Baumann fired away with questions. What would the business realistically involve? How would Kilmer make money on it? What type of equipment would he use to lower the cost of labor-intensive peeling and chopping? How long could the peeled spaghetti squash stay fresh in the store? And how much money did Kilmer have available to invest? Kilmer didn't know all the answers, Baumann recalls. "But when he talked about spaghetti squash, he really sparkled." Based on the enthusiasm he saw and Kilmer's background, Baumann encouraged him to pursue the idea.
Kilmer immediately went to work. For the next four or five months, he was scooting off in a hundred different directions, trying to answer basic questions about how his business would work. Where would he buy his raw squash, for instance? And how would he go about processing it, packaging it, and getting it into stores?
Kilmer was amazed to find how many resources there were for helping someone create a business. At Heinz, his network had been internal -- specialists in every discipline imaginable sprinkled around the organization. "We thought we were the only food company," he says. "If I had a problem, the last thing I'd do was to call someone at Stouffer's." But on his own, he began to start a network from scratch.
Kilmer's outgoing personality stood him well. He wasn't the least bit shy about picking up the phone and asking for referrals. In addition to Baumann's Center for Entrepreneurial Development, people at the Enterprise Corp. of Pittsburgh told him how to beef up his business plan; a Penn State University lab provided technical assistance (under a grant from the Ben Franklin Technology Center) on how to extend the shelf life of squash; somebody else introduced him to an accounting firm; a recommended law firm gave him 18 months of legal work for virtually nothing.
Both as moral support and as an extra pair of hands, Vickie (who worked as a substitute teacher) plunged into the start-up. In no time flat, she shifted from being a mom who was always home when the boys came back from school to a working parent who, like her husband, was usually away until 7 or 8 p.m. "One of the first things we did," she says, "was to go out and buy a beeper," so the boys, then 11 and 14, could track her down if they needed to.
Working together as "mom and pop" had its advantages, at least at the beginning. For one thing, nobody had to ask Kilmer how his wife felt about his risky venture: for important meetings with prospective vendors and other contacts, Vickie was right there (sometimes weighted down with a Styrofoam cooler full of squash). Like college students gearing up for finals, the Kilmers crammed for the market test during the spring and early summer of 1991. But truth be told, working side by side wasn't all it was cracked up to be. Jim was annoyed by Vickie's constant stream of questions about why they were doing things one way and not the other; he also resented it whenever Vickie wasn't available to help out. Vickie found that hearing about every blip in the business and being on call every minute were too much. Eventually, she says, "we decided we'd rather stay married." She took a $6-an-hour job at the local library and in an instant became the family's number one breadwinner.
To keep expenses down when the market test got under way that summer, Kilmer did as much as he could himself, calling in part-timers only when he was swamped. When he wasn't peeling squash on into the night (in a kitchen he rented by the hour from a local caterer Vickie knew from the PTA), he was cooking it or wrapping it or packing up coolers and making deliveries or sales calls at stores. Ideally, he would have made his drop-offs in a refrigerated truck, but he made do with his 1983 Buick Skylark. On hot days he just cranked up the air conditioner and hoped for the best. There were times Kilmer felt like Clark Kent, changing his clothes four or five times to accommodate all the different jobs he had to do in the course of a day.
The busier he got, the better time he had. "I ran on adrenaline. I thought about stories I could tell my grandchildren." Some days he'd set up a card table in the aisle of a supermarket and cook up spaghetti-squash cheese crêpes for customers to try -- one more thing he'd never been called on to do at Heinz. Of course, it helped that the market test was going well: on average, the 23 targeted stores were selling twice as much spaghetti squash as Kilmer had forecast. At revenues of only $500 to $1,000 a week, the test itself wasn't a moneymaker; in fact, it continued to be a $4,000-a-month cash drain. In Kilmer's mind, though, he had proved what he'd set out to prove -- there was a market. Now it was time to turn it into a commercial enterprise.
Kilmer admits that, coming from a big company, he didn't have a lot of experience in raising money. "At Heinz," he says, "financing involved requesting to have your budget funded. And when you ran out, you asked for more." Still, he fantasized that, as a former Heinz manager, he'd have no trouble attracting investors who would trust him to run the business. Wrong. The wealthy people he courted were very demanding. How big a plant did Kilmer intend to have? Where would it be? And what kind of production and distribution costs did he expect? He didn't have all the answers. And each time he grabbed a few hours to scope out potential facilities for his squash factory in the greater Pittsburgh area, he came back shell-shocked. "They all looked like Superfund sites," he says.
Just as he started to panic, a local business owner introduced by Kilmer's lawyer came through. He was ready to commit $500,000 in exchange for about 30% of the business. But as the lawyers worked over the details, the terms became unpalatable. In one provision, for instance, the investor could grab 70% of the business if its financial ratios weakened more than a little. Upon hearing this, Kilmer gagged. It might fit an old-line steel company, he thought, but not a start-up like his. Yet another lesson in the world of start-up financing. In early June 1992 he walked away from the deal. No money. No production. No company.
