May
27

The Classic Entrepreneurial Story of Cereality

Before we discuss Cereality, whose story was told by co-founder David Roth recently in Chicago, here are a few quick questions about your creative inclinations regarding food:
Do you prefer to cook by recipe or by seeing what you have in your fridge/cupboards and improvising?
Do you prefer a few favorite restaurants or would you rather experience new ones (despite their unpredictability)?
Do you cook/order the same few dishes or do you choose new offerings you never tried before?

Now, I respect people who like what they like or can produce a consistently winning dish via recipe, but your creativity quotient is higher when you seek out the new and are willing to experiment. I happen to be a variety junkie. My favorite meal is one during which I can sample many different tastes. My bias is to constantly create new combinations, try unusual pairings, and I appreciate opportunities to experiment, which is the general idea behind Cereality, perhaps opening a new store near you.

Here’s the scoop (or bowl): Roth and his partner Rick Bacher started with the somewhat questionable idea of having a retail location that would serve only cereal, and through an amazing array of creative decisions (and entrepreneurial perseverance), they created a brand and store that became a classic American example of entrepreneurship. (While Roth resisted franchising Cereality for as long as he could, multiple copy-cats and legal issues led him to selling it to franchise giant Kahala-Cold Stone in 2007.)

Like other quick-serve outlets who have innovated similarly, Cereality’s creativity began with customer choice, offering cereal your way in whatever combination of cereal, fruit, nuts and milk you desired. Creativity and playfulness were an indispensable part of the entire brand and culture: Employees wear pajamas, you use a sloop (a straw and spoon in one that allows you to slurp up that remaining milk), and the entire experience in the store is part of the pleasure.

[youtube=http://www.youtube.com/watch?v=hcJ7pv0YyXA]

The creativity extended as well to the entire process of building the business, which you’ll get some sense of in the video above. As Roth made clear in his talk, entrepreneurship is not for the easily discouraged. Starts and stops and “midcourse corrections” were constant, and he learned that the key was always to come back to their own original vision–the personality and culture they uniquely imagined from the outset. They tried a food service company to run the stores, but they ended up taking them back themselves. They hired restaurant industry executives but got rid of them.

Inventive PR campaigns and strategic, cross-industry partnerships were essential, but perhaps the most innovative idea helped them get a needed sponsor: They offered to provide data on the habits of customers in exchange for financing. Quaker liked that idea and the whole enterprise so much that they paid even more cash and signed on as the sole provider of hot breakfast choices.

The process from idea to implementation is a long one, and less passionate entrepreneurs may have given up long before they opened their second store, not to mention sold the brand for a hefty sum. But the constant flow of creative ideas–even with failures along the way–helped Cereality become a reality and great American business story.

Want to read more of Adam’s posts? Check out his main blog: Innovation on my Mind

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