Sharks, picture this: it’s summertime in Maine. Both locals and tourists alike are in line at Maine’s iconic lobster shacks. They’re standing alongside the Atlantic Ocean, smelling that salty air. Most importantly, they are eagerly awaiting the chance, the opportunity, to sink their teeth into Maine’s signature dish, the lobster roll. Sharks, at Cousins Maine Lobster, we bring the Maine lobster experience to Southern California and we do it via our amazing gourmet lobster shack on wheels. We get our lobsters from shore to door in less than twenty-four hours. So, you know what that means, Barbara? The next time you’re hanging with the cousins, you’re having the freshest fare possible.
And that’s how we introduced Cousins Maine Lobster to roughly 9 million viewers (and Barbara Corcoran) on October 19, 2012. The two of us were back in Maine, watching the episode on a big projection screen in a warehouse with more than a hundred friends, family, and business partners. Although we had entered the Tank asking for $55,000 for a 5 percent stake, we accepted Barbara’s counteroffer of 15 percent. Still, we hadn’t seen the final cut of the episode, so we were watching it for the first time along with everyone else in America.
We wanted to see how much of our discussion about our e-commerce business the producers had left in the final cut. In the weeks leading up to taping, which had occurred way back in July, we decided that we should use the Shark Tank opportunity to boost sales, a sort of insurance plan against missing out on catching a shark. Seems obvious, right? Well, not when your business is a food truck—a single food truck. It’s a bit hard to boost sales when you have a single truck that can only hold a specific amount of lobster. Our food truck business had a sales ceiling.
Our idea was to raise that ceiling by adding an e-commerce business that shipped overnight fresh lobster, lobster roll kits, and soups like chowder and bisques. That way, we could direct viewers to a sales point other than a food truck that only operated in Los Angeles. By the time of the taping, we only had the bare bones of this e-commerce division in place. But so what? We had three months before the episode aired to finalize the site, buy the inventory, and hire the extra hands to take orders and package the food. Besides, we had just signed a deal with Barbara Corcoran!
By October 19, we had $250,000 of inventory ready to go in an eighteen-wheeler freezer truck. Meanwhile, fifteen packers and eight operators were on standby, ready to take orders all night after the episode aired. Our excitement over the amount of product we would sell was at a fever pitch. We barely noticed that the producers had edited out everything we had said about the e-commerce business. America had heard none of it.
No matter. The booze was flowing that night, and our spirits couldn’t be dampened. Surely, at that very moment, thousands of people were visiting our site for the first time, just begging to taste some of our fine Maine lobster for themselves!
The next morning dawned bright—too bright for our bleary eyes and aching heads. Almost immediately the calls from our suppliers started coming in, asking how we did on the e-commerce sales. We quickly checked with our call center to get a round number. “Don’t worry about specifics,” we said. “Just ballpark it!”
Oh, no.
Back on the phone with the suppliers: “It’s, um, lower than we expected.”
Suppliers: “How low? A thousand orders? Five hundred?”
“Thirteen,” we said.
We had only thirteen orders all night.
Fuck.
GREEDY CRUSTACEANS
Leaving the “Tank,” or studio, is a surreal experience. After your brain, heart, and emotions have been running at full speed, everything suddenly stops. When we emerged into the bright California sunshine, we both looked at each other as if to ask, “What the hell just happened?” In fact, the producers anticipate this and almost immediately after taping, you’re hustled to another room, where you meet with a psychiatrist. The reason is because the intensity of the taping, the drama, is very real, even if it’s a bit different than what viewers see. The psychiatrist is there to help dazed or rattled contestants regain their composure.
This speaks to the authenticity of the show itself. The actual experience for the contestants is nerve-racking because nothing is scripted. Although sometimes the sharks assume a personality for the cameras, their barbs and critiques can really sting. Imagine if you’ve spent your entire life savings on your business, only to be told that you’ve wasted your time. It can be a traumatic experience.
Although we were a bit anxious after our taping, we were also deliriously happy. We had agreed to a deal with Barbara, after entertaining a counteroffer from Robert Herjavec. We got what we wanted: A partnership with Barbara Corcoran. We even addressed her in our opening pitch! And we got her. Everything had worked out just as we had hoped. Yes, we agreed to hand over more equity than we had originally offered, but that was to be expected. If we hadn’t been prepared to give up more than 5 percent, then we shouldn’t have gone on the show.
That’s one of those fine lines we agonized over in the run-up to the taping. Just what do we ask for and offer? Regular viewers of the show know that an outlandish valuation or miniscule equity offer can sink your chances with the sharks before anything else happens. We knew that going in, which is why we spent hours working with Steve to come up with a valuation that we could defend. Let’s remember that we had been in business only three months. Any valuation, low or high, is suspect with so little sales history behind it. But that’s why we were on a television show and not in an investor’s office. Our story was good for TV; but most anyone else wouldn’t have even bothered to return our phone calls.
But so what? We had been offered this chance to accelerate our growth and we had decided to take it. We just needed to find a valuation number that wouldn’t have us laughed out of the Tank—and we almost were. We came up with a valuation of $1.1 million. How did we get there? Fairly simple math and a little bit of guesswork.
First, as previously mentioned, we had around $150,000 in sales over two months. Spread that out over twelve months, and we stood to make $900,000 in sales. Getting there, but still far short. We knew we could add the cost of our truck ($75,000) plus the value on our inventory. We say “value” because our inventory was worth more than the dollars we spent on it. Recall from chapter 2 that our relationship with our supplier is the most valuable business relationship we have. Not just anyone can start buying Maine lobster wholesale the way we do. In fact, Kevin O’Leary (“Mr. Wonderful”) asked us directly why he couldn’t do the same thing we did.
Jim’s answer: “You can start your own truck and hire your own staff. But what you can’t do is what you just said, and call up on the phone to Maine. They just don’t do business with other guys.” That is 100 percent true. But how do you put a value on that? It’s certainly worth something and must be part of any valuation of the business.
Finally, we included the potential sales from a second truck. Now, we didn’t have a second truck when we entered the Tank, but that’s what we told the sharks we would do with their investment money. Still, you need to be careful about valuing your company with capital you don’t have. Although we factored the sales of a second truck into our final valuation, we were careful not to make it fit too nicely. So, we lowballed the sales of a second truck, included the cost of two trucks, and added the price of our inventory and suppliers. That’s roughly how we reached $1.1 million.
And even though we thought we could’ve valued the business a bit higher, most of the sharks weren’t buying it. O’Leary called us “greedy crustaceans.” Daymond John didn’t really believe what Jim said about our suppliers, and Herjavec responded to Sabin’s answer that we would increase our equity offer to 7 or 8 percent with, “You know what? You’re a very good actor. You said that with a straight face.” This is what the sharks are supposed to do—rip apart your carefully crafted valuation and tell you why your company isn’t worth what you think it is. They do this even if they’re interested, because they’re bargaining. They want more of your company for less. It’s easy to say now that we took these critiques with a grain of salt. We mostly did. But, damn, they make you second-guess your whole life.
Barbara later told us that it was our composure, our coolness under fire, that convinced her we were a good investment. To her, we seemed like more than just food truck guys. We were hungry, and we had come prepared to do real business. We weren’t just trying to boost sales for our one truck; we wanted to build something. We weren’t exactly sure at that point what we were going to build, but she saw the ambition and the work ethic.
She just wanted more than what we offered. Now, 5 percent is about as low as you can offer. It almost says to the sharks that you don’t need them at all. That’s exactly what we were going for. For starters, we didn’t want to hand over a big chunk of a business that was only three months old. But we also wanted to come across as confident, like we knew what we were doing. It’s a fine line to walk, not least because we didn’t know what we were doing. But confidence, played poorly, can come off as arrogance. No one wants to do business with an arrogant asshole. But greedy? We can handle being greedy—and we loved O’Leary’s “greedy crustaceans” line, because if you know anything about the nature of lobsters (and you will, just keep reading), you know that they are some freaking ornery little creatures. They greedily gobble up anything in their path (including lobsters smaller than them) and they protect their homes with a ferocity that’s fanatical.
So, yes, hungry and protective—we can live with those qualities.
Regardless, we knew that we would have to accept giving up more than 5 percent, which is another reason why we chose it. Negotiation 101: always start with a number far lower than what you’d accept. If we had started with 15 percent, then we better be prepared to accept 25. Start with 25 percent, and it says you’d accept 35.
In any case, everything we said and did when we walked into the tank that afternoon had been carefully planned and scripted. We knew the general questions the sharks were going to ask, even which shark would ask which question. As we said in the introduction, we watched nearly fifty episodes and quizzed each other with note cards. We had our pitch and our business down stone-cold.
We assumed that’s how most contestants prepared, but we’ve since learned that’s not the case at all. But usually when a contestant is caught off guard it’s because they’re not looking for a deal at all. They see the show as a good promotional opportunity and so don’t prepare or give their valuation much thought beyond picking a number. So, they get torn apart, which makes for good television, then they go home and watch their web hits skyrocket. But like any shot of adrenaline, the effect wears off. People, especially television viewers, have short memories. That web traffic boost might last twenty-four hours at most, before you’re back where you started.
And then you realize you should have tried to get more out of the show.
We wouldn’t have gone on Shark Tank if we didn’t want a deal, specifically a deal with Barbara. So, we came prepared and we came with the one thing that all good players should have: a strategy. We knew our valuation seemed a bit high and our equity offer a bit low. That’s exactly what we wanted it to look like—it said we came to play ball. It said we wanted to deal but weren’t desperate. We came prepared to defend our offer but also let it be known that we would modify it depending on the counteroffer. We also knew that our ask of $55,000 would start to seem odd the further the negotiations went, assuming they went further. After all, if two trucks are good, then wouldn’t three be better?
Herjavec noticed this, and offered $125,000 at one point, just “to get more trucks on the street.” It’s a fair point, but we weren’t ready for that yet. Flooding LA with Cousins Maine Lobster trucks seemed like a good way to overextend ourselves and destroy our novelty status among Southern Californians. Never mind whether there was enough demand for more than two or three trucks, there’s something to be said for a product that’s hard to get. We didn’t want to be everywhere, like a fast-food joint, because we aren’t a fast-food joint. Lobster is a delicacy that should be treated as such. Flood the market with high-priced lobster and you’ll waste a lot of lobster. We enjoy—and continue to enjoy—a specialness with our product. Precisely because it isn’t everywhere, people seek us out. They talk about us. There’s a buzz. To be sought is better than being everywhere.
Whether Barbara appreciated this thinking at the time, we don’t know. It surely wasn’t her intention to keep our business at two trucks. Nor was it ours. But if we were going to expand, we would do it safely and smartly. We had the long game in mind and so did Barbara, who probably understood what kind of business we wanted even before we did.
We understand now, and it’s because of Barbara Corcoran that we’re at this point. Our intention in entering the tank was to offer the sharks more than a share in a food truck business. We wanted them to see the opportunity to be a part of something special—special because it meant so much to us. That’s not for everyone and we weren’t looking for any shark. We knew which one was a Mainer at heart and we got her.
WHAT BARBARA SAW
There are two questions we get asked all the time. The first, “How did you do it?” has resulted in this book. You’re reading our answer. The second is, “What’s Barbara really like?” We totally get it, people love Barbara. We love Barbara, too, and for the same reasons you do. The Barbara you see on the screen is the Barbara we see in our office in LA or her office in New York or at Jim’s parent’s house in Maine. She is who she is. Genuine, funny, honest, and supremely confident. But there’s the Barbara you see on-screen and there’s the Barbara who’s the brilliant businesswoman. You don’t see that. You experience that. You get a sense of that Barbara on the screen, especially when she’s analyzing or negotiating—she does this thing with her eyebrow and looks at you squarely, like she’s trying to detect the bullshit. But that’s not the complete picture. Let’s try to fill it in for you.
The deal we “signed” with Barbara on the show wasn’t signed until August. This is normal, but our contact with Barbara was fairly limited until then. Even after we signed, our partnership didn’t blossom until after the episode aired in October. But during this time, Barbara got to work on fixing the “small” stuff. And we only call it small stuff because that’s what we thought it was at the time.
During the show she explained exactly what she considered fixable right way with Cousins Maine Lobster. “I think your truck is terrible,” she had said. So, she started to work on the outside design of the truck. But the truck design reflected our overall marketing and branding. It was all bad, according to Barbara. While we thought we were making the most of our Maine story, Barbara showed us just how ordinary our food truck was.
“You’re the ones selling your product, not the truck!” she told us later. This was both a compliment and a criticism. The compliment was that we were very good salespeople. When we were talking about our business in front of a camera, when we were outside the truck mingling with customers, when we sat down with Barbara and her people, we could sell the shit out of our business! The one thing we can do extremely well is tell our story. And people love to hear it. It’s a competitive advantage for sure. On that score, we were killing it.
But we can’t always be out there selling our business. We need to let other things sell it for us: the truck, our packaging, and marketing materials. These were amateurish, and Barbara saw that immediately. They weren’t the best symbols of the brand we were trying to sell. They didn’t reflect the Maine of our childhood, they didn’t reflect the values we hold dear, and they didn’t reflect the two most important parts of the business: us. And we say that in all humility.
This is part of Barbara’s genius. She saw Cousins Maine Lobster perhaps better than we saw it. We had started a food truck because we wanted to recapture a moment from our childhood and share it with others. But we didn’t extend that vision to our marketing material, specifically the truck, but also to everything else. Customers heard that story about Jim’s backyard and our deep connection to Maine when we told them, but we weren’t always there to tell them. “You should have your faces all over the truck,” she had said during the show. What she meant, as we learned later, is that we need to be with the truck all the time, even when we can’t be there at all.
This is just one reason you see our faces plastered on every bit of Cousins Maine Lobster material out there, from our truck to our web site. It’s not just because we’re showing off our George Clooney/Brad Pitt looks. In fact, the whole marketing campaign around us is a bit uncomfortable (for Jim—Sabin loves it). It’s a shift in perspective we hadn’t considered in those early days, mostly because we aren’t marketing guys. But Barbara saw it immediately and went to work making sure that all of Cousins Maine Lobster told our story, not just the two guys who started it.
After the episode aired, our time with Barbara increased significantly. In the fall of 2012, prior to the airing of Shark Tank, we were lucky enough to secure a “home package” from Shark Tank. Basically, the Shark Tank producers come to your home town and shoot a brief introduction of you and your business, which airs right before you walk into the tank. Being that Barbara was now coming to Maine, we invited her to stay at Sabin’s uncle’s house in Scarborough and to have dinner at Jim’s parents’ house in Cape Elizabeth. Today, we wouldn’t think twice about sending her an invitation like that, but back then we were still a little star struck. To our surprise, Barbara accepted, and even brought her young daughter. By the way all of us—meaning the members of the Tselikis and Lomac families—reacted, you would have thought that the president of the United States was coming for the weekend. Of course, that’s when we met the Barbara that so few people see. The kindness, the humility, the humor—the absolutely wonderful sense of humor. It was no different than having anyone else over for the weekend, except this “anyone else” was Barbara Corcoran, who had given us $55,000.
Of course we talked shop that weekend. We started the groundwork for plans that would come to fruition months (or in some cases, years) later. By visiting the Tselikis’s house, meeting our families, seeing the Maine coast, Barbara learned more about us and where we came from, which is what our company is all about. It helped her see the vision behind the company. For our part, we learned just by watching her. In particular, we learned from Barbara that there’s no secret to business success; there’s just what feels right. You can work the numbers again and again, but in the end, you need to trust your gut. We also learned that not every opportunity is the right opportunity (a lesson experience would reteach us later). And we learned that it’s OK to not know what the hell you’re doing. We understood this at some level, but assumed that someone like Barbara always knows what she’s doing. So would we, one day, right?
Wrong.
Follow your gut. Don’t chase every opportunity. And, finally, never take no for an answer. At one point during the weekend, over a discussion about expanding the menu, Barbara burst out: “If they can put a man on the moon, we can put lobster mac-’n’-cheese on a food truck!” If it’s the right opportunity, the one that makes sense deep in your gut—and, believe us, lobster mac-’n’-cheese makes sense—then find a way. Even when they say it can’t be done, find a way.
Our business relationship with Barbara blossomed that weekend. It reached a level we could never had guessed back in the summer, when we agonized over going on the show at all. Our concern—did the show actually work for guys like us?—was answered with an emphatic yes. Shark Tank is first and foremost a television show, and everyone who goes on must accept that before anything else. It’s also that rare television show that does what it promises viewers. We wouldn’t be where we are today without Shark Tank. More specifically, Shark Tank is how we met Barbara Corcoran.
The show gave us and continues to give us a rare spotlight that so few other entrepreneurs ever get. We got lucky. But we would trade away all that notoriety, all that minor fame, just to keep the one gift the show gave us: Barbara. Without her, we would still be just a couple of guys operating a few food trucks on the side. With Barbara, we run a multimillion-dollar company.
THE SACRIFICE OF SUCCESS
However, our success hasn’t come without cost. If that sounds ungrateful, give us a moment to explain. When we started out as a single food truck rolling around LA as a mobile lobster shack, we never intended to be anything more than that. Back then, it was a labor of love, a way for us to work together selling something that made us happy. But we didn’t really consider whether we’d enjoy doing it. It’s not like operating a food truck business had been a childhood dream of ours. It’s not like either of us had any culinary experience or skills.
But in the process, we discovered that we enjoyed it immensely. We loved going out with the truck and talking with customers. It’s like we had stumbled upon a passion we didn’t know we had—and that’s quite a thrill. It didn’t take either of us very long after the first day to realize that this was something we could do for the rest of our lives. It was an unexpected but welcome surprise. Neither of us were strangers to pursuing our passions and interests. Jim had devoted himself to hockey in college, while Sabin studied drama. We knew what it felt like to be engaged in an activity, pastime, or job you love.
This is part of the joy of entrepreneurship. It’s one of the few professions where you are tested on a near-daily basis with challenges you think you have no skills to conquer. Yet that’s when you discover you do have those skills: they’ve just never been used before or they’ve been used in a different capacity. Now, talking with customers isn’t exactly a challenge. Nor are we strangers to the game of salesmanship. We were essentially both salesmen in our previous careers. So, it didn’t shock us that we were good at selling our product or telling our story.
But we were surprised at how much we enjoyed it. It was unexpected. Why was it different than what we had done as a real estate agent and a medical representative? Because this time it was our product, our story. We both feel a tremendous surge of energy and joy when we are out in front of the truck, in our restaurant, sitting with a journalist, or just passing the time with friends talking about what we do and why we do it. We had each discovered a new passion and we felt like the luckiest guys in the world.
This isn’t exactly unusual with a new entrepreneur. After all, the reason people start businesses is so that they can do what they love. A baker starts a bakery because she loves to bake, an artist opens an art studio because he loves making art, and two cousins from Maine open a food truck because they love talking about their childhood eating the freshest lobster on earth.
But here’s the rub. The moment the baker wants to open another bakery, the day the artist expands his studio into the next-door flat, and the second that the food truck operators put another truck on the road, they must give up what they love. Because at that moment, they cease to be practitioners of their passion and must become managers of it. Put another way, you can either run a company or do what you love. You won’t have time for both.
This was made painfully clear to Jim not long after we first opened. You might recall that Jim was in Los Angeles that first week on borrowed time. He had to get back to his job in Boston, but couldn’t leave Sabin running things all by himself just yet. What’s more, we were both on this incredible high because we had discovered that we absolutely loved this thing.
So, Jim called his father, Steve, to tell him he needed to stay in Los Angeles another week. He told Steve how amazing our first week had been; he told Steve about the lines around the block; he told Steve about the amazing reviews on Yelp. Finally, Jim told his dad how much fun he had being on the truck, being outside the truck, serving up lobster and talking to customers.
And that’s when Steve stopped him. He didn’t talk Jim out of staying longer. Nor did he talk Jim out of taking Cousins Maine Lobster as far as we could. But he did say this: “Listen, if you think you’re going to make a living by being out in front of the truck every day, you have another thing coming. You can’t grow a business if you’re standing outside the truck talking with customers. You can’t grow the business if you’re busy selling lobster all day to Southern Californians.”
Steve put it plain to Jim that very day: you can have a food truck or you can run a company, but you can’t do both. He was absolutely right.
We rarely go out with our trucks anymore. We still do, but, boy, do we need to fit it in our schedules. And as Barbara taught us soon after we signed our deal, if you’re doing one thing, it means you can’t do something else. If we’re on the truck, then we aren’t talking with our suppliers or employees. If we’re talking to customers, telling our story, then we aren’t on the phone with our new franchisee in San Antonio, Las Vegas, or Atlanta. If we’re rolling around Los Angeles having the time of our lives, then we aren’t opening a restaurant in West Hollywood. It’s a matter of balance. There are times when we need to be on the truck, particularly when we’re with a new franchisee. Then there are times we need to be in the office with our staff. We’ve had to set aside what we want to do. These days, we do what we need to do.
Of course, Barbara understood this fact of entrepreneurism as well as Steve. It’s why she focused immediately on improving our marketing and branding material to tell our story when we aren’t around. She knew we wouldn’t be around the trucks anymore. She knew we would have to give up our love of being on the truck, talking with the customers, if we wanted Cousins Maine Lobster to achieve its potential.
This is one of the harder lessons for entrepreneurs to learn. To be a successful entrepreneur, you must give up what made you an entrepreneur in the first place. We hope you will discover, as we both did, that the joys of running a company and building a brand are worth the sacrifice. They were for us. But if you just want to be a baker, then be happy with your bakery. If you just want to be an artist, then enjoy your studio. And if you just want to talk to customers and tell them your story, then stay on your truck.
But if you want more, then be prepared to make the sacrifice. Trust us, it’s worth it. It’s just not for everyone.
THE RISE OF A BRAND
Lobsters have been synonymous with the Maine coast since the days of the Plymouth Company. Those early settlers encountered the ugly creatures crawling along the shallows as far in as the shoreline back then. As Colin Woodard writes:
Coastal Mainers had been catching and eating lobsters since Waymouth’s day, but nobody had ever tried to make a living from it. Lobsters were tasty, plentiful, and easy to catch. In colonial days, a small boy could bring home enough to feed several families by simply wading along the shore at low tide and gaffing the huge five- to ten-pound beasts hiding among the rocks. Coastal New Englanders ate them in quantity, or fed them to prisoners and indentured servants in place of commercially valuable cod, mackerel, or grain. One group of indentured servants in Massachusetts became so upset with this diet that they took their owners to court, winning a judgment that they would not be served lobster more than three times a week. Lobsters were sometimes taken in great numbers and strewn on the fields as fertilizer. Well into the nineteenth century, fishermen were grinding up piles of lobsters and tossing them overboard in an effort to attract schools of mackerel.9
But the lobster wasn’t just local to Maine. Up and down the New England coast, from New Brunswick in the north to New York City in the south, some seven hundred miles as the crow flies, lobsters were large and plentiful. Which is why the term “Maine lobster” hadn’t been invented yet. In the early eighteenth century, when the lobster industry began, it would be more accurate to call them “New England lobster.” Indeed, the first lobster fisheries were set up around Boston and New York, where a sizeable consumer market had developed. Meanwhile, Maine lobstering was almost strictly a local affair. Maine fishermen would catch lobster in between the far more profitable groundfish seasons to feed their families and sell locally.
Elisha M. Oakes isn’t a name history remembers, but he is credited with creating Maine’s lobster trade. The problem with lobster as a consumer product is that the damn things just don’t travel well. You can’t smoke them or salt them and they don’t last long on ice, particularly as ice was used in those days. But then, some New England merchants developed a new style of shipping vessel that had a large tank in its hold with holes in the side through which seawater could travel. The innovative boat, called a “smack,” revolutionized the lobster industry and allowed Oakes to start shipping lobster caught in Harpswell, Maine, to Boston. In just a few years, Oakes had depleted Harpswell’s lobster supply and moved his operations to Penobscot Bay. Around the same time, the southern lobster fisheries around Boston and New York also started to dry up. New Englanders had developed a taste for lobster, but the little creatures had abandoned the shallows for the safer waters farther from shore.
Still, New England’s lobster industry remained small-scale, particularly compared to the groundfish industry, until some innovative person decided to start canning lobster meat. Forget smacks: now, lobster could be shipped all over the world in easily packaged one-pound cans. The first canneries were set up in Maine, where the supply was most plentiful.
Woodard writes:
In 1850, these three lobster factories were practically the only canneries of any kind in the entire country.… The canneries spread like wildfire and the lobster fisheries followed. By the late 1870s, there were twenty-three from Portland to Eastport, engaging the service of 1,200 lobstermen. Together they churned out two million one-pound cans of lobster in two four-month canning seasons. These were distributed far and wide and introduced the American West and Southwest to lobster meat. Roughly half the production was exported to Europe, particularly England, where well-cooked meat found a ready market.10
All of a sudden, lobster—especially Maine lobster—had become a global market. In time, the canneries would die out, as economic troubles and sustainability concerns drove them out of business. But the lobster industry had found its niche on the Maine coast, where the local fishermen were in desperate need of a new revenue stream after the slow but devastating collapse of the groundfish industry.
Nearly three hundred years after the first settlers had arrived on the Maine coast looking for fertile farmland, the inhabitants had finally found their state’s true bounty. That lobster became Maine’s principal export and source of income for thousands of families and dozens of coastal communities almost by accident doesn’t matter. You work with the gifts you are given. Maine was blessed with access to a species whose taste appeals to a great portion of humanity. And thank God for it. Without the lobster, without this brand, Maine’s fall into obscurity might have had no bottom.
But once discovered, this new gold mine had to be protected. Without it, there would be no Maine economy to speak of—a little like how, without Barbara Corcoran, the landscape of Cousins Maine Lobster would be dramatically different.
THE LESSON
PLAY THE LONG GAME
The day after our Shark Tank episode aired should have been one of the best in our lives, certainly in the life of Cousins Maine Lobster. It turned out to be one of the worst, because we had screwed up. It wasn’t the producers’ fault that they had left our every mention of the new e-commerce business on the cutting-room floor. Their job isn’t to advance our interests, but to produce the best episode they can. We should have foreseen that and not spent a lot of money based on an assumption. But it wasn’t just the money. We had promised our suppliers a big day and we didn’t deliver. What an embarrassment. When the producers had cut every mention of the e-commerce business from the episode, we not only lost hundreds of thousands of dollars—we could have jeopardized our most valuable business relationship. Or so we thought that day.
But, again, we did have Barbara Corcoran.
Never one to panic, Barbara quickly worked her connections and landed a spot for us on Good Morning America’s “Deals and Steals,” a kind of lightning-round segment where the hosts interview four or five company owners about their product. This is how, two weeks after Shark Tank, we found ourselves in front of the cameras again, only this time our time was limited to about thirty seconds. That’s right: we had thirty seconds to sell America on our e-commerce business. That we had just been featured on Shark Tank certainly helped, but never has a taping gone so fast for us. The host bit into one of our Lobster Pot Pies, reacted like they had just tasted the best thing they had ever eaten, then took another bite. That was it. We were on camera, then we were off.
Our hope was that the appearance would stop the bleeding. If we could sell just a few thousand dollars of product, which was still sitting on our eighteen-wheeler freezer truck, then we would save face with our suppliers. We had been humbled by the disaster two weeks earlier and weren’t about to get our hopes up again.
The next day, the sales figures came in.
We had sold $250,000 of product in four hours.
Thank you, Barbara.
The entire experience taught us an invaluable lesson that all entrepreneurs should learn early on. Namely, play the long game. Envision your company as a living thing that requires good food, good exercise, and plenty of nutrients and vitamins to grow into something healthy and sustainable. All that takes time and it requires a level of patience that is rare in the young entrepreneur. We get it: you want it fast and you want it now. You get a little bit of money and suddenly you want to expand well beyond what your meager operations can bear. Or, you bet the whole store on a nutty get-rich-quick scheme that leaves you with nothing.
When we decided to go on Shark Tank, our intention was to play the long game. We knew we would get a good publicity boost out of it (we still get that boost today), but we wanted something more, something lasting. A publicity boost is like a shot of caffeine in the morning—it gets you going, but it won’t sustain you for very long. Publicity is like the sugar rush of the business world. It’s a nice treat to have occasionally, but it’s not a sustainable strategy. We wanted Shark Tank to work for us over the long term, which is why we trained all our efforts on landing the one person we knew could help our little food truck company achieve its potential. We got her.
But then, at almost the same time, we made the mistake of looking for the quick hit. We spent half a million dollars on a gambit that was entirely dependent on what the producers decided to leave in the final cut of the episode. How freaking stupid was that? But we weren’t playing the long game. We now know that building the e-commerce business and promoting it on the show wasn’t the mistake. The mistake was buying the inventory before we had the sales. The day after our episode aired would have gone much smoother if we hadn’t gone for the quick hit of caffeine.
Live and learn.
We managed to minimize the damage from our mistake, thanks to Barbara Corcoran. But our long game had just started. Together with Barbara, we had identified a brand that centered on us, our story, and it was time to see where we could take it. More importantly, we had started to believe that our food truck company was more than food trucks. The food truck was and remains the focus of our brand, but we began to realize it didn’t need to be the sole focus.
Our challenge going forward mirrored the lobstering industry’s challenge in those early years. We had caught lightning in a bottle. We were the only ones doing what we did, just as New England was the only place to get the American lobster. The temptation to grow beyond your means, to fish the hell out of your supply, is incredibly strong at those moments. The fishermen of Maine, desperate to keep themselves and their families out of poverty, could have easily gone for the quick buck and fished the waters dry. We could have thrown hundreds of thousands of dollars into half a dozen more trucks, and saturated Ssouthern California with mobile lobster shacks.
The lobstermen avoided the temptation and so did we. Our challenge going forward was also very like theirs back then: How to grow the brand we had built in a profitable yet sustainable way? The solution wasn’t immediately clear, but then again, it never is.