Whether you believe it or not, looking at the world differently can lead to success. Here to talk with Dr. Diane Hamilton about the concept of her book, The Disruption Mindset, is New York Times bestselling author, Charlene Li. Charlene talks about the importance of creating a good leadership culture while embracing the need to thrive on disruption. Teaching business leaders how to think differently is Charlene’s expertise. With her knowledge in the field, she shares how to have promising professional relationships with clients and employees and what opportunities are there for women on board.
Helene Godin is known for selling Audible to Amazon and building New York City’s top gluten-free bakery chain. In this episode, Helene talks with Dr. Diane Hamilton about how she’s standing out in the pastry industry by building By the Way Bakery, an old-fashioned bakery where everything is made by hand, from scratch, in small batches. Learn how she does it and how her creativity is continually enthralling consumers.
We have Charlene Li and Helene Godin. Charlene is a New York Times best-selling author. Her book is The Disruption Mindset. Helene has taken her career from legal to building the New York Times’ top gluten-free bakery chain. She has gone all across the board in what she’s accomplished. Between these two interesting people, we’re going to have quite a show.
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The Disruption Mindset With Charlene Li
I am here with Charlene Li who is the author of six books including the New York Times bestseller, Open Leadership and co-author of the critically acclaimed book, Groundswell. Her other book is the bestseller, The Disruption Mindset. She is the Founder and Senior Fellow at Altimeter, a disruptive analyst firm that was acquired in 2015 by Prophet. Charlene is a graduate of Harvard. She was named one of the most creative people in business by Fast Company. It’s nice to have you here, Charlene.
Thank you for having me.
That’s quite an honor. That’s what I’m trying to work with, for people to become more creative. I’d like to find out how you got to be so creative. Can you give me a little backstory on you?
Part of it is that I grew up as an Asian-American in Detroit. That’s not a usual background. When you’re put into a situation where in many cases you’re the only person of whatever group, you tend to look at things a little bit differently. For a young age, I looked at the world differently from everybody around me and that gave me this comfort level of sticking out simply by being present. Curiosity and creativity go hand-in-hand. When you look at things differently, you start asking questions differently. From an early age, I had the confidence to be able to express that curiosity, to be comfortable at being uncomfortable. That has helped me a lot in my career and in my personal life.
It’s interesting because I’ve had some creativity experts on the show and I asked them about what comes first, creativity or curiosity? They always say curiosity comes first. It’s important for creativity. To be creative is important because we’ve got many companies trying to be innovative. You talk about having this disruption mindset. First of all, what is a disruption mindset?
A disruption mindset says you can look at the world in a different way than somebody who doesn’t. When you look at disruption, you look at change and you run towards it because you are focused on making things different and better. You want to make a change happen. It’s not any small incremental change. You think, “This needs to get a lot better. We could do a lot better and create exponential change, impact and grow.” They realized that it is going to be hard. The disruption mindset says, “I’m not looking to create a period of disruption that’s going to drive growth. I’m going to grow. I’m going to make things change. That itself is going to be disruptive.” It’s a simple fact of growing and changing and they prepare themselves for it.
You’re talking about a lot of things and I’ve written about in terms of my work in perception because it’s all about how we look at things. It’s important because it ties in IQ, EQ and CQ. You’ve got the cultural quotient, the curiosity question, the CQ2 or whatever you want to call it. You get all of these things together and that’s what it takes to see the world through the lens and realize what everybody’s seeing. It’s challenging for people to get that empathy without asking questions. I’m curious, what do you help people do to improve that disruption mindset?
There are these three things. When you’re having a disruption mindset, you look at strategy, which is where are you going to go? You look at your leadership and you look at how you create culture. How you work with people in a completely different way. The most important thing is how you look at the future and how you figure out what the future is going to look like. From a business concept, it’s about what does the future look like for the people you’re trying to serve or your customers and to have empathy for them, to understand them truly. The hard part is, and I hear this pushback from people all the time, “I don’t know who my future customer is.” The challenge here is you may not know 100% who they are, but you probably have a good idea. You could figure out more by creating what I call empathy maps.
There’s a practice in business where you’re creating personas and understanding your customers’ journey, but they tend to be academic, in your head activities. What I encourage people to do is to go into the heart to create empathy for this future persona. Don’t try to understand the demographics or psychographics. Ask four questions. What do they do? What do they think? What do they say? How do they feel? Put that as a map on the wall and take sticky notes and see, “Who are these people? Who are you trying to serve?” The more you can understand them and their needs and where they are and what they want to change and how they want to get better, the more you can identify how you can help them. It’s only when you know how you want to help them in the future that you make the hard choices and decisions to make the changes you want to have to be able to create that future.
I could see that as being important not just for customers, but for employees. I’m sure you include how you interact with everybody. You can’t ask people you haven’t met these questions. You have to have your own idea of what the answers are. How do you know if you’re right of what you think they would do, say, feel? Is there a way to quantify that at all to make sure you’re on track?
The thing is you have these models and then you go out into the world and you look for them. You actively try to find that and when you find one, take advantage of that situation. Gather everyone around you and be like, “We found one here. We know that we are looking for one. It’s right in front of us. Let’s confirm if this what they do, say, feel and think.” “It’s not quite what we thought. It looks more like this.” Now, we have a more robust picture of who this person is. We have a deeper understanding. We have greater empathy for them.
Now, we’re going to be able to serve them better. You keep looking and validating that. The difference is when you have a disruption mindset, you’re doing this testing. You’re being curious about this, not to be proven right. You’re doing this to be proven wrong. The more you figure out like, “I wasn’t completely right in this way. This is the better truth. I now have a deeper understanding,” you remain curious and open to a deeper understanding versus if you try to prove to yourself why. You’re going to be disappointed because you’re never going to be 100% right.
That’s interesting because I’ve worked as a doctoral chair and my students would tell me how their research would end up when they’re telling me what they were going to write about. I’m like, “If you’ve done that, if you’ve already decided what you think it’s going to be, you’re already in trouble. It’s going to be what it’s going to be. If you try to force it to be something else, you’re not doing what you’re supposed to be doing. There is an answer. You have to explore to find out the true answer instead of what you want it to be.” Is that what you’re saying?
Research is based on hypothesis and you create your hypothesis in as clear and as stark way as possible to be proven right or wrong. It’s not 100% right. It’s never 100% wrong. It’s to give you a better knowledge. A well-constructed hypothesis deepens your knowledge because it allows you to test it across multiple dimensions to get a better picture of understanding. If you never set out in research to say, “I want to prove this hypothesis being right,” and it’s a failure, it isn’t.
You’d be surprised by how many have tried to do that. We get to go through that story with them a lot. As we’re looking at creating this disruption strategy, you talked about thinking about this, what do they do, what do they think and how do they feel and all that stuff. Is there more to the strategy that we need to have in mind or is that the heart of it?
[bctt tweet=”When you look at things differently, you start asking questions differently. ” username=””]The heart of it is if you know who your future customers are and then you stick with it, I call it the big gulp decisions that you have to make. The biggest problems are people are like, “This is where we want to go.” They start going along that path and they realize, “This is going to be hard. This is way harder than we expected. We’re going to back away from this now. We can’t do this. It’s too hard.” People with a disruption mindset are like, “No, it’s going to be hard from the beginning.” You’re trying to create disruption. You’re trying to append these established relationships and the way we think about the world. That does not come easily. I have this wonderful case study of Adobe where they decided to append their business model completely. They went from selling packaged software to being in the cloud and then doing so knowing that they were going to lose money for two years.
They’re a publicly-traded company. You can imagine the CEO probably explaining, “I had to go to Wall Street. I got this great idea. We’re going to shift our business model completely. No customers are asking for this. Our employees are up in arms. We have to do things in a completely different way. Also, we’re going to lose money for two years. Isn’t this great?” They painted this picture of who this future customer is and how they would benefit from having the software in the cloud where they could collaborate a lot better and get updates all the time. They would open up new audiences who could never afford to pay $800 for Photoshop software, but they could definitely pony up $10 a month.
This has made logical sense. The team out in Adobe was telling me, “This is hard for us to decide to do this because everything had to change.” There came a moment where they had to take a big huge gulp and say, “Are we going to do this?” “Yeah, we’re going to do it and we’re going to stick to our guns.” I find with strategy, it’s not enough to come up with the idea. You have to be completely 100% behind that. It’s difficult. I understand this is so difficult to do this with something like your future customers that you’re not even 100% sure they’re there.
I found a lot of that when we would plan in education when, as an MBA program chair, we would think about what we are going to offer for the future. Once you plan, you don’t know what jobs are even going to be available and you’re teaching them something now that by the time they graduate, those jobs haven’t even been created yet. It’s hard to think in the future sometimes. I love that you talked about painting this picture because sometimes you’ve got to paint a picture of failure. You have to paint the picture of what Blockbuster or all the common Kodak kinds of failures happen so that you can say, “This is what we don’t want.”
Do you know what an interesting television show that demonstrates some of these great ideas of creativity is? I don’t know if you’ve seen it, but there’s a show called New Amsterdam, based on a true situation in New York City of the hospital there. They have no money. They have to come up with all these ideas. It’s a fun show to watch to see the creative ideas that they think of to treat patients to do things when these things have always been done a certain way. Sometimes you have to break the model. That’s what you’re talking about. It’s got to be hard for leaders to think like this. How is leadership different when we do this? What do they do differently now?
The biggest thing is that leaders realized that this is going to be hard. They systematically create a movement, a sense of belonging to something bigger than yourself to sustain people with that purpose, and then also to create other leaders. I love this quote from a book called New Power, “It’s not a movement unless it moves without you.” A leader has to inspire people to change or they have to develop these deep relationships with people. Leadership is like you’re practicing followership. You’re actively thinking about your relationship with your followers and you’re imbuing them with the ability to become leaders themselves. They themselves are going to create more movements. That’s how a movement grows and spreads. You need that because this is going to be hard and you have to know that as you embark on this journey, we’re going to overcome these obstacles that the fighter’s worth is going up. We’re fighting for the journeys worth going on.
I see a lot of issues with younger leaders having fewer problems adapting to this disruption and older sometimes. You’re in San Francisco, so you probably see all levels of leadership. We know that culture starts at the top. If leaders don’t embrace this need to thrive on disruption, how do you create that culture if the leader doesn’t buy in? Have you had to deal with that?
Left and right and everywhere. You’re truly blessed if your leader understands this and encourages and your organization is thriving with it. The majority of companies, organizations, schools and churches across the board are not. That is because in many cases, leadership has been tasked with keeping things smooth, pulling up and taking away all the ripples, making sure that everyone is comfortable and everyone is happy and managing things so that things aren’t being appended all the time. That’s great, but if you’re not creating change, then you’re not a leader. You’re a manager.
A leader creates change, then you develop the relationships with people who will help you carry out that chain. You influence them and inspire them to make that change happen. When you’re trying to create huge amounts of change, the inspiration part has to go up high. It’s the same as the relation part. In many ways, the biggest issue I find in organizations is that people were waiting for somebody else to take the lead, waiting for those guys to make the change, the waiting to be empowered. In many ways, leadership is not a title. It is a mindset. If you see a change, you’re going to make it happen.
I love what you said about waiting for somebody else to take the lead because Take The Lead is the name of this show. That’s what we’re trying to do is get people out there. Your book has been successful in doing this. In your book, you interviewed some of the most audacious people driving disruptive transformation. Who did you interview that stood out to you? Do you want to share anything from your interview?
One of my favorite ones is the President of Southern New Hampshire University, Paul LeBlanc. This is a tiny little university. They have about 3,000 students on the campus in Southern New Hampshire. He developed this online university. He believed that there was an opportunity to serve people online, but through an accredited university, a private nonprofit and not one of these for-profit schools and to do it right. He kept students in the middle of everything that they did. In particular, serving students who wanted to get a 2 or 4-year degree. These were typically people who were pivoting in their career, coming back from the military, shifting jobs, taking it in the evening, taking courses in the evening on the weekends. He was going after an underserved market and student. He now has 180,000 students pursuing degrees online. They didn’t say like, “We’re The Southern New Hampshire University. We’re a tiny little school here.” Who gave them the right to become this online giant? They’re going to clear $1 billion in revenue.
That’s fascinating because I’ve worked in online education since 2006. I’ve seen a lot of different models of what’s worked and what hasn’t worked. A lot of them have collapsed and to see a great success story, it’s always wonderful to hear what they’re doing. I’ve seen a lot of them go into nonprofit status because of the problems we had in the past. That is an excellent model that you’re talking about. You also had mentioned Adobe before, but you’ve talked to Nokia and T-Mobile. How did leaders embrace you wanting to talk to them about this? Was it hard to get into them or to talk to them?
Some of them I had relationships with. Adobe has been a longtime client relationship. Nokia, I happen to meet the chairman at a breakfast meeting. Shepshed, a newspaper company, which I reached out to a guy on LinkedIn and he said, “Sure.” It’s sometimes those direct relationships. A friend of mine was the chief of staff for the director of the art museums in San Francisco. She said, “You’re writing about disruption? You’ve got to talk to my leader.” I got lucky and used my network, the relationships, and sometimes reached out by cold calling people. I got lucky in terms of these people being so generous with their time to tell me their stories.
It does help to be nominated for all the things that you’ve been nominated for. You have an unbelievable resume, MBA from Harvard, and having the New York Times bestseller status. I’m sure that they’re respectful of what you’ve done and they should be. What is it like to be a New York Times bestseller? I’ve asked people that sometimes. When you find out you’ve made that list, what does that do for you?
First of all, I intentionally went after that list. In this day and age, you don’t accidentally get onto that list. You have to plan for it. You have to work for it. If you get lucky, you get on it. First of all, it’s an incredible honor. The fact people would even buy my books and find them helpful. Probably the most rewarding part isn’t so much getting onto the bestseller lists. It’s a little bit when somebody comes up to me or messages me and sends a picture essentially with my book completely highlighted with lots of tabs all over it. Your book was super helpful. That makes my day, to know that the words made a difference. That’s the biggest payoff.
The Disruption Mindset: A disruption mindset says you can look at the world in a different way than somebody who doesn’t.
You’ve written some impressive books. Six books is a lot. Do you have a seventh?
I’m thinking about it. It’s starting to come together. I’m happy to share some early thoughts on that too. The fact of the matter is that these books and the conversations that come after them are some of the most intriguing things. People will come up and say, “I love the book. I wish I knew more about this.” I’m listening to the conversations of people and they’re like, “These are the biggest problems that I’m direct with. How do I do that?” I listen and keep asking those questions. They go into my notes. I sit down every once in a while and scrabble them together into a post to see what the reaction is. I test it out in a speech and try it out in a workshop. I’m constantly researching. I’m constantly thinking about and collecting more information. It’s fun being curious and I have the ability in my job to get paid to be curious.
You also do a lot of other things that show your curiosity. You’re on the regional board of YPO. That’s a global network of 30,000 CEOs. That’s got to be a fascinating board to serve on. What’s that like?
It is such a privilege to lead other leaders. It is also one of the terrifying things to do when you have to show up and the people you’re working with are these amazing CEOs. There’s nothing more humbling to show up and like, “I’ve got to get my game on here.” It is an incredible privilege. Every time I go to a YPO meeting, I learned so much about myself and grew as a leader. It’s because of this opportunity to serve people. I can do that now. I’ve been doing it now for the past 1.5 years at the regional level for the Pacific region. I got onto the board as a fluke. When I got on and I got, this is incredibly powerful. More than anything else when you have almost 30,000 leaders, they are all grappling with issues of, “How do I manage diversity and inclusion? How do I serve my employees in a more modern way? How do I think about the multiple stakeholders that are out there? Not just my shareholders, but my customers, my employees, my community. How do I do this?” YPO is trying to create this excellent and inspiring type of leadership amongst the people who are coming to it.
As you talk about the struggles that CEOs have, they’re in the same position. They’re afraid they don’t know as much as they should know. Everybody is in that same position. It’s great to have all kinds of diverse input from board members because not everybody knows as much as we think everybody knows. I know California has got a lot of attention for women on boards. I’m curious since you’re in the heart of all that. Are you seeing more opportunities for women on boards?
Yes, definitely. I’ve been working with some groups, like a board list and how women lead. We’re doing a lot of training now because of the new legislation that passed, that public companies based in California must have two and sometimes three board members. If there’s a tremendous interest, but it’s still the odds are stacked against women. While the numbers are getting better, more women are getting on boards, more men still get on boards than women. I hear some of my male colleagues are like, “It’s much harder now because they don’t want me. I am an old white guy.” I’m like, “Believe me, you’re going to get on board sooner than I will. Trust me on this.” It’s one of those things where we’ll be getting to even up the playing field. We’re beginning to see women as not just a diversity number to get onto the boards, but also meaningful contributors based on the areas of expertise.
A lot of the expertise the board needs are more HR, sales, marketing type of expertise. Sometimes boards are financially focused that there’s that lack of diversity. Don’t you think?
To be honest, even the hardcore areas. I was speaking at a conference where it was women in the cybersecurity. I’m like, “Wow, look at this. Every company is looking for a cybersecurity expert and here are 300 of them who are not on board.” That group, the Executive Women’s Forum, has been actively developing a board program to develop these women so that they can’t get onto the board.
All the work that they’re doing and the work you’re doing is inspirational. It was exciting to have you on the show, Charlene. A lot of people could benefit from reading your books and finding out more. I know you do so much work and a lot of people want to know how they can reach you. Can you share that?
You can find me on my website, CharleneLi.com. I’m on social media everywhere consistently, especially on LinkedIn. I would love to connect with people. I’m also starting a new community for disruptors because we know how hard this is. Think about it as YPO for disruptors, not necessarily CEOs. It’s called Quantum Networks.
Thank you for being on the show. I enjoyed it.
Thank you for having me.
You’re welcome.
Succeeding Through Creative Marketing With Helene Godin
I am here with Helene Godin who is known for selling Audible to Amazon and building New York City’s top gluten-free bakery chain, then won over Whole Foods later. She’s done it all. I’m excited to have her here. Welcome, Helene.
[bctt tweet=”Leadership is not a title. It is a mindset. ” username=””]Thank you. It’s a pleasure to be here.
We are going to have a lot to talk about. You’re also married to Seth Godin. That’s going to be an interesting story in itself. Tell me a little bit about your story that got you to this quite a huge success to sell Audible to Amazon.
I didn’t personally sell the company. I was on the team that did the deal. I was the general counsel of Audible when Amazon bought them.
That’s a big deal though.
It was definitely a big deal.
Tell me a little bit about your backstory. All I know is you never had an Easy-Bake Oven. Start from there.
I come from a family of lawyers and from the time I was a little girl, for some reason, I said, “I want to be a lawyer like my dad and my grandfather.” When I got to college, I took every class that had “and the law” in the title like “History and the Law”, “Politics and the Law”, “Theater and the Law”, whatever it was. I was hyper-focused. I went to NYU Law School. I got a great job when I graduated, being the right-hand person for a top intellectual property lawyer in New York City who specialized in copyright law. I worked for him on not just copyright issues, but also on television deals, some music stuff, and did a little bit of First Amendment work.
I then got a job as a news lawyer at NBC. It was fabulous. (I recently sent someone the clip from the movie “Broadcast “News” where Joan Cusack is running like a lunatic through the halls of a television station with a videotape. This was in the early ‘90s, when in fact everything was on video.) I then went to Reader’s Digest because I had two little kids and a monthly magazine is a lot easier than the timing required for television news. I then had my own firm before ending up at Audible for three years, which was a fantastic experience.
My last job as an attorney was at Bloomberg from 2008 to 2010. As much as I loved working with the people in that legal department and the issues were interesting, I said, “I’m done with the law.” I was working so hard that when I told the general counsel there that I was leaving, he said, “Of course you’re leaving. We gave you the work of two people. We never thought you’d do it.” He said, “Let’s talk about dialing down.” I said, “It’s too late for that.” He said, “What are you going to do?” I said, “I have no plan because I’ve had no time to think about it, but I know I need to do something completely different.”
I was retired for about four days, two of which were a Saturday and a Sunday. I was already going out of my mind. In short order, I came up with this crazy idea that I wanted to do something local in my little town so I could see it in the daylight hours rather than as I’m leaving the house in the dark and coming home in the dark from my commute. A restaurant was too overwhelming, so I announced to my family that I was going to open a little bakery. They all looked at me (by this time, my kids were teenagers) and they said, “You don’t know how to bake.” I said, “Yes, but I have a hunch that gluten-free is going to be the next wave and nobody knows how to do that well.”
I didn’t want to buy a business or hire a bunch of consultants. I really wanted to do it from the ground up. I took all my neurotic energy and put it first into learning how to do gluten-free baking. Because I had zero training, I followed the “bake-bite-throw out” model. For example, the chocolate chip cookie took 52 iterations until I got it right.
In doing my early research, I learned that you need a ratio of grains and starches, not just one kind of flour. I said to myself, “Here are the six things I have to have in my bakery. Let me come up with a mix that works for these six things. Once I have that, anything else I want to try has to work with the mix. If it doesn’t work after numerous attempts, then I’m going not to make that item. I’m going to keep the mix, so I only have one bin of flour that I have to work with.”
I would stop at any bakery I saw. I should have had a sticker on the back of my car with the warning, “I stop for bakeries.” Everywhere I went, I would take notes on my phone. For example, “What is my store going to look like?” I went to Chelsea Market in New York City. There’s a butcher shop there that has a butcher’s cleaver for a handle. I thought, “French rolling pin!” All four By the Way locations have a French rolling pin for a door handle. I asked myself repeatedly, “What can I do from a design perspective, from a food perspective, from a menu perspective, from a production perspective?”
The good news was that when I started it was a bake sale because it’s a sleepy little town. That gave me plenty of time to experiment.
The reason I did gluten-free, by the way, is because I needed the shop to be a destination. The town I live in, and where our first shop is located, is on the Hudson River. There’s a rule of retail that you always want “360 access” – customers need to be able to access you from 365 degrees. My shop is near the river, so I’ve eliminated 180 degrees, unless they’re going to take a boat. The shop is also eleven minutes off the parkway. All I had was a straight line from Yonkers and Dobbs Ferry, the two towns on either side of my little shop. That’s why I decided to open a gluten-free bakery. Because it was unique, I thought people would travel for it. As much as I wanted it to be a local business, I couldn’t be dependent on local traffic.
Your traffic is substantial though. I was looking at some of your business write-ups of how well you’ve done. It’s amazing. From the picture I’m looking at, it’s homie. It’s cute the way you’ve designed it. I could see you put a lot of effort into it.
And all my shops look like that to some extent or another.
How many are there?
The Disruption Mindset: A leader creates change, then develop the relationships with people who will help carry out that change.
I now have four locations. They all have the mason jar fixture, which I got at Pottery Barn. I have one more in my garage, so I can still open one more store. (The fixture was discontinued so I can’t open anymore after that.) The layout of some stores is turned 90 degrees from what you see in the photo, but all the shops have the same feel.
The thing is, I started small. We were only open from Wednesday to Saturday, from 9:00 to 5:00. On Sundays, we were open from 9:00 to 2:00. They were really, really limited hours, which was great because I was able to learn as I went.
We opened the door of the first shop in May 2011. By May 2013, I thought, “This is working. What am I going to do next?” So I went back into high gear and opened a shop in Manhattan. From there, it exploded.
This was about the same time we got into Whole Foods. Whole Foods loves local and we were hyper-local, so starting in 2012 I started showing up at my local Whole Foods on a regular basis, hoping I’d run into someone who I could show my samples. (I was the crazy lady in aisle 3.). I became friends with one of the team leaders and she gave me a heads up – their buyer was coming in. I met the woman (her name was Christie), and she said, “Wow. Yeah. Let me bring this in.” So I was in one store, and one store led to two stores, and now we’re up to 80.
Did you get to meet Mackey at all at Whole Foods?
No, I have not.
He’d be an interesting guy to talk to because all his work ties in a lot of the courses I teach.
What you’ve done is fascinating. To get into Manhattan. That had to be a huge expense. I was recently in Manhattan, but I didn’t realize you were going to be on this week. I would have come by and checked out one of your shops. I flew into New Jersey where there are Carlo’s Bakery things everywhere as you fly in. Did you learn anything from somebody like him? How they became a destination? Did you take any tips from that?
As you shared with your listeners, I’m married to Seth Godin. He was at the dinner table that night with our children and he too said, “You don’t know how to bake.” I said, “I’m not opening a regular bakery. I’m opening a gluten-free bakery, so people will have a reason to travel. I don’t know if you’ve heard of it, but there’s this book called Purple Cow by Seth Godin. It’s about opening a remarkable business. My business will be remarkable, no worries.”
It’s amazing what you can learn from him. There’s so much that you’ve done that reminds me of Woody Allen’s movie, “Small Time Crooks”, where they open up a bakery as a front. They’re trying to drill into a bank and rob them, but the bakery takes off and they’re super successful.
Those stories are common. They even say the mafia was using waste management as a cover-up, but they discovered carting away people’s trash is actually more lucrative than selling drugs.
Do you only eat gluten-free now? Is this something that has changed you?
I was just at a sales call this morning where I said, “I have to eat conventional baked goods because I need to make sure my products are as good, if not better.”
That’s a good point. How do they differ? What’s the biggest difference in taste, do you think?
There isn’t any or I don’t sell it.
[bctt tweet=”Putting your own twist on someone else’s success or someone else’s failure entails learning.” username=””]You’ve got it exactly the same.
I think so. I get wonderful notes from people saying, “Oh my God, I served this. I didn’t tell anyone until after,” (which is why it’s called “By The Way”) “and the guests raved that it was the best wedding cake or birthday cake they’ve ever had.”
We also occupy two other niches, because I wanted to cast as wide a net as possible. So when I first started in my home kitchen, I thought “I’ll be gluten-free vegan”, but that was too much of a challenge. There are those who can do vegan gluten-free, I couldn’t. I threw eggs back in but kept out the dairy products. We’re gluten-free and dairy-free. Once you are dairy-free, if you do it right, you are also kosher pareve, which means I also have a big Orthodox Jewish following, particularly in Manhattan.
I could see that’s a big group. You’ve touched on what people are looking for. The less that you can have issues, the more you’re going to have success, especially in New York, having such a diverse crowd. I can imagine why you’re successful. I’m looking at one of your products – the Amy Cake. I’m curious, do you name things for a certain reason? What’s an Amy Cake?
What had happened was that Alex Quail, my now-COO, worked with one of the bakers while I was on vacation. He loves colors. So they came up with a little bundt cake that has a white glaze and round sprinkles. It also has confetti sprinkles inside. (It’s so adorable. I have to go on vacation more often! Thank you, Alex.) When I returned from vacation and saw it, I decided to bring the cake to a dinner that I was having with my friends, Amy and Brian. I said, “You’ve got to try our new product.” I looked at Amy and announced, “I’m going to name it after Amy,” because Amy, like Alex, loves sprinkles. (And, to be honest, “Amy Cake” sounds a lot better than “Alex Cake”.)
It does have a ring to it. You’ve caused much attention. The New York Times has written about you. How did you get their attention?
This is a crazy story. Laura, my friend and neighbor, saw me one day when I was walking my dog. She was a book editor for The New York Times at the time. Laura said, “You’re not going to believe this but Hillary Stout, one of my co-workers at The Times, saw me at the coffee maker. She said, ‘I’m writing an article about people who have left the law to open a gluten-free bakery. I’ve got two former lawyers. Do you know a third?’” I said, “You’re making this up.” She said, “No, really, should I give Hillary your information?” I said, “Yeah, we’re opening in a matter of weeks. Have her come on over to the bakery.” That is how, even though I was having a bad hair day, I ended up on the front page of the New York Times Style section.
That’s a great place to be. I’m sure your hair looked fine.
So now I’m on the Times’ radar and Florence Fabricant, the renowned food writer reaches out. I’m good at writing press releases because as a lawyer you’re good at writing, making arguments. She writes about the opening of our store on the Upper West Side. Timing it right, I send an email eighteen months later, “Hey, Flo. We just came up with a kosher gluten-free challah in time for Rosh Hashanah and it’s kosher.” She says, “Fabulous” and writes about By the Way again. All in all, we’ve been written up in The New York Times five times. The most recent was when we had a new product for Rosh Hashanah that Florence thought was interesting.
That’s interesting that you’re good at writing and your husband is good at writing. Do you guys have any battles of who writes more interesting?
He writes for a much larger audience than I do.
It’s an interesting thing to talk about though. What you do can tie in to so much. Does he write about what you do at all? Does it overlap?
Not a lot. We’re careful because, here’s the thing – I don’t want anyone to think that, while I have an incredibly loving, supportive, and brilliant husband, By the Way is his business. It’s very much MY business. While Seth is a wonderful sounding board when I need it, it’s only when I need it. If it was Seth’s company – as I said to Micah Solomon, who wrote about me for Forbes and in his new book, Ignore Your Customers (and They’ll Go Away)– my logo would be orange and purple.
You guys have great taste in glasses. I was noticing you both have a similar style in your eyeglass wear. I saw a picture of you. You have trendy cool glasses. I have to say I noticed that. I listened to you and it reminds me of me like I retired one time for 1.5 days and did the same thing. It sounds like we’re both probably high energy people. What do you do for the next thing to get you energized like this? Let’s say Whole Foods decides to buy out everything you do, and then what would you do? What’s your next big venture?
Do you mean if someone bought By The Way Bakery? I have absolutely no idea because I’m so loving what I’m doing right now. I’ll wait until someone makes me an offer that I can’t refuse. It’s like when I quit my legal job and it took me four days to find something else. When the need arises, I will find my next act but, for the moment, I am truly happy with what I’m doing.
The Disruption Mindset: Whole Foods, at the moment, sells a lot of products in plastic containers, but you have to find the right plastic container.
I’m sure you had no problem doing your own copyright work.
Yes, it is protecting the BTW trademark. But it’s so lovely to exercise my creative side.
What’s the next creative thing you’re coming up with?
We hope to expand our line of products available at Whole Foods. We’ve been doing product development and that also requires not just the baked goods themselves but the packaging.
What kinds of things are you experimenting with the packaging?
Whole Foods at the moment anyway sells a lot of products in plastic containers, but you have to find the right plastic container. That are the right shape. That work with your molds. That have the right clarity. I don’t want some deli clamshell. I want something that has heft and sophistication and adequately reflects our brand.
All of these that you have to do are a lot different from being a lawyer. It’s a lot different from working on the news. It’s such a hard thing to start a company from scratch. How many people fail at this? What do you think you did differently to make you succeed that other people may have missed? Does it have a law degree that helps us? What is it?
It’s definitely not having a law degree. Someone just said to me, “My son is going to law school so then he can do something else.” My response was, “I loved being a lawyer but if he doesn’t want to be a lawyer, he should skip that part.”
Not every business is going to work. I was fortunate, but I’m also unbelievably tenacious. I did an enormous amount of research on how to start small. What about costs? What can I do to run this as efficiently as possible? I knew that on a small scale, it would be hard, but also I had to be careful because I was planning on growing. I had to put systems in place that would work not just for one Whole Foods but for 80, and 280 maybe. I’m very detail-oriented and methodical. While there are things that I can do that can be impulsive, it’s mostly a lot of analysis and deep thinking about “Why is this company working? Why did this company fail? What can I learn from both of them?”
I love that since I’m a curiosity expert that you are curious and looking into all the different aspects. A lot of companies fail because they don’t ask enough questions. They don’t look into all the things that have worked. A lot of people reinvent the wheel that they don’t even need to invent. Don’t you think that there are a lot of people who’ve already failed and you can learn a lot from that?
Totally, and then put your own twist on someone else’s success or someone else’s failure. I remember I was a mid-level associate and a junior associate had joined us. I said, “Here are the papers we filed at the trial level. We’re on appeal. You get to write the brief to the Appellate Court based on the record below.” She hands me a week later something that has nothing in common with any of the documents I gave to her. I said, “What is this? Why did you do it this way?” She said, “I went to Catholic school. The nuns would hit you on the knuckles if you used anyone else’s material.”
You need to learn to build on what other people have done to pave the way. That doesn’t mean that you don’t put your unique twist on it. As a former intellectual property lawyer, I’m well aware of certain constraints, but you can look at someone’s concept and say, “This concept worked and maybe I can apply it to my little niche.”
We learned so much from many other past successes and failures and yours has been super successful. I’m trying to figure out why you look so tiny and petite in these pictures. I would be eating everything around me. Is it tough not to eat the merchandise?
I have to be careful. While we do tastings, we do tastings in small quantities. It will be 3:00 and I’ll be hungry, but like my bakers, I don’t grab a cookie off the shelf. I try and grab an apple from the fridge instead.
Good for you because I don’t know if I’d have your willpower. What you have done with your career was fascinating to me. I remember talking to Micah about you and he says, “You will love her. She’s full of energy in what she’s done, not only with her law career,” but with Audible and all that you did. This new venture of yours is impressive. I am going to your Manhattan location the next time I’m here. Where is it in Manhattan?
We have two. One on 90th and Broadway, which is the Upper West Side, and one on 84th and Lexington, which is the Upper East Side.
We’ll definitely have that on the list and I was so excited to have you on the show. Thank you. This was fun.
It’s been a pleasure. Thank you.
You’re welcome.
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I’d like to thank both Charlene and Helene for being my guests. We get such great guests on the show. I hope you enjoyed this episode. I hope you join us for the next episode of Take The Lead Radio.
Important Links:
- The Disruption Mindset
- Helene Godin – LinkedIn
- Open Leadership
- Groundswell
- Altimeter
- New Power
- YPO
- Executive Women’s Forum
- CharleneLi.com
- LinkedIn – Charlene Li
- Quantum Networks
- By The Way
- Purple Cow
- Ignore Your Customers (and They’ll Go Away)
About Charlene Li
Charlene Li is the author of six books, including the New York Times bestseller, Open Leadership and co-author of the critically acclaimed book, Groundswell. Her latest book is the bestseller The Disruption Mindset.
She is the Founder and Senior Fellow at Altimeter, a disruptive analyst firm that was acquired in 2015 by Prophet. Charlene is a graduate of Harvard College and Harvard Business School and was named one of the most creative people in business by Fast Company.
About Helene Godin
Helene Godin was part of the law team that helped the of Audible to Amazon, then she built New York City’s top gluten-free bakery chain that won over Whole Foods.
She is the Founder of By the Way Bakery.
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