Everyone has a role. You know, in some ways we describe our business as like running a--opening a Broadway show every day because we start from scratch. There are no cupcakes saved overnight. We bake everything. We start with nothing every morning. By 10:00 a.m., all of the deliveries have to be out. All of the cupcakes have to be set on the front counter and the doors need to open for the first customers. And to get all of that done by 10:00 a.m. every day is like putting on a show every day. And so everyone's really got to fall in line and know their roles. I think that sometimes people when, you know, they're--I'm not--I don't know what I should be doing or what should I be doing, that's not good. Like everyone should know what their--they should be doing. And so you really have to lead that way.