Staying Power

Handle With Care

In 1991, brothers Josh and Seth Frey were driving an ice cream truck--a former postal vehicle they had bought and converted into a dessert-mobile. They operated it between semesters at the University of Wisconsin-Madison. Seth, a senior, planned to join the corporate world after graduating, but Josh was enjoying being his own boss: The Hebrew and history major felt he had finally figured out his future. Still, he didn't want to be the neighborhood ice cream guy for the rest of his life. What else could he sell?

Care packages. That's what Josh decided the following summer. He was impressed that a few dorms at his university offered care packages for parents to send to their kids. How to improve on the product? They should do this campuswide, he thought.

When Josh, 26, learned his university sold mailing lists of the addresses of students' parents, he scraped up a few hundred bucks and bought 8,000 names. He then purchased cookies, became a regular customer at warehouse store Sam's Club, and soon customers were paying $10 for his care packages, which he dubbed Granny's Goodies in honor of his then-89-year-old grandmother.

Josh earned $2,500 selling the care packages during his senior year. After graduating in 1993, he took a job at a nonprofit organization. Miserable there, he returned to Granny's Goodies four months later, setting up shop in his parents' McLean, Virginia, basement. Upon learning that most universities don't sell mailing lists, he secured a bank loan and, in 1994, purchased a mailing list of 70,000 names and addresses of parents with kids heading off to college. Using that list, Josh grossed a cool $20,000. Unfortunately, start-up costs were more than $30,000. Nevertheless, Josh was convinced Granny's Goodies was something special. If only he had a partner, someone who had studied business in college . . .

"I left a $30,000-a-year job to make zero," says Seth, 27, who quit his account manager position at a Washington, DC, commercial security company to work at Granny's Goodies. In their parents' basement, Josh handled production details while Seth spearheaded sales and marketing. "We had no business experience--just an idea, a name and passion," recalls Seth. "It was staying up until 2 or 3 in the morning and waking up at 6 or 7 to put together care packages."

Two years later, as revenue increased, the brothers moved the business into a warehouse in Alexandria, Virginia. (They had previously been outsourcing production.) Sales were around $300,000 a year, but profits were sketchy. Parents clamored for care packages early in the school year and during final exams. But summer sales were sparse and, with the exception of a few glorious weeks, so were sales in autumn, winter and spring.

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the June 1998 print edition of Entrepreneur with the headline: Staying Power.

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