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Jesse Jenifer Had a Winning Product - But Couldn't Keep It In Stock Until He Partnered with an Investor

Capitalism.com
|
April 27, 2021
Jesse Jenifer Cakes of Eden

Jesse Jenifer had an epiphany while on vacation with his family in 2017. Before leaving, he made certain to let his website design clients know he would be gone for two weeks and warned them they would receive an "out-of-office" email reply. 

How did his clients respond? 

"They all flipped out. They couldn't handle it." Jesse's clients bugged him around the clock. They became needy, and everything was suddenly an "urgent" emergency. Jesse quickly realized he needed to do something else. "Yes, I am my own boss, but I have like 20 bosses who won't let me take a vacation."

"I need to diversify my income stream." Jesse Jenifer

Jesse started looking at every possible venture—well, at least those that didn't involve clients. He stumbled across Ryan's famous video and believed the plan would utilize all his skills. Selling physical products seemed like the ideal business opportunity.

But the road to success wasn't without a few potholes. After a stressful failed product launch (which Jesse says was a blessing in disguise), he started Cakes of Eden. The brand's first two products took off, but keeping items in stock became a different story entirely. 

Commodities Get Cannibalized

Cakes of Eden grew faster than Jesse anticipated, although not necessarily in an ideal way. He prioritized launching products instead of building an audience. Sure, his products were a hot commodity, but they were only a commodity. Once he sold out, his customers vanished, and he had to regrow his entire audience with every restock.

Before funding, inventory management was all Jesse did. It accounted for at least 90% of his workload. And he found it impossible to break even. "All the products were cannibalizing themselves," he half-jokingly recalls. Money was so tight that Jesse could only afford to buy the bare minimum with each launch. Every penny he earned, he spent on ads, discounts, and giveaways to regain ground. He practically gave away the first 500 units, and if lucky, Cakes of Eden would break even on the second inventory run.

The constant cycle of buying and selling without turning a real profit left Jesse banging his head against the wall. 

Give A Few Grapes, Get a Whole Vineyard

The Capitalism Fund landed on Jesse's radar in July 2020. He spent the next few months in advisory calls, and by January 2021, the investment was officially complete.

But has the Capitalism Fund really helped Cakes of Eden? More than Jesse ever dreamed possible.

This past year, Jesse hit his most significant milestone—a successful Q4. It was the first time ever, Cakes of Eden didn't run out of stock. Instead of closing down early, the brand got to capture the entire buying frenzy, and it was amazing to watch the sales continue.

How would Jesse best describe the Fund? "If only I could have a magic lamp and rub it and ask the genie for anything—question, idea, money—that's what it's been for me." And unlike in the movies, the Fund doesn't stop with just three wishes.

While some entrepreneurs struggle to give up equity, it was the easiest decision for Jesse. "It's better to give up a few grapes in exchange for an entire vineyard." Continuing on the same path would probably take the brand to $2-3 million, but he's confident the Fund will push Cakes of Eden to $10 million. It was a no-brainer. 

"Take Long Walks on the Beach and Think Like a CEO."

Focus is paramount when building a business, but focusing on the wrong thing will only send you back to the starting line. And thinking like an entrepreneur instead of a business owner forced Jesse to restart the race more times than he cares to remember.

Cakes of Eden passed the $1 million mark after a few years. But that isn't the ultimate goal. Jesse dreams of growing to $10 million. Before meeting Ryan, he assumed launching more products was the only way to succeed. After all, 20 products got him to $1 million, so 100-200 would take him to $10 million, right?

"No," was Ryan's blunt response. 

He told Jesse to focus on fewer products and to build his audience instead. He should take long walks on the beach (which is easy to do in Costa Rica, where this former New Yorker lives) and think like a CEO. Even more importantly, if Jesse wanted to go from $1 to $10 million, he needed to hand over his entire to-do list to someone else.

Jesse Jenifer

Until that moment, Jesse was Cakes of Eden. His wife did help out with social media, but when COVID-19 hit, she became the teacher, the baker, and the candlestick maker at home. The pandemic left Jesse doing everything on his own. Letting go and finding people who were better than him was a fun challenge.

Cakes of Eden now has a customer service team in place and recently brought on TurnKey Product Management to handle the Amazon stuff. Jesse is also in talks with a couple of companies to manage social media and email marketing.

Belay That Launch Order

Now that Cakes of Eden has all the right processes in place, Jesse knows it will hit a home run and become highly profitable. Instead of worrying about paying the bills each month, his primary focus is serving customers and providing the best experience possible.

Perhaps the most profound change, however, is how Jesse views product launches. Cakes of Eden planned to launch multiple products this year. But because of Ryan, Jesse learned that one fantastic product is better than five mediocre ones.

This year, Jesse plans to launch an express cake pop kit. It will contain everything needed to make delicious cake pops at home—from start to finish. Target and the grocery carry everything needed to make cake pops, but all the components are in separate aisles. It's easy to forget something and have to make a shameful trip back to the store.

Jesse wants to simplify the process and sell the entire experience direct to the consumer in one package. "You're going to have to buy them all together anyway!" He's currently working on an organic cake pop mix with dye-free sprinkles that he would feel good feeding his two kids. 

It's Not the Finish Line; It's the Journey

Entrepreneurialism is part of Jesse's soul, and he learned a lot from his own family. His dad, Daryl Jenifer, taught him the art of negotiating. Daryl is in the rock band Bad Brains, and as a child, Jesse watched him negotiate music contracts. Growing up in this atmosphere made Jesse realize he wanted to work for himself. As he says, "I've always been a maverick."

Jesse's grandfather was the don of the family. He created an innovative brand that brought British products to other countries, but he lost all his hard-earned money right before his death. Jesse aims to re-earn the family fortune. 

"I want to make back what he lost."

And with Cakes of Eden, he's on the right track to do just that. 

Invest in People, Not Products

The Capitalism Fund taught Jesse the importance of knowing your vision and growing a rabid audience. "Know your audience. They invest more in the person than in the product." Your audience needs to trust you would be successful doing anything, whether it's e-commerce or selling frying pans on the side of the road.

But the best piece of advice Jesse has to offer is, "Get back up."

It doesn't matter what you want to sell. As long as you grow an audience and think like an owner, success will follow.

You can hear more about Cakes of Eden and the other brands the Capitalism Fund invested in on this podcast episode.

And now that you have an irresistible craving for cake? Jesse's got you covered. Head over to CakesofEden.com and use the promo code "capitalism15" to get 15% off.

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