Bear Naked Speaker Talks Granola and Success
April 17, 2006
The venture, Bear Naked Inc., started by Flatley and childhood friend Brendan Synnott, has quickly grown into a national phenomenon in which their granola products have outsold the venerable Cheerios and Frosted Flakes in some markets.
Flatley spoke to a standing room only crowd Tuesday (April 11) evening at Wilmington College as this year’s presenter in the Ralph J. Stolle Business Entrepreneurship Lecture Series.
The predominantly student audience was enthralled with learning how two recent college graduates pursued their dream of starting a successful business. Flatley explained that she and Synnott left good jobs with Sports Illustrated and Saturday Night Live, respectively, to venture down the uncertain road of the entrepreneur.
“We both had pretty fun jobs but one day I asked myself, ‘Is this what I want to be doing for the rest of my life?’” Flatley said, noting they started with a product, a dream and little else.
“We didn’t know what we were doing — I was a sociology major in college — but I found you need only be certain about one thing, who you are,” she added.
Flatley recalled the early days of begging people to sample her products against the backdrop of an industry dominated by juggernauts like Kraft and General Mills. “I found I had the courage to do something everybody laughed at,” she said. “When other people saw limits, I saw opportunities.”
From the start, Flatley believed her granola was superior to existing brands — her oats-based products are “barely processed and utterly natural,” thus the catchy name Bear Naked.
The snacks and breakfast cereals are sweetened with honey rather than refined sugar or high fructose corn syrup, and they contain no trans fat, cholesterol or added oil. Flatley’s and Synnott’s contingent of friends, family and former classmates regularly joined them in passing out granola samples at 10-kilometer road races, cycling events, sailing regattas — anywhere persons were in the “mindset” of being healthy.
“You have to sell something more than the product to get people to buy it — we sell lifestyle, a healthy lifestyle,” Flatley said, noting that however one serves it, granola is pretty basic, so, in marketing lingo, they’re not selling the steak, they’re selling the sizzle.
“We put granola in a pretty cool package and came up with a sexy name,” she said. “You don’t have to make something new — you have to make something better.”
From the start, the brand name Bear Naked attracted attention.
“I approached people by getting in their face asking, ‘Do you get Bear Naked?’” she said. “It always elicits a reaction and spurs the imagination.”
When the initial investment of their combined $7,500 life savings ran out, Flatley and Synnott used the risky procedure of financing the formative stage of their venture with credit cards before a bank gave them a line of credit.
“Never let the lack of money get in your way,” she boldly stated. “What you need are guts, passion and a solid work ethic. In the beginning, all you have is passion. For two years, we worked seven days a week, lived at home with our parents and didn’t make a dime.”
That first year, 2002, the Connecticut-based business experienced sales of only $10,000, yet they were not discouraged and, in fact, felt momentum was quickly building.
A venture capitalist company noticed their momentum too and offered them $1 million for 50 percent of the business.
“I’m 25 years old and someone just offered me $1 million,” she said, noting the reality behind the offer was, if accepted, she and Synnott would ultimately lose control of the business. “I had to make a phone call declining $1 million! But we can go to work everyday and decide where we want the company to go.”
And where Bear Naked went was into modern entrepreneurship folklore. Year two realized $400,000 in sales, followed by 2004 with $5 million and 2005 with $10 million. The company projects sales of $25 million in 2006, yet Flatley and Synnott, as co-founders and CEOs, are drawing only $60,000 annual salaries — less than many of the company’s other executives.
“It’s not profits and loss — it’s passion and love,” she said.
Flatley said luck also has played a key role in Bear Naked’s success. With no General Mills-sized advertising budget backing them, they employed a grass roots public relations campaign in attempts to get noticed. Bear Naked’s “big break” came when its story enticed Inc. magazine to interview the co-founders for what they anticipated might be a small article about young entrepreneurs “on page 176.”
They were astounded when they realized Bear Naked was the next issue’s cover story, which fomented skyrocketing internet sales and the appearance of their products on more and more store shelves. Subsequent exposure on the Food Network served to enhance further the company’s exposure and image.
Those in the Wilmington audience received packages of Bear Naked products, however others wishing to try the granola snacks and cereals can find it in the Wilmington Kroger’s health food aisle. Wal-Mart, the nation’s largest grocery chain, does not stock the product — yet.
“If you’re going to be a big food player, you have to have a presence in Wal-Mart,” Flatley said. “I don’t foresee us becoming the next General Mills, but we don’t want to put a cap on growth.”