It's just past seven on a Saturday night in New York City, and every seat at Sweet Revenge's custom-built zinc bar is taken. Forget about grabbing a table--they are all full, too. A big group is standing along a narrow drinks ledge, spilling into the back, and more people are hovering by the entryway. The room is warmly lit by suspended globe lights, giving off an inviting, Euro-chic vibe--dark hardwood, distressed mirrors, wall sconces with vintage metal accents, a striking art deco bird tattooed on the ceiling.
Sweet Revenge is a cupcake shop.
Its owner, Marlo Scott, has managed to turn the whole cupcake phenom on its buttercreamed head by serving "grown-up" versions in sophisticated, and not always sweet, flavors topped with three fat slashes of frosting--a "badass mohawk" motif, as Scott puts it. Even more badass: The cupcakes are offered with wine and beer pairings designed to bring out the best of both. For the signature Sweet Revenge cupcake--a peanut butter cake with a chocolate ganache center and peanut butter-fudge frosting--there's a frothy Weihenstephaner Hefe Weiss ale or a Las Perdices Malbec, a full-bodied Argentinean red.
No place on the planet is thicker with cupcakes than New York City. There are nearly 40 bakeries devoted to them, including Magnolia Bakery, which kicked off the whole craze after appearing on Sex and the City in 2000, and Crumbs Bake Shop, a 35-unit cupcake corporation on the verge of mass franchising. Besides the specialists, there are so many bakeries, restaurants and food trucks pushing their own spin on the cupcake that there have been more than a few rumblings that the whole thing is over.
In the midst of all this, and in a recession, no less, Scott is proving that great opportunities are still out there for smart entrepreneurs: She has found a niche no one else tapped--a cupcake, beer and wine bar, with the atmosphere of a stylish bistro--and turned it into a spectacular success.
"She's found a different way to market cupcakes," says Nichelle Stephens, co-founder of the popular cupcake blog Cupcakes Take the Cake. "Sweet Revenge is not a dive and not too high-end, and appealing to locals at night, and tourists and families during the day. Actually, I'm surprised there aren't more places like this."
Video: The Innovators: Sweet Revenge's Marlo Scott »
Just four months after opening in July 2008, Scott received a Critics' Pick award from Time Out New York magazine; the following April, she won another for "best case against cupcake backlash." Her recipe for a chorizo sausage and Manchego cheese savory cupcake was featured in Bon Appétit magazine, and she's shown off her cupcake and booze pairings on The Martha Stewart Show, the Today Show and the Cooking Channel's Unique Eats. Last summer, she became the face of a national advertising campaign for Chase's small-business credit card, Ink. In 2009, her first full year in business, revenue hit half a million (that's about 143,000 cupcakes). This year, Scott has plans to expand the menu and introduce Sweet Revenge lines of apparel, fragrances and wedding cakes.
It all started in August 2005, when Scott--a slim brunette with a wide grin and edgy style--got fed up with working for "the man" in sales, corporate development and brand licensing at NBC and Time Inc. "When I was passed over for a promotion in 2005, that day, I literally swore that I was going to get my sweet revenge on these, uh, folks. I think that's the F-word I used," she says, with a smirk.
Scott immediately began plotting her escape, taking business courses about the restaurant industry and attending entrepreneurship seminars. She discovered that cupcake bakeries had a mere 8 percent failure rate. By December, she had started baking in earnest. "I sucked at it at first," she recalls. "I'd forget about [the cupcakes] in the oven, and they'd come out very … toasted."
When a layoff came a couple years later, Scott was ready. She sunk a total of $500,000 from her savings and an SBA loan into the business, and got ready to show her old employers what she could really do.
Three years later, sweet revenge tastes pretty good, especially when it's a raspberry red velvet cupcake served with a cold raspberry bellini.
Cupcakes and booze. How did you come up with that?
Up to that point, cupcakes were cute, girly-swirly, nostalgic all-Americana, but that just was not me. I wanted to create a whole new brand and experience, so I started by looking at successful concepts in the restaurant industry, and at my own experiences going out in New York City. I read that French bistros were successful as a restaurant concept, and sure enough, where did I go? Pastis, Felix, Café Noir--all these really beloved French bistros.
What next?
I was really a super sleuth. I started taking pictures [of all these places], talking to the bartenders about what the countertops were like, studying the lighting, fixtures, fans, wood, paint colors, tiles, chairs--literally every element. And I used Baz Luhrmann's film Moulin Rouge as [an example of] best practices in branding. I evaluated what he did in the visuals--the fonts, use of colors and language and decorative elements--to evoke the Bohemian spirit and energy across every element of the movie and its marketing.
What about the nouveau cupcakes?
I hired a genius consulting chef and tested out recipes, different packaging and frosting styles with friends and their friends. We ultimately got to this edgy, sexy, exotic styling, with the mohawk piping element and the rustic parchment paper instead of the pleated paper cup.
It's very adult.
Actually, there was a time I was thinking about doing a whimsical, kid-friendly, family-oriented cupcake experience, because I had a lot of friends who were having babies. Then I spent some time sitting in the cupcake bakeries and literally standing out in the street counting foot traffic and guessing ages and watching for children. It wasn't moms with strollers or toddlers at all; it was a 20- to 40-something crowd, predominantly single and--this was shocking to me--30 percent were guys.
All that research--it's clear you have a marketing background.
It's frustrating sometimes because I take longer than I'd like--it took 11 months to do our brunch menu. We did focus groups to evaluate service, taste, presentation. We asked what was missing, what they would never order and we made some key business decisions based on the feedback. We slashed the salads and hummus, redesigned the menu and added some non-cupcake items, like bacon, eggs Benedict and lox and bagels.
What couldn't you figure out with research?
I bought all new plates because the original ones were way too large. We were trying to fill white spaces on the dish with sides that weren't appropriate. And in the first couple months, I was overwhelmed. I didn't know about the day-to-day, like how someone has to make sure there are four different types of sugar in the sugar bowl! It was a year before I developed all the procedures and checklists.
You started research in 2005, but by the time you opened ...
Muddling out of a recession wasn't in my projections, and when I opened I suffered miserably. I literally would stand out on the street and try to give stuff away for free. It is unbelievably hard to give away anything on the streets of New York--people would look at me like I was half-crazy.
Then I had a staff member not show up and I had to take over the shift, but I didn't know how to use the point of sale. A friend down the street had to show me how to use the espresso machine. So I started pulling every second shift, because I realized I could make tips that I could live off of, and I could control my employee costs.
I was at the stage of the business where every penny counted, and January 2009 was absolutely the apocalypse. I was coming off incredibly small numbers, like $600 a day. I was working every night, and I knew that I was not going to be able to manage payroll and the SBA loan in February out of operating expenses.
Did you have a Plan B?
No. No. I never had any doubts, never had any regrets, didn't second-guess myself. I knew it was all about endurance and getting creative in figuring out how to take costs out. So I was mindful of HR costs and trained the staff to be conscientious about overproducing and wasting packaging and paper goods.
And I tried to win repeat patrons and create a lasting relationship with them. I think people love to eat and drink here, but we also treat them with really good cheer. You get greeted by name--and you'd think that's the way it should be in the service industry, but it isn't. In all my years of living here, only one bartender knew my name, at an Australian bar called Eight Mile Creek in the NoLita district. It made such an impression on me.
What was the turning point?
Being on The Martha Stewart Show that January [in 2009]. I was connected with the set decorator on the show, and I was asked to drop off some cupcakes for a taste test. I got the call two hours later to be available to film. I left the taping immediately after to bartend here, and 30 seconds later, some people from the audience walked in. Martha's viewers were so responsive that it allowed me to make rent and payroll on Feb. 1.
You've had incredible press.
You're shooting yourself in the foot if you don't do strategic stuff to get the word out. About two months in, I got on the Time Out New York website and sent an e-mail to the generic address saying hi. I think they called 30 seconds later to tell me to please bring the cupcakes. So I did, and when I was on the subway back, they called to let me know they were naming me a Critics' Pick because I was doing something so radically different.
Has the visibility made a big difference?
I'm finally seeing sales numbers on the weekends that I said I was going to do on an average daily basis in the original financial models that I built. It would have made me a $1 million business. It is driving top-line growth, and it's really increased web traffic.
Which you've taken advantage of.
I launched the Sweet Revenge apparel line online. I have stock here, and the staff is outfitted in it, but I don't want to kitsch out the place with T-shirts on the wall. I always knew I could expand the brand into different consumer products, because I was going to create a lifestyle--sexy, edgy, inviting--around Sweet Revenge. Also, I think anyone who's been challenged in the recession can appreciate the anti-establishment rebel yell, and the way I turned a bad situation around and got to do what I wanted to do.
What's next?
I'm hoping to get into lotions, perfumes, soaps. This is a platform for me to develop and launch other experiences. One of these days, I plan on writing a book, and I'm really hoping I can nail a TV deal that can pull off a Sweet Revenge concept about our quirky regulars or other small-business owners doing daring things.
Will you open more cupcake bars?
If I Starbucks myself, I'm no longer special. For me, it feels more authentic if you have to come here, to Carmine Street, to enjoy the experience and the cupcakes and booze.
So what about this rumor that cupcakes are over?
That's the silliest thing. The reality is, if you're doing something innovative, there's always room to become newsworthy, even in the cupcake industry.
Cupcake City
How Sweet Revenge compares to New York's leading cupcakeries.
| Sweet Revenge | Magnolia Bakery | Crumbs Bake Shop | |
| Cupcake style | Grown-up, eaten on plates with knives and forks | Frilly, with sprinkles and frosting swirls | Huge, and huge selection (more than 50 flavors and toppings daily) |
| Price | $3.50 | $2.75 to $3.25 | $3.25 to $4.50 |
| What else? | Wine, beer and savory cakes, plus breakfast, lunch and brunch | Pies, cakes, cookies, brownies, pudding, muffins | Cakes (and "colossal cupcakes") |
|
Locations
|
Just one | Six and counting | 35; 200 planned by 2014 |
|
Ambience |
Cool, West Village bar where regulars hang |
Bright, retro bakeshop with long lines and the "velvet rope treatment" | Fancy candy store: Wood cases, marble counters and treats |
| The hook | You want Pinot Noir with that? | Sex and the City ate here |
More locations, more cupcakes and online delivery |
| Plans for world domination | Sweet Revenge apparel, fragrances, TV show | Major expansion (first up: Harlem, New Jersey and Boston) | Franchising, after going public in a $66-million merger |
This article was originally published in the April 2011 print edition of Entrepreneur with the headline: A Refined Taste.
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Comments:
Thumbs up! More power to you. Very inspirational. I like the idea of quitting your job and then naming your business Sweet Revenge...
This is so inspirational..I just started my own company and hope to be as successful! Thanks for sharing.http://apps.facebook.com/photopad/
This is such an inspiring success story. Above all, it teaches entrepreneurs the value of getting media. Media can do wonders for a startup. Of course, without a hook, which Ms. Scott, clearly has, a trickle of media may not necessarily have led to more media.
Marlo is a genius. What a great way to merge two big markets and introduce it in a fun way. She also brought in other talent and knew better than trying to undertake the project all on her own. Great work! Jon
Interesting comment. I find the harsh, accusatory tone of your note to be in stark contrast to the rest of the comments which are a pleasant, respectful, interesting debate on the subject. My comments were professional and related to the facts of the story, not personal and attacking like yours. You will note that more than one person in this dialogue had a similar response to the article as I did. I am entitled to share my opinion just as you have. And, ironically, you accuse me of judging? Hypocrite, much?
Interesting article
This is great. I think sometimes it is easier to spend money you borrow unwisely. You seem to spend money you've worked for a lot more frugally.
understand your 'complaint' or rather 'grudge', but have you ask you self this? : - Why is there zero in your saving account? - Why is always the same in your checking account? probably you need to have better management of your whatever business you are in. Don't come tell us , or keep complaining of this and that. Find out what makes your unsuccessful with empty bank account in the first place and try or get busy fixing that first and then comment silly things here..
I loved the story! I want to hear ANY and all business success stories. Kudos to her for sticking to her guns and following through. She had her own savings and maybe didn't have to borrow...Big deal! She was smart in her approach and solved her own problems. We can get an idea and never act on it. She saw it through. Good for you Marlo!
I agree with Chad. If you want to impress the masses, put a rags to riches story out there because essentially thats where most of us are. Trying to make something out of nothing. What the typical American has in their bank account...it's called ends meat.
if you sell anything with booze you'll make money.......you're thinking cupcakes and i'm thinking you can sell pencils with beer/wine etc..... hey best to her.....we the people will "eat anything" including soaps, potions and apparel? she had the money and regardless of making it easier - sure but it could easily fade away to dust......you can start a biz with belief and guts if you don't have 500K cut out everything but the roof over your head and go for it!
A Refined Taste: Marlo Scott by Jennifer Wang I just finished reading your Entrepreneur cover story. What an uninspiring story. Nothing makes me think, "Wow! That's amazing, way to go girl!". How can I relate to someone who quit their extremely high paying job because she got overlooked for a promotion (awe) and still have $500,000.00 to pull out of her savings? My wife and I have begun our small business. The main difference is: •We CAN"T quit our jobs because together we make $60 working a 40+ hour work week, plus haven't received a pay increase in the past 4 years. •We have $0 in our savings and have pretty much the same in our checking accounts. •And...a Loan? what are those? With a 5 year old, it's pretty tough to come up with any extra money or time for blazing into a business. Not for Marlo though. She can conjure up some loot to "HIRE" a f&$@ng genius consulting chef!!!! Whaaaaa??? I'd really like to read stories about building a successful business out of a mudpit scenario like most of us. Forget the rich entrepreneurs who tell us how hard they had it, and the struggle it took to build their "quirky, but subtle & quant" high-end businesses. If you start off rich, then it doesn't really count...no applause necessary. Thanks, -Chad
Marlo Scott is awesome. Not only is she a creative marketing genius, she's willing to share advice on being a successful entrepreneur with anyone and everyone. She's coming on my podcast this Saturday to take live questions and talk about her success as an entrepreneur because she wants to give back. I think that's awesome! If you'd like to check it out here is the link: http://www.blogtalkradio.com/dreamjobradio/2011/04/16/entrepreneurs-turn-your-dreams-into-sweet-revenge
Regardless, success is success and more power to her. She did this in the worst economy that most likely any of have ever seen and in a saturated market. She made it her own, she saw something and made it different, unique, blending several elements and thinking outside the box and that my friends is always inspiring. Being an owner of a gym in a market I helped saturate, I have had to claw my way to being different, ahead of the curve, go through a divorce and this is something that I can take from and grow. So I say thank you for writing this article and keep on kicking ass!
Great article; what an example for new entrepreneurs. One thing that really impressed me was the plan she developed and carried out with strong conviction.
I want to first point out that I was admonishing Entrepreneur Magazine, not Ms. Scott. I would not have referred to her as a marketing maven, or a savvy businesswoman if I felt that she had not, at least in some part, earned her success. Please note that I also specifically indicated what I would have found inspirational in the story. I believe that my message is strongly pointed at the magazine for writing a fluff story, not a message denigrating Ms. Scott for her success. My biggest issue lies with the headline on the cover of Entrepreneur Magazine: Be your own boss: Ditch your corporate gig and start your own business. Marlo Scott did it. She walked away from the big office and the big salary to find sweet revenge. You can too. The "rest of the story" however, would read: if you have more than 10 times the annual salary of most middle-class American workers in the bank in savings (plus an SBA loan), AND if you are discovered by none other than internationally-recognized mega-star Martha Stewart. Ms. Scott herself said that her business turned around after having an "in" to Martha Stewart. How many of Entrepreneur's readers are in that position? How many will take that information and use it to succeed in their own venture? The message that this sends to the rest of the entrepreneur world, in my opinion, is that this is what it takes to be successful. I'm sure Sweet Revenge is fabulous. But again, my issue is with Entrepreneur for suggesting that this is an every-day entrepreneurial success story. As an entrepreneur, I know first-hand that when you do NOT have a $500,000 savings account and do NOT have an in to Martha Stewart, you must rely on your wit, your strength, hard work and making use of the resources in your community such as SCORE, women's business groups (if you are a woman), networking groups, university-based small business programs and the like. Many entrepreneurs aren't even aware that these things exist and struggle and even fail as a result of not using these community-sponsored resources. I would guess that very few readers (in that situation) could afford to take 11 months developing a menu and hiring consultants at every decision-making point to ensure they are making the right move. You are quite right - Ms. Scott is a successful entrepreneur in the dictionary definition of the word. She is a businesswoman and a very good one at that. She would likely be successful at whatever business venture in which she takes an interest. And perhaps I am wrong in assuming that the average reader of Entrepreneur is one who is researching and studying every available resource to guarantee success in the venture in which they wish to launch. My criticism is that having a huge savings account or an in with a super-star are both benefits that 99% of their readership do not have at their disposal, and if this is true, that article, while entertaining, did not provide much value to those individuals. It certainly did not provide any value to me, an entrepreneur in a similar situation.
i love how she took every part in, examined and studied all the details, and i mean ALL the details. it reminds me how important input can be. great read...
I think Entrepreneur took the wrong tack in presenting this restaurant to us. That's the point of a bakers comment. Marketing yes. Baker no. Sweet Revenge was not getting the traffic until the connection to Martha Stewart was exploited. Is that Entrepreneurship? Savvy business, perhaps, but 500K and Martha Stewart aren't advantages every baker and cupcake shop has.
No offense, but not everything can be inspirational. As a matter of fact, she's genius, and she found her way to the top. Who are you to judge? Insulted because you might be struggling?
I understand your point, Baking being obviously your passion and I respect that and thank you for this because we do need in this world people who go for their childhood dream. But I don't think we should be so hard at someone else, just because they made it the other way around. I think that, on a marketing point of view, being able to find the perfect niche to develop a new business, that far from your professional background, and being successful in it, it is the essence of entrepreneurship. You're right, her adventure did not start from a passion but I am quite sure that, she is passionate about what she does. And yes, she was lucky to have a comfortable savings account and may be some good connections and it does not hurt sometimes in the tough world of entrepreneurship...
I find this article to be an insult to entrepreneurs. This woman was a marketing maven who saw the cupcake craze as a lucrative business opportunity. She did not have a passion for baking, hired a chef to develop recipes, didn't even know how to use her own equipment in spite of the fact the place was up and running, and had a whopping $500,000 in savings with which to launch the business. I would find this article much more inspirational if the entrepreneur being featured had a passion for the business and was fulfilling a lifelong dream through hard work and making the most of every dollar and every resource out there to get to where he/she wanted to be. A savvy businesswoman with connections to Martha Stewart who thinks that buying used $7,000 doors is a good way to save money is hardly newsworthy. How about a bakeshop owner who bought their equipment at auction for pennies on the dollar. THAT is information a fellow entrepreneur can use. I am highly disappointed in Entrepreneur for this fluffy, insulting piece of work.
This is my most absolute favorite place to go in the city...for cupcakes, beer, wine, a good time with friends & family, or even for a nice cup of tea (preferably the Vanilla Bean) and a Sweet Revenge Cupcake! Seeing Marlo interact with the customers and make us all feel warm and fuzzy in her presence is an added bonus! Marlo is an inspiration and encouragement to me! Not only for her business savy-mind, but for the tone of excellence that she gracefully demands and the down-to-earth love that pours from her and every DELICIOUS YUMMY cupcake in the house! CHEERS to Marlo!!! You deserve the absolute BEST and to think, it's only just begun!! :)
I stopped by Sweet Revenge to see what it was all about - loved it - it's a great little shop with energetic staff and delicious cupcakes! I admire Marlo's spirit and her drive - it is inspirational!
A new take on something old can be the simplest form of innovation to sell.
As a brand coach I was proud to see a business owner use to her advantage brand experience with bold taste, a sexy storefront, and a solution to a problem we didn't think we had. However, my knee jerk concern is that she is taking her branding in a direction that might not promote her actual goal. A t-shirt will not satisfy my sweet tooth, although as a west coaster who may never get to step foot in her shop, a Sweet Revenge port wine available in my city would keep me on her brand's side. And it just might do so enough to make me visit New York City just to step into her shop. Just a thought! Andrea, founder brand&bloom www.brandandbloom.com
A good read for all aspiring entrepreneurs. Kenneth Lee http://ideasforsmallbusinesses.blogspot.com
This article raises some great points around the importance of uniqueness. A plain concept has minimal chances of success, especially in a crowded market. Companies looking to move forward in their growth stage need to consider how they can extend their brand and create new and exciting revenue streams. Ryan Melkus www.brickstonecg.com
well being diabetic, both a cupcake with booze doesnt appeal to me or my sugar levels. LOL