Interview: Mike Tevlin and Dan Devlin
Mike and Dan are the founders of Give & Go, the company notable for products such as “Two-Bite Brownies” and brands such as “Kimberley’s Bakeshoppe”
IBR: You both met at Ivey before pursuing your respective careers. How did it all start, and what motivated you to leave your jobs during your initial pursuit of entrepreneurship?
DD: We graduated from Ivey in 1981 and went to Toronto chasing the jobs down there. Mike went to work for Loblaws as a business analyst in the bakery department. While there, he met Paul, our future mentor and probably the best mind in the bakery business in North America. Mike was right in the middle of the action because Loblaws was a very cutting-edge company at the time. I went to work for the Hudson’s Bay Company, training to be an executive. After a couple of years there, we both migrated into the food business with a company that manufactured frozen dough products. We spent about four to five years there and sales were just going through the roof.
MT: We were a good team, but the environment started to wear us down. Eventually, Dan and I said, what if we did something on our own? We’re not afraid to work hard, and if we do something well, we’ll feel good about it. We don’t need to get rich, we just need to make a living, pay the mortgage. Neither of us was married yet so that was a big consideration. It was a lot more of a “why not” than a “hey, let’s go build an empire”.
IBR: How did you come up with the iconic “Two-Bite Brownies” concept? What was the key in making it into the culturally significant snack it is today?
MT: The Two-Bite Brownie was probably our eighth or ninth major product line, but it’s the one that everyone knows about. The concept and the quality were just so good that it was magic. We had another younger partner, Steve, and he always kept an eye out for interesting products. He had been over at one of the grocery stores in upstate New York, and brought back these brownies; they were shaped like little muffins in this unattractive plastic dome container, and they were awful—but very cool looking. Around the same time, I was down in Texas and went to a small Whole Foods store; it had all these old-school brown paper bags that they were selling baked goods out of. I said to Dan, if Paul (the aforementioned mentor who had, by then, joined up with us) could come up with a way to make these brownies taste as good as the stuff our moms used to make—which was all our products were about—and they were shelf-stable, we could put them in a 1950s-1960s home-styled bag with a window. So, we put them in the bag, priced them so they could retail at $2.99, based on what we thought the market could handle, and ran the numbers on how profitable we’d be. If anybody talks to me about manufacturing and sales, I’ll always tell them to do an exercise like that before you even get started.
It fit right into our sweet spot. We brought it to Loblaws and told the company it would have the product for three months exclusively. While Loblaws was promoting the heck out of it (with our help), everybody else was knocking on the door. The brownies started selling like crazy. We built enough into the margin that we could spend a little money on promotional allowances, but the main thing was that [Two-Bite Brownies] was an exceptional product. We never had a single person try the brownies who didn’t think they weren’t outstanding, because they really evoked the taste of a homemade brownie and that didn’t exist in a grocery store anymore, because they’re difficult and expensive to make. The story is the same for all our products: we start off making them by hand, and in a few weeks we’re making them with slightly more advanced equipment. By the time we sold the business, we had millions of dollars of high-tech bakery equipment.
IBR: How long did the entire development and product launch process take?
DD: That’d be one of our strengths and one of the reasons we had such a good relationship with stores like Loblaws. Once the decision was made, we’d tell them we could have [products] out in their stores within six to eight weeks. They’d ask, “Well how can you do that?” The point was that we were small and we didn’t have a lot of bureaucracy. We spent five to six weeks in development, and didn’t go out and buy a million-dollar equipment line on day one. We would be nimble and buy smaller lines that weren’t as efficient, but were cheap to get started. Once we got the volume, we’d start automating.
MT: Well Dan, the fact is that we never had any long-term debt in our business. We had a couple of machines that we actually leased instead of bought—but could have bought if we had wanted to. We just continued to have good cash flow, and looked before we leapt. In a growth environment, we always found that cash was king.
IBR: How did Give & Go’s strategy change over time?
DD: The core of our strategy was good customer relations. The way we did it was by supplying what the retailers wanted on time, and at the quality and price that they wanted. It was this wonderful value proposition.
MT: Our reputation, quality, value, and extras—like driving for hours on a Friday night, or Dan driving to Niagara Falls to deliver some orders—strengthened the relationship with the customer. Another key aspect was that we identified a niche. That niche was, and I’m sure you learned it year one in class, high quality and fair price. You can be low-quality and low-price, and that’s alright. Low-price and high-quality, that doesn’t exist. We tried to be high quality, like your mom’s baking, and fair-priced so people could afford it every week. Whenever an opportunity didn’t fit, we said, “Sorry, we’re not in that business. Let somebody else have it.”
IBR: We know that Give & Go operates a variety of product lines. Was the overall corporate strategy designed with these decisions in mind? How were they related?
DD: We had our first one or two big hits with Homestyle butter tarts and tea biscuits (scones). That got our nose above water, generated some cash, and got us banking a pay cheque to pay our mortgages. There was a little bit of pressure because people would come to us and say things like, “Cinnamon rolls are old news. We beat the heck out of that last year and sales were through the roof. What’s this year’s big item going to be?” This became a defining aspect of the company. Every 12 to 18 months, we had to put together a new product line. It had to be something different, something with a spin on it that didn’t cannibalize all our other products. We wanted people to buy the cinnamon rolls and the butter tarts, not just one or the other.
MT: Once in a while, my son will ask me what our corporate strategy was. I feel a little guilty because I’m not sure we had one. What we had were core values and we didn’t vary from them. I think Ivey prepared us to be generalists; and with sales after our first couple of years continuously increasing exponentially, we had to learn how to strategically plan on the fly. Marketing plans to launch products, supporting the necessarily big egos of our top-performing team, making ROI decisions about when to automate – all these types of issues required a fluid management style and strategic plan.
IBR: Was there a time when you wanted to give up? If so, what really kept you going and what did you learn from that experience?
MT: We got some business for butter tarts, an order for 1,200 units. This was a big deal for us early on because we were essentially broke. We had two employees who came in early and helped us until the work day was over. We knew that we needed to get about 90% of the product to package. Well, of the 1,200 tarts that we baked, about 1,175 were stuck like concrete to the pan. So at around 3 a.m.—after starting at 6 a.m. the morning before—we were done packing these ugly things and our hands were all bleeding. We would probably only get $350 out of it, and we spent $500 on labour, and that didn’t even include the ingredients, overheads, or margins. We were going broke; but then Dan looked at me and said, “Mike, stupider people than us have done this and made money from it. It’s just our first time, and we have to be a little patient.” I was a little more impulsive and hot around the collar than Dan, and he had the ability to calm me down. At the end of the day, we would remind ourselves that no matter what, we have to keep going because it is better than working for someone else.
IBR: You have both accomplished so much in your careers. After the sale of Give & Go, what have you shifted your focuses toward?
DD: I think we are both similar in a lot of ways. We have each sat on boards and been involved in philanthropic initiatives that are important to us. Mike and his wife have been amazing supporters of Tennis Canada. We often get asked if we miss the business. The answer for me is: not really. I miss the great team that we saw day after day for 15 years, but there are so many other things to turn your attention to. It was a great gift for us because we were given a good offer far earlier than we expected, and our kids were young, so we could spend a lot more time with them. We’ve kept busy and have never had a boring day since May 2003.
MT: Life is busy because if you are used to being busy, you will continue to be busy somehow. I feel like I live on Dragons’ Den, constantly getting calls about advising someone’s nephew on an idea. Now we have the luxury to be busy without having to worry about the pay cheque.
IBR: Students at Western and Ivey are becoming more interested in entrepreneurship. For those people, what kind of advice would you be able to share both in work and life?
MT: I believe anyone who is interested in being an entrepreneur should do something that is not particularly entrepreneurial at first in order to get a dose of the business world. Do not be reluctant to take a job in the corporate world for a while to get a feel for how things work in business and life away from school. The second piece of advice is, before you start your own business, do the numbers and have your best guess on what you require financially to survive. Then determine how many pieces of that product or amount of that service you need to sell, at your required margins, to afford that cost of living.
DD: Get out there and discover the rhythm of business. Do not put too much pressure on yourself by thinking that you are 22 and don’t have that one “big” idea yet. If you have the one great idea, that’s fantastic, but one in a million people are killing it at 22 years old. Mike and I were lucky to meet in business school, but we didn’t get the great idea until we had been in the meat grinder for six or seven years. By then, we knew a lot of people in the industry who would let Mike come in the door and actually listen to a pitch. It’s also really important to know every single cost. I guarantee you that no matter how often you go through the numbers, you will miss something. But if you are conservative, have a buffer, and it still works out—maybe that’s the arrow pointing you to go for it and give it your all.