When she graduated from college, Candace Nelson figured she would pursue a stable career in the corporate world, just as her father had done before her. But after a stint with an investment bank and a tech startup, she found herself in one of the least stable worlds imaginable: restaurants. Not only that, but a restaurant category that basically didn’t exist in cupcakes.
Nelson and her husband, Charles, opened their first Sprinkles Cupcakes in Beverly Hills, Calif., in 2005. While the business was a huge gamble — it was the height of the low-carb trend and one-item-only concepts were unheard of — there was a line outside the door from day one, and a years-long cupcake craze ensued around the country. That success propelled Nelson to becoming a household name via television appearances on shows like “Sugar Rush,” “Cupcake Wars,” and “Shark Tank,” and her authoring books like Sweet Success: A Simple Recipe to Turn Your Passion into Profit.
Nelson sat down with NRN editor-in-chief Sam Oches to discuss her career and how she and Charles were able to sell Sprinkles before launching another successful restaurant concept, Pizzana. The conversation is a preview of what she’ll discuss during her keynote conversation at CREATE: The Event for Emerging Restaurateurs this Oct. 9. (This interview has been edited for clarity.)
Tell me about your initial decision to leave a career in finance and why you wanted to open a cupcake brand.
I'll rewind just a little bit to how I grew up, which was in a very stable, corporate environment. My dad was a corporate lawyer. He had, I think, two jobs over the course of his career, so very secure, very stable. And that's kind of what I expected out of my career. Out of college, I went to work at an investment bank, learned finance business, and then ultimately went to work for a technology startup because it was the late ’90s, with that big internet revolution going on. And then the dot-com bust happened and all of a sudden I was out of a job, on the couch, no plan, no idea what I was going to do with my life. And I got to thinking that I had really followed this path because I thought it was going to bring me security and success, and it hadn't delivered on either one of those.
It allowed me to burst my world open and think about other possibilities as far as careers. I never really loved crunching numbers. I didn't love what I was doing. I just didn't really know that there was anything else out there for me. I hadn't been socialized to believe I could pursue it, even if there was. Life throwing me this curveball allowed me to think differently. And I decided to lean into my joy and my passion.
Even though I didn't know what I was going to do with it at the time, I went to pastry school, because I love to bake. I'd grown up baking with my mom and I just loved it. And I thought, I've done the opposite. I've crunched numbers. I've done something that I didn't want to do for so long. I am just going to do what feels good to me right now, and I'll figure out the rest later.
What was the key to helping launch this trend in cupcakes and turning Sprinkles into such a massive success?
There was a huge cupcake phenomenon that followed, and I definitely think we had a hand in that. When Sprinkles first opened, we were the first-ever cupcakes-only bakery, and it may seem crazy now, but no one had done that before. They hadn't heard of a bakery that only sold one thing. They hadn't heard of “fancy cupcakes” before. They were used to getting cupcakes at the grocery store in those plastic clamshells. So I think part of what allowed Sprinkles to really explode onto the scene — in spite of the fact that everybody said it would never work — is that we were doing something that flew in the face of expectation. We were being really innovative. We were saying, ‘This is what a cupcake is right now, but what if it could be something else, something aspirational, something elegant?’ And so we were able to take it from its humble roots of being like a kid's lunchbox snack and turn it into something aspirational and branded.
What did you learn about yourself as an entrepreneur in the process of building Sprinkles into the success that it was?
Well, in hindsight, everything looks easy and it looks like this straight shot to success, but it was unbelievably challenging to try to manage a business that was really on fire from day one. We were nowhere near ready. We had no experience in the restaurant industry. We were building the plane as we were flying it, so to speak.
Anyone who runs a small business or who is an entrepreneur understands that it's the hardest work you can do. The highs are really high, but the lows are really low. So being an entrepreneur really showed me what I was made of. And I didn't realize that I could get through some of the lows that we did. It showed me how strong I truly was.
Tell me about the process of selling Sprinkles and what you learned going through that. What did you learn about the process? How did you set this business up to successfully sell it when you did?
So a lot of people think we had a plan to exit when we first started, but really nothing could be further from the truth, because we were opening a cupcake shop. Everyone thought we were crazy. We'd left high-paying jobs to kind of follow our passion. It was the height of the low-carb craze. We were opening in Beverly Hills where everybody said, “Nobody eats carbs.” So all signs pointed to we weren't going to be around very long. We were just happy when, on the first day, we had customers lined up at our door.
Once we had proof of concept, then we started to think a little bigger. And granted, both Charles and myself came from the world of finance where there is this model of found it, scale it, and sell it. So that was definitely in our DNA, but it wasn't until we really had proof of concept that we even entertained that idea.
In terms of advice for other people — and I am guilty of this too — what is keeping you in the weeds of your business and keeping you mired in the details and not allowing you to get up from out of the day-to-day stuff so you can focus on bigger-picture things? I know I was a perfectionist. I was controlling. I didn't want to delegate. I had to go through that whole process.
Another thing is we didn't bring on private equity until we were 10 locations with Sprinkles and we were across the country. So one of the things that a potential acquirer is going to want to see is that you have proof of concept, not just in one market, but maybe in several markets, because they want to know that your concept has legs and it doesn't just have regional appeal.
You and your husband have a very successful business partnership. What's the secret to that? How have you found a balance in your family, in your marriage, in your business that works for you?
I think we have the same value system. We both have a great work ethic. We're both passionate about what we do. And we're also really passionate about our family in general. So we know what our priorities are. And I think beyond that, just having a really good sense of humor; even on our worst days when we're just both in the dumps, he can crack a joke, I can laugh. We understand the sky isn't falling necessarily, because we love what we do.
I don't know that we've necessarily found balance, because we do bring our work to the dinner table. We are always talking about it. But what I love about that is that we're modeling that for our kids and we actually are inviting them to help problem solve some of the challenges that we see on a day-to-day basis. And I love that that's giving them an early first look at what the business world is like. They didn't see us in the early Sprinkles scrappy days, right? So we have to always remind them that business is hard and these are the sorts of problems you're going to have to face on a day-to-day basis. And the more I can train them to be problem solvers, the more successful they'll be regardless of what they end up doing.
After you exited Sprinkles you decided to get back into the restaurant industry with Pizzana. Tell me the story of why you decided to do this all over again, to launch another concept that you are now scaling?
We came to this industry because we have a passion for food. And I know that's how almost all of us come to this industry. When you're bitten by the bug, you just want to go back and do it again.
I was at a party and had this bite of pizza that really just made me go, “Wow.” And I found the chef. He was working at the pizza oven. He had just arrived from Naples. His name is Daniele Uditi. He's our executive chef at Pizzana today. And he had created this incredible dough that really was this beautiful marriage of the best of Italy meets American tastes, because truly Neapolitan pizza is quite soupy and soft, but Americans like to pick up their pizza and hold it as a slice. And so not only did he have this great story of coming to America from Naples, but he had this incredible product. And I realized in that moment how much I knew about building a brand and building a business. And I just thought, we can do this with you.
And so we couldn't help ourselves. We got right back into the food business with Pizzana and are very proud of what we've accomplished there. It is literally the world's best pizza. We have seven locations and counting — five in the L.A. area and one in Dallas and most recently in Houston.
You were a judge on “Sugar Rush.” You've been a guest shark on “Shark Tank,” among many other appearances for you in media. And I'm just curious what you've learned in that world? I'm sure you get such an interesting perspective, meeting so many people, getting to see the industry in a really unique way with this platform.
I think it's really the power of building your personal brand as a founder. I started actually back in the day on the Food Network with “Cupcake Wars.” Zooming into people's living rooms via a TV set was really important in terms of establishing the Sprinkles brand. And granted, times have changed quite a bit. We can all just build our personal brand on our iPhone now. You don't have to do TV. But that was an early lesson for me in how you need to be representing your brand in whatever medium you're in, whether it's on stage at the CREATE conference or on the Food Network or just even in your restaurant itself, right? People seeing you and knowing who you are and representing the brand personally. So that was one of the major lessons I learned through a media exposure.
What is one piece of advice you can impart on entrepreneurs that you think is most important for them to be thinking about on this brand-building journey?
I think it's about getting your training in order and making sure that your books are solid from the get-go. If you are building your business and your restaurant with the hopes of selling, you need to be operating it as if there's somebody doing due diligence on your business right now. And I think the more that you can prepare your business to be replicable by someone else — and that's with your training manuals, your processes, your POS system, all of that — the more attractive that's going to look to a potential acquirer.
