Advice Line with Seth Berkowitz of Insomnia Cookies

Key takeaways

Insomnia Cookies aims to grow to 1,800 stores globally without franchising, maintaining direct control to ensure quality and innovation.
Seth Berkowitz believes that brands should earn growth by cultivating consumer love and engagement first, rather than expanding recklessly.
Focusing on the core products that drive revenue—like best-selling items—helps brands improve marketing efficiency and customer targeting.
For brands targeting different buyer and user groups, the primary marketing focus should be on the end user, especially if they are the ones who create social buzz.
Using local pop-ups, collaborations, and experiential marketing are effective ways for niche brands to educate and engage consumers.
Partnering with hotels and resorts for corporate gifting or inclusion in events can rapidly increase product exposure and build brand awareness.
Gathering customer data through engagement tools like QR codes can inform targeted marketing and help build a loyal community.
Simplifying a product line and deeply understanding the customer lifecycle enable sustainable growth for evolving brands.

Summary

Introduction and Overview of Seth Berkowitz and Insomnia Cookies

The episode begins with host Guy Arroz introducing the Advice Line segment of How I Built This Lab, inviting callers with business challenges to share their stories. Seth Berkowitz, founder and CEO of Insomnia Cookies, returns as a guest. Seth recounts how he started the cookie delivery business while in college to satisfy a late-night craving, initially delivering from his dorm. The conversation highlights Insomnia Cookies' growth from a few locations to nearly 400 stores worldwide, with aspirations to reach 1,800 and become a global chain.

Discussion on Franchise Model and Growth Strategy

Guy Arroz probes Seth Berkowitz on his decision to operate company-owned stores rather than franchising, despite the potential rapid expansion franchising could offer. Seth explains that Insomnia Cookies’ business is highly seasonal, operates off hours, and relies on multi-channel sales, making franchise management complex. He emphasizes the importance of controlling quality and maintaining innovation, which are easier with direct ownership. Seth advocates for earning growth through consumer love rather than just expanding quickly, highlighting the importance of deep understanding and engagement with local markets.

Insights from Seth on Brand Building and Customer Focus

The discussion shifts to how Seth views his early success and current expansion. He stresses the importance of earning growth by building brand love and community engagement. Seth describes his approach of testing new ideas and products directly in stores to stay relevant after nearly 25 years. Conversely, he reflects on how Insomnia's core customer shifted from college students to city dwellers and suburbs, following customer lifestyle changes. He underlines the value of understanding customer lifecycle and tailoring growth accordingly.

Caller from Congo: Kahindo’s Luxury Fashion Business and Growth Tactics

Kahindo, a caller from New York, seeks advice on her African-inspired luxury fashion brand, Kahindo Matin, which specializes in special occasion wear rooted in Congolese heritage. She explains her recent pivot from wholesale to direct-to-consumer sales, focusing on bestsellers and small boutiques. The hosts advise her to concentrate on her top-selling products, gather customer and purchase data, and leverage local pop-ups and collaborations to deepen engagement. Seth emphasizes the importance of showcasing her designers’ stories and understanding her niche market.

Caller from San Diego: Tara’s Sauna Hat Startup and Branding Strategy

Tara Gilman from San Diego calls to discuss her Saunasociety brand, which offers stylish, functional sauna hats designed to extend and enhance the sauna experience. She shares her journey from personal need to product design, emphasizing her desire to build a brand synonymous with sauna culture. The hosts recommend focusing on experiential marketing—getting her product into local wellness centers, spas, and resorts—and using photo and video to educate consumers. Seth suggests exploring business-to-business channels, such as hotel partnerships and corporate gifting, to accelerate brand awareness and adoption.

Caller from Houston: Carol’s Collegiate Bag Business and Marketing Challenges

Carol Dishon from Houston introduces her company Desden, which makes collegiate clear bags and accessories inspired by stadium policies and aimed at female fans. She reports solid growth from 2007, with sales exceeding $2 million annually, mainly through wholesale. She asks how to market her brand when the buyer (grandmothers, mothers) differs from the user (daughters, granddaughters). Seth advises her to focus on the end-user, mainly students, by creating social media content and building brand relevance in that demographic. The hosts also suggest strategic collaborations and QR code promotions to gather customer data, as well as expanding licensing selectively.

Closing Advice from Seth Berkowitz on Business Foundations and Growth

In the episode’s closing segment, Seth Berkowitz reflects on his early days, emphasizing the importance of listening to consumer feedback and behavior. He advises aspiring entrepreneurs to cherish customer love and insights, which guide product and service development. Seth recounts how simplifying his product line and focusing on core offerings helped Insomnia Cookies grow sustainably and maintain quality. The episode ends with Seth’s general advice to follow consumer signals and nurture brand loyalty for long-term success.

Show notes

Today’s callers: Kahindo from New York is looking to reboot her African-rooted fashion brand after losing a few key retailers. Then Tara from San Diego considers avenues to educate consumers about the benefits of her wool sauna hats. And Carol from Houston wonders whether to market her collegiate purses and accessories l to students or their gift-giving family members.

Plus, Seth lays out his ambitions to quadruple Insomnia’s locations and become a global chain — without turning to franchising.

Thank you to the founders of Kahindo, Sauna Societé, and Desden for being a part of our show.

Be sure to listen to Insomnia Cookies’ founding story as told by Seth on the show in 2024.

This episode was produced by Casey Herman with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Annlie Huang.

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