Last January, Morgan Newman and his partner, Casey Elsass, made a crazy commitment to launch their spicy honey company, MixedMade, in just 30 days. The two pulled it off, and Newman delighted GrowCo attendees last year with his story of launching a startup in a tight timeframe with multiple constraints, and then blogged about it for Inc. This year, Newman returned to GrowCo with a more cautionary tale: Be careful what you wish for.

After almost a year of steady growth, Newman and Elsass, joined by a third partner, Ted Barbeau, found themselves gearing up for their first holiday season. The partners struck the jackpot with media coverage: mentions of Bees Knees Spicy Honey in Bon Appétit, Vanity Fair, and Esquire, plus interviews on CNBC and coverage on the Today Show resulted in a 2,200 percent spike in sales over the previous monthly average. It was every entrepreneur's dream, or nightmare.  

By December 10, the company had more than 5,000 bottles of spicy honey backordered, and it was still shipping out of Elsass's apartment. All the while, it was coping with multiple snafus: its sole bottle distributor short shipped and backordered bottles with no notice; the chilies used to infuse the honey were out of season and in short supply; PayPal froze the company's account because of fraud concerns given the uncharacteristically high transaction volumes; and honey shipped via USPS with the promise of Christmas delivery was tracking for delivery on Dec. 27. Long story short: the partners addressed each problem and the company survived. But Newman describes the experience as "type two fun," akin to the thrill that one gets from rock climbing after the climb is finished.

The holiday season was not so much a roller-coaster ride, says Newman, as a white knuckle trip down a loop slide. "On a roller coaster, you know you're going to end up on the platform where you started," he says. "But on a loop slide, you're not even sure you're going to come out the other end and if you do, you probably won't be walking." So how do you survive the chaos? Newman has four tips:

1. Build relationships, not transactions. 

Always remember that your business partners are critically important to your success and treat them accordingly. From the outset, Newman and Elsass forged a strong relationship with their honey supplier, a small family beekeeping operation in the Hudson Valley. So when holiday orders spiked, says Newman, "they bought a van to make bigger deliveries to keep us alive during December." The supplier felt personally invested in MixedMade because Newman and Elsass had treated him like a true partner, frequently visiting the company and asking for advice. 

2. Invest continuously.

Newman and Elsass learned the hard way that it's frequently dangerous to rely on a single supplier. The shortfall of bottles during the holiday season was a huge pain point. "If we had a back up plan for the bottles, we could have brought in another $20,000 in volume over the holidays," says Newman. Now, the company has three bottle providers. "We think of it as health insurance," says Newman.

3. Over-communicate.

When your company is in a state of chaos, fear can set in and it's often wildly difficult to address the elephant in the room. But transparency pays off. When it became clear that orders may be delayed, Newman started emailing customers, explaining the situation and pledging to update them every few days.  "I sent 700 personal emails," he says. "All of those people who were panicked that their honey may not arrive for Christmas were getting great customer service." What better way to create lifetime customers?

4. Smile, or don't.

In the end, says Newman, "You can get it done by freaking out, which will make everyone else freak out as well. Or you can make it work with a smile, which will keep everyone optimistic and motivated." In other words, you can't always control circumstances, but you can control your reaction.

Newman and his partners made it through "Christmageddon '14." At the end of the holiday season, MixedMade saw a 600 percent increase in the company's cash balance, which allowed them to buy new equipment and move into new kitchen space in Brooklyn. "We've already seen a 400 percent increase in yield," he says. The company is also now in Whole Foods and is working on the launch of a new product.  Which may mean that Newman is in store for more "type two fun." 

Published on: Apr 23, 2015