Money Rehab with Nicole Lapin - Melissa Ben-Ishay, Founder, on Unapologetically Following Her Gut and How Getting Fired Kick-Started her Company (Change Maker)

Episode Date: June 3, 2023

Originally aired 6.2.21 Melissa Ben-Ishay tells Nicole Baked by Melissa’s whirlwind origin story, her tips on building a team, and how she learned the language of business.

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Find a co-host at Airbnb.com slash host. Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player, GameStop. Are you ready for some money rehab? Wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. As you know, every Friday we talk with a public figure making change in every sense of the word. And along the way has been in or is still in money rehab.

Today I'm talking with Melissa Ben-Eshe. Yes, it is the Melissa of Baked by Melissa and my and everyone's favorite cupcake shop. Melissa has been one of the best startup stories of all time. Right before she started her company, and I mean right before, she was fired from her job and wondering what to do next. Then she got right to work and started Baked by Melissa out of her apartment in New York. Fast forward 13 years later, and she has 14 Baked by Melissa locations, and she ships her cupcakes all over the country. It's a smash success story, and I wanted to hear all about how she did it. So Melissa, welcome to Money Rehab.

Nicole, thank you so much for having me. We start the show with a quick round of Money Rehab, Never Have I Ever. So it's like the financial version of the drinking game. Never have I ever bought a house. I have. Never have I ever bought a house. I have. Never have I ever bought a used car. I have not. Never have I ever taken out a student loan.

I have not. Never have I ever missed a credit card payment. I'm sure I have. Never have I ever overdrafted. I have. Never have I ever bought crypto. I have not. But my husband has. But the day is young. My husband does that stuff. I like you might not want to hear this, but I'm not. I don't. I know what was about to come out of your mouth. I want to just push it, smush it back into

your mouth. I don't like it. You are the money person. You are. I make it. Yeah, you do. You let there is a dough pun in here somewhere. I don't know exactly where it is, but you are making the dough. Why do you say you're not the one who handles it? I prefer not to manage it. Why is that? It scares me. I don't enjoy it, quite honestly. That's why. I do, though, think it is so incredibly important to understand it, to save it, to spend it wisely, to invest it. And I understand it. I am just, as it relates to business, I focus on leading the company. I have a vast understanding of our finances, how the money's being spent, obviously the balance sheet, the P&L, but I hire the best people to own it. So it's not like you're avoiding it.

It's not like you're burying your head in the sand. It's a choice between not wanting to do it, but being able to do it. Correct. And I actually believe I'm just not the best person to do it in my company. My time and focus is best spent on product, creative brand marketing. So you just threw down P&L and Balance Sheet like a boss. How did you start speaking the language of business? Because as you know, it's a language like anything else. Did your family,

were they into business? Did they talk to you about money growing up? I come from an entrepreneurial family. So my grandfather actually started the business that my father and uncle run today. My brother is the definition of an entrepreneur. I used to complain growing up because family dinners were always about golf or business. But I think that's why I love business. To me, it's like a game. Interestingly enough, I think I learned the most about the financial aspect of business. And I really I really went to like bootcamp when I had the privilege of working with my last CEO before I stepped into the role of CEO. He really understood the importance of everyone in the company owning the P&L and understanding it and looking at it.

owning the P&L and understanding it and looking at it. And he, you know, that's his, that was his greatest passion. And so he wouldn't let me not give it the attention I needed to, which taught me so much. And so today I find myself in meetings, like asking questions and, and saying things where I'm like laughing at myself, like who would have known I'd be here? I've learned and grown so much since we started this company. Do you sometimes say finance stuff and you're like, yeah, I said that. And I know what I was talking about. Like I'm proud of myself. Go me.

Like who am I? Yeah. Self high five. I love doing that. I just, I feel like, yeah, I do a little happy dance for myself. And that's good. I mean, you know, I think that it's a language like anything

else. Fun fact, back in the day, I thought it was P-N-L. And I have a story in, I think it's Boss Bitch, about how I assumed it was my producer asking me if I needed to pee because my name is Nicole Laban, N-L, and a lot of people call me N-L. And so I just totally had no idea that it was like an and symbol because when you're saying it, you don't think of it that way. So I imagine you growing up like with the Wall Street Journal in your crib or New York Times. My dad made me read the front page of the New York Times every day. He's like, you don't even have to read the articles, just read the headlines. And I was like, it was the best. I'm so happy that he did that. My experience with business actually taught me what I know, which is very interesting.

And obviously, like, you cannot run a business without a clear understanding of your finances, because otherwise, it's going to go right into the ground. It is. And that's why it surprised me when you said you got this education from your CEO that you took over for, because that was like already when the business was baked, pun totally intended. Of course, I had a basic understanding and pushed for a certain financial structure that didn't exist before. Well, before the CEO that I worked with, who taught me so much, even started working at Baked by Melissa. But the CEO before him was my

brother. And so I am a very trusting person, especially when you work with family. There are so many challenges that come with working with family, but one of which is not trust. I trust my brother, obviously. So that was his department and he did that. But when my next CEO came on, he said, I don't care. Like, yes, I'm going to own this. And yes, like you're going to be focused on brand marketing product, yada, yada. But you have no excuse. You must be aware of everything that's happening in your business. You didn't start as an entrepreneur. You started as an assistant to a media planner. And then what happened? And then I was fired because I wasn't good at the job. And I wasn't passionate about the work

I was doing. And then I went to my brother's office crying from being fired, who had just started his own interactive agency, like the 10th business. But this one really did well. I went there crying. He said, go home, bake your cupcakes. We'll start a business together, which wasn't crazy. We always wanted to go into business together. And the crazy part is that I listened to him. And from that day on, I mean, like it was really hard and it took time. It wasn't overnight, but it was pretty quick that everything happened. I had the opportunity to go to a tasting

for this very well-known caterer, which came to me like 48 hours after I was, 24 hours after I was fired from my job, actually, because of my positive attitude and ability to see this challenging time as an opportunity to do something that makes me happy, I went and I baked the cupcakes, my tie-dye cupcakes that I was known for baking at the time. And I went for a tasting with the caterer and he loved them and we knew we needed to do something different. So we decided to make the cupcakes just a bite, which allowed me to then try every flavor, which I was doing anyway. And yeah, I was doing events as Melissa baked by Melissa less than two weeks after being fired. It sounds like it was easy.

It really wasn't. It was very difficult. And it still is today, which is why not everyone starts their own business. And so that was your first foray, big break into your own business, into entrepreneurialism. But that obviously can happen to a bunch of folks and then they shit the bed. Do not create an amazing business that you've created. And for that first event, we created a website bakedbymelissa.com and we shot all the images on my Ikea coffee table in my Murray Hill apartment using a Canon point and shoot digital camera because iPhones did not exist the way that they do today. You could go to bakebymelissa.com,

buy that first event that I did, order a hundred cupcakes on our website that I would bake out of my apartment and deliver using the subway if you lived anywhere in Manhattan. And we also created business cards that had our beautiful logo on it, my home address, 300 East 34th Street, sweet 27 G, but it was my apartment and my cell

phone number, which my parents were not happy about. But that's, that was the fake it till you make it mentality, which quite honestly, like that was my brother really driving us at the beginning. It was his vision. He was encouraging me. It was very much outside of my comfort zone. I used to like say, who the hell do I think I am? Melissa baked by Melissa. And he would say, but you are, and he was right. And, you know, he taught me so much. I mean,

from the moment I like came out of my mother's womb, but like also when, from the moment we started baked by Melissa, I mean, he believed it. And I think that is actually so important and something that I have found to be very consistent across the most successful entrepreneurs. Because if you don't believe it, as corny as it sounds, you're just not going to achieve it. Because there are so many people out there that are going to tell you, you can't do it. Yeah, you knew your lanes. And it's so refreshing to hear such you can't do it. Yeah, you knew your lanes.

And it's so refreshing to hear such a success story about working with family because you hear a lot of horror stories. And it's also really refreshing to hear you say that you just did it on a total shoestring and you just got after it with the basic tools available to everyone. Because I think, you know, everyone has an idea or mostly everyone has an idea. But it's that sort of moment between the idea and getting shit done where people fail, I think, because they're like, oh, no, but then I need a graphics designer and I need a blah, blah, blah. And I need to raise money and all these things. Yeah. And to be clear, like, it's incredibly difficult to work with your family. Brian would say that I'm saying that.

I think the one thing that sets us apart from those horror stories that you've heard is that our priority is our family. And so we've been through like, you know, we've wanted to kill each other and but we're family. And so I would never let anything come between like the love I have for my brother. And he feels the same way. But it's I mean, it's not I don't recommend it. Oh, really? So you would tell other budding entrepreneurs don't start a business with family, whether it's sibling or parent or spouse, even? No, I wouldn't. But I would tell them that it's hard. It's very challenging. It's very challenging. And it's also there are certain things that make it incredible, like the trust. It's very like I'm too trusting to people when I meet them. I trust my brother.

You know what I mean? And I think that allowed us to do a lot very quickly. And what was a lot very quickly? Did you guys raise money to get the business off the ground or did he start the initial? We did not actually raise money to get the business off the ground. We did like five years into it. What we did do was surround ourselves with people who had skills that we didn't. Matt being one of them, the caterer being the other, and then a restaurateur like a little while later who wound up giving us our first retail location on the highest foot traffic corner of Soho rent free for five years. How do you get that sub score? You give a little bit of equity. He actually didn't think that he was going to have the building for too long.

They were trying to sell it. He said month to month, we'll do it for as long as we can. And it wound up being five years. Now it's Nike town. It's Nike's flagship store. Hold on to your wallets, boys and girls. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts

like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash

while also making it easy on myself. Find a co-host at Airbnb.com slash host. Now for some more money rehab. And oftentimes I give the example of making cupcakes to people starting thinking about starting businesses or turning their hobbies into jobbies, so to speak. And, you know, I think sometimes when you have a hobby of baking, for instance, it is better left as a hobby because you might glorify this idea that you're just going to like be baking all day long and it's going to be rainbows and butterflies. But then when you start it as a job or a business, you have to source ingredients. You have to do accounting. You have to do all this like non-sexy fun stuff that people don't necessarily associate with fun, tidy cupcakes.

That is so true. I don't bake cupcakes all day, every day. Although people think that I do, especially since we've started to be more active on TikTok. So follow baked by Melissa on TikTok to see me baking. And it looks like I bake all day, but I actually do that all in like three hours once a week. That said, I love business. I love being challenged. I love going outside of my comfort zone. I love being told that I can't do something so I can prove you wrong. And I love finding solutions for problems. And if you're starting your own business, the one thing that is certain is there will be challenges and problems every single day. And so after being in business for 13 years, the same business, which is unique,

not only have I learned to anticipate the challenges, I've learned how important it is to see every one of those challenges as an opportunity to find solutions, to learn, to grow, and to celebrate. And the people around you, I'm assuming, celebrated along the way because you knew them since the womb, literally. Would you tell folks when they're trying to think of their team, whether it's a co-founder or an executive team, if they're starting a business, to look more for values? Like thinking of money in the same way? I think being able to identify like when you find the right person, even if it's not like exactly what you think you're looking for, give yourself an opportunity to think it through and like search within yourself to better understand if it's better to stick to what you thought should be or if it's better to kind of like pivot a bit. It kind of sounds like dating.

Yes, it is exactly like dating. And I think everyone has this preconceived notion of like the type of person they think they're going to end up with or the type of life they think they want. Hey, but I grew up with a stay-at-home mom who was the best mom ever. And that's what I thought I could possibly,

would probably do to be honest. But Baked by Melissa happened and I had the opportunity to do what I love every day. And then I met a bartender who looked at me like nobody ever looked at me before. And we are celebrating our nine year wedding anniversary today. He does not fit the description of what anybody in my family thought I would marry,

but he is my best friend and baby daddy and it, and it works. And I, and in my, in my brother's speech at our wedding, he said, what Melissa does so well is follow her heart. And my brother follows his mind. And, and so you got to learn to follow your heart a little bit. Otherwise, you might be your own worst enemy at times. And I unapologetically follow my heart. And so sometimes it works against you. But for the most part, I think it goes with trusting your gut a little bit. Only you know what is best for you.

And it may not fit the description in your mind but that's life nothing goes as planned here's a tip from melissa you can take straight to the bank i think it's important to take the time to understand what you're spending your money on like to really break it down and understand where you spend it first you understand it then you ask questions to better understand it and then you have a dialogue like my desire to not focus on this, like works to my advantage. I have zero ego. So I like to be the dumbest person in the room. I like to ask the questions that other people might not want to ask because it may make them sound silly. I love that. Like, cause if I have the question, I'm sure a million other

people have the question too. And they're just, they don't want to ask it. And I don't really care. question too, and they're just, they don't want to ask it. And I don't really care. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikadader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all. money, money, money. You spend my money, money. You spend my money, money, money. You spend my

money, money, money.