Moments with an M.E.O.

Pivoting and Pricing During a Pandemic, with Karen Hetz

May 20, 2022 Britt Lanza Season 3 Episode 121
Moments with an M.E.O.
Pivoting and Pricing During a Pandemic, with Karen Hetz
Show Notes Transcript

Remember when we couldn't eat birthday cake with our friends because of a pandemic? I remember. So does Karen and her (at the time) 6 year old son, who's heartbreaking virtual birthday realization prompted Karen Hetz to start a cake box company to bring birthday cake to children all across America. Throughout her journey of creating a business prompted by a gap in the market of the time, Karen has had to delicately balance everything from how to price her boxes to fit the market, and how to pivot when the gap in the market wasn't a need anymore. Episode 121 of the Moments with an MEO podcast is about pricing and pivoting, and what a new business owner can expect to ponder in both of these issues. 

Karen and I discuss: 

  • Starting a Covid-inspired business and how she got into and out of 2020 with a strong business connecting people together. 
  • Pricing your new product or service to fit your niche and budget restrictions. 
  • That lull in sales you can expect when you pivot and change your mission or message. 
  • Kids in STEM and how baking and cooking in general strengthens their skills and brain.

Enjoy today's conversation? Don't forget to write a review and check out the links below:



Check out MilSO Box here:

Karen Hetz  0:00  
The original concept was that it would be a cake baking kit with an activity with a party activity in it. And because of that price point in order for me to keep decent margins and not gouge my customers, I had to take out the activity and now you promote your product as the activity is the cake decorating. So yes, so there's a lot of you have to think through what needs to be eliminated from this.

Britt  0:34  
Okay, welcome back to the moments in an MMO podcast. I am beyond excited to welcome Karen from kids cake boxes. Karen. Hello, how are you?

Karen Hetz  0:45  
Good morning bright. Thank you so much for having me.

Britt  0:47  
I am so excited because there's so many good things about what you are doing that I not only want our community to know about, but the conversations we're gonna have today are so juicy. And I'm so excited. But before we dive in, let me just read your bio real quick. So Karen heads is the founder and C H O that's cheap happiness officer. How cool. Have kids cake boxes crafted in 2020? Y'all 2020 2020 Okay, as a solution for COVID-19 and post socially distanced birthday celebrations and the sadness that it brought. Karen created kids cake boxes, cake baking kits, so that all virtual party guests could happily enjoy the sweet ending of a birthday. The cake, that's the most important part of any birthday party together. Kids kick boxes has since pivoted from a pandemic business to an everyday solution for quality screen free family time, by providing an engaging, enriching activity that cultivates childhood creativity with a deliciously shareable edible work of art. And I love it. And I've seen some of your, like themes and stuff. They are so cool. And we're gonna dive at Matthew. Thank you. And so you are a military wife of how long now? It's been a while.

Karen Hetz  2:11  
So he actually just retired in September after 20 years. Wow. So we did our time.

Britt  2:19  
Oh my gosh, okay. So not only did you start a pandemic, birthday cake business, but then you also phased out of the military within two years in a pandemic, how insane I'm not defined

Karen Hetz  2:33  
does not define though military life that you just have to go with the insanity.

Britt  2:39  
On 100% 100%. So Karen, why don't you introduce yourself a little bit more loosely, like who is Karen?

Karen Hetz  2:47  
Sure. So I know that in the intro, you said I am a mom to three young children. My oldest is 10. I have 10, eight and four. Now they just had a couple birthdays. So that is kind of my current phase of life. Before becoming a mom. I was a registered dietician. I still am I keep up with my credentials. Did I ever want to go back to dietetics? Yes. So I received my master's degree in nutrition from the University of Washington. I don't know many years ago, prior to that was attended Carleton College, a little liberal arts school in Minnesota where I was a biology major, but I am from the Midwest. It's a lovely place to be, but I think I found some more of my happiness along the coastline.

Britt  3:30  
How did you meet your spouse? What's your love story?

Karen Hetz  3:33  
So that happened when I was a graduate student at the University of Washington. So Oh, my goodness, what year did we meet 2006 I think and so he had actually been in for five years at that point when I met him, but that was back when it was not Joint Base Lewis McChord. It was Fort Lewis and McChord Air Force Base. And he was stationed at Lewis, one of the gals who was in my program with me up at the University of Washington in Seattle, actually was a lieutenant colonel and she was doing her PhD in nutrition through the army. One day, she came to me she's like, so my husband works with this guy down at Fort Lewis, would you ever be interested in like going on a blind date? And I was like, Oh, sure. Yeah, sure. That sounds great. And on his end, my husband's end of it, the her husband, the classmates husband, who was working with my husband, he didn't know me, her husband and know me, and she didn't know, Chris, you know, my husband. And so it just kind of made us like, well, I have a girl in my program with me and I work with this guy here in the office. So they set us up on this blind date. Yeah, we totally I planned it for like a Wednesday night in Seattle. So if it was like really bad, I could be like, you know, I gotta be to school in the morning. So I had him drive up to Seattle and meet me at this restaurant. We ended up like closing down the restaurant just because we were talking so much and I If that was a Wednesday and intentional Wednesday, and I think that we are on our second date by Saturday, so

Britt  5:05  
Wow, that is so fun. Do your friends ever, like bring up how like they made you guys? You know a couple.

Karen Hetz  5:15  
They don't. But it was like their mission like so they PCs, so she graduated that year with me. And then they PCs. But then we followed up with them at their next duty station. And they were doing it again to another couple at the next place. I think it was just kind of like their thing that they would go round and like make these connections where people so it worked out in our case, I don't know anybody else's. But

Britt  5:40  
that's really cool. I really liked that. That's awesome. So how did a registered dietician start bringing cake all across the country for kids? Like how did that happen?

Karen Hetz  5:56  
So cake is good for the soul. It's this is sugar, right? So and I think sugar can be enjoyed every day. That wasn't the Registered Dietician that brought cake across the country. It was the mom, it was the mom and me because it was April of 2020 when we're all like still crying ourselves asleep. And we attended our first virtual birthday party for my niece. And you know, we're all there. And we're in like, you know, oh, zoom, what's zoom, let's get on a zoom call. We sing Happy Birthday to her. And she blows out her candles. And we're like watching her eat her cake. And my son, who was six at the time, looked at me and he was like, Wait, so we don't get birthday cake anymore, either. And I actually had to like, and he just saw, like the crestfallen. And I had to look at him and say, No, honey, not now we, you know, birthday parties won't have cakes for a while, that hurt my heart. And it hurt his and I just thought if there's any day in the year that should be happy, right? It is children's birthdays, what do these kids need to feel included, to feel part of this party to be able to celebrate? Right, we should just can we forget the outside world for a minute and celebrate with our friends. And with that forced, like social isolation, I just wanted to do something I wanted to help, I wanted to bring happiness. Like if there was any day that we're gonna let these kids be happy when the outside world was throwing sad at us. I said it's going to be birthdays. And so I came up with the concept of kids cake boxes, in that so every cake box is a cake baking kit that has just a four inch round cake pan in it and the cake mix packet that's in there fills that little cake pan so perfectly. It was supposed to be this personal sized cake so that the virtual party host could send these cake kits to their virtual party guests. And then every guest at the party could pre bake their cake, and then bring it to the party and everybody could decorate it together like an activity. And then after we sing Happy Birthday, and after that birthday cake blows out the candles on the other side of the screen, we all get to eat cake. And so it was one of those like, at least we get to enjoy cake together. And that's how we started. And that's what I wanted. I just wanted to bring the mom in me just wanted to bring happiness to, to children during this really, really sad time.

Britt  8:30  
Wow. I'm really curious what it was like because I also started my business and my platform in the midst of 2020 because I was bored out of my mind for you. What was it like creating a virtual experience for kids in the middle of a pandemic, but also like trying to start a business in that time, that couldn't have been easy.

Karen Hetz  8:57  
So what was really interesting I think about my particular journey on my on starting my business was that it was very fast. Because my business was started in response to a need that's now like this need is now. And I even I even remember when I talked to my mom about it. And I said, Mom, I'm gonna start this, I want to start this business, I want to I want to get these cakes these cake kits to children, so that they can do this at virtual parties. And, and her first response was, Well, what happens when COVID ends? And it was one of those like, I kind of can't think about that because this this is happening now. Like I want to solve this now problem. So I think my particular journey was was just a little more accelerated. In a sense, that's harder, but in a sense, it's easier because you're like, I don't have time to think about what problem this is going to cause I'm just going so that's that's kind of how my journey was with that it was one of those like, I don't really have time to stop and think I just I know what I want to do. I'm going to reach out to all the support networks I can find. And we're going to, we're going to go forward.

Britt  10:07  
That is so cool. And yeah, my next question was like, okay, but like, how did you plan for the end of the pandemic? But like, honestly, if this is like middle of April, beginning of May, we were in that phase where it was like, Okay, this is supposed to be only two weeks. Yes, it's not the spread. And now it's like going on forever. So what was that like for you?

Karen Hetz  10:31  
So to give you like, a real clear timeline, so that was April, mid April, that we had that situation, and I'm like, I gotta make a change, I want to make a difference. And then it was July that I started to physically assemble. I thought about it for like a month or two. And then I started to physically assemble my cake boxes and prototypes, and I reached out to close friends, I sent them the boxes, they gave me their feedback and what I could change, and then I went live with my website on October 1. So really, it was about five, six months from the from the party from the thought to the I'm ready to sell these. And so at that time, I was convinced it was all going to be over by the Fourth of July. When it wasn't, I was like, let's, let's put this stuff together. Let's make it happen.

Britt  11:16  
Yeah. Okay. So you create this business with a current need that you see, what was the response? Like,

Karen Hetz  11:25  
it was actually pretty strong. And because people were purchasing for birthday parties, it meant that, that it wasn't just one box being sold at a time, but that was also inhibitive the cost of that, right? Like if I'm throwing a party now, if I'm throwing a party normally, and I would take the kids to the bouncy house place. What is my normal budget for that? Right? You think what I normally spend on that a couple 100? Maybe? And so it depends on how many people you have. And if you get the pizza and the cake, you know, cater so anyway, but um, so the thought process was, what would you read? What would you normally spend on a birthday party? How can I price my cake hits, so that it was similar, because I didn't want anybody to be like, Well, I gotta cut down the guest list only for if we want to do the cake kits. So I really tried to finagle a price point where you'd say, we have about a dozen kids come to our party every year. And when we do that at a bouncy house plays or a similar, similar venue, what would I spend for that? So that was kind of my thought process so that that party host wouldn't feel that they couldn't do this activity with their guests. So because of that, though the initial purchases were larger quantities. But the response was strong. I sold a number of birthday parties. So I think that it was appreciated.

Britt  12:48  
Yeah, absolutely. Now, I don't want to run off on a tangent right now. But you just said something that was so important that I have to touch upon it, that you looked at your market and your niche and your industry and said okay, like I need to price this accordingly. This is something a ton of clients and listeners have this question and how to price your products. So I know that you looked at that and said, Okay, this is what it needs to cost. Did that change what you originally wanted to put inside each of these boxes? Like did you have to work with that? To make it work?

Karen Hetz  13:24  
Yes, absolutely. And the original concept was that it would be a cake baking kit with an activity with a party activity in it. And because of that price point, in order for me to keep decent margins and not gouge my customers, I had to take out the activity. And now you promote your product as the activity is the cake decorating. So instead of oh, let's all paint something together, and then eat cake. Why don't we decorate our cake together? And so now you so yes, so there's a lot of you have to think through what what needs to be eliminated from this and simple, simple things like how do I change the packaging? How do I because that makes such such difference in price? And yes, you want your unboxing experience to be to be a wonderful one, right? Because you want so much like when you get like oh like the pretty box and all this and I do I have cute little boxes covered with sprinkles. But the appearance of the box of the delivery box does not sell your product on the website. So it's one of those like, Look, if you need to cut down the amount that you spend on your custom delivery boxes so that you can meet those margins. So you can set your price point at one that will meet your customers needs, you know, consider that do that. So right so you have to think about every single aspect of what money goes into each individual box that I send you. And yeah you have to adjust because if I wanted to give you Everything that I wanted to give you, I have to charge you for that. And especially with my initial platform, my initial my initial business model was you're buying 10 of these at a time. And so I can't, I can't ask you to spend $35 A box, you know. And then the other the other thing that I really had to change, and I'm also getting off on a tangent, though with pricing, that's love a shipping, shipping. I mean, that'll keep you up at night. Because we all understand that Amazon Prime has ruined all small businesses for shipping charges. Because why would I spend, you know, $8 in shipping, when I can get something similar for free shipping over here? And the truth of it is if they're if small businesses are going to survive, shipping is a real high percentage of every package they send. So it is how do you do that? Do you offer free shipping, quote, unquote, and throw the price of shipping into the price of the product? Do you offer essentially subsidized shipping so that that price of your products can come down? But then they're they're paying a certain amount for shipping? Or do you let that price of your product drop even farther, but they cover all the shipping? And so it's you know, it's a real it's a game? That it isn't, I shouldn't say it's a game, but it's definitely a trial and error that I think every small business owner goes through. And that's to decide.

Britt  16:29  
Yeah, and it's really about like strategy and what makes sense for your business. Like every business is going to be different. And I think that's huge. Yeah. Okay, so you were doing this in the pandemic. And now we're kind of, we're like, in this next phase, I don't want to say we're out of the pandemic, because like, are we ever going to be out of a pandemic app or no, but like, you know, for the most part, kids are back to school until there's another case, and then they're back home, but like, we're kind of in this transition of, okay, what's the new normal? What was it like for you? What was the thought process there of like, okay, I've been making this for the pandemic, and now we're no longer needing to do virtual, what does that look like?

Karen Hetz  17:13  
So that was like, actually a really happy note, right? That suddenly we can get back together again, that was kind of the what we were always working toward anyway. So that was really happy that we could get together again, but then what happens to kids cake boxes. And so what was really kind of an organic pivot for us was, because all along kids cake boxes provided this quality bonding time between parent and child, you have to be present, you have to be involved with this project, because there's an oven involved, right? You cannot give this to your six year old and say, best of luck, honey, you the potholder. Like you said, you are there. Right you are, you are working together. And that's what provided from the get go there what you know. And so what we did was he said, Well, what this true, yes, it gives us a chance to enjoy cake at a virtual party. But what it also is doing and always has done is it provides this intentional moment, right, this intentional time, together in the kitchen, let's shut down the overscheduled calendars for a minute, let's turn off the noise, let's come together. In the heart of the home, that is literally what the kitchen is called. And we are together, there's I feel like there's love there. Like nobody has a bad memory of good smells coming from the kitchen. And like you just have this. There's there's connection there. And there's love and there is there's just this togetherness. So we really, we really just, we pivoted to focus on, on that, on that mission on that come together be together. And it was also as it always was for the day cakepops or whatever it is you're feeling you want these days. But get creative, do it your own way, and then enjoy it together. Right, get a couple forks and share it. So that's what we're about.

Britt  19:02  
I love that. And I think it's so important to instill those types of relationships, you know, parent or older sibling to child like in your right. Like there's no bad memories that come out of that. What was it like going from one niche really, because it was like, okay, virtual birthday parties to kind of the same niche, but not really. I mean, you had a different message. So what was that transition? Like? Was it difficult? Did you have like, a lull period? Like, what was that like when you were starting to pivot and change? Like, what can people expect?

Karen Hetz  19:39  
Yeah, so if you look at I run my website through Shopify, if you can run reports on that, and you see you see that low and you see that dip in sales when I pivot, and it was, you know, I'm not even two years old yet with my business. So it's a decent chunk of my history, but they're, you know, but now we're starting to grow back up again. So there is there is that expect, like there should be that expectation of, I'm going to pivot, I have to change my messaging. And that's going to probably take me away from the customer base that I had with my original messaging. Now those people in my those customers and that original niche, are included in this in this current niche as well. But now, it is one of those like, now, I'm not now not suggesting you buy 10 boxes, right now it's like, by one by two is your niece coming over by you know, by three or one however that works. So with that new model, repeat customers, again, in Shopify, you can run these analytics, and you'll see my return customer rate keeps going up. So I think, yeah, of my customers, you know, so no, they didn't buy 10 boxes for one day, but they've purchased, you know, five boxes over five months. And this is so you see those repeat customers coming back. And you see that they really do love this. And so yes, expect a low, at least I did, I experienced a low, but I pivoted

Britt  21:07  
100% Because you're, you're so set on this one message, and then all of a sudden, you're changing directions, and you're not talking to the same person anymore, even if it's the same, you know, a parent is a parent, but you had such a specific need that you were filling and to shift that does cause a little bit of confusion, of course, and it does, cause you know, new people have to come in and see what you're all about, which is important too. But, you know, every time I go to pivot, and I get anxious or nervous about you know, man, I gotta pivot, which ultimately, every entrepreneur has to do. You know, I just think if I'm your case, if you stayed there, you were going to be, you know, your business was gonna die. And that move isn't gonna need Yeah, isn't gonna be there. So, I love that you pivoted. And I think it's important as entrepreneurs to realize that we are that we eventually will all need to pivot at least once, if not multiple times, in our business endeavors in order to stay current, and to stay up to date. And I think that that's important, too. Absolutely. Yeah. Yeah. So something that I again, don't want to get off on a tangent about but something that I love is how much your box is really instill a sense of STEM or a place for STEM for kids to learn things like measuring things like science of adding ingredients together things like, you know, understanding how things work like ovens, and, you know, I just feel like, not only is this a great bonding experience, but this is a great way to keep kids interested in STEM fields. And I'm curious your viewpoint on that.

Karen Hetz  22:51  
No, absolutely. And it's so funny, you bring that up, because it was actually just last spring, where I ran a baking stem after school class that was virtual for our elementary school. And it was we talked about what is an emulsifier? And what's the difference between baking powder and baking soda? And what does that act what is a leavening? You know? And so, yes, and what you can do in your own home with your own child is, you talk about tablespoons versus teaspoons. And you can, you can show them the difference. You can say, look, it went from this liquid batter to a solid cake. And that's another way that kids cake boxes. And I think it really does, it keeps children engaged. It keeps them engaged, it keeps them wanting to do more and now suddenly, they know something, and something more than when they first started. So I think it's definitely an amazing way to to, to teach children.

Britt  23:40  
Absolutely. And I'm obsessed with everything STEM field related. So I love that now. Go ahead and tell us if we were to order a kid's cake box today what would come in the kit. And then where can we find you to order one absolutely just hanging out in yours? Yes.

Karen Hetz  23:57  
So every every kid's cake box will come with your pan your four inch cake baking pan comes with the cake mix. It comes with your frosting mix it comes with cocoa powder in case you want to make your cake or your frosting chocolate. It will come with your recipe card and then it comes with any fabulous decorations of the theme you chose. So like I said, we have multiple themes you can choose from. We have a day at the beach. We have dinosaurs we have construction trucks, we have unicorns, and so that'll either be an eye packet of you know, the decorations like I'm thinking of my unicorn cake right now has unicorn sprinkles my diggit cake which is a construction cake has little candy corn road cones and chocolate rocks and are gluten free Oreo dirt and so it's an I should say that you can choose that your cake mix be either regular or gluten free. Maybe that's the dietitian and me but you can choose between if you have gluten free needs. So yeah, so that's what you're gonna get in every kit. That's what you're getting every kid and then you can find those kits simply at kids cake And then you can follow me at kids cake boxes on Instagram. Same on Facebook as well. So

Britt  25:08  
perfect. All right, just two more questions. Yeah. What does success look like to you? And can you describe a time when you truly felt successful?

Karen Hetz  25:18  
So I think this is a this is a tiered question. I think success, the definition of success has multiple layers. The base of it for me is simply did I do what I set out to do? And that was make children happy? Have I made children happy with this? And if the answer to that is yes, then I was successful. Success, perhaps going up the pyramid? is, am I making money off? Am I is this profitable? And that's, you know that you have to look at that frequently to say, look, how much money am I putting in? How much money am I getting out of it? And at what point do we pull the plug? Or do we say, Let's bootstraps, the more because we're bootstrapping this and and that's no joke. You have to look at your finances and are we applying for grants are you looking for, you know, investing money, what road Do you want to take on your journey? And so that is I think the next part of success for me is Did it make money? Is it profitable? I would love for it to be profitable as anybody what I don't think people start out on businesses to lose money. So I think that's the next step and then you know, maybe somewhere down the road on the top of it it was enough money so that he could be a stay at home dad for a little bit and I could it could support our family. So and a time can I describe a time when I felt successful? I think every time I get a positive email a review something where somebody said this was so cute, or I love this or we had such a fun playdate. We what a great idea. I think every time I hear that, I'm like, yeah, yeah, that's good. That was success. That was good.

Britt  27:03  
I think anybody listening who has a small business is like nodding their head in agreement right now that like those emails, those testimonials, those reviews, those Etsy dings that let you know, you have a new five star review, like those literally mean the world. And I don't think consumers realize just how much those those matters mean. Yeah. Yeah. All right. Last question. And then I promise, I will let you get back to your four year old and all your other adventures. But can you describe to me how you embrace being an MBO?

Karen Hetz  27:36  
I think it goes back to pivoting. I really, really do. And I, every one of us, you know, you talked about some time in your small business, you're gonna have to pivot and I just want to give a big shout out to all the military entrepreneurs listening right now. You already pivot all the time. I and you can do it in your business, because you do it in your life. And you embrace that you say, Yep, it's time to pivot. And here we go. And whether that's a new PCs, whether it's a new branch in your business, whether it's, I'm sorry, I thought your your RFO said, we were going here, and your orders actually say where, you know, and so you you know, you pivot, you pivot, and you say, oh, here we go. And I think that that is how I embrace it, because he you're flexible. You say I can do this, I can pivot and we do it all the time. So that's that's a, I think that's sort of the strength is and the sense of community that this community has, right. We embrace each other the whole way through. Yeah,

Britt  28:41  
absolutely. I love that. Well, Karen, I just have to say, like, literally from the bottom of my heart. Thank you so much. I know that it's not easy, being a mom and a business owner and trying to do a podcast. But I just appreciate that you took the 32 minutes that it took for this podcast episode. I'm just so thankful for you and for your time. And I think that this conversation is truly going to resonate with a lot of new business owners. So thank you so much. Well, thank

Karen Hetz  29:06  
you, Brett. And thank you for all you do for all of us listening. Thank you very much.