Rich Habits Podcast - 49: Scaling a Small Business to Millions w/ Candace Nelson

Episode Date: January 29, 2024

In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz are joined by Candace Nelson. Candace co-founded Sprinkles Cupcakes with her husband, Charles, in 2005. In 2012, they sold the business for 10s of millions to a private equity firm. In this conversation, we discuss scaling a business from scratch, essential mindset shifts entrepreneurs need to make, as well as the compounding effects of small efficiencies. ---You can follow Candace on TikTok, Instagram, and Substack! You can also find her book, Sweet Success, on Amazon. ---Public has finally released options trading on their platform! To learn more about all of the product features Public offers, ⁠click here!⁠---⭐ Download our FREE Budgeting Template – ⁠click here⁠⭐ Earn 5.1% on your savings with a High-Yield Cash Account – ⁠click here⁠⭐ Automatically buy stock where you shop with Grifin – ⁠click here⁠⭐ Protect your family with term life insurance from Suriance – ⁠click here⁠⭐ Use code “Spotify” for 15% off our 4-module video course – ⁠click here⁠⭐ Optimize your portfolio with Seeking Alpha – ⁠click here⁠---👤 Explore everything Austin does – ⁠click here⁠👤 Explore everything Robert does – ⁠click here⁠❓ Ask us questions for our Q&A episodes – @richhabitspodcast on Instagram📬 Inquire about working together – [e-mail]---Hankwitz Group LLC has an existing business relationship with NEOS Investment Management LLC. The opinions expressed are those of the author, and the author owns several NEOS ETFs.

There's more to life than finding the perfect car. But finding the perfect car can help you get the most out of life. Like the SUV that handles everything from drop off to off road, and the car that hulls groceries and hockey teams, or the van that's gone from just practical to practically family. Whatever you want, wherever you're going, start your search at autotrater.ca. Canada's car marketplace.

Want to go electric without sacrificing fun? That's the Volkswagen ID4. All-electric and thoughtfully designed to elevate your modern lifestyle. The Volkswagen ID4 is fun to drive with instant acceleration that makes city streets feel like open roads. Plus a refined interior with innovative technology always at your fingertips. The all-electric ID4. You deserve more fun. Visit vw.ca to learn more.

S-UvW, German engineered for all. Hey everyone and welcome back to the Rich Habits podcast, a top 10 business podcast on Spotify. This episode of the show is incredibly special because we are joined by the powerful Candice Nelson. Candice is a serial entrepreneur, bestselling author, Wall Street Journal contributor, angel investor, TV show star, guest shark on Shark Tank, but above all, she's a mom. Candice started her career working as an investment banker, but in 2005, she left her banking job to launch Sprinkles. Sprinkles is the world's first cupcake bakery and cupcake ATM. In 2012, Candice sold Sprinkles to a private equity firm, netting her what I'm sure was millions upon millions upon millions of dollars. Since inception, Sprinkles has sold over 200 million cupcakes,

has over 20 stores, 30 cupcake ATMs, and thousands of employees. But she wasn't finished. In 2017, Candice co-founded Pizana Pizza Restaurant, which has seen rave reviews from the LA Times, food and wine, and many more. Today, Candice leads CN2 Ventures, a family office and venture studio, which invests in early stage consumer companies. Most recently, Candice published Sweet Success, where she shares her entrepreneurial journey. Candice, congrats on all the well-deserved success. We are so happy to have you on this week's episode of the Rich Habits podcast.

Thank you. I'm delighted to be here, and I love following you on TikTok. Thank you for sharing all of your knowledge with the world in bite-sized pieces that even my kids can want to watch. Let's go. I just want to remind everyone here now, this interview happened because I sent Candice a DM on TikTok. I have this podcast with Robert because I sent him a DM on TikTok. So y'all don't underestimate the power of those TikTok DMs. Don't be afraid to shoot your shot. So the first question I have for you, Candice, is around your career and what got you excited to take the leap into being an entrepreneur, right? You worked in a career that had a very clear path to a comfortable retirement investment banking. But you decided to take the leap. into entrepreneurship anyway. What inspired that? I'd say I'm an accidental entrepreneur. I was raised by a corporate lawyer. My dad had worked for two companies his entire career. Corporate lawyers are not known for their risk-taking, very risk-averse household. And growing up, I didn't

have much in the way of female entrepreneurial models. So my vision for my path was to get the prestigious job, learn business, and just follow a corporate path to, you know, pot of gold at the end of the rainbow, right, to success. And life threw me a couple of curveballs. The first was, well, I'll take a step back. After a couple of years as a financial analyst at the investment bank, I went to work at a technology company. It was the late 90s. It was the early.com boom. And so many people were doing that. They were jumping ship from traditional jobs going to make their millions in stock options. And so I was working for an early internet company. And for those of you who are more my age than your age, you'll remember that after the boom

came the bust. So literally within a few weeks period of time, the market, you know, for that early internet world just imploded. And everyone I knew was out of a job, including myself. So I went from sort of my very merry path to success to sitting on the couch, aimless, without a job wondering what to do next. And then not long after that, 9-11 happened. And that was a real, a very dark period and a period of reflection for myself where I came to realize I'd done everything right.

I'd followed all the rules and where had it led me, right? It hadn't led me to what had been promised. And so with sort of all those rules out the window, I started to really think about what I wanted to do with my life, not what was expected of me, not what, you know, success looked like for other people, but what did it look like for me? And so I came to terms with the fact that I didn't like what I've been doing. And I wanted to make like a real change, do something meaningful, do something joyful, work with my hands. And so instead of going to business school, I opted for pastry school just to, you know, test my interest. I'd always loved to bake. I'd grown up baking with my mom.

It always carried a lot of meaning for me. And I realized once I got into pastry school that I loved it, I really loved it. I even surprised myself with how much I loved it. So that was the beginning of my path towards following my joy and following my creativity. And that's what led me ultimately to opening my own business with sprinkles. So just as a quick follow up, I just thought about this when you were talking through this, Candace is I think a lot of people, including myself, right, we have this sort of ego where we're like, yeah, you know, I was told to go to business school.

I got the investment banking job. I'm not going to go be a, you know, a pastry chef. No, I'm going to private equity. I'm going to venture capital. I'm riding up this ladder. Now, can you maybe talk for a second to the person listening right now who's really having that inner conversation with themselves that's trying to get over the ego hump of like, I mean, I kind of had it, right? I was like, I'm going to do M&A. I'm going to be a financial analyst and

do all these fun things to my job. And I'm like, well, I think I might just post videos on TikTok and see what happens, right? That was kind of what felt like a walk backwards, but turned into a leap forward. So did you have a similar kind of inner conversation with yourself? Absolutely. I mean, there is a lot of swagger and mojo that comes with those jobs. And you feel a little bit deflated when you leave them. I mean, that's part of the whole golden handcuffs. It's like, You'll never be the same without this job, right? You'll never make this amount of money again. Like, who will you be without this job?

And I was just shy of buying into that. I didn't have enough of a paycheck. I was still an analyst that I was fully golden handcuffed to that job. So I got off easy. But no, in all honesty, I did have a hard time with it because I didn't have that model for entrepreneurship with one exception. Okay. So while I was on the couch, aimless, wondering what I was going to do with my life,

I ended up watching a lot of Martha Stewart. a lot of Martha Stewart. And, you know, part of the investment banking swagger for me was the fact that I was a woman in a man's world, right? And I had sort of crashed through this glass ceiling. I was one of very few women in that investment bank. And so when I thought about embracing baking and moving away from the corporate world, I had this extra feeling of like, am I, is this regressive for me as a woman? Am I, you know, kind of going back on all of the strides we've made, right? And I have carried that extra burden with me. But as I was watching Martha Stewart, she was the one who kind of gave me permission because here was this woman who was completely embracing the domestic arts.

And yet she was a total business badass. She had built an empire. And so I think ultimately what I realized was that by holding myself to societal standards that weren't true to me, that was another way of holding me back. Right. That's another way of holding women down. The whole idea of feminism is that we get to make a choice as to what's right. for us. And so I think to your point about leaving the world and going into content creation and me going into baking, it's like you find power and success through being your authentic self. And you don't find it by trying to live up to the values of those around you. And, you know, it can be hard to step away from that. You have to have a sense of self and you have to have a

sense of strength and resilience. But guess what? As an entrepreneur, that's really good practice because you're going to need that resilience. It's going to come in handy. Yeah, I remember vividly when I stepped away from my finance job and went the entrepreneurial route. And my mother lamb-baseded me for two years. What are you doing? You have a degree. You're making more money than anyone you know. And I'm like, it's just not for me. And so I had always been in that entrepreneurial route, but I chickened out early on in my career in my early 20s and really went the corporate route. And as soon as I pivoted away from that, the world opened up to me. And it just seemed like this magical land of success and fulfillment. And that's why this is such a great start for the episode.

Just because I think we've all gone through it and my mother probably similar to your father, very risk adverse. She just was not having it. And I was just like, this is just the way it is. And I was fortunate enough to have some good success. And then silly bands happen. And then my mom led up on me quite a bit after that. So it was the last laugh there. It was definitely the last laugh. So let's get into, because we could talk on this one question for hours and we have limited time. So let's get into my next question. In my career, I had found myself many times undercapitalized along the way. Did you go through this?

And how did you find the necessary funding to grow at the speed that you desired? Because I find so many entrepreneurs try to do it all on their own. They try to self-fund. And it really slows them down. And it's just not a good practice for growth. if you're not keeping up with the speed of the desire of what you could do with that company. So walk us through how you handled that first kind of hurdle of having enough capital to grow swiftly. Well, I'll be fully transparent.

My husband and I had a little bit of a nest egg that we'd socked away from our investment banking bonuses. It was enough for us to work on the business for a couple of years and live very modestly. Like I'm talking about my car was breaking down. I couldn't get a new car. Trader Joe salads for dinner. You know, and this is a point in our career where a lot of our friends are now buying homes or going on nice vacations and certainly going out to nice dinners. And there is definitely a lot of sacrifice in the entrepreneurial journey.

But in particular, you know, you feel a little left out, right? You're like, wait, I can't go to dinner with you. I've got to have my Trader Joe's salad because we're building this business. So, yes, I had a little money to play with, but it wasn't lots. and we didn't even entertain the idea of raising money because essentially we were two out of work investment bankers betting it all on cupcakes. Everybody said we were crazy. And not only that, you know, if you looked at sort of the macro market conditions, everybody was on a low carb diet. So carbs were completely out. And here we were talking about, you know, erecting a very special temple to cupcakes

in the middle of Beverly Hills. So we were not a fundable business by anyone's measure. Luckily, we were able to bootstrap, build that first location. As can happen, everything took longer and cost more. And we were definitely sweating it out. We were very lucky to start cash flowing very early. And what we ended up doing is scaling the business through cash flow, which has its pros and its cons. You know, the pros are that we got to make all of the executive decisions.

So whereas an investor might say, I don't think you need to spend, you know, this much money on those eam stools or on that beautiful custom cabinetry, we were able to build the brand exactly to our specifications, which most people probably wouldn't have understood, but it built the brand equity. And the flip side of that is that even though we were a very innovative concept, we were trailblazing and doing something no one had done before, you know, cupcakes only luxury bakery, competition followed really quickly. So we had this, you know, national expansion plan. Well, by the time we got to location, 7 opening in Houston, we weren't the first cupcake bakery in town. Somebody had already sort of ripped off

our concept. And so we were having to defend who we were. So, you know, I love the fact that we were able to bootstrap. We owned 100% of it when we, my husband and I did 50-50 when we sold to private equity. We were able to do things our way, which was totally different from the way anyone else was doing things. So to have that creative control was amazing. But, you know, there's an argument to be made, we should have franchised. People certainly wanted the franchise. Nothing but cakes did a really good job franchising their model. So I don't want to look back and say I have any regrets, but it's certainly a debate that you could have. I just want to quickly follow up actually, because you mentioned talking about how you guys were 50-50 when you sold to

private equity. Describe the moment to me when you guys realize like, it's time to get out. It's time to let someone else run this business. Well, my husband and I weren't exactly in agreement on that. I think I heard about this a lot in investment banking and I was sensitive to it, this idea of founder syndrome, where you fall so deeply in love with your baby, right? Your business is your baby that you can't imagine anyone else being able to operate it the way you do. You can't imagine that anyone will value it the way you do financially or otherwise. And I think my husband had a little bit of that. And I was very sensitive, even though it was truly my personal baby. It was my recipes. I was the face of the brand. I did not want,

to be accused of founder syndrome. And my husband and I are very much more brand creators than we are true operators. I mean, we operated our business and scaled it nationally very hard to do. But that's not our strength. And so I wanted to hand over the reins to somebody who really, that is their expertise. I didn't want to hold back the growth of my company because it was my baby and it was too precious. Having said that, I do think that something gets lost when the founder isn't at the helm my friend Greg Renfrew from Beauty Counter just returned to Beauty Counter. And I'll be really interested to see how that goes. But, you know, her team is so thrilled to have her back.

So, you know, I think he was a little bit on the fence. I felt it was time. The thing that really pushed it over the mark for us was the fact that we had young kids that we were toting around the country every time we'd go to a store opening or checking on a store. And I really wanted to give them some consistency, allow them to have some roots. And so that was ultimately the deciding factor. Got it. And I think for me, the biggest takeaway for everyone following along and listening to this

episode that's a budding entrepreneur or already well into your journey is to understand there is no right way to do this. Every way is different. And like Candice alluded to, you might grow faster having that money, but then losing some control sometimes can backfire. So it's just really all about what works best for you. Because when you do create something very successful and everyone is out for you, you're going to have to either beat the competition or just thrive in spite of that competition. And I think that's something that we both have gone through Candace because I learned a very, very valuable lesson with SillyBans when we were in the name creation phase. I put a list of the 10 finalists narrowed it down to five, narrowed it down to one.

The biggest mistake I made during that period is I should have bought the URLs and reserved all of the social handles for every name, not just the finalist, because it would have made the knockoffs and the copycats work a lot harder had I taken all the names and brought them in under my URLs, my portfolio to prevent them from being able to copycat as much. So I think there's both sides of the fence. And this is a great point for anyone who's in that position of do I bootstrap or do I bring in outside money. Austin, I'll take this next one. So plenty of budding entrepreneurs can execute on getting started. But in my experience, I found that they hit a wall when it comes to scaling the business to a level of like what you did.

So what are some key insights that made you different along the way and help you get to that next level? Because I see so many entrepreneurs that can get to that $1 million or $2 million a year size, but then they struggle to get to the next level where maybe it's $5, $10, or $20 million a year. So touch on those hurdles and the outcomes relative to hiring, inventory control, supply chain issues, and how to get all of your processes in order to be able to scale a business that large. So Charles and I, neither one of us had any experience running a business. We didn't have any experience in retail, definitely not in bakeries. So we went into this with the idea that we were smart enough to figure some things out,

but certainly we were going to have to hire from the best of the best, whether that was someone from Starbucks or Houston's, you know, these businesses in the food world that we respected. As soon as we could afford it, we would be bringing one of those people in because they knew all the answers. They had all the answers. And what's ironic is what ended up being so special about sprinkles is that because we were trailblazing and doing something new and because we didn't really have any legacy knowledge of the industry, so we just had to figure it out and do things our own way, it became such a special

culture and people loved working there so much. And we did things that made sense, right? We did things that were preserved the quality of the product that were the best for the customer. And there wasn't this sort of, this is the way we've always done things. It was like, no, this is the Sprinkles way. And so when we did finally end up hiring those people, they didn't last because they just weren't innovators. They really were just executors. And Sprinkles really at the end of the day was an innovative startup, right? It wasn't really a bakery.

It was trailblazing a path in a very sort of mom and pop. legacy industry. And so it just didn't compute. And to your point about scaling, the number one thing, particularly in a retail brand, is your team. You have to have feed on the ground, unlike maybe, you know, an e-commerce company. You have to literally hire your team, send them to the next location. And we ended up more often than not, I mean, 95% of the time developing our talent in-house and promoting them. And they so believed and bought into the brand because it was, really was a brand that was established based on my authentic purpose, my joy. And so that translated. And so people were sort of drawn to sprinkles because it was a special place to work.

We would pour into them. We would develop them. We would send them off and promote them, which is honestly, my favorite part about growing a company is being able to promote people that you love who work hard and give them like a better job, more pay. And it's just, to me, the best part about it. So we were able to, we went into it with that sort of mindset like, oh, there are people out there that know better. And for sure they did know better, but they didn't know our way. And our way ended up being such a special and unique, like, competitive advantage, really, to our business. Amazon presents Jeff versus Taco Truck Salsa, whether it's Verde, Roja, or the orange one. For Jeff, trying any salsa.

is like playing Russian roulette with a flame thrower. Luckily, Jeff saved with Amazon and stocked up on antacids, ginger tea, and milk. Habaniero? More like habanier, yes. Save the everyday with Amazon. Yeah, I remember early on, I was skeptical. I'm like, really, cupcakes? This is when I was living in L.A. more full time.

I'm like, cupcakes in an ATM. and I remember going to the Beverly Hills store and the lines were so long and I forget where the first ATM was. Beverly Hills. Was it still? Okay. And I remember going there and I'm like, there's no way. And I remember opening the little box. And I'm like, okay, this is good.

It's not smashed. It's not whatever. And the ATM freshness seemed to be just as equal to the in store freshness without all the lines. And so that's what I liked about it. And still to this day, if it's still there, it's been probably about a year. but every time I go to the grove, I go to the ATM under the stairs, and I'm like, I'm just going to go get a cupcake there. Well, thank you for your support.

Yeah, I love that you guys were able to figure that out because it is one of the coolest things when you feel like you're a trailblazer and you did something different and you really change the game because a lot of times people think you need to build a better mouse trap. And you do, but you don't have to create a brand new sector. You just have to disrupt something that already occurred. And I talk about that all the time. You think about every single day, there's 100 products we could talk about.

They're antiquated and haven't been changed or industries that haven't changed in 20 years. And you can go in and add these wrinkles in these new technologies and change the game because people want to feel like they're part of something new. So I love your story based on that. Thank you. Yeah, that actually pulls us into our next question. You know, Robert, we talk a lot about you don't have to reinvent the wheel, right? if a business already exists and you can buy it with a bones already built, simply build upon that and optimize it. So I'm curious, Candice, how did other bakeries at all inspire innovation at Sprinkles?

Did you ever say like you walk into one or see something like, wait a second? This process or this idea is great, but because we're going to tweak it a little bit, the Sprinkles way, we can make it completely different and we can completely stand out and innovate a specific vertical of this industry. I think the way we did things that Sprinkles was really a reaction to, almost more of a rejection of what we saw going on in the industry. So, for example, when I first moved to Los Angeles, I was really studying the market. We moved down from San Francisco to open the business. And I went to all the cafes around town, the bakeries around town. And I'd be like, when was that cookie baked?

And it was either a couple days ago or it was either, I don't know. Interesting. That's not an acceptable response for a baked good. Right. I mean, the whole point of a baked good is it's fresh, it's yummy. And so I was like, okay. And also the way bakeries did things, I mean, this could be a whole other masterclass, but just everything down to the display case.

So the way that traditional bakeries, you know, displayed their goods, they were just sort of on a tray and you would kind of peer into the side of the baked good. And they were always kind of like messy, right? So we had these dye cut trays where the cupcakes would sit in their little pockets. They wouldn't move. They were always perfectly placed. So it didn't matter who was like hung over that day and like, you know, arranging the cupcakes.

They always looked good. And they were at an angle. So when you walked in and there was the first thing you saw when you walked in, you saw the prettiest part of the cupcakes, the frosting and the dots. The way that bakeries staffed bakers, like they would staff one in the morning to bake what they thought they needed for the day. And then by the time you got there at the end of the day, they were having to discount those baked goods, right?

That's why you see half off baked goods at the end of the day is because those pastries are a day old. Well, we did this sort of just in time baking where we staffed bakers throughout the day. So by the time you got there at night, you know, I remember in the early days, people were waiting for us to discount. They'd be milling around the outside of the store. And I was like, these are fresh cupcakes. Come on in.

They're full price. There's no discount here. We just made these. Right. So I think the way we were inspired by what was going on in the industry is like, what doesn't work in the industry? And how can we improve on it? And how can we make it really special?

I mean, even just the idea, I've heard from so many men who, you know, accompanied their wives to sprinkles in the early days, they thought they were standing in line for like a fashion brand or a jewelry store because it literally looked, didn't look anything like a bakery. It looked like a luxury retail brand. I know Robert, for example, he just purchased a pizza shop just outside of St. Petersburg. Really? Well, we can talk pizza because I have a pizza concept myself, Pizza on it. That was the plan. Okay.

It's so interesting, though, because, like, Robert's done kind of a, essentially. similar thing where he understands the restaurants and he understands all the back-end processes. And he was telling me a story. He's like, yeah, man, like they weren't weighing their cheese. And I'm like, what do you mean they weren't weighing the cheese? And he's like, yeah, they would just go. They'd just kind of sprinkle cheese on the pizza, how it looked, and they liked it like that. And I was like, well, that sounds like most pizza shops. He's like, right, but what you should do is you should weigh the cheese. You have a specific scupor, this, this and these different things. And I'm like, man, I had no idea to your point talking about how the displays are tilted. So the prettiest part is there. There's so many small decisions that go into process.

if it's, you know, bakeries and cupcakes and things like that or if it's restaurants, but there's so many small things that they add up over time and they compound on themselves. So that is what really pulls into the long-term success of these ideas. Well, and I think that's you're setting the stage for scalability because you can't be on the ground at all times. You can't have eyes on. So how are you setting up these businesses so that they operate well without you? They're maybe not going to operate the same as if you were there, but they operate really well because you want consistency in the food business. It's exactly that. When I go into a business that I'm looking to acquire, the number one thing I want to figure out is how much value engineering and how much value add can I bring to the table immediately to move the needle on that business. So like this particular pizza store, it was laughable. I ended up there as an accident. I was looking at another property nearby in small town Florida. And there was nowhere to get food. And I'm seeing cranes everywhere and all these new neighborhoods right around this pizza store. So we go there to eat. And I thought it was close.

because the lights weren't on and it's dark this time of year at 5.30. The lights weren't on. We walk in and I'm like, okay, it must be open. There's a lot of people in here. Sit down. We order food and I'm like, this is a little bit scary. There's no music playing. The lights are on.

It looks like a dentist office. And I'm like, wow. And then we had the pizza and we were like, holy crap. For basic small town pizza, this is really incredible. Were they New York transplants? No, they were Ukrainian transplants that just put together a pizza store. So anyway, the long story short on this was is they were like, well, it's for sale. We just put it up for sale the other day.

And I'm like, really? Not knowing. They didn't have a clue knowing who I was. So we hooked up. I got all the information. And I'm sitting there thinking to myself, it's this busy. Once I got the P&Ls and I got the numbers and mind you, it's a small town pizza store. So 2023, we took possession on December 27th.

So just a couple weeks ago. And for 2023, we looked at the sales were right around 500. thousand for the year and the net profit was around 89,000 on 500,000. And I'm like, not bad. And I was like, but they don't turn the lights on. There's two foot weeds outside. There's no signage. I'm like, I can take this 2,000 square foot store from 500K to probably 800K pretty easily. Then all of a sudden, it's a cash printing machine with the right processes. And like Austin alluded to, day one of going through the due diligence process. I'm watching them. I worked a shift with the present owners and they didn't measure cheese. They had no timers. So literally a guy sat there at the deep friars trying to temp out

the mozzarella sticks or the chicken wings and all that. I'm like, how do you even do this? And they would literally temp with a thermometer and have a guy stand there, which is such a waste of labor. So all of these little things led me to understand and know that I could optimize this business very quickly, bring labor way down, and bring efficiencies way up. And their total cost, they owned it for, I think, 17 months. And they'd only spent $380 in marketing. No social media, no nothing. So yeah, it's really all about,

and that brings me full circle back to your die-cut cupcake holders. And this might sound like I'm a crazy person. But that was one of the first things I alluded to, because when I went to the store, I would get so mad when I went into one of my restaurants in Ohio. and the cupcakes would touch. And then you'd have pink on blue and blue on yellow. And it drove me nuts.

And I saw those dye cut. And I'm like, I could make those in my laser machine right now and fix the problem with my cupcakes because you're right. So like Austin said, the little things compound into big things. I imagine you talk about this a lot in your podcast. You're getting a lot of people reaching out to you about optimizing their businesses. Oh, I could do that just for a living. I'm sure.

Just business consult. I could do it forever and never even do anything else. And I really enjoy it, but I enjoy the building process more. So that leads me to the next question that falls right in line with this conversation. You know, there's countless entrepreneurs and solopreneurs listening right now who are saying themselves, I have an idea, but I just don't know where to start. If you could put yourself back into the mental headspace of Candace in 2005, tactically speaking, What advice could you give an aspiring entrepreneur to help put them one foot in front of the other and how to get started? I think the key here is you have to dream big as an entrepreneur.

I mean, even before Sprinkles was just a little idea in my head and I was already thinking national business, right? Cupcake shops across America. But you have to start small for a lot of reasons. One, it's so daunting to think like from day one, how am I going to create and erect like a national brand. But two, I think action begets more action and momentum comes from that. So instead of thinking, how am I going to be, you know, a national cupcake brand think I need to create a really, really beautiful version of a vanilla cupcake. Let's start there. And so I just started with development, developing in my house. And as I was developing, I just started selling to friends and friends of

friends, mostly who felt sorry for me at the beginning. They took pity on me and they bought my cupcake. But what happened was they took on a life of their own. And before I knew it, people were calling me to order cupcakes. And I couldn't trace how they had found me, gotten my number, tasted my cupcakes. They'd had them at some shower. So that was really validating to me. And it was also validating to the concept. Like, okay, this is something that the market here in LA needs. Hopefully, they will be willing to pay the price tag. You know, I was selling them out of my house for less than I ultimately sold them for at the store. And hopefully, there are other markets in America who need this to. But starting with that early validation, before you go all in,

I mean, it's scary to sign a lease. It's scary to make these investments. So just try to sort of test on a small scale along the way to see if you're onto something or not. And it gives you the ability to pivot to something else if it's not. I was interviewing someone recently about a Etsy shop and they sell cool designs and t-shirts and posters and things like that, right? And it started because one of their friends was like, you know, you're a really good illustrator. You should try and sell these. And that turned into a six-figure year business. And just to your point, Candace, about how it's so much easier to see the long-term vision once you've had a little bit of a taste, right, once you have a little bit of validation in the near term that, wait a second, people like my

cupcakes, people like my illustrations, they like my posters, my T-shirts, whatever it looks like, and not having to make the mistake of saying, okay, I've got this grandiose vision. I do not have product market fit yet. I'm just going to assume it's going to work and I'm going to raise a bunch of money or go into a lot of debt or whatever that might look like as a mistake. I think that's really, really important here. I just saw a deck the other day and it was like, we're going to take on this market. It was food-based business. And it's a huge market and no one's doing this. And this is how we're going to take it on. And this is what we're going to get acquired for. And I was like, this sounds wonderful, but there are no products yet. Like, it's, let's not put the part before

the horse. Like, it's really important that the product tastes good. Like, let's start there. I needed a vanilla cupcake that was craveable, that people would remember, that was different and that was memorable. Like, let's start there. Sometimes I think people get too analytical and they think about like the white space and all of this. If you're working with food, like it better taste good. If you're working with like a beauty product, it better be efficacious. You know, so let's just start small and go from there. This brings me to now, you know, we're talking about decks and investing.

You have, you know, CN2 ventures as a multimillionaire who's always looking to invest. to the next big thing. What are you most excited about investing toward right now? I'm assuming it's probably specific consumer companies that you have inside of C and two ventures, but maybe do you have any specific products or verticals that are really standing out to you at the moment? I love food, obviously. I go where my gut tells me. And I love wellness. In spite of the fact that I deal with all these yummy things like cupcakes and pizza, I do really like, you know, products that are working on sort of the longevity space. So health and wellness is a big one for me, beauty and personal care. And also early childhood, I feel like early childhood is kind of an overlooked space. We have a

business that is focused on sensory development in kids from zero to five and basically working, you know, sort of on the occupational therapy front, but also like in group classes from a very early age to see if there are any issues that develop at that age, but also just to help develop their motor skills and so many of those really important skills that will ultimately help them sit still in the classroom and learn. There's a lot of impact in that space, which is really exciting to me. But I'm very fortunate to be part of an incredible community of people here in LA that are all just doing things, right? They're change makers, they're trendsetters, they're starting companies, they're writing books. And so I oftentimes will support my friends

in their efforts in the businesses they're starting. I love that. So given your experience on Shark Tank, what would be the three most important mindset shifts you see entrepreneurs struggle with and how are you able to help them overcome these pitfalls in all of the deal flow that you see? Let me think about that. I think, you know, one of the mindset sort of shifts that I would like to see in some of these entrepreneurs is to step back a little bit. Some of them are very perfectionist, which I can relate to, very controlling, which I can relate to. But that doesn't allow you, as we've spoken about earlier in the podcast to scale a business, right? If you have to be on site, if you have to do things a certain way, if it's only this, only that, like, that to me signals,

you know, we just had someone on the show. It was Heather's choice. And Mark told her, like, I see a woman who's scared to say yes. And I couldn't have said it better myself. It really was one of those things where she was putting up barriers. She had to be involved in every step. And the business was suffering as a result. So the details matter. But there comes a certain point of where you need to let go a little bit because you just can't be in all places all the time. On the flip side of that, I am starting to see some founders in this next generation because it's so easy to outsource some of these things. They are a little too ready to do so. And I think that it's hard when you are outsourcing all of the marketing, the SEO, that this and

that, and you yourself don't have a knowledge base of that. How are you going to manage somebody? who's doing a good job for you? How are you going to know they're doing a good job for you? Right. So I think having your hands on everything, at least initially, so you have a knowledge base to work from is really important, right? You can't just be a founder and face and then like outsource all of the jobs. And then the other thing in this is I think more specifically for women than men, but I think stepping into your own power because as a founder, you know, you really are by default a leader. You know, people look to you as a leader. And so set your imposter syndrome aside and, you know, fake it till you make it if you have to,

but act like a leader. Bring your confidence. Bring your passion and your conviction and lead with that. Don't lead with, oh, I'm not sure. I'm not ready. I'm not this. Like you may feel that way. We all do at times, but block that off.

Get out of you with that. In the past five years for me, five to seven years, I have found a huge. shift and I really personally enjoy and have had better success with female founders than male founders because I feel that female founders are more willing to know what they know and know what they don't know and they don't let ego get in the way, whereas a lot of male founders are afraid to ask for help because maybe they feel they're weak or they don't seem like they know what they're doing. And that's just a huge mistake. You always want to bode to your strengths and higher to your weaknesses. And a lot of male founders, I think, struggle with that. And that's why I

prefer to invest in work day to day with female founders as most of the time. That's amazing. I love to hear that. And I think there's so much truth in that, you know, I think one of my superpowers is that I'm never really afraid to ask the stupid question. I will ask the stupid questions all day long. And sometimes that means that people will underestimate me. But that's also very motivating to me. Yeah, you don't know what you don't know. And a lot of people, and that's why I said men, they just act like they know it all. And sometimes they're successful despite themselves. But there's just a whole lot more out there if you can understand your weaknesses and hire to those rather than do everything and know it all. Now, I try to know every aspect of the business,

but I certainly don't need to be an expert in every little detail. And you're 100% correct. And for all of you young entrepreneurs out there, please learn your business, know your numbers and know what what's happening with inside of your business so you can work on the business and not in the business once you get to a certain point. Because I agree with you 100% Candice that too many people try to outsource too much too early on. And then they don't know where they really are in the business growth cycle. What a great episode we've had here on the Rich Habits podcast. Now you all know why we are a top 10 business podcast. We have two incredible titans just dropping knowledge bombs left and right. Everyone, thank you so much for listening

to this episode. But before we go, Candice, let the people know about your substack, where to find you, your book, everything in between. Oh, that's so kind of you. Yes, sweet success. It's a great guidebook for aspiring entrepreneurs, new entrepreneurs, savvy entrepreneurs, takes you through the entire life cycle from ideation to sale and with a lot of fun stories of me building sprinkles along the way. And then you can find me on Instagram and TikTok at Candice Nelson and my substack, which goes out every couple weeks, which is filled with great tactical advice, is what you should find it under Candace Nelson, but it's called Sweet Success. And before we sign off, I'm putting my hat in the ring.

Let's open one of your pizza stores down here in South Florida if you don't have any nearby. Okay. Let's do it. Let's talk. We're looking. I mean, we're in California, Southern California and Texas right now, but definitely looking for strategic partners to take it across the country. And we can't be in all places at once. So everyone, thanks so much for hanging out with us on this week's episode of the Rich Habits podcast. Share the episode with a friend. Put it on your Instagram story. Click the little notification. button so you know every single time we post episodes here. And don't forget to leave us a five-star review. Thanks, everyone, and have a great start to your week.