March 27, 2018 15+ min read

This story appears in the April 2018 issue of Entrepreneur. Subscribe »

"I need to make a decision on this,” says Sarah Michelle Gellar.

Her two co-founders, Galit Laibow and Greg Fleishman, stop chatting and join in. It’s mid-November, and they’re standing in the center of their Los Angeles startup office: a converted garage half a block from a pot dispensary, with two rows of desks in the back, a shared office-slash-conference room for the co-founders up front and the words what’s up batches?! towering above a kitchen in the middle. This is Foodstirs, their baking-mix company, and in a week’s time, Gellar is going to be on Harry Connick Jr.’s show, Harry, promoting their products by baking…something. But what? That’s the decision.

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The next minute is rapid-fire: The trio seem to seek consensus largely by talking over each other, excitedly and animatedly, as if advancing a collective thought.

Gellar: “I think we have to do gingerbread --”

Fleishman: “It’s the presell into Christmas --”

Laibow: “So gingerbread and --”

OK; go ahead and say it: Celebrity-endorsed baking mixes? This is a company worth taking seriously? It wouldn’t be the first time people dismissed or insulted Foodstirs -- even to the founders’ faces. Foodstirs was dissed by countless investors. Retailers. Suppliers. Gellar found that some industry types pooh-poohed the company because of her involvement in it. (In case her identity needs explaining: Buffy the Vampire Slayer. Cruel Intentions. Ask anyone alive in the ’90s.) “If we took no for an answer, this company wouldn’t have existed,” says Laibow, the company’s CEO. “They’d say, ‘Cute little baking brand! Oh, that’s great. Not for us.’ ”

Then her tone turns stern, as if admonishing an investor still in the room: “No. It’s a big idea.”

The big idea is this: There’s a hole in the $26.8 billion baking-mix and prepared-­foods category, and it can be filled by a product that uses high-quality ingredients but sells at a mass-market price, and focuses as much on the food as on the family-fun experience of making it. It’s a concept that Fleishman, who’s spent his career in retail, from Kashi to Coca-Cola, calls “an idea hiding in plain sight.” While others rolled their eyes, Foodstirs aggressively built a supply chain, placed product in more than 7,500 stores (plus, starting in April, a special “one-minute mug cake” in 8,000 Starbucks) and honed a story and a message that’s won over investors. The cute little baking brand is, in fact, a story of keen strategy and resilience.

So back to the decision. After some debate, the team decide to squeeze two separate items onto their Harry spot. First, gingerbread men. Then, a “Foodstirs after dark” adult treat -- balls made with white cake mix, eggnog and cake-flavored vodka, for when the kids go to bed. “The whole idea behind all of it is repeat business,” Gellar says. By making something unexpected with a baking mix on TV, they’re reminding customers of how versatile their product is. A cake mix is not just for cake.

Two hours later, Foodstirs’ head chef has formulated a recipe and executed the first batch. Gellar walks them into a branding meeting the team is about to have. “The Harry balls,” she announces. “Did you guys try the Harry balls? That’s what I’m going to call them, too. Harry’s going to love his balls.”

Can you say that on daytime television? It’s unclear. But Gellar seems determined to find out.

Image Credit: Photographed by David Yellen

The big idea started with Galit Laibow. She’d spent a career in public relations, but in 2011, while at home on maternity leave with her second child, she began imagining her kids asking what she does for a living. Her answer would have been, “I help people get on TV and sell their products.” Which suddenly felt empty. Their products? “I want something my kids can be involved in, too -- something they can be proud of,” she says.

At the time, her older daughter had become obsessed with the Food Network. “And I thought, People really love this stuff,” Laibow says. “Cooking is such a big part of family, such a way for people to come together.” That was, truth be told, something she had only limited experience with. Her parents both worked full-time; there weren’t many gather-round-the-kitchen moments. Now that she was a parent, Laibow wasn’t baking much, either. But she began wanting it -- not the baking, really, but the experience. The memories.

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That longing Laibow felt, industry analysts say, drives a phenomenon in the food industry today. There’s a rise of what we might call partial convenience -- delivery not of fully cooked meals but rather of Blue Apron-style meal kits that are cooked at home. Why? Because consumers don’t have the time or the patience to make meals from scratch, but they feel guilty not putting in at least some effort -- especially if they have kids. A Mintel research report recently found that 60 percent of adults say cooking is something they want to do, rather than need to do. It’s an echo of how the baking-mix industry began in the 1930s. The first mixes contained powdered egg, so the baker literally needed to only add water in order to make a cake. But consumers, it turned out, preferred cracking their own eggs. It made a cake seem fresher, and the product of their own effort. So mix manufacturers adjusted.

Laibow wondered if there was an opportunity to create, say, the Blue Apron of baking. And as she started doing research, she discovered that the baking-mix and prepared-­food industry is a crowded but fluid market. The four major players own only 20 percent of sales, according to IBISWorld; the rest is 1,000-plus small players. And as Laibow saw it, baking mixes largely split into two categories. There are the Betty Crocker types -- giants too big or cautious to innovate, that use chemical ingredients, and that many people buy out of habit rather than loyalty. And then there are niche alternatives -- gluten-free, paleo or some other specialty mixes, which tend to be expensive and unappetizing.

There was nothing in the middle, she realized -- a brand that appeals to health-­conscious shoppers, experiments with flavors, sells at a mass-market price and is constantly innovating.

So Laibow set out to produce that middle, crafting mixes at home and testing them out on friends. Among them was Gellar, whose daughter went to the same preschool as Laibow’s. At the time, Gellar was filming a sitcom set in an ad agency called The Crazy Ones. “I spent a lot of time with these high-power business individuals who kept saying to me, ‘You need to do more,’” Gellar says. She’d thought that for a while, too. But do what? She didn’t know.

Then The Crazy Ones was canceled after one season, and Gellar took it as a wake-up call. She started talking seriously to Laibow about this baking company. The two took their kids out to a local store, bought some mixes and spent the day making sweets. “I went home to my husband and said, ‘I think this is the crossroads -- like, this is what I’ve been waiting for,’” Gellar recalls. Then she told Laibow she wanted in, but not as a spokesperson. She wanted to be a co-founder, at the office every day.

“Can you commit for real?” Laibow asked.

“I can absolutely commit,” Gellar said.

In 2015, the two debuted Foodstirs as an ecommerce company. Consumers could subscribe, and baking kits would be mailed out every other month -- everything you need to make, say, “movie night” cupcakes that look like bags of popcorn, or a bouquet of flower-shaped cookies. Retailers soon asked to stock Foodstirs on shelves, but Laibow and Gellar had no idea where to begin. Mutual friends connected them with Greg Fleishman, a veteran of the retail food scene.

Fleishman, as it turns out, gets a lot of calls from founders looking for help. “I’ve met so many who have this great idea, but they’re friggin’ all over the map, or they want to work 9 to 5,” he says. So he long ago stopped evaluating just ideas and started evaluating founders. When he met Laibow and Gellar, he ran through his five-item checklist: 1. Are they visionary? 2. Strategic? 3. Creative? 4. Do they have a relentless work ethic? And finally, 5. Do they have situational awareness -- which is to say, do they know what they don’t know?

“That’s such a critical component,” he says. “The idea that you could be so obsessed with your idea and your vision but still have the awareness to improve.” With these two women, he answered yes to all. “You want to be with A players. You want to be with Steph Currys,” he says. So he came on as co-founder and COO, and set about changing Foodstirs’ business model. Rather than rely on mailed-out mixes, they’d need to settle on a line of flavors, figure out how to produce them inexpensively and get them placed on store shelves across the country. That meant securing funding and forging great relationships with suppliers and retailers.

He began focusing on what he thought were Foodstirs’ strengths. Among them were some obvious standouts: a well-timed idea in an industry ripe for disruption, a product that’s easy to appreciate and in Gellar, an internationally recognized name. Each would turn out to be more complicated than he expected.

Entrepreneurs are trained to look for their “unfair advantage,” the element all competitors lack. At first, Gellar’s celebrity would have seemed to be just that. When Foodstirs came knocking, potential partners’ doors would swing open. But meetings tended to follow a pattern: Smiles. Nods. A #BuffySelfie request at the end -- which, it seemed, was the reason they said yes to the meeting at all. Because no deal would follow.

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As Foodstirs came to learn, celebrity was a disadvantage for a lot of potential partners. “In my mind, I’ll be more skeptical if a celebrity gets pushed out in front of the brand,” says John Lawson, Northeast regional grocery buyer for Whole Foods, “because then I think the brand will take second place to the celebrity.” Others share his hesitancy.

For Gellar, who wanted to be taken seriously in this new line of work, the experience could be emotionally bruising. “The 20-year-old me would not be able to handle this life -- the travel, the noes, the expectation of failure,” she says. “Even the misogyny. I mean, in my other career, I faced a fair amount as well, but it’s just at a different level. And I’m a little more sensitive to this because it feels more personal.” Once, for example, she was on CNBC talking about Foodstirs, and afterward people on set sweetly complimented her on how she talked business. She saw the moment for what it was: They’d expected her to be a ditz. “Sometimes I would ask Greg and Galit, ‘Is it easier without me?’” Gellar says.

That’s not an option, they’d say. Fleishman began bringing the team to investors he had connections to or had worked with before. But some of those investors said no, too. Some questioned whether Laibow -- or as the Foodstirs team saw it, a woman -- was fit to be CEO. A few even pulled Fleishman aside, trying to counsel him out of working with Foodstirs at all. These memories still make him fume. “I was personally appalled by the financial community,” he says. “I started reevaluating some of the people I knew.”

Yet the team kept at it, and they started seeing results after a few changes. They switched the kind of investors they went after. Fleishman first thought Foodstirs’ online-only subscription origins would

resonate with tech investors, but he then pivoted to investors in conventional packaged goods. Those people turned out to be far more understanding of Foodstirs’ marketplace -- and would often hear about the product before they knew it was connected to Gellar. In that way, her celebrity seemed like a bonus on top of a big idea.

As time went on, the founders talked a lot about how best to tell their company story, and they homed in on that key insight of Laibow’s: Baking is a time to share with kids. They should always be leading with that. Surviving rejection also made them tighter, a team that moved in lockstep. That, it turned out, would be their unfair advantage -- not one member’s celebrity but the trio as a whole. “When we start finishing each other’s sentences,” Fleishman says, “then they’re like, ‘Oh, this is the management team? They don’t seem ego-driven, they’re not arguing, they’re in sync.’ That cohesion leads to amazing ideas, and then amazing ideas being properly executed.”

That’s what jumped out at Filipp Chebotarev, COO and managing partner at the investment firm Cambridge Companies SPG. “They’re all on the same page, and they each bring a unique skill set,” he says. In Foodstirs, he saw “a new spin on a very established American pastime,” and he became Foodstirs’ largest investor.

Image Credit: Photographed by David Yellen

Consider the economics of an organic baking mix. As any Whole Foods shopper knows, organics are expensive -- that’s because the raw materials are expensive and often come from small producers. Add in the cost of a distributor, Laibow says, and a Foodstirs mix could easily be $10. Which wouldn’t work. The goal was $5.99, low enough for the mass market.

So how does a little startup get its costs that low? “We learned we have to go direct to the source,” Laibow says. Most suppliers wouldn’t take Foodstirs’ calls, figuring the order sizes were too insignificant to deal with, so the team just kept calling. And calling. They found a fair-trade chocolate maker in Peru and repeatedly called until they agreed to take a meeting. (It didn’t hurt that Buffy was huge in Peru; a local newspaper reported Gellar’s arrival.) They repeated the trick with a biodynamic sugar supplier in Texas.

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Once in these meetings, the Foodstirs team tried to find ways to be useful. Their order sizes, at least at first, weren’t going to blow away suppliers. But what else could they offer? The answer: messaging.

“We’re like, ‘We’re going to help you,’” says Laibow, recalling the meeting with the sugar company. “We have this megaphone, we have this PR, we’ll bring a spotlight to what biodynamic is.” (It’s related to organic; among the differences, Laibow says, the sugar is so sweet that Foodstirs can use less of it per mix.)

Laibow won’t reveal how much her company saves by building these direct relationships but admits it’s “a lot.” With these two suppliers on board, Foodstirs could make a $5.99 mix. It began developing 10 of them for retail, including twists on old standards, like Brooklyn salted chocolate chip brownie or snickerdoodle blondie.

Once it was time to really push into stores, Foodstirs had its playbook ready: Meet in person. If a sales rep couldn’t get them a meeting, the founders reached out personally. Then for most of 2017, the trio traveled the country meeting retailers who were unaccustomed to company founders showing up in person. “You’re dealing with people who are used to the same old, same old,” Laibow says. Newness -- not just in product but in approach -- stuck out.

The tactic also impressed buyers who are inundated with attention. At Whole Foods, buyer John Lawson -- the guy skeptical of brands with celebrities attached -- was won over by the Foodstirs story. “If you can get parents and kids baking together with a mix,” he says, “the hope is the kids will take an interest in baking and go on to make a loaf of bread or cookies from scratch.” That makes Foodstirs a gateway to other Whole Foods products.

At Target, showing up in person helped make a critical upsell. The retailer had accepted a Foodstirs pumpkin pancake mix for a holiday display, but the Foodstirs team worried one product would get lost in that space. They wanted two. So they secured an hour meeting at Target’s Minneapolis office, flew there, went to a Target to buy a skillet (and then went back to Target because they forgot milk) and had Gellar bake the second product, pumpkin bread, right there at the meeting. Target’s people loved it and put it into its holiday display.

As these meetings went on, Gellar also made a personal adjustment. She began thinking about how her acting career prepared her for business, and she found plenty of useful, well-honed skills to work off. First, there’s the high tolerance for rejection -- a must in either line of work. She also has an ability to read a room, refined through decades of auditions. When Gellar entered a potential partner’s office, she began scanning it for details. Did they have a wedding ring? Pictures of kids? Of a dog? She looked for some way to get personal fast. “Because if we connect, you’re more likely to connect to what I’m telling you,” she says.

Not long ago, the Foodstirs co-founders were at a meeting with a large retailer, and things were going really well. Gellar could sense it. If she spoke up now, she thought, she could ride the retailer’s enthusiasm toward something she’d never otherwise get -- not at the end of the meeting, not tomorrow on the phone, never except for right now. “Great,” she said to the retailer’s executives, “so no slotting fees?”

Slotting fees -- money paid to get a product on a shelf. Retailers rarely waive them. But this one did. It wasn’t because Gellar is an actress. It was because she knew when to act.

Image Credit: Photographed by David Yellen

At some point in the life span of every startup, co-founders must draw lines between them. He does this; she does that -- a matter of efficiency. “I’ve been involved in building other brands, and they do hard-lining too early,” Fleishman says. It’s why he wanted this trio to do everything together at first: Their combination of perspectives helped spot opportunities that one “expert” might have missed.

It’s only now, two years in, that lines are being drawn. Fleishman says he prefers to let it happen organically -- as a company grows, founders naturally find their strengths. His are sales and operations; Gellar’s and Laibow’s are marketing and product development, but they’ll never wall themselves off. “You want to be able to leverage all our expertise,” he says.

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Though sometimes, particularly with Gellar, decisions may come from the group, but the execution must happen alone. And so, a week after creating treats for the Harry show in Los Angeles, she’s off to New York to appear in the studio.

When Gellar joined Foodstirs, she thought baking on television would be easy. You talk, you whisk, you eat; roll the credits. It’s not like she hadn’t been on TV a bazillion times before. “I should have practiced,” she says. “Now I tell everyone to practice.” Because actually, baking on television is crazy hard. In the time it takes to say “Roll the dough,” little to no dough has been rolled, which means there’s rolling to do while she must do something else -- which is to entertain, while slipping in Foodstirs’ message. “And I’m still trying to not fuck up what I’m doing,” she says.

That’s why she now loves preparation. On a cold Thursday morning, she’s sitting in her dressing room as a Harry producer walks her through the segment she’s about to film. First, of course, they’ll make the gingerbread-man sandwiches.

The producer: “Then he’ll say, ‘All right, you brought one other treat. What’s this?’ And then --”

Gellar: “Harry’s balls. I will not call them Harry’s balls; don’t worry.”

Oh, did you forget about the Harry balls from the beginning of this story? Gellar didn’t. She’s been carrying around that joke all week. The producer doesn’t register it and continues the instructions, so it’s still not clear if this is something wise to say on daytime TV. A few minutes later, a small entourage -- Gellar’s publicist, a friend, various hair and makeup people -- walk down to a staging area so she can review the kitchen set. And a few minutes after that, the set is rolled out in front of a live audience, and she’s behind it with Connick Jr., who asks about her kids.

“Well, they were the inspiration for all this,” Gellar says, weaving in the Foodstirs narrative. “And I got to a point where I thought about how my kids were young, and they’re only young for that little bit, and you get that time with them. And what are those moments where you really connect? It’s always in the kitchen.”

The gingerbread men come out looking tasty, and then, as planned, Connick Jr. moves over to the final treat. “So these are, um, OK.” Gellar half-laughs nervously. This is the moment. “I’m not going to call them what I was originally going to call them, because I don’t think your audience would appreciate that, but—”

“Sure they would!” he chirps.

“I was calling them Harry’s balls.”

The crowd erupts in laughter. Someone lets out a loud hoot. Afterward, back in her dressing room, Gellar will claim that nothing in that segment was done strategically -- that live TV moves too fast, that she ran on pure instinct. And if that’s the case, then here’s to instinct. Do something enough, believe in it, commit to it and hone it across years of rejection until the people who said no begin saying yes -- and then, when the pressure’s on and time is short, instinct will kick in. And that’s the start of something good.