It was a few minutes before 8 a.m. on August 27, 2005, and twenty-something Neal Gottlieb was feeling scared, excited, happy and anxious all at the same time. Shortly he would open the doors to his very first Three Twins Ice Cream Store, a San Rafael, California, shop selling organic treats that he had put the finishing touches on just five hours prior.
The move was bold and cost him $70,000 in savings and $25,000 from his parents' account. He made $365 in sales his first day. The next day was a little slower: $200. By day three, sales were down to $110. Looking back, Gottlieb shakes his head.
“In hindsight, that was so little money, I should have quit and gone back to work for Gap,” he says, laughing, referring to his stint in corporate finance. “But I was determined to make it work.”
Determination is exactly what Gottlieb needed to get through many entrepreneurial bumps—like when he raised $850,000 to build his factory and just a few months into construction realized it wasn't enough, or when he couldn't pay his contractor and bartered a deal to pay him in Home Depot gift cards.
Through it all, Gottlieb never strayed from his goal. Today, Three Twins Ice Cream employs 55 people out of its corporate headquarters in Petaluma, California, has several physical stores, is sold in Whole Foods locations nationwide and, with 17 flavors and counting, is beating out Ben & Jerry’s and Häagen-Dazs for shelf space.
Gottlieb offers one piece of advice to those starting out: “Always remember that cash is king; don’t spend money where you don’t have to,” he recommends. “You have to be thrifty.”
What’s the story with your relationship to cash?
Well, at first, I was golden when it came to money. I went to Cornell, worked in finance, saved money, went to Peace Corps and got out with $70,000 in my pocket. That is, until I decided to start Three Twins. It was a rollercoaster after that.
My slowest day at the San Rafael store brought in $49. $49! I could have made more begging on the street! Another [standout] moment was when I decided to build a factory to make pints of ice cream. I raised $850,000 in 2008 to do this, but a few months in, realized that I didn’t have nearly enough.
Did you stop construction on the factory when you ran out of money?
Yep, we had to stop for nine months until we raised more capital from investors. During that time, I never had to short payroll, but I didn’t have enough to pay contractors. Thankfully—or not so thankfully, depending on how you look at it—I had good credit, so I took out around $100,000 worth of credit cards to help make ends meet.
I remember one of my contractors needed to get paid and I literally had no cash, so he agreed for me to pay him with $2,000 in Home Depot gift cards. It was a crazy time.
When did things start to get better?
2009. That is when I started raising more money. To date, we’ve raised around $5 million. We opened our factory in 2010.
Let's go back to the early days. How does a guy with a finance background decide to start an ice cream company?
After I got back from Peace Corps, I was living with my twin brother and his fiancé, who is also a twin. We called our apartment “three twins,” which is where I eventually got the name for this company. I was working in finance at Levi’s in San Francisco and started taking entrepreneurial classes at night. At the time, my brother and I liked to frequent a local ice cream shop, so he came up with the idea of opening one of my own.
It’s not like I’m obsessed with ice cream or anything. I like it, but I was more interested in building a brand. I wanted to create a green business and make organic ice cream, which was a fairly new concept in 2005. So I quit Levi’s and went for it.
How did you come up with the recipes?
I created them myself. It's all about fat and sugar and balancing the flavors. I took a two-day commercial ice cream making course in New York and learned how to use the machine.
How did you land the Whole Foods account?
In addition to my store in San Rafael, I was hand-packing pints and selling them to nearby grocery stores. I was also selling to a few restaurants. One day, I heard about a local producer forum where small companies were encouraged to come to San Francisco and talk to Whole Foods about working with them.
I attended the event and wanted in right away. I knew that I couldn’t hand-pack enough pints—this was in the pre-factory days—so I offered to sell them bulk ice cream. The Cupertino, Calif., store agreed and it went from there.
Were there any bumps along the way?
Well, yes. I’ll never forget my first delivery. It was for $2,000 worth of bulk ice cream and I drove the product packed into 15 coolers in the back of my pickup truck by myself. By the time I got to the loading dock, one of my coolers had blown off the back of the truck. The guy from Whole Foods who helped me unload gave me a pitiful look and asked, “This must be your first time, right?” I nodded and proceeded to go out and buy a freezer truck immediately.
What does the future hold for Three Twins Ice Cream?
We are looking to open a few more stores in the San Francisco area this year. And next year there is a good chance that we will be opening a location in Seoul, Korea, which would be our first international store.
In addition, I want to grow with the packaging side of our business. I want to make enough product to fill up a door in a grocery store aisle just like Häagen-Dazs and Ben & Jerry’s. I want us to break out and no longer be a niche brand, but be a brand that fills doors like the big boys.
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Photos from top: Courtesy Three Twins Ice Cream, Thinkstock