- 1 week ago
Seth Berkowitz was over late-night pizza. What he really wanted was a warm, just-baked cookie delivered to his door. Since he couldn’t get one, he built Insomnia Cookies in his dorm room. Berkowitz shares the simple, disciplined game plan that turned a craving into 350 late-night cookie-delivering stores worldwide.
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00:00I'd go to class and then I'd have a three hour break. I'd get in a car and drive out
00:04to Costco.
00:05So I'd like make a bunch of product, ruin some product, put it in the fridge for that evening.
00:10And I go run back to class. So I get like very creative with it. I would like to leave
00:14cookies
00:14in the oven and say to my friends, like, make sure they don't burn. And like inevitably they
00:17forget and they burn. How much of your product got eaten before it even had a chance to get out
00:23the door? You know, I don't know if I had a strong inventory management system.
00:33Hey everyone, welcome to How Success Happens. I'm Dan Bova, writer and editor at entrepreneur.com.
00:40And man, I sure wish I was at today's guest headquarters rather than in my stupid basement
00:45where there's currently a severe cookie drought going on. Seth Berkowitz is the founder and CEO
00:52of Insomnia Cookies. And after more than 20 years in the baking biz, we're going to find
00:59out if success really does have a sweet smell. You know, that made a lot more sense when
01:06I wrote it down rather than when I said it, and it sounded very stupid, but we're just
01:09going to keep pushing forward and we're going to welcome Seth. Seth, how are you?
01:14I'm doing great. Thanks so much for having me.
01:16Yeah. So give us the sort of elevator pitch of Insomnia Cookies. I mean, you're known,
01:25you're well known, but just for those who don't know, what's Insomnia Cookies all about?
01:29So Insomnia is a 350 store bakery plus system. We have locations in the U.S. throughout the entire
01:39United States, continental U.S., in England and in Canada. And our premise is simple, right? We serve
01:48a singular craving of a warm, delicious cookie accessible through all hours of the night. So
01:54we're open till three o'clock in the morning, most days of the week. We have our own delivery
02:00personnel. We focus a lot on executing against a warm, delicious product in every single touchpoint.
02:06And we have a ton of fun doing it. You know, warm cookie makes all moments better.
02:11And we're trying to prove we're trying to prove that that could scale throughout the world.
02:14That is awesome and is killing me because I haven't had lunch yet. And as you're describing
02:20that, I'm just like, oh, my God, I wish I had one right now. So I love how you first
02:25came up with
02:26this idea, which I'd love for you to tell everybody. Sure. So I started Insomnia when I was a junior
02:32in
02:32college. And I guess the semester beforehand, there was this moment that I experienced, I'm sure many
02:38college students do, where, you know, I'd lost a video game or whatever. It was my turn to answer
02:44the door. And I went and answered the door. And there was a pizza delivery guy on the other side
02:48of it, which is doesn't say a ton, except that I feel like I recognized him because it was the
02:54third
02:54time that night I'd opened the door and he was there. And I remember turning to my buddies. I lived
02:59with a bunch of good friends for my last three years of college. And so they were used to me
03:04being a
03:05little bit quirky and provocative. But I said, like, what is with this? Like, why do we keep getting
03:09delivery of pizza? It's just the same pizza over and over again. Like, I think I slammed the pizza
03:14box on the table for a fact. And I'm like, I want something different. And they're like, walk to
03:19Wawa, which is this great, great kind of regional grocery or convenience store in Philly. And I looked
03:26outside, it was snowing. And I was like, I cannot brave the elements right now. Whatever, I'll dig into
03:32this pizza. And I think at some point, like later that evening, I was like, you know, a warm cookie,
03:38something delivered to us that would be sweet would really solve what ails me right now.
03:44And I ultimately set out to solve that problem.
03:47So my follow up to that is, I think most people, you know, there's, there's, whether it's every day
03:55or whatever, there's some moment where you're like, Oh, I wish someone would do this. Oh, I wish
03:59someone did that. But there's a small handful of people that actually follow through on that notion
04:06and actually do the thing. So my question to you is what worked for you? What, what pushed you to
04:12say
04:12like, this isn't just like a fun idea. This is like an idea I'm going to do.
04:17I was at this very natural, it felt like to me a natural inflection point in life. I was a
04:22couple
04:22of years out of my parents' home. And I was a couple of years away from entering the workforce.
04:27And I had no idea what was next. Like I couldn't visualize what the future was going to look like.
04:34I just, I didn't, couldn't imagine working in finance, which is where I went to school was like
04:38very, a big focus area. And I was thinking to myself, what would comfort me? What would like
04:45be something very nice to have right now? And like a cookie kind of serve that idea.
04:50Um, and it particularly served that idea because like, you know what, I'll have it at two o'clock
04:53in the morning. So it's not that I'm back at my parents' house and I'm a kid, right? Like
04:56this is a future forward idea, right? I'm an adult, two o'clock in the morning. That's crazy,
05:01that concept. And so it had like this emotional texture to it that gave me a lot of like a
05:07really
05:07some, some serious resolve that I could, I could attempt to make a business out of it because it
05:12just connected to where my mind was at the time. Um, and so from there, I just rolled up my
05:17sleeves and started baking cookies and the, the customer guided me from that point forward.
05:23So yeah. Can you talk a little bit about those early days and then we'll get into all the
05:27incredible stuff you're into now, but you know, rolling up your sleeves and doing it,
05:32selling it, getting the word out. What were those early days like?
05:36Chaos is the best word to describe it because I'm still in school. So I would like, I'd go to
05:41class
05:42in the morning and then I'd have a three hour break. I'd get in a car and drive out to
05:46Costco.
05:47And I'd pick up all the ingredients. I'd come back and I was like becoming a pretty strong
05:52baker, but I was still learning right on the fly. So I'd like make a bunch of product,
05:56ruin some product, right? Put it, put it in the, uh, the fridge for that evening. And then I go
06:01run
06:02back to class and I turn on my phone. If I think at the time we, when I've launched, I
06:07would open it
06:07for and close it to, um, and I would turn on my phone and maybe not, not even for the,
06:12it was like
06:13maybe eight to two in the first couple of years, actually. Um, I turn on my phone and then the
06:17orders would just start coming in and I would bake them up and I'd deliver them out. And when they
06:21reached a point where it was like 10, 15 orders a night, I couldn't really bake to order. So I
06:26had to get like very creative with it. I would like leave cookies in the oven and say to my
06:29friends,
06:29like, make sure they don't burn. And like, inevitably they'd forget and they'd burn.
06:34So it was, it was a lot of testing and learning a system and then recognizing this can be a
06:39one
06:39man band for a short timeframe. But ultimately there's a real business here, like the school
06:44newspaper or an article. And all of a sudden I was getting 40, 50, 60 deliveries a night.
06:49And then I started hiring some support. Wow. Uh, and I wonder, uh, as you're saying that you're
06:55living in a house with a bunch of guys, like how much of your product got eaten before it even
07:00had
07:01a chance to get out the door? Um, you know, I don't know if I had a strong inventory management
07:05system at the time, so I don't, I don't know, but I do know there's a guy on my third
07:10floor.
07:10My buddy would call like almost every night and be like, can you deliver cookies? I'm like,
07:15you're on the third floor. Can you come down? He's like, no, I'm paying for them. Please bring
07:19them up to the third floor, which is reasonable. And I did. Uh, but yeah, I don't listen. And they
07:22were, they were super generous with everything about it. Right. I took over the kitchen.
07:27Yeah. It's not like we were, we were using it that often, but I took it over. I was using
07:30the,
07:30you know, the utilities. Um, and so I was happy to, to share and, uh, share in some of those
07:36suites, share some suites with that. That's great. And I mean, I think people should remember the time
07:41we're talking about, you know, we're sort of used to be being able to get almost anything delivered
07:46to our door now, but this is well before any of that was the norm. Oh, for sure. I mean,
07:51we had
07:52three delivery options, which is why the pizza story is more relevant to me than it probably is to,
07:57you know, kind of more concurrent times, but we had a, uh, sandwich shop, Chinese, Chinese restaurant,
08:04pizza store, pizza shop. That was it. Three, three delivery options, period. And at like midnight,
08:09it was down to one. Yeah. Um, so yesterday as we're recording, this, uh, was national cookie day.
08:19Tell me what is national cookie day to you? Is it Christmas, the super bowl and the academy awards
08:26all rolled up into one? How, how big does it factor into your life? Um, I mean, there's a bunch
08:31of days
08:32of the year that are uniquely insomniified, I'd say, you know, Valentine's day is really,
08:37really substantial for us. Um, it's just a wonderful day for, for gifting and shareability. And like,
08:43that's what insomnia is all about national cookie day. Um, it's a moment where the cookie actually gets
08:48elevated so you can participate in a lot of the hoopla. And so we, we, we had so much fun
08:54with
08:54it this year. Uh, it was, it was truly the best version of it that I've seen maybe ever in
08:59insomnia's
09:00history. Um, and it was all predicated on this idea of kind of treasure hunting. Like we had a hundred
09:05insomniacs lining up at every store. And if you bit into a cookie, there's a buttercream in it,
09:10one of which was purple. Uh, you'd receive cookies for a year for 2026. So we, we kind of just
09:17played,
09:17we just played it up. We had a lot of fun with it. Um, and it's just like, it's one
09:21of those times
09:22you, you actually like step back and see what's been built and you can really see the insomnia
09:27brand playing out in a way that I always, you know, I always hoped it could be.
09:30That's, that's so awesome. Did, did you run into any, uh, people who like try to use like a purple
09:36Sharpie and color in the middle of the cookie and claim it was, uh, the one?
09:40I think we did get a couple of, uh, submissions that were doctored. I'd say suspect. Yeah, for sure.
09:48That's great. That's so awesome. Speaking of success. I mean, when you started out in your
09:53mind, what was your kind of definition of success and as now 350 locations, and we'll talk about your
10:00partnerships with like the Knicks and things like this, but what was your initial, like,
10:05this is what success means to me and what does it mean now? The amazing thing is that the bigger
10:10the
10:11brand gets, the more opportunity that's in front of us. So I always said the hundred biggest college
10:17campuses in the country, right? If we just get there, that'll be tremendously successful. We have
10:23230 college campus locations around the country now. Um, and since then we basically followed the
10:30life's path of our insomnia. So they graduated from college, lots of people move into kind of
10:35dense major cities. We've opened in cities and then people, you know, will oftentimes leave the
10:41city and head into the suburbs at some point in their journey. And now we're starting to enter into
10:45there. So the definition of success, I mean, truthfully, like I had no anticipation that insomnia
10:50could be at this scale. I just, I really loved what I was doing. I felt the consumer appreciated
10:58the product, the warm deliciousness of it, the delivery service, and there could be more in front of us.
11:03Um, and I just, I tried to march ahead as fast as I could, but it just keeps widening, which
11:08is,
11:08it's really exciting. That's awesome. So when you, uh, I mean, it sounds like you pretty much,
11:15when you started, you pretty much had a very early indication that, okay, people want this and this
11:20is going to get bigger, quicker than I ever imagined. Were there any moments that gave you the like,
11:27uh-oh, like, okay, things didn't, things weren't going in the right direction? Was there anything
11:32that you had to kind of course correct for? You know, I tried to engineer the whole business around
11:37this idea that the warm cookie bite should be perfect. So like, it was like this, this engineered
11:43system, how often we baked, you know, how we delivered it, the fulfillment process. And I was like,
11:50very maniacal about it. And that seemed to really work well and resonate, but I needed a certain
11:55amount of scale to be profitable. And so they would like three stores, five stores. It was,
12:00they worked, the moments worked, the insomniacs were excited, but it didn't add up to much.
12:06And so it took a while and it took a while to like really understand that a retail business was
12:12still
12:12necessary. Like we needed to have a street side, incredibly impactful, late night thoroughfare driven
12:20in retail. And then if we attach our delivery system to that, it created enough brand awareness
12:26to be successful. So what would you say to people who are maybe experiencing similar problems?
12:32I've always been a believer in growing fast when you know, when you understand the opportunity in
12:39front of you, not just to grow for growth sake. So I think insomnia and maybe for better, for worse,
12:44I mean, it's worked for us, but like there was this kind of minimum viable product idea. Like we
12:49weren't going to open up an expensive retail shop or 10 of them. We'd open up one to make sure
12:53that
12:54that worked, right? We tried a vending truck. It worked. We tried a second. It worked. We opened 10.
12:58Actually those didn't work. So we had to stop and pivot. So I was, I believe in trial and real
13:04experimentation, but like clear measurement of the testing and learnings. And when you feel like you have
13:10the comp, you know, the correct data and you're confident in the approach, then go really, really
13:14fast. I think people sometimes put the cart before the horse. So we're talking about expanding,
13:19uh, you know, 350 bakeries. Uh, you, you talked about being so maniacal about that, that one aspect
13:27of the cookie. So my question is, as you expand, how do you ensure that all of these places are
13:34doing
13:35it the way you envisioned it and that it's delivering the customer experience that you
13:41want? I mean, it's a great, it's a great question, right? I think the, with scale always comes the
13:47opportunity for like that core message to be diluted, right? You're getting wider and wider, further away
13:53from the original founding. So some of it comes from training, right? You need to be incredibly
13:58organized around your training process, uh, making sure that your operating procedures are clear
14:04and digestible for your teams. Um, and then you have to be data oriented, right? Like there's
14:09certain KPIs and metrics that allow us to understand what a successful order looks like.
14:15And are we sharing that with the teams? Are we educating? Are we guiding? Uh, and are we holding
14:20people to them? I mean, that's, that's so far has proven to be, uh, our best path to success to
14:25make
14:25sure that experience is wonderful. And then we talk to customers. I mean, talk to customers. And this is
14:29something I did, you know, originally I spent as much time as I can understanding the, the, we call
14:35them insomniacs, like the lens that they have of the business, how it's evolving, how their preferences
14:40are evolving and make sure that our understanding of expectations are their understanding of
14:45expectations and that we're exceeding them. So talk to me about insomniacs because, uh, you know,
14:51this community that you built, like how do you foster that? How do you make people feel like this is,
14:57this is their brand. I'm an insomniac. Like, I love this. I'm part of it. How do you nurture that?
15:04I mean, I think some of it comes down to the emotion, that emotional moment I talked about
15:08at the beginning, like insomnia, it provides a warm cookie. It creates a connection. Like a warm
15:13cookie is a connecting, has connective tissue in it. And so can you generate that over and over again
15:20to create, you know, further, uh, further brand love, uh, you know, really, really further tethering
15:26with our insomniacs. Like I think for us, that's the singular principle. Um, but then there's the
15:31part of like, how do we, if you understand expectations, how do we wow them? Like how do
15:36we create what seems like a simple concept and silly concept yesterday? And a lot of guys like
15:41this purple cookie, uh, and just create something that's, that's new and unexpected and a reason to
15:48believe in it and enjoy the brand. Like it can't just be product. It has to be product and like
15:53a
15:53really strong positioning to, to really connect. So what does it mean to you? Uh, something that
15:59you started, you know, in your essentially your dorm room and now you're in Madison square garden,
16:06uh, you know, being sold at Knicks games. Uh, you're also being sold at Philadelphia flyers.
16:12Boo. No, that's, that's amazing for your business. Uh, I'm a Rangers fan, but, um, you know,
16:18what does it mean to you to like, see that? So, you know, I'm a big sports fan. I'm actually
16:22an Islander fan. So I understand your flyers. Um, but I'm also a, you know, I'm a, I'm a Philly
16:28person these days, certainly, uh, working in that market for over 20 years. You know, our approach
16:33to sports has been our approach to, um, almost everything, right? We believe in this concept
16:40of unparalleled reach. We want our insomniacs to enjoy our product in unexpected places, right?
16:45And create it. And when you think of sports, we want insomnia to be a little bit in the back
16:49of your mind, right? And cause there's, it's so prevalent in society. So that was the kind
16:53of the brand building component, but insomnia is so, it's so powerful in a stadium, uh, kind
17:00of, kind of setting because the cookies come out quick. They're warm. You can like in between
17:06halftimes or periods in hockey, you can run out into the concourse and get a cookie and get
17:10back to your seat before the next step or they drop the puck. And I felt very strongly
17:15that it, it kind of, it worked really well for everything we were trying to go after.
17:20It would build awareness. It would be product focused, um, and it could wow the consumer
17:25and exceed those expectations. And so far in all three instances, I think it's working
17:29really well and we're hopeful we can, we can kind of go a little bit deeper in the coming
17:33years. Is there a, uh, insomnia cookie puck on the way? Uh, it's been, no, but it's been
17:41discussed, but no. Um, so when things are going great, it's great. But, uh, as any small business
17:51owner will say, it doesn't always go great and there's moments of stress. Um, what have
17:58you learned about keeping calm and stressful moments? You know, over this past 20 plus
18:05years, a lot has happened in the world that has put in a tremendous amount of stress on
18:09businesses, big and small. How do you kind of find your way through stressful times?
18:15How do you keep your decision making clear and your head clear?
18:19I think in moments I struggle like everybody, right? You could see what's happening around
18:24you. I mean, in COVID, like it was incredibly challenging, um, for app, the whole universe,
18:29it goes without saying. Um, but that moment was really, uh, an opportunity to reinvent the
18:36brand in the way the consumer needed. Like we had this college base of stores and then one
18:42day, every college campus, the students had been, had, had left right overnight. And so how
18:47could we reach them? And so we quickly pivoted to nationwide shipping. We're able to put cookies
18:53and send them through the mail. We expanded our delivery zones and we reached insomniacs in a way
18:58that no one else could. I always feel like I've been forged through challenge because 23 years is
19:02a long time. And I've, I've, you know, I've seen the challenges in, uh, the financial crisis timeframe
19:08and certainly in COVID. And there's, it's just been a lot to digest in my seat. Uh, and through the
19:14more challenging times, I think the business has always come out stronger. Let's get into a little bit
19:19of process porn as, uh, as I just called it. Uh, sounds disgusting, but, uh, can you talk us
19:28through the process of, I mean, you have so many cookies on the menu. What's the process, uh, from
19:34idea to this is something someone can buy? Yes. I mean, our, typically our, our cookie innovation
19:40process is marketing driven. So like we're, we're looking for cultural moments to connect our insomniacs
19:48too. So like, you know, I mean, Valentine's day is called for a moment, right? So how do you,
19:52how do you build a cookie around Valentine's day? That's relevant and, and easy to, uh, connect to
19:59the consumer with. So we'll have a bunch of ideation around it. We'll say we need something
20:02for Valentine's day. We've done red velvet for years. So like we'll constantly shift on that a
20:07little bit. Um, and then we will go directly on Tuesdays. We call them tasting Tuesdays to our insomniacs
20:15in our flagship bakery and we'll, you know, we'll, we'll speak to them. Uh, we'll get back data from
20:20how they feel about a wide array of cookies. We'll take that. And oftentimes we'll put it into other
20:24bakeries and just make sure that the purchasing intent, that the quality of the product exceeds
20:30expectations, right? That's, that's the singular goal there. Um, and then sometimes we'll go a
20:34different path. We'll say, all right, what if we do something that just sparks interest that's
20:39differentiated? Um, we get, we did a bagel spice cookie, but years ago and like half the people
20:45loved it, half the people hated it, but it was great for business. Right. And so there's all
20:50sorts of ways to engage, but I really do like connecting the cookie to culture. Cause then
20:55there's a real 360 view of what you're trying to accomplish and, and get in people's minds.
20:59Like when they're experiencing a Valentine's day, when they're experiencing March madness,
21:04when they're experiencing, um, back to campus, right? Insomni is going to have something new
21:09and inventive and inviting to give you a reason to buy. That's great. That's, that's awesome. So,
21:16uh, we have a question of the week, uh, subscribers to our how success happens newsletter, uh, we're
21:22asked to give a problem. They wish a business would solve for them. Uh, and we had one reader,
21:29Mark write in and say, I wish there was an alarm clock type gadget that would
21:34give me an alert when my avocados were ready to eat. I always wait too long, forget they're there.
21:40And by the time I cut into them, they're black mush. Uh, so Seth, any thoughts on that? Any
21:46solutions for Mark? Do you think that's a good idea? I mean, it's interesting question. I feel like
21:52I, we all get this one wrong, right? But like avocados, I assume ripen at a certain rate based
21:58on the temperature around you. So like you probably don't need a device to figure it out. You just need
22:02to mark when you bought it and where it was, what it was like, whatever the firmness of it was
22:07at the
22:07time. Um, but yeah, I mean, it's big, it's a big wasted problem for sure. And I know we're big
22:12avocado eaters. I get it. All right. Great. Well that he sent that in, uh, by subscribing to our
22:18how success happens newsletter, which you can do it's info.entrepreneur.com slash HSH. Uh, and we also
22:26got a reader question for you. This came from Lisa, have you seen any impact on sales from
22:34Ozempic? Is that a cutting into cookies? It's a great question. I mean, I think it's cutting
22:41into consumption for sure across the kind of the food universe. You know, our demographic is, is
22:47younger. I mean, I think we're very Gen Z oriented, very collegiate. I don't know if exactly the Ozempic
22:53data is showing to be quite as prevalent in that demo. Um, but it's something we see,
22:59and we certainly see like there's the, the, the eating patterns are always changing.
23:04And if the share of wallet goes down, we need to make sure that we're more exciting and more
23:08engaging than ever before. Right. It keeps you changing environment and changing landscape,
23:12keeps you on your toes and it should make you better. That's great. And just speaking of winning,
23:16I'm just glad that cookies are back. Uh, cookies are back on the front. There was a moment where
23:21everything was, was cupcakes. I'm a cookie person. So, uh, I applaud your victories here.
23:28No, I appreciate it. I'll tell you, I've watched, I watched the frozen yogurt craze. I watched the
23:33cupcake craze. I'm like, there's definitely cookies are having a moment for sure. You know,
23:37when I think about insomnia though, there's such an element of endurance. There's like this long
23:41game nature to us. We've watched others come and go. And like, you know, we try to make sure it's
23:47not a trend business. All right. And now we're going to get into a quick little speed round.
23:53So Seth, what is a habit that you are happy to have and one that you wish you could ditch?
24:01Um, habit I'm happy to have. I get home every single night that I can and put my daughter,
24:06my youngest daughter to bed. Um, one that I wish I could ditch is I have a zero inbox policy
24:11on my phone
24:12and it's really bad. I wish I didn't have it. Great. Um, do you have a favorite way to turn
24:21off
24:21your business brain? I put my phone down, uh, for two hours every, every evening. I mean,
24:28I'll look at it towards just to make sure I didn't miss anything, but like I try to unplug in
24:31general.
24:32That's great. What's something that most people love, but you secretly can't stand?
24:40Oh man. My team always says about me that I'm like, I'm very critical of, of, uh,
24:45things. I have very strong opinions. Um, give us why. Um, I didn't like the show, the wire,
24:51even though everyone loved it. I really didn't like it. Yeah. So monster. No, I have so many examples
24:57of that and entertainment for sure. Okay. That's great. And then finally, who's the ideal customer
25:05for you? Cookie monster or Santa Claus, both noted cookie eaters?
25:12Oh, that is tough. I mean, it's a cookie monster. It's such a classic. I think, uh,
25:17always give him the nod. Okay. Sounds good. Excellent. Well, so how can people keep up with
25:23all things insomnia? What's the best way for them to know what you guys are up to?
25:27Uh, our website and sound cookies.com Instagram, tick tock, uh, all, all forms of social media.
25:34And we try to be engaged in the 3d universe as well. It should see more activations and
25:38entertainment coming out of our brand in 2026. So, uh, hopefully we're out there all the time.
25:44Awesome. Awesome. Well, uh, so great talking to you every time you said warm cookie, my stomach,
25:50uh, gave me a gurgle. So I gotta go, I gotta go bake something, I think, or maybe, uh, no,
25:57I'm going to order some insomnia. That's what I'm going to do. Uh, but, uh, so great talking to you,
26:02man. You as well.
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