The Evolving Business of Doughnuts
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- Опубликовано: 5 июн 2024
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Donuts are a multi-billion dollar industry fueled by insatiable demand. The United States is the battleground between chains and mom-and-pops. It’s on the West Coast where the market has gone through the greatest evolution - donuts here are a canvas for gourmet ingredients, unorthodox flavors, and elegant decorations. In this Modern MBA exclusive, we’ll break down the business of donuts from the lens of the biggest chains in the world in Dunkin’ and Krispy Kreme. We'll then dive behind-the-scenes of 2 West Coast shops looking to disrupt this status quo.
Mikiko Mochi Donuts is one of the hottest donut shops and a pioneer of mochi donuts in the state of Oregon. Owner Alex McGillivray is a progressive owner who is as much a donut connoisseur as he is a shrewd restauranteur. In 4 years, Mikiko has gone from an idea to the leading shop in Portland with a second store underway in Beaverton. / mikikomochidonuts
As the doughnut capital of the USA, Los Angeles is where the opportunity is the greatest. In LA, desserts like cupcakes and donuts have been elevated into upscale indulgences. Owner Peter Womack has just opened Lola's Doughnuts - selling artisan yeast donuts with organic gourmet ingredients and elaborate toppings. Peter makes everything from scratch by hand, every morning at 3AM. He uses the recipes he’s honed over the years at various shops around the country.
/ lolasdoughnuts
Even in the world of donuts, product is not everything, passion is no indication of success, hard work is not a moat, and being good at your craft and being good at business are two different things.
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Mikiko has the old pre-tech boom no nonsense business plan. Make a great product, stay lean, but also pay workers well to invite a sustainable business. We need this all across the world.
How are we going to enrich hedge funds and faceless shareholders with that business model? What's next; not letting banks gamble with people's life savings?
I hear you. But I can’t help but think what happens 10 years from now? Those kinds of margins are like chum in the water for other entrants. It seems like a great business and great guy and I wish him luck, but what he’s got is very hard to sustain for years or decades.
@@dlb8685 I can't help but thinking that a lot of the other entrants are going to shoot themselves in the dick by focusing just on what margins they can get rather than how they can provide the best product and service. They'll mostly be a flash in the bucket, while the places like Mikiko that focus on quality product and service first will stick around.
Slow down, cowboy. How many Cambodian donut stores were closed by Mikito? I like my donut store serving me to be immigrants, not locals, cause it’s how it was when I was a kid.
lol I love how a donut shop is compared to "old pre-tech boom"
Not putting in chairs so customers don't lounge all day is WILD when you're NOT getting customers
Like fr
Yeah, that part really threw me for a loop. He should be desperate for customers, especially ones that will stick around and maybe place more than one order. I wonder if he's dogwhistling about homeless people her - it is LA after all. That's the only kind of guest you would not want lingering around.
There's also things he can do to keep people moving, like put in more bar seating, but the parents and nannys won't bring kids in to eat gourmet doughnuts if they can't sit and take a load off!
Homeboy might be a artisan donut baker, but he comes off as a terrible business man. Setting up in a mall? Farmers markets? Come on man! Gotta cater to kids and soccer moms. Pump out dozens of donuts that people take to kids sports games on weekends, teachers bring em to school for kids, etc. Hes missing out on a lot of sales by trying to sell individual frufru donuts at ridiculous prices.
@@AltimaNEO exactly! You can go elite, high-end on a store after you're successful
I have had many delusional ideas in my life, but thankfully selling luxury donuts with 12K+ monthly overhead in a space with no furniture has not been one of them. Sad thing is I bet Peter makes some killer doughnuts.
How much you wanna bet he's got rich parents footing the bill for this nonsense
It's because you're not the target audience lol
The donuts looks good, he only has the the basic donuts in the display case though
hopefully now that modern MBA did fantastic commercial for lolas doughnuts, maybe more people viewers in LA will go n buy to see if taste good as they look
@@benverboonen1108 he moved out from the mall, seems the target audience didnt care much
As soon as I saw he decided to rent in a mall, I knew it was doomed. $12,000 a month rent for an old frozen yogurt shop where he can’t even cook in his own shop?? That’s a terrible idea.
Found out online he made the same realisation and has left the mall to reopen somewhere else
Ya it’s crazy how everything has to be made offsite and transported by car. Doesn’t seem like any location is worth that extra step
@@TheRedfuss Not sure he's still in business. The facebook address is a shared kitchen. Website points all over the place and fake phone number.
I live close to this mall. There’s also a mochi donut shop in the same mall
No idea how well malls work there, here they are initially hyped, mostly for the investors. They lose renters, adjust rent, get new ones who still cannot make profit, now like 1/3 to 2/3 of the stores in many malls are empty, with some printed front looking like an actual store (it's still just an image, so it looks weird as it cannot change perspective). Mostly chains like MakuDo survive. But the initial investors got their money and sold their share to others.
I wouldn't want one of their contracts, with specified core opening hours, or if you are a bakery they might require you to have 80% of products still available an hour before you close, leading to so much waste.
Lola Donuts should just rent kitchen space in a central location and distribute out to coffee shops in high-end areas. To me, seems like a no brainer. Cofee shops don't want to go into the trenches with this type of baked goods and if this guy is literally making the same flavours daily then you don't run the risk of going stale as you can rorate flavours around to various cafes. You still get all the social media buzz and it leaves you exposed to less risk. Also, you can do catering and corporate stuff all from the same kitchen. He should have stayed an "online" brand but pivoted slightly into partnerships and catering.
Wow, good and succinct advice 👍
wow, that's a good idea.
I absolutely agree. He should have leaned into a 'made-to-order' model and added customer value adds & systems around that specifically. Not merely copying/pursuing the moves of the shops he is seeing in the market. Hopefully he gets to read your comment and adopts your lower risk and higher margin & volume strategy! Also instead of coffees, sandwiches and all that, he could use his skill and innovation explore offering products within the dessert & cakes category (a niche can sell itself better).
Indeed! I was thinking the same (selling to high-end coffee shops) but as his story unfolded, he makes evident he wants a store/brand of his own - even without chairs lol. Passion is not everything I’m afraid
@@maiastela He can still be a brand - the high end shops might put a sign on the display for the donuts. Assuming that this idea goes well, that'll generate some mental real estate for his brand that he can leverage to drive traffic to his own location in the future...
But he jumped the gun and went for an overpriced, over-sized spot in a mall...
Lola does not want people lingering in the shop all day but people will not go into a shop that's empty.
It’s crazy because people in a mall have been shopping all day and want to sit down and enjoy a treat. People lingering would literally incentivize others to come in.
Yeah, isn't it kind of the point to have people linger around and buy more the longer they're there?
He's an excellent donut maker, not a business man
He needs WiFi that is free for customers to use. Have customers lounge with their laptops, buying coffee and/or donuts throughout the day. Make it a lounge and/or place to chat. People will come in and purchase as they see it is busy. He needs advertising through social media like Instagram and TikTok. What about delivery too? It seems this is just a passion project than a business project for him. The name Lola's Doughnuts feels like it is catered to either a higher class or old ladies. Guy needs rebranding too....Also it seems that mall is dead. lol
If he was so set on being in a mall, he shouldve leased one of those cut outs that Cinnabon and Jamba Juice are usually in. People would see the menu easily while just walking by and he could chat with people as they pass/hand out samples. Forcing customers to come into an empty shop that appears to be unfinished is a big ask. Asking them for $6 after that is an even bigger ask lol
wasnt expecting it to get so dark, but i liked that you showed its not all sunshine and rainbows
It's such a sharp jump from Mikiko too. "This business is well planned, well run, and sells good products while paying workers a good wage. Things don't have to be soulless and corporate - You can have profits AND sunshine and rainbows!"
"... but not here in LA, at a mall, with no sales."
Lola’s website literally still has the demo squarespace pages for the location page, shop page and contact page. He doesn’t seem cut out for business. He really might benefit from an advisor or a class.
yeah wow I took a look and it's the default squarespace page - bleak.
His menu on the website hasn't even been worked on! It's in hkd and there's stuff like ramen on it omggggg
The realtor, then “entrepreneur” career path is a red flag to me. Those people generally tread water doing anything they can to avoid working for “someone else”.
he should watch this video lmao
i get that he was working 14 hour days but he should’ve sorted that out before renting a 12k space or while he’s waiting from 10-1 for a customer to show up
The Lola Doughnuts guy's story is depressing. He's so detached from reality.
probably spend too much time in LA without a reality check.
Bro it really caught me off guard how dark it got
I agree 100%. He needs to move to a standalone place. People want a cafe to sit in or walk by. Mall is a terrible idea.
He should stand outside and give free samples. Go to schools and colleges to get catering offers.
Worked with a couple who did this and after 1 week they were selling out.
Ya I’d go and want to get a donut because that mall looked like the Del Amo fashion center but he rather have someone who would buy 3 dozen donuts instead of my 2 donut purchase so I’ll just go get a box for $8 at my local granny’s donuts
Pretty blown away by the Mikiko guy’s understanding of every aspect of his business. It’s extraordinary that he prints those margins at such modest scale. I see that being a very successful pitch to franchisee’s should he ever go that route.
Seriously.
He's just going to get copycats vs franchises when the equipment is so lean
Everything but gloves sadly
The mochi donut guy seems really cool, I'd visit if it were in my state!
The doughnuts themselves aren't very good, IMO.
@@GeeEm1313 have u tried them?
Anytime an owner proudly states how much they pay their employees, they have my respect and those donuts look pretty damn good too. I'm assuming healthier too since it's not deep fried.
@@alanc4091 Image a slightly gummy, doughy thing. Mochi-nut really isn't doughnut and you just can't replace deep fried stuff with baked stuff.
Next time I go to Portland I'm checking them out.
so cool you actually went out and did an interview for this!
I loved this style of video!
Yeah this was a step above.
No shade to Peter but that donut shop looks like a Saw location.
I’ve never seen such a clinical looking donut shop. The oncology hospital I work at is far warmer.
I'm loving the new style of Modern MBA that covers businesses and people IRL, rather than speak solely about financial statements
It's one thing to speak about how they operate but another to see it happening
"Being good at your craft and being good at business are 2 different things". This is critical to understand. Even the business school that I went to leads you to believe that if you simply have a good product, you will have business. It's simply not true.
Man this and the Chicago club promoters videos are seriously MBA capstone course level of research with interviews and inside financial info; you have leveled up. I just hope the algorithm helps you as sadly the big name brands seem to get more eyeballs even though those are not nearly as well researched as ones with interviews and inside financial information.
I think the algo will punish his videos…the club promoters video did not do well..his audience is used to the big name brands …best advice would have to start a new channel specifically for this
Ya they’ve really upped their game and are getting deeper into the topics they cover
@@abdifatahmohamed2613Interesting… The algo never recommended me the chicago club video.
@@abdifatahmohamed2613 with the club video, I wonder if the semi-sexual nature of it hindered it in the algorithm. It would really suck if all the interview content did bad cause this has been BY FAR my favorite videos from Modern MBA that he has ever made.
I just discovered the account from this video! That’s a good sign :)
Moral of the story: Do what Mikiko does, not what Lola does.
Seriously Mikiko’s inspires me to travel across country and go like Keaton in the founder “FRANCHISE”!
@@methos-ey9nf Ill go there this weekend and buy a few.
Lola needs to take another look at his product. If they weren't coming back at a farmers market, they aren't going to come back at a mall. The recipe needs to be examined.
This
I think his donuts are probably fine. They certainly look good. I just think hes going about it all wrong. Trying to cater to an upscale crowd at locations where it doesnt make much sense.
Just a good, cheap donut sold in volume would do him wonders in a neighborhood type donut shop. Somewhere near a school.
They might be too big or too rich. When I eat donuts they’re a simple side to a good cup of coffee.
@@s4098429 They look average sized. They're probably not that rich, though. I think its just that hes making them by hand, along with the toppings, and making the price reflect the amount of work that goes into them. Basically, hes not providing good value.
But you are right, people want something simple from a donut. Anything fancier, and you're in cupcake/cake territory where the higher prices can be justified because people expect it.
I would love to watch more videos where you talk to different independent businesses in different states. ❤
Thank you very much for your support!
@ModernMBA No problem, this was your best video so far. Consider making these videos into a series.
Agreed! Loved this format.
@@GuillermoMunozOrtiz you should his video about Chicago nightclubs then. It is basically about the promoter business, which by its very nature has to a small independent business. I am loving ModernMBA's new interview direction with his last two videos.
Funny thing is Lola's exact concept is thriving in Covent Garden in Central London, its called Donutelier and is super successful. The same gourmet £6 doughnuts, but the business is different. The space is extremely beautiful, you see the doughnuts made fresh and theres often a queue to get them at peak hours. He needs to get out the mall, and get to a location that is cheaper and aligns with overpriced baked goods
I live walking distance to Covent Garden. It's not exactly some noughties shopping centre though.
I admire Peter's tenacity. I wish him the best and hope that he succeeds!
Future endeavors but not this one😂
Peter can learn a lot, simply by watching this video 😂
This video explained why Krispy Kreme donuts are so terrible. I never understood why my American friend thought they were amazing, yet I thought they tasted stale and overwhelmingly sweet. He probably just started eating them when the donuts were made locally, but when I eventually tried them they were made in a factory
Yeah, a Krispy Kreme hot off the conveyer is amazing. The most unhealthy thing you can eat, just BARELY solidified. Every ten seconds after the first minute, it gets worse-after an hour it may as well be a vending machine sticky bun.
Yeah, I remember having them as a kid in like 2006 and being obsessed. Had one a few years back and it feels like empty calories.
They are so good hot off the machine. I won't eat them unless they are fresh (can you even get them that way anymore?)
If you want a solid American donut, I highly recommend Duck Donuts!
When I was a high school kid in the late 90s as they were taking off, they were popular for a reason. But like others have said they get nasty fast and the logistics got way overstretched. I’m not much of a donut eater anymore anyway, but can vouch that Krispy Kreme was pretty good back then.
If Lola’s doughnuts could talk, they would sound exactly like the owner … 😂
He's really sleep deprived working 14-18 hour days and waking up at 3am. Seems depressed too.
Probably can't think clearly, which is extra dangerous when spending 12k a month (possibly with debt)
@@untrusted8008 I thought the exact same thing. Poor guy. I can't imagine the stress he must be in.
"I want big orders like an office or school. " ... Who wants to pay for overpriced premium donuts for coworkers or other people's kids?
@@frankd9945who doesn’t want to sell high volume orders to few customers rather than low volume orders to many customers. That statement was so obvious it doesn’t need to be said. If he had an idea of how to execute on that plan, sure. But just wishing you could sell everything to one customer is moronic. Like a car dealership saying I wish we could sell the whole lot to just one guy.
Anyone who has ever had Tim Horton's in Canada since they were bought out by private equity can tell you that the hub and spoke model absolutely compromises significantly on quality.
Who owns Burger King as well. I wish I could have tried them before the buyout.
@@GeeEm1313 Yep and now Popeye's (which I don't think was ever good) and most heartbreaking of all, Firehouse Subs. 😭
Franchising kills quality in most cases
Since being bought out, they don't taste as good as they used to.
it's so inconsistent😭😭. i don't think i've ever gotten a steeped tea that tastes the same. no matter which store i go to
It's sad seeing Peter do everything wrong. His prices are too high, the store feels uninviting (which is intentional), the location is bad in many ways. We have to get a follow up later this year.
He just closed his store and went back to making pre-ordered donuts for third-party delivery.
Man lolas opening at 10am is rough people are already at work hard to get anything after
Yeah! Donuts are usually a breakfast food. I work at a popular Cafe in my town and on average were sold out of our pastries by 10 to 11am.
I'm not business minded but Peter's choices keep confusing me
The whole setup stinks. In a mall? Like what is he expecting? That kinda getup works for a lean, heat and eat model, where you just take premade, frozen product and heat what you plan to sell (exactly how Starbucks does it, for example). Theres not enough foot traffic at a mall to make the kind of sales one needs from a fancy, handmade, premium donut shop.
If he was serious about selling that many donuts, he should have set up shop somewhere in the neighborhood near schools or offices. Open up at 5 AM as the crowds are getting to work and school. Donuts are the kind of thing that sell themselves, as long as youre in the right location.
Lola’s shop guy, if you’re reading this: no one is gonna be attracted to your empty box of a store. It’s bad vibes. Donuts are a dime a dozen, if I’m gonna go to a bare store it’ll be a southeast Asian donut store when the craft is generational and cheap.
People don’t go to malls for cheap shit, it’s gotta be good vibes
He's selling overpriced depression. Who's not loving this?
And no one even knows they are handmade artisan doughnut, I didn’t see it advertised outside the shop or inside.
Some Southeast Asian donut shops in SoCal have chairs and small tables. A problem such stores have are customers who sit down and don’t order anything, because they just want a place to sit.
@@DovidMwouldn’t having people visibly in the store make more people want to walk in overall?
@@cookiesandpudding8485 depends what kind of people are sitting around in the store. Where I'm at in Southern California (in LA, about 15 mins away from where Lola's used to be) in the immediate local area there's one Dunkin location and numerous independent mom & pop style shops that are run by Cambodians, primarily, all of them more or less copycats of each other. These places 5 years ago used to have a couple of small booths/tables and chairs inside, but nowadays, in the few who haven't removed them altogether, they aren't too happy to be having people sitting around, because 99% of the time it's homeless people, the kind who are confrontational and cause trouble, no less.
The mochi donut dude genuinely looks so awesome to be around. Like his whole mentality of investing in people is so real and telling.
I really appreciate the footage used in this video. In past videos, apart from shots of graphs, it was almost all short TV advertisements or other stock footage. It related to the topic, but it was also very generic, it was just filler for the narration. In this video the footage is specific and directly relates to the content. I also liked how you focused on two specific shops to explain the larger struggles of this industry, I found it very engaging.
Imagine struggling to sell your premium made from scratch product at a farmers market and thinking your problem is not enough foot traffic.
never suspected that I could learn so much about life from donuts
It'd be really interesting to have a check up on these guys in the future. I hope Lola's finds its footing.
I’ll be amazed if i he sees August
When there were no repeat customers after 6 months,
that indicates there is something wrong with the product,
or the perceived value vs the cost.
Basically his donuts likely don't taste like a $6 donut should.
Look good, but taste below average.
It could be that is is actually a $4 donut and that would bring people back. It's crazy how precise pricing has to be. I do think people have a barrier for anything simple that costs more than $5 (Cofee, cookie, donut, drink).
@@KOSMOinfinite Yes price points matter.
Although in NYC there are plenty of $6-10 donuts for sale, and more expensive cronuts.
Its a combo of price and likely poor quality product due to a lack of repeat customers.
Guy likely sells donuts well past their prime due to his off location cooking of the donuts.
Stale $6 donuts dont get you repeat customers.
29:15- always sheds a good light on your business, if you complain about low customer numbers on your official social media :D
What a stupid thing to post on social media, especially when selling doughnuts for $5 a pop. This guy has no chance and should cut his losses sooner rather than later.
Oh wow. 🫣
Been watching your channel for a year now and have been super impressed with the consistent high quality and well-researched videos! Really appreciate that there's not a lot of clickbait and nothing is overdramatized, unlike most of youtube. Your videos are refreshing, unique, and wish there were more channels like this!
Thank you for the support!
Bravo! This was my favorite episode yet! Would you consider doing an episode on bubble tea "boba" shops? I think you will find a new viewer base with that. I own multiple boba shops around LA and would be happy to contribute.
Send us an email - happy to consider!
Wall Street millennial did a video on this but I’d love to see some real life stories from smaller owners and not just the mega franchises
@@spicy_xinger sweet, I will look that video up, thank you.
@@spicy_xingerdefinitely some viewer overlap because I watched that video too.
I love your transition from biggest companies to small businesses. Great research, thanks!
Lola’s Doughnut is literally at the closest mall I live by. Might go to see if he is actually like this.
Update and let us know if it’s any good
I'd love to hear a follow up on this!
Commenting so I get updates tol 😅
Update us
Can you also ask what he thinks about this vid, or whether he knows how he’s portrayed here at all?
Sometimes a craftsman needs a business coach/mentorship. I once knew a girl who began studying jewelry making, creating fantastic stuff like cuffs and such. Couldn't part with what she created because she felt the offers for her items were too low
My pops started a business 50 years ago renting roller skates. He'd come home with $0.00 days but showed up the next day, every day. He followed the market and brought on skateboards, snow boards and all that goes along with it. It was a successful business for over 30 years. Then came the Internet and he retired. Lessons learned, show up everyday, follow your market and show up everyday.
Peter seems kind of screwed
Portland vs LA exemplified so well
I don’t think one guys bad business venture encapsulates a city but ok
@@taylor3342 I speak from a position of authority as general of portlands woke mob. What credentials do you have
@@taylor3342 Especiallly since that business is clearly unsustainable and wont exist for long
Dumb comment.
LA rules Portland drools
The Mikiko guy seems like a solid business owner and employer. Hope his business continues to succeed.
There's a donut food truck at my local farmers market. It typically has a huge line because people love them. They fry them in the truck so they're super fresh when you get them. They only sell plain glazed at $4 a piece. All this to say, there can certainly be donut success at a farmers market.
As a chef, I see Lola’s problem far too often. Creators are like parents… they will love their baby more than everyone else. When you have someone looking at the product so closely it’s hard to have the outside perspective on who will care about what you are creating! From my experience, finding a solid business partner who is pragmatic but invested in where you want to go is the most important relationship you can develop.
Don't knock those south east Asian mom and pop donut shops. They know how to make one fine donut! 🍩❤
Love that Modern MBA is covering small businesses also not just big business. We learn a lot from seeing how small business operate in competitive environments
Peter's business is going out of business for sure
I think I recognize the mall as well. If it is the one I am thinking of, he's also competing against the massive Japanese market/food court with its own bakery just downstairs and around the corner. There's no way he's going to be beating that.
@@ohnosmoarlulcatzeven if the rent was $6,000 selling that amount of donuts in a month for well established brands or the other donut in the documentary is difficult . Peter if you’re reading this cut the losses before it’s bankruptcy. You don’t have a drink menu like a normal dessert shop
Looks like Del Amo Fashion Center from some Google Maps digging. I couldn't even search the place itself, so I don't know if he's still in business. He's delusional
Southern California has a very interesting history with Cambodian Migrants and donuts. Hulu has a documentary called Donut King, where I think it was the SVP of operations of Dunkin said that they couldn’t penetrate the west coast market because they couldn’t compete with the mom and pop shops of the area.
Dunkin left the Portland area years ago. Rightfully so, as they're plasticky and gross.
Indeed, the California market in general was one of the few regions of the US where Dunkin had zero presence whatsoever for several decades, they only recently (~5 or so years ago) made a re-entry into this area. I highly suspect that a lot of their decision to do this has to do with their transition in business model from being formerly more strictly focused on donut sales themselves to their current strategy as a less expensive Starbucks alternative mainly focused on beverages with a decently sized food menu. The Cambodian donut places are still around and are still sticking it out, but they are almost all the same low quality donuts, not very good tbh.
Average American eats 31 donuts every year? I had 10 last week for teachers appreciation week 😂😂
You're the one who increases the average
lmao
I lower the average, I have about 10 a year....from different places.
Gone are the days of a dozen glazed, or eating multiple doughnuts at once. The mochi doughnut shop we go to is 3$ for 1 doughnut! We drive out to a small country town and get get the best cinnamon roll ever for much less.
I'll eat one here and there.
I really like the transparency in this video. As an entrepreneur who's dealt with ups and downs, I can relate to the struggles and it's a relief to see the reality of many, instead of only the successes of few.
As part of practical experience, our business school assigned us businesses to help them optimize. We got a donut shop. We analyzed sales, optimized the donut sale mix with statistics and optimized labor timing.
Then we asked questions like, what time do you open? They opened at 8 am! We got an A based on post-encounter increase in profitability. Mostly because we told them they had to open at 6:30 am. LOL!
I think you have a new series, idead where you talk to local independent businesses in different states.
This was so fascinating.
Loving this new style!
The final line of "Being good at business and Bing good at your craft are two different things" hits way harder than I thought It may at the end of the video.
I was not expecting that Peter diss track in the end. I wonder if that will help raise Lola's business though
Very true, I do hope Peter takes the criticism well and use it to improve the business.
The most important point for me is how empty the store looks without table and chairs. And having chairs may benefit the business by making the place look like 'high demand'. Also moving the doughnut display towards the window could help bring people in (Ik this because I've gone into places with window displays of food).
Business is ruthless, and being good in your craft does not mean you're good at your business. The best route would be the mix of both, someone focused on the craft and the other on the business.
@@humza890 maybe investing into a location where things can be made on prem would be a good investment. His current process seems inefficient
As someone who grew up in LA eating "bland donuts" don't you ever disparage LA donuts again. The cambodian donuts becoming so wildly popular didn't happen on accident. LA has the best donuts in the country, bar none! Those pink boxes are legendary. Sadly I don't live there anymore. After living in many different locations in the country I've discovered that the reason Krispy Cream and Dunkin does so well is because the donut shops outside of LA suck.
I was just at this mall today (live 15 minutes away) and had no idea this Lola Donuts place existed. I love donuts and often expense a dozen gourmet donuts for the office. Marketing fail.
I’m months away from finishing my MBA as a second career, and I’ve been toying with starting my own small business instead of looking for some boring manager gig. This content is a great find! I appreciate the frank reality’s of both these shops’ stories. Great information on what to do and NOT do!
This is a fascinating episode because in my area theres not a single donut shop of any kind, be it a chain or local store. So this episode is a view into a business I have no reference for.
And where are you from
@@nonononameee5833 South Dakota
Huh? Where do you live that there's not a single donut store?
@@dieselbaby South Dakota.
Alex, I like Alex. More business owners need to think like him.
SideCar Donuts in California are focused on premium product and are my absolute favorite! Less sweet but more flavorsome, and closer to the side of a nice pastry shop than generic, sickly sweet, cheaper donut stores.
Having lived in LA for 20 years as an actor, I get the owner of Lola's doughnuts logic, if flawed. A lot of people in LA think "if I am good at what I do, work hard, and am seen by a lot of people, surely I will be successful." But it's not enough to be seen: you need to know your audience. Bigger audiences only gravitate toward you if they see other people excited about what you do, and that means building a relationship with people willing to pay $5-$6 each for your doughnuts. But building quality relationships is much harder than making good doughnuts and spending a ton of money on rent & advertising.
26:48 Lola’s Doughnuts has once again become available for third party delivery only.
Peter took a lease on an upper story of a strip mall. Usually, businesses on the second floor are providing services like tutoring and tax preparation. Travel agents are often located there. Such services don’t generate foot traffic. He’s probably paying less in rent for a second floor spot but he’s dependent on word of mouth rather than foot traffic.
He's hoping the foot traffic from Starbucks next door would spill over to him.
When I first started my business I made many of the mistakes that Peter is making. I end up spending lots of money on expensive advertising, thought I needed a large office space. 13 years later, I still over-complicate things here and there, but I've also learned to simplify and evaluate what's actually needed.
With the way that he's operating things right now, he doesn't actually need a storefront, he would probably do much better with a kiosk or a food cart.
I've subscribed to this channel for some time now. First time watching an episode and I'm blown away by the passion and thoughtfulness to put all this together. Telling the story of the two founders so succinctly; there are no emotions in running a business. It's a cruel realization once you dip your feet into entrepreneurship.
This content is always so well done. Excellent, ModernMBA.
Jeez that Lola’s location is so empty it gives me anxiety at the idea of walking in. When there’s more things in a shop- chair, tables, pictures, merchandise, whatever I feel like I’m not the center of attention. Walking into that empty place dead quiet makes me uncomfortable.
I hate to say it, but it gives off money laundering or crime front vibes than a donut shop
I really appreciate the original reporting done for this episode. It makes the channel all the more informative.
peters insane for saying that maybe a parent will shell out $45 for a dozen of these donuts to bring for their kids class
This is why I only buy doughnuts 1 at a time... if at all. Another traditionally cheap food, that's now very pricy.
We need more bosses like the donut guy, considerate human beings who are genuinely concerned about the well-being of their staff.
ALL Krispy Kreme's donuts taste the same, just different icing.
Their moto should be, "A pound of sugar in every donut!"
😂😂 😂😂😂 absolutely made my day😂😂😂😂 this is just gold
😂😂😂😂😂😂
I want to go to Mokiko. I've tried Mochinut, and I thought they sucked. So, I hope Mokiko is good.
Also, if you pay $5-6 for a doughnut, you should be locked in a rubber room.
😂😂😂😂😂😂😂😂
This is your best video so far.
More like this, I love the interview model and the contrasting storylines over time with real numbers from small private companies.
Thanks!
Im loving the interview format!
Mall bro makes a lot of assumptions that are quite costly. His overhead is pretty, his product is very expensive, and people judt dont care much for malls to begin with. If you want to sell a premium product you need to be situation in a high traffic location around the city center of 1) a large city, 2) a small well-developed city with a lot of young people (i,e. Collegue town).
I don’t know where to request next topic but I’ve always seen Ecolab products and am curious about Ecolab as the company.
Really great to see videos about smaller entrepreneurs, and especially case studies of failed businesses, thanks for that! Valuable lessons to be learned
Fascinating analysis of the doughnut industry's dynamics! The shift towards gourmet and creative doughnuts on the West Coast highlights a broader trend of innovation in traditional markets, reminding us of the power of differentiation and niche marketing. 🍩
Mikiko is THE hippie donut store in gentrified areas. $20 for half a dozen served by a hairy guy with no gloves.
Well, now I want to eat donuts D:
The way you made an analysis video having both the giants and then independent stores compared is something we want regularly in all your videos. Please, please!
I'm glad you featured Lola's donuts. We rarely get to see the struggle of starting and running a business. Learn and adjust, or fail.
Amazing video, I literally forgot this wasn't a CNBC video when you did the interview
I honestly feel bad for Peter. We are told all our life to follow our passion but the danger of this is delusion.
Lola donuts is a case study for sure.
Because real estate is a great foundation for opening a donut shop 😂 😂 😂
You caught the guy with a duck sweater like 3 times working and touching food surfaces, and then adjusting the duck sweater, or glasses, and then you cut the camera before he went right back to food. You are cutting the camera away, but you still can't hide how bad his health sanitation is.
Peter is on the arena floor fighting the fight. He going after it and will be better for it. He’ll figure this out or apply what he has learned to the next thing. 🥃 Here’s to the people of action
I really enjoyed the video. Showing the corporate side with numbers and showing two really different establishments with their own niches in a mini documentary kind of way. And it stumbled me how good the shots were in the two stores as if i was walking with them. Also founders ideas and businesses are delivered really compactly with each second of the video designed to have only essentials and used to maximum efficency.
I think the quality of the video is directly related to the huge amounts of passion the team has, because this video feels more natural and educating than any yt video from big tv channels, like cnbc.
I LOVED the two interviews with the shop owners!! I know it's probably not possible with all videos (like the big franchise wars ones) but they were really insightful looks into the business on the ground.
Peter talks about having a great product having a good product is important. Look at the McDonald’s cheeseburger. It’s not the best cheeseburger there is by any means but it’s the best cheeseburger that efficient and economically mass produced that’s how you make money and run a good business
As someone with a deep appreciation for quality, it would be sad to see good a product disappear because the owner cant see the bigger picture. All that hard work and dedication is for nothing if he doesnt learn the right lessons from his failures and I really hope that wont be the case.
His price point is too high for his product, especially in this economy. When he was at the farmers market for 6 months and didn’t have a repeat sale that was the biggest red flag. Either the product looks good but tastes bad or it’s too expensive. I make handmade candles and wax melts and sale online and in person via farmer markets and pop-up events. And I’m also trying to branch out into wholesale. My business is slow right now but it’s because I’m not putting in the effort. I’m currently trying to switch my day job. Once I get a new job, I’ll be able to refocus on growing my business. I’ve been in business since 2020 and last year was my highest grossing year overall but my first year was my highest year for online profit. Doing the markets were extremely helpful in getting real time feedback from customers about product design, branding, and pricing. He learned something during the markets but is choosing to ignore it.
This format of video is my new favorite, on an Modern MBA. I love the in-person reportage and documentation efforts.
Please tell Peter that yes, as what is essentially a cafe, he wants people to hang out, get free Wi-Fi and being people in who want to sit, have some doughnuts and maybe do some work.
I'm not getting my 31 doughnuts per year average. But when I do have a doughnut it is from a mom and pop shop where doughnuts taste good. Krispy Kreme are extra sweet with no flavor. Plus a mom and pop shop is more likely to have a wider selection than Krispy Kreme and Dunkin.
28:26 that place straight up looks like its not even open. If I walked past, I would think it was closed. Seriously, no tables or chairs?????
That rent for that space is insane too. Everything about it is bad.
Really really good video. As every one else said, showing numbers and footage from businesses is really useful. I just wonder why Mikiko agreed to explain so much of their winning formula! That being said, it'd be so much nicer if there were fewer Dunkins and Krispy Cremes and more small businesses like Mikiko that don't try to get huge and care about their employees and, as he said, do more with less revenue. Small scale is nice too. And they're really not doing at all.