Kickstarter helping launch local eateries

Donut Cooperative is one of them

Kickstarter helping launch local eateries
Benjamin Carter Grimes

The people have spoken. And they want roast beef. And doughnuts. And popsicles. Time will tell whether they also want soul food delivered to their door or a new Irish pub in downtown Buffalo, Minnesota. If they do, there's an easy way to vote: They can toss $25 or $50 in the hat on Kickstarter.com.

Kickstarter has been democratizing venture capital since 2009. Artists, authors, entrepreneurs, and other creative types post projects; those who want to see the projects come to fruition pledge funding, as little as $1 if they like. In exchange, rather than owning a piece of the business like a traditional investor, they get a little reward—a CD, a book, a T-shirt. But there's no way a plugged-in reader doesn't know that already, because news of Kickstarter has gone seriously mainstream in the past few months, so much so that some bloggers are now begging their artistic friends to stop the "Internet begging."

The participants are big, like ousted New York Times ethicist Randy Cohen, who is raising money for a podcast, and small—tiny-small, like the Delaware poet who was raising $1 (singular) for a poetry project. (That got funded.) While the largest category of projects is definitely albums, followed by small films and photography projects—one-off sorts of things that tend to result in a tangible object—there are also a handful of food projects currently seeking funding in Minnesota. Inspired by the recent success of the Donut Cooperative and Land of 10,000 Licks, both of which achieved their funding goals in August, these entrepreneurs are looking for a little help kick-starting what they hope will be long-lived enterprises.

More than 150 backers helped Dawn Otwell and Jacob Schumack open Donut Cooperative
Benjamin Carter Grimes
More than 150 backers helped Dawn Otwell and Jacob Schumack open Donut Cooperative

Location Info

Map

The Donut Cooperative

2929 E. 25th St.
Minneapolis, MN 55406

Category: Restaurant > Bakery

Region: Seward/ Longfellow/ Minnehaha

What I learned from talking to the newbies and to successful Kickstarters is this: It's not about the money—at least not entirely.

Few things are guaranteed in the food business, but of this you can be sure: When the Bloomy's Roast Beef truck parks in downtown Minneapolis or St. Paul for the first time next April, there will be a line down the block. That's in part because owners Katie Johnson and Ryan Bloomstrom are hardworking dynamos. But more importantly, it's because they have savvily used Kickstarter to build an enthusiastic customer base months before they make their first sandwich.

One morning in early November, Johnson opened her laptop and had to stifle a happy scream: Bloomy's Roast Beef had reached its goal of $10,000. Within 30 days, 56 backers pledged an average of nearly $200 each to get the food truck off the ground. Many have become devoted followers of "Bloomy's Blog," chronicling the venture. One even offered up his family's cherished coleslaw recipe for the cause. In exchange for their help, they'll all get some combination of free meals and Bloomy's gear to wear around town, and they'll be invited to a launch party where they'll get to sign the truck itself.

"And when they see that truck around town, they'll think, 'I'm a part of that,'" Johnson says. "Everybody has a desire to belong to something bigger than themselves. A lot of people don't find that in life. I think people enjoy seeing what they've helped us grow." And when customers feel like a part of your business, they just might start doing some of your marketing for you.

"Kickstarter is a brilliant tool to get people interested," Bloomstrom says. "They want to see you succeed, because they're involved. They'll put it on Facebook and shake the bushes for you."

WHEN THE DONUT COOPERATIVE opened in early November, it also had a ready horde of customers before the first doughnuts came out of the oil. More than 150 backers had pledged a total of $12,032, and they—and their friends—were all eager to get their hands on treats like sea-salt potato-chip doughnuts with butterscotch caramel sauce. In fact, the Kickstarter buzz is working almost too well: Lines out the door are still common, and demand often outstrips supply.

Head baker and menu designer Jacob Schumack says Kickstarter was a great way for the Donut Cooperative to test out a business idea before running with it.

"Without Kickstarter we wouldn't be here," Schumack says. And not just because of the capital the cooperative raised online. "Kickstarter helped us gauge whether people were willing to put their money where their mouth is. It gave us hope that people were really excited."

Backers got swag like buttons, T-shirts, free coffee, and free doughnuts. The 15 people who pledged $250 or more get to design a custom doughnut flavor that Schumack has to try to concoct. The lingonberry doughnut was easy (and delicious). But the chili dog doughnut is more challenging: "I've got the recipe to the point where it's palatable when it's hot, but it's not so great when it's cooled down."

But were people giving for the swag or out of the goodness of their hearts? Schumack says neither. "They weren't just being philanthropic," he says. "They really wanted to have doughnuts here. They were asking us to open."

LAST YEAR, Krista Leraas raised $8,200 for Backyard Harvest, an urban farming project of the Permaculture Research Institute. She turned to Kickstarter again this year when she and business partner Dina Kountoupes wanted to add a social justice component to their new farming venture, Harvest Moon Backyard Farmers.

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4 comments
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I don't get it, it's not venture capitalism when you're not getting money back from a successful business. Kickstarter is more like business begging/charity.

 
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