Rule-Breaking Entrepreneurs Share Stories of Success

August 27, 2008

In 1949, when Shirley Schmitz graduated from Arizona State University, women leaders were an anomaly in business. Now 80, she is charismatic and sharp, and could easily fill a book with insights earned during her own high-octane career. But instead of dwelling only on how she made it, Schmitz convinced 11 other entrepreneurs -- all brash rule-breakers from a range of industries -- to spill the beans, too.

In her book, "Guts, Imagination, Vision; Conversations with Innovators-Changemakers," the 11 tell their stories to Schmitz, sharing instructive mistakes and failures as well as winning strategies.

Luckily, Schmitz chimes in often, contributing lessons from her own "adventure in the people business." The book is the natural outgrowth of her passion for helping others succeed. In 1995, Schmitz founded and provided charter funding for the Center for the Advancement of Small Business, which evolved into the W. P. Carey School's Spirit of Enterprise Center. And in 2003, she established the Shirley G. Schmitz Foundation, which provides scholarships and training to college students interested in starting and opening a business.

"Guts, Imagination, Vision" delivers a series of business cases -- seven of them winners of the W. P. Carey School's Spirit of Enterprise Award. One of the most compelling is told by childhood buddies, Eileen Spitalny and David Kravetz, the 42-year-old founders of Fairytale Brownies.

A sweet fairytale

While most business gurus warn against going into business with friends, Spitalny and Kravetz work so well together that Fairytale Brownies reported revenue of $9.3 million for fiscal 2008. The company was founded 16 years ago in Chandler, a suburb of Phoenix, Arizona.

Throughout the book, Schmitz acts as narrator as well as interviewer, teasing and coaxing introspective answers from her subjects instead of the usual biz-talk sound bites. Asked "what do you believe are your greatest strengths?" Kravetz starts out by answering, "my ability to multi-task."

It's a good answer turned banal by overuse, and another interviewer might have been satisfied with a commonplace tip, but not Schmitz. And so Kravetz keeps talking, explaining the importance of design -- in not just the symmetrical brownie itself, but in picking packaging colors, in developing internal policies. He links design to an overall goal of becoming faster and more efficient company-wide, then introduces another Fairytale Brownie priority: being "user-friendly."

"User-friendly is really important to me now in all aspects of business and my personal life," he continued. In college, his Stanford University senior-class project was designing a toilet-paper dispenser. The dispenser won a prize for best design. A paragraph later, readers learn that Kravetz is an Apple Computer "evangelist" thanks to Apple's user-friendly system.

For their start-up, Kravetz and Spitalny scraped $14,000 together and asked permission to use the Kravetz family brownie recipe. They made small changes, such as replacing regular chocolate with Belgium chocolate.

But why sell brownies? Why not cookies or donuts or miniature pecan pies? "We both liked food, we both wanted to be in business together, we both wanted to offer a product, not a service. We saw Mrs. Fields become famous. We saw Ben and Jerry's become famous. There was no big brownie brand name," Spitalny explained.

Knowing when to transition

Marketed largely through the Fairytale Brownies web site and catalogs, the business peaks around the winter holidays, which means a seasonal labor force that dwindles to 45 workers in the spring and summer, then swells to 175 in the fall and winter.

Kravetz defines himself as "curious," while Spitalny says she's "laid-back and easy-going." It's an almost perfect pairing for business purposes, leading to what Schmitz observes as "simply the best interpersonal skills I have seen in my long career." Interestingly, although the friends began as bakers aiming at producing "the best-tasting brownies in the world," neither lasted too long in the kitchen once the basic brownie began selling. Instead, Spitalny plunged into marketing, while Kravetz grabbed strategic planning.

While speaking with a reporter, Spitalny emphasized how important it is to make that transition at the right time, for the appropriate reason. "I needed to go out and sell. David needed to run the business -- working on our Web site, developing a catalog, building the brand strategically. My husband stayed a baker longer," she said. "It's always that way, you stop making the product yourself, hire others to replace you, and focus on expanding and running the business."

Trying to do it all, from production to long-range planning, is a mistake often made by entrepreneurs, Spitalny added. "You must realize you can't do it all yourself. And it's hard to grow if you're fearful, so you must hire and empower others. Be willing to share your knowledge, because everything is shared in a successful business," she continued.

Thanks to their meticulous business tracking and reporting, Kravetz and Spitalny know exactly who their customers are. They are broken into three groups: buyers, inquirers and gift recipients. Since buyers are "bread and butter" return customers, Spitalny designs a circulation plan targeting them. You know how you get four or five catalogs from your favorite stores in a short period before the holidays? That's a deliberate attempt to snag the early-bird shoppers, the on-time buyers and those last-minute, frantic folks.

Different circulation plans target the other buyer groups. Back when Fairytale Brownies was brand new, Kravetz and Spitalny simply couldn't afford to produce a catalog. As Spitalny noted, "you have to watch the dollars to avoid too big a loss if the circulation plan doesn't increase sales. It can bankrupt you easily."

It's been a bucking-bronco ride since their 1992 start, complete with exciting coups (Fairytale Brownies are included in Hollywood award-show goodie bags) to the disappointing splats (packaging the brownies in tins instead of pastry boxes). "We've still got tons of those tins around here somewhere," Spitalny said with a laugh.

Despite "Tingate," and other disasters, Fairytale Brownies has earned a stellar reputation, both for its delectable brownies and the business acumen of its owners. In addition to landing other small-business awards, the company was named a "Spirit of Enterprise" winner in 2005.

Schmitz's book will be officially launched at the 12th Annual Spirit of Enterprise Awards luncheon on September 25. 

Bottom Line:

Author Shirley Schmitz was the early champion of the Spirit of Enterprise Center. The center's work includes:

  • Assisting hundreds of businesses each year by providing them guidance and connections to key resources. This program is known as SMART (Spirit Mentoring Resource Advisory Team).
  • Participating in inter-disciplinary projects such as "Entrepreneurship at ASU," an initiative supported by the Kauffman Foundation.
  • Cultivating close involvement with existing programs, including the Edson Student Initiative, ASU Technopolis, and Innovation Space.
  • Supporting an academic concentration or emphasis in entrepreneurship that enables undergraduate and graduate students to understand the nuts and bolts of entrepreneurship so that they might chart their own path to making a difference.
  • Bringing entrepreneurial business leaders into the classroom to expose students to the mindset, inspiration, and passion of entrepreneurs
  • Linking teams of W. P. Carey students with businesses to serve as class projects, case studies, and other learning objectives that result in value-added services for the business. This program is called STEP (Student Teams for Entrepreneurship Projects).
  • The annual Spirit of Enterprise Awards, which brings together over 1,000 entrepreneurially-minded individuals each year to showcase leading local and regional companies that best exhibit the cornerstone attributes of Spirit: Ethics, Energy and Excellence in Entrepreneurship.