SEE REALITY

SEE REALITY

From Chicken Soup for the Entrepreneur's Soul

See Reality

My business partner, Rick Bacher, and I are not cereal fanatics. We’re not restaurateurs, either. We are, however, two outside–the-box marketing guys who are keen observers of human behavior and fascinated with the passionate and often wacky, deeply rooted relationships people have with brand-name cereals.

Rick and I also consider ourselves pioneers and renegades. In creating “Cereality”—a cereal café that offers all cereal, all day, all ways—we took on the fiercely competitive and adversarial $11 billion cereal industry, and the even more cynical and entrenched $475 billion restaurant industry, turning some of their most basic assumptions and ways of doing business completely upside down. We listened to their positions: “People will never be comfortable eating cereal outside of their home kitchens,” or “They won’t spend $3 or $4 for something they can get in a supermarket for a fraction of that price,” or “You can’t build a restaurant around a menu of food from a box.” But through sheer moxie, diligence, sweat and courage, mixed with a little bit of luck, Rick and I proved them wrong.

Cereality was built on the basic foundation that when it comes to cereal and the 95 percent of Americans who enjoy it, the emotional ties surrounding the cereal meal—the rituals and habits, the loyalties to a particular product, the mood and ambience—are much more important than how convenient the container may be. Moreover, when it comes to cereal, unique in that it is an exclusively “branded” item, one can actually build a restaurant menu entirely around someone else’s food if the focus is on making everyone feel like it’s “Always Saturday Morning” rather than merely a restaurant that serves only cereal. That’s a big leap and has tapped into the national zeitgeist with lots of people saying, “Why didn’t I think of that?” Rick and I believe it’s the hallmark of entrepreneurship at its very best.

For me, entrepreneurship was, and continues to be, a calling. For Rick, entrepreneurship was a freedom and a “zone” where he could be most expressive and empowered. We work especially well together and have for close to a decade, because Rick can quickly articulate an idea in a visually potent and meaningful way that speeds up the process of going from an idea to a product to a brand statement. The other reason our partnership has been so successful is that we are fully committed to authenticity in whatever we do. Our business philosophy is that in order to succeed, you must “bring who you are to what you do.” It’s the anchor of our corporate culture.

I see entrepreneurial life as a calling for a variety of reasons, some psychological, some financial. I’ve tested this over the years by taking often-challenging and prestigious, albeit traditional, jobs. Inevitably at the end of the day I would reach a brick wall, a “glass ceiling” if you will, when my creative spirit and drive to innovate and ask too many questions invariably resulted in someone above me being threatened. In the end, I was always made to be the scapegoat.

Going out on my own has been successful, like with Cereality or earlier in my career when I worked with Fortune 500 companies, helping them communicate around sensitive psychosocial issues in the workplace. I was in my twenties at that time, walking my career path of organizational psychology after receiving my master’s degree from Harvard. But talking about depression in the workplace day in and day out just didn’t seem to be a good fit for me. I was yearning for something else, and that something else was culinary travel.

But sometimes entrepreneurship can be more of a struggle. Following my dream, I entered the publishing world, starting a magazine for culinary travel enthusiasts like myself. I became inspired, focused, organized and made it happen. Just like that. I wore all the hats from CFO to editor-in-chief. The magazine won critical acclaim in the national press and had passionate and devoted subscribers, but because the topic was ahead of its time, I couldn’t get the right level of financing to expand. After three years, the magazine died. While closing the magazine was devastating, it ultimately became the best learning experience of my life. I discovered later that prospective investors in Cereality viewed my experience with the magazine as a critical asset in my making Cereality a success. “First-time entrepreneurship is like riding a bike for the very first time,” they would tell me. “You’re now ready for a triathlon.”

Unbeknownst to me, the first stop on my personal triathlon was at an office on Wall Street, where I was meeting with a colleague in the middle of the afternoon. During our conversation, my colleague was sneaking Cocoa Puffs behind his desk. I asked what he was doing and he said, “Oh, we all do this. Just look at our cupboards in our staff kitchen.”

Leaving the meeting, I saw two different mothers walking down the street pushing baby strollers; both strollers had a diaper bag and a bag of Cheerios. Shortly thereafter, Rick was at an airport and noticed more than one parent feeding their child cereal while standing in line at a fast-food burger joint. And various friends shared with both of us their cereal-eating habits. It was then we realized we might just be on to a really big business opportunity.

The first thing Rick and I did was agree to explore the viability of a business that tapped into people’s seemingly passionate cravings for their favorite cereal anywhere, anytime. We gathered up all of our savings, raised some outside capital from friends and associates and hired a research firm that told us a few salient things: (1) cereal was the third-most-purchased item in grocery stores; (2) 95 percent of the American public enjoyed it, and (3) cereal manufacturers were spending boatloads of cash on finding new packaging to make their products more convenient outside of the home and it wasn’t working.

With these facts as our starting point, Rick and I developed the Cereality brand identity, put together a strong business model, then started raising operating capital. Two years later, after much grief, heartache, lecturing and hair loss, we found a very smart and visionary executive at Quaker who “got it” and agreed to support our initiative with cash and advice. Other high net-worth investors came on board, and we also hired some best-inbreed restaurant consultants. We were finally off to the races!

With inspiration from both Seinfeld and Martha Stewart, Rick designed a restaurant that looked like a home kitchen. We named our servers “Cereologists™ ” and dressed them in pajamas, put together a menu of well-known cereals, delicious and fun toppings plus myriad specialty cereal menu items, which allowed us to serve cereal all day long. We launched our first store at Arizona State University in August 2003.

Our original plan was to keep the store off the radar, because it was meant to be a laboratory to glean ideas of what worked, and what didn’t, for future stores. But six months later, after receiving one too many calls from folks asking about franchising opportunities, or more alarming, others who alluded to opening their own cereal cafés, we knew we had to legally secure our idea. As any good entrepreneurs who create something truly original would do, we hired the best intellectual property attorneys in the country and then issued a press release that unequivocally claimed the business idea as ours. The headline read: “95% of Americans Like Cereal. 57% Like Sex. We’ve Got Cereal.” It struck a chord. Behold, the birth of a brand.

Three years following the debut of the very first Cereality Café, we continue to build company stores. We have also expanded on our original model of a great restaurant chain: we’ve embarked on a major franchising initiative with best-of-breed partners; we’re manufacturing our own specialty cereal bars for many companies, including a leading international apparel retailer; we’re selling merchandise online; we’re catering events for faraway movie companies and local accounting firms; and last, we have signed deals with major partners to license the Cereality name for all sorts of innovative products that will remind folks of our “Always Saturday Morning” spirit, regardless of whether or not they ever visit our cafés. Rick and I refer to it as our “Multi-Bucket Approach to Seeing Reality.” I guess you could also say it’s really just out-ofthe-box thinking.

David Roth

[EDITORS’ NOTE: Cereality® is more than a place to get cereal: it’s a new way of thinking about cereal, a new choice in fast food, and an idea whose time has come.

To learn more about Cereality, ®David Roth and Rick Bacher, please visit www.cereality.com, where it’s “Always Saturday Morning!”]

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