From Bootstrapping Via Craigslist To Double-Digit Growth
Bagel giant Einstein Noah Restaurant Group has acquired a five-year-old bagel company founded by a Taiwanese immigrant who scrounged his startup capital from Craigslist.
The company—Portland, Oregon's Kettleman Bagel Company—has 100 employees that produce 14,000 bagels a day for five stand-alone stores and 140 wholesale accounts including Whole Foods, Intel and Nike.
The acquisition price was not disclosed.
Kettleman's five Portland shops will be folded into one of Lakewood, Colorado-based Einstein's other lines, which include the Einstein Bros., Noah's New York and Manhattan Bagel brands. There are seven Noah's locations in the Portland area.
Kettleman's founder and CEO, Jeffrey Wang, 57, learned the bagel trade shortly after his arrival in the U.S.—and New York—in the 1980s. He opened a deli, then noticed the line at the bagel shop next door was much longer than his. So he bought a small bagel shop on Long Island. Part of the deal: that the owner teach him how to make bagels. (The former owner took the money and ran, so Wang watched other bagel makers.)
Wang, a serial entrepreneur, eventually moved to California and launched computer-related businesses. When he moved to Portland in 2006, suffering burnout from the computer industry, it had been nearly a decade since he'd thrown bagel dough into boiling water.
"I'd tossed my recipes and left the equipment behind," he told Oregon's Tri-City Herald earlier this year. "I thought, 'Will I remember how to do this?'"
But he'd spotted a hole in the bagel market, and turned to Craigslist to solicit investors because it was free.
"Real boiled bagels in Portland—do you want to invest?" he posted. He told the Portland Business Journal earlier this year that Craigslist removed the ads almost as quickly as he posted them, but still he managed to get four investors and $80,000 in startup capital.
He leveraged the money plus $30,000 in credit card debt and secured a $100,000 business loan guaranteed by the U.S. Small Business Association. He then set up his commercial bakery/retail outlet and, according to the Business Journal, rarely left. He slept on a mattress in his office at night and played handyman by day, converting the space himself.
Even as the company grew—Wang said it had double-digit revenue growth every year—he continued to use Craigslist to post ads for job openings.
In a statement, Wang said that Einstein Noah's "proven success and personable culture made becoming part of Einstein Noah an attractive and easy decision."
Wang himself plans to retire.
“I’m just too tired,” Wang told Nation's Restaurant News. “I’m 57 and I’m burned out. We have about 100 employees, and they’ll carry on from here.”
Jeff O'Neill, Einstein's president and CEO, called the purchase part of the company's "aggressive growth strategy" and said the acquisition was aimed at strengthening the company in the Pacific Northwest. The $414 million Einstein company operates more than 750 locations across 39 states.
Image credit: Courtesy kettlemanbagels.com