With WooCommerce businesses scattered all over the world, it’s not often I get to do an interview in person. But this is an entrepreneur story that could only come from San Francisco.
Last week I spoke to Dandelion Chocolate founder Todd Masonis, at their factory location in San Francisco’s Mission District.
After selling their consumer internet business to Comcast in 2008, Todd and business partner Cameron went down a path of experimentation and discovery that eventually led them into the business of fine chocolate making.
Read on to learn more of Dandelion Chocolate’s unique story.
Kirby: How did you first come up with the idea for Dandelion Chocolate?
Todd: Basically my friend and I were in a garage roasting up cocoa beans, we were just having fun making chocolate, trying to see if we could make it at home.
We didn’t start out intending to create a business or chocolate factory, we just were literally having fun learning how to make chocolate ourselves. Before we knew it, our friends and family said: “This is really good.” Then we started winning awards and bringing [our chocolate] to little farmers markets and [we] seemed to be getting very popular.
So we said: “Okay we should do something with this,” and we ended up starting the business.
But it basically just started as a fun project.
Kirby: How did you find your first suppliers?
Todd: When we first started, we bought some beans off the internet. We were just buying handfuls of beans to see if we could make some in our kitchen.
Once we actually started going, we found some bean brokers, then we found farmers and went down and visited the farms. We just kind of kept going up the chain, from the middle men to today, where we source all of our beans directly from farmers.
It just kind of evolved over time.
Kirby: How much did you have to learn about chocolate?
Todd: We have learned a lot. The type of chocolate we make is pretty different. It’s how people used to make chocolate 100 years ago.
Chocolate became industrialised, so a lot of big companies have for a long time been very concerned with consistency and low cost, but a little less concerned with super high quality and flavour.
Chocolate can actually have more flavour complexity than wine or coffee, but most companies have been trying to get rid of that. What we’re trying to do is actually get the beans—get those flavour nuances to come out—so it’s more like third-wave coffee.
You know, most chocolate shops don’t make chocolate, they generally make chocolates. Now it’s getting more and more popular. Five or ten years ago, almost no chocolate was taken from the beans in small batches.
We had to learn a lot of things, read a lot of books. We had to communicate a lot on the internet. We had to try a lot of experiments to figure out what we were doing. But we’re still learning. Every day we’re trying to figure out better ways to make chocolate.
Kirby: How did you reach your first customers?
Todd: We started going to farmers markets. San Francisco used to have something called the Underground Market. It was a farmers market you could go to even if you didn’t have permits, which is pretty cool.
If you want to start a food business, you have to go through a lot of red tape to start. They changed it now, [with] the Cottage Food Law, where you can make food out of your home and sell it in a limited amount, [but] when we started they didn’t have that.
So these guys started the Underground Market, which was a really cool farmers market where you didn’t need permits and everyone would sign a waiver saying: “I understand that this has not been inspected.” That was [a] really fun [way] to get our first real customers.
It’s one thing to have your friends and family say: “Oh I love your chocolate.” But it’s another thing for strangers to actually, you know, give you money for it. With the first one [sale] we were like: “Wow, we’re really interested in this.” It was pretty exciting.
Kirby: How do you reach your customers now?
Todd: Well we have our store. We’re on a pretty busy street, which is nice. We have the kiosk in the Ferry Building, we have our website, a blog, an online store.
In terms of outreach, we don’t do any sales or anything like that. But we have like our blog, and Twitter. But mostly people find out about us and come to us, which is nice.
Kirby: What was the design process for your brand?
Todd: That’s a really good question. We thought long and hard about what our brand values would be. We debated them and tried to come up with a couple of words that really encapsulated the brand. Then we took those words that we had debated and gave them to our architect and our graphic designer.
By knowing, defining, what we wanted it was easier to know then and not be like: “Well I like this style, and I really like that.” There are tonnes of ideas that are good ideas, but don’t fit what we’re trying to do. It really has helped us edit, by knowing what we are and defining that from Day 1.
Kirby: Were you self funded, or did you receive investment?
Todd: At first we were mostly self funded, and then we started to build this place [the factory] and it got a little more expensive. So we raised a bunch of money from friends and family, kind of like investor-type people. But mostly friends.
Kirby: And what has been the biggest challenge so far?
Todd: Our biggest challenge has been trying to keep up with the demand. Mostly because we are very careful about the chocolate that we make.
There are lots of steps we do that are very labour inefficient. For instance one of the steps we do is we wrap our bars in gold foil. We have a machine that will do that, but it doesn’t do it quite the way we like. So we still do that by hand. We’d love to find a machine that would do it the way we want, but until we find that we’re still doing it by hand.
[There are] a lot of these places where we don’t want to compromise on the flavour or the experience, so it takes us a really long time to figure out how to get a little bigger.
Kirby: One of my colleagues wanted me to ask you about the 60 year old wrapping machine, how did you find that?
Todd: In New York, there’s a hundred-something year old family, [they are] used confectionary equipment dealers. And so they found this machine, they had it. It spent the last 50 years in Iceland. They fixed it up for us.
It’s funny though, because recently I visited a place in Italy that had, like, 100 of these machines. So you can still find them if you look carefully.
But they’re pretty old. The one we have is so old that it can run without electricity, just by spinning the wheel. It does a better job than we can by hand, much faster.
Kirby: Did you customise it?
Todd: You know, we customised it to fit our bars. But it’s the kind of thing where once it’s working, you don’t want to change it.
At first we had this idea that we’d have all different sized bars and we’d just adjust it. With a modern machine you would do that, you could just press the button and it would change.
But with this one, if you want to change the shape or the timing, you have to take the entire machine apart. If something breaks, you have to re-machine the cams.
So once that’s working, we try to never touch it.
Kirby: And how many people are on the team now?
Todd: We’re a little over 50. And that’s split between production, the cafe, bean sourcing, and finances and all that stuff.
Kirby: With the website, why did you choose WooCommerce?
Todd: We knew we liked WordPress as a platform. We wanted to find something that would work well with WordPress and would take away the hassle of dealing with all the payments stuff.
We looked around a bunch [of options], and we liked WooCommerce. We’ve used it for a couple of years now and it’s pretty good.
Kirby: What’s your favourite thing about WooCommerce?
Todd: Probably that I don’t really think about it, you know? I think it’s the sort of thing where, if it’s working perfectly, you don’t really worry about it.
We have so many things we have to worry about here [at the factory], it’s like every day a machine breaks, or you know, lots of things you take for granted can happen. So having one less thing to worry about is really nice.
Kirby: Have you thought about offering subscriptions?
Todd: We have, we would like to. Just right now we don’t have enough chocolate reliably. We’re only now catching up from the holidays. You can see right now I think we only have four bars on the shelf, normally we have about six. There were days in January where there were no bars on our own shelf.
Our waitlist is over 400 wholesale customers, that’s waitlisted people that we’ve said “no” to.
We need to be able to make more chocolate before we can even think about subscriptions.
Kirby: How do you balance between the retail, wholesale and online businesses?
Todd: Yeah, it has been a challenge, mostly. I know we’re kind of like backwards compared to most businesses. Usually it’s like: “How much can we sell?”
In our case, we don’t want to promise something we can’t deliver. So we have these problems where we do wholesale, but if somebody orders online and we promised the bars to wholesale, well then we’re in trouble.
If our store is empty, that’s also a problem. We actually have a person who tries to manage where the limited chocolate is going. Then we have to set limits in the online store, or what we’ve done is basically said no to wholesale customers. It’s probably been over a year since we’ve taken a new wholesale customer. We want to deliver to the existing ones.
During the holidays we said: “Get your orders in before October, there’s no more wholesale for the rest of the year.”
So it’s been hard, but also we’ve tried to be very communicative. I feel like people have been pretty understanding. As long as you say: “Look we’re really small, this is all the chocolate we make, we’re oversubscribed.”
It’s very different to when someone orders and they get disappointed because two weeks later it’s like: “Sorry, we don’t have the chocolate.” So we try to be very clear and upfront, from the beginning.
Kirby: How important is the online store relative to [the other parts of the business]?
Todd: I think it’s super important because there are lots of people who would like to try our chocolate who normally wouldn’t get to buy it, because they’re not in San Francisco. You know, we sell in stores around the world, but not a lot of them because we have very limited supply. And so people hear about our chocolate, and they don’t get to try it, but we’d love for them to try it. So if they can go online and buy it, that’s good.
And then, just from like a revenue standpoint. It’s really nice to get extra, sort of bonus orders just without thinking about it, so that’s been really nice.
Kirby: Do you have any advice for other people who are thinking about starting a business?
Todd: Sure. I think it’s a lot of work, but if you’re passionate about it you should go for it. You can never predict how it’s going to turn out. But I think there’s nothing more rewarding than working on something you’re really passionate about. So yeah, go for it I guess!
Kirby: What are your plans for the future here?
Todd: We are building out a new second factory, much larger down the street. We’re going to keep this one and build a second one. That [location] will have a cool cafe and some other stuff in there.
We’re thinking about building a hot chocolate stand at the Ferry Building, and working on a book and other expansion plans that we’re not ready to announce, but we’re getting there.
I think when the new factory is up and running, we’ll be able to do quite a bit more, which will be nice.
Kirby: You must really love chocolate.
Todd: Yeah, yeah.
Kirby: You don’t get sick of it?
Todd: Ah no, I’ve had to diet a lot more. But no, I love to eat chocolate.
We also have a pastry chef and the pastries and hot chocolates.
Yeah… I eat a lot of chocolate.