Finding the Opportunity Through Business – Crushing COVID

J:
Welcome to the BiggerPockets Business Podcast show number 72.

Michelle:
You really have to push yourself to think, what’s my end goal and how can I do it? Not can it be done, because anything can be done, right? Honestly. If it’s something you’re passionate about, try to keep your slate clean and have an open mind and think, how can I do this?

J:
Welcome to a real world MBA from the school of hard knocks where entrepreneurs reveal what it really takes to make it. Whether you’re already in business or you’re on your way there, this show is for you. This is BiggerPockets Business.
How’s it going everybody. I am J Scott. I’m your cohost for the BiggerPockets Business Podcast. And I am here again this lovely week with my lovely cohost, Mrs. Carol Scott. How’s it going today, Carol?

Carol:
So well, and like so many other parents and business owners, trying to juggle it all as we integrate the kids back into school. If you’re a parent or a caregiver or just a community member, kudos to all of us for just working together to do everything getting our kids back into school, being there to help them learn. Whether they’re learning from home, whether they’re back in the classroom, just thanks to everyone for all working together to do the best we can do for our communities.

J:
Absolutely. I think you said it all there. Let’s just jump into today’s show because we’ve got a great show today. Our guests today are Michelle Oppelt and Samantha Mooney, and they are founders of a company called Smartycat Kids and actually another company called SmartycatTV. And actually this show is all about the evolution from Smartycat Kids to SmartycatTV. It’s more inspiration and motivation for anybody that’s struggling to pivot through COVID and their business. If your business is struggling through COVID, this show is really going to give you that inspiration and the motivation to kind of change up and do things differently to kind of get you through and get you to the next level.
Michelle and Samantha are in the process of converting their what’s essentially an in-person learning business. So they teach classes to kids. Everything from science to baking, they go into schools and they teach kids. And obviously with COVID these days, you can’t just go into schools anymore and teach kids. So they’ve had to basically not just pivot their business, but they figured out how to take their business to the next level. Basically completely change the paradigm and business model around which they’ve been operating and start an entirely new business that is based on their old business, but it’s going to be taking them to places where their old business couldn’t take them.
Just a great episode. In this episode we talk about partnerships, we talk about breaking through plateaus in your business, and most importantly we talk about making your business COVID proof and really being able to pivot your business to take advantage of the new opportunities in the new normal. Again, that term, I hate using that term, but it’s so true; taking advantage of the new normal. So if you want to find out more about Michelle, Samantha, about Smartycat Kids and SmartycatTV, check out our show notes at biggerpockets.com/bizshow72. Again, that’s biggerpockets.com/bizshow72. Now, without any further ado, let’s welcome Michelle Oppelt and Samantha Mooney to the show. How are you guys doing?

Samantha:
How are you?

Michelle:
Hey, doing great. Thank you so much for having us.

Carol:
We are so looking forward to chatting with you. I’ve got to tell you, I am a huge fan of both of you. I think you’ve done incredible things over the past several years and continuing on now with Smartycat Kids and SmartycatTV, and cannot wait to dig in and hear all the great things you have to share with our listeners. Before we get started into the whole journey, I would love to set the stage for everybody. Well, one of you tell us what… let’s actually take this into, we’re going to kind of do this interview in two parts. What was Smartycat Kids and what is Smartycat Kids? But let’s start with what was Smartycat Kids in the beginning? Kind of the origin, who started it and how it became the product that it is?

Michelle:
Yeah. Sam, if you don’t mind, I’ll answer this one. I’m Michelle. I started Smartycat Kids 12 years ago, about 12 and a half years ago now. And at the time my youngest son, well, my oldest son actually, was three years old. So he was in preschool. My educational background is in bio-science. I’m a science nerd and I was going to be a high school biology teacher and then decided to take some time off. I wanted to stay with him and then he got to preschool age so I said, “Well, I’ll go teach at a preschool so I could be that helicopter mom that’s in the room next door.” So I chose this preschool that said they had a great science program for kids and I was like, “Oh, this will be great. This will be a perfect fit.”
And when I got there, I realized it was really lacking and it could use a lot of improvement. So my husband at the time said to me, “If you see a need, go fill it, go do something about it.” So I said, “All right. Well, I’ll put together some fun science classes for my son and some friends.” I rented a room at a local church and put out a flyer, got about 10 kids in the first class. It really didn’t start as a big dream of I’m going to start this empire. It really was just filling a need for my son and some local kids. But it pretty quickly started getting requested by… there was a recreation department right next door and they heard about it from the kids going to the church. There was a preschool in the church and those parents started to hear about it.
So I started to get requested left and right to run these fun hands-on science programs for kids. And that was when I had the aha moment of, “Okay, I don’t need to go be a high school biology teacher. I can make something of this and I can still teach science and it’ll be super fun and on my own terms and it’ll be great.” So it started pretty much as a one woman traveling science show. And then about two years into it, coincidentally I had met Samantha and she was kind of just starting her post-school journey, was trying to find her path and one of the things she had said she wanted to do was start a cupcake catering company. I love to decorate. She loves to bake. I said, “All right. I’ve started a business. I might have some experience that can help with you. Let’s do this.”
So we started a cupcake catering company together and quickly after started baking programs for kids, teach them to bake and decorate. Loved baking with kids, ended up hating baking for adults. So anyway, that’s kind of how Smartycat Kids started and I came to meet Samantha. And then we can probably dive into this a little bit later, but we ended up obviously joining forces and the science program and the baking program kind of merged and we ended up doing a lot of different enrichment programs, all science, art, and hobby based. And that’s how Smartycat Kids up until COVID had kind of morphed.

J:
So what was the original plan? You have the science classes I assume that’s kind of starting to do well, you’re in schools, you’re taking off and then the baking comes in. Was the original thought that you were just going to roll that into the science classes and say, “We’re going to use the same sales channels, the same marketing channels. We’re going to teach in the schools just like the science.” Or did that fundamentally start to change the business where you said, “Okay, we’re going to do something different now that we have a second, I don’t want to call it product, but a second source of content to teach.”

Michelle:
Yeah. Initially the two were completely separate. We had no vision of combining the two. And then a couple of things kind of happened that led to that fate, I guess I would say. About a year into running this other company, it was called the Cupcake Experience, which was super fun for kids. But about a year into that, I had moved from New Jersey, which is where we had started, where we were based, down to Tennessee and was at a point where I was doing all the backend stuff, all the computer work, the advertising, creating a curriculum. That could all be done from my computer. So I moved to Tennessee and Samantha stayed in New Jersey and she kind of ran the hands-on operations, the day-to-day stuff.
Well, the two businesses were totally separate at that point. It just so happened that I had been training somebody for Smartycat Kids to take over as the program manager for six months and one week into me moving, she quit very abruptly. So I called Samantha one day crying from a furniture store because I didn’t have furniture in my house yet and I was sitting on the couch in the store just in shock, what do I do? Because our cupcake company was very new. Smartycat Kids was now four years old at that point, my main source of income. And I had just moved and I was eight months pregnant with my son. So anyway I’m bawling and I’m saying, “Sam, I don’t know what I’m going to do.” She immediately, like without a hiccup was like, “I know how to run these classes. We’ve been running the baking classes. Science is a different subject, but I know how to logistically run these programs. You tell me what you need to do, I’ll start today. You just tell me what you need to do.”
And so she immediately took over, she was a rock star and honestly saved the Smartycat Kids from going under. And so it wasn’t long after working with her in that capacity and seeing what she was capable of that I realized, one, she should be a partner with Smartycat Kids. She is absolutely owning it and should not be in an employee role, and she brought so many unique skills and values to the table that I thought it would be a lot better to have her as a 50/50. This needed to be our baby, not just my baby. And then that’s when we started talking about, “Okay, well, let’s go ahead and officially get rid of what we don’t have a passion for,” which was the baking for adults. Let’s take what we do have a passion for. We’ve got the science, we’ve got the baking.
Then it started to become a conversation of, “All right, the infrastructure’s there for Smartycat Kids. We know how to run that successfully. It’s been growing. What if we do take the baking?” We have all of these contracts already set up. Instead of just offering science, now we can go back to them and say, “We’ve got 10 different class options,” and immediately able to grow exponentially just from the contracts we already had. It wasn’t a preconceived thing. It was really just having to adapt to a crazy situation, but it ended up forming this idea that was like, okay, this could be better for the company in general all around. Hopefully that answered your question.

Carol:
Very well. I love that. And I’m curious too, especially because Michelle you were talking about how you’re a science nerd. Samantha, you were talking about how the cupcake company was your brain child. What is your background?

Samantha:
Well, when I graduated high school, I was like most 18 year olds. I was not sure what I wanted to do with my life and I had one chance at college. My parents were like, if you’re going to go, you get one chance. Pick where you want to go. I didn’t know and I didn’t want to waste that one chance and get out of school and have all this school debt and not be doing what I’m really passionate about. So I took some time. I was instructing classes for Michelle and then I was working three other jobs at the time and going to community college because that was the deal with my parents. I had to do something with schooling.
I was working at this salon, this hair salon, and we had gotten a new computer system and they had asked me to put in an appointment or something and I had a hard time doing it. My boss, the owner of the salon, looked at me in front of all my coworkers. She looked at me and she said, “What, are you stupid?” Like why can’t you do this? I took everything in me not to cry. I waited till the end of the day and I told my manager, who was also one of my friends, I said, “Listen, I can’t do this. I can not work for somebody that will just call me stupid in front of all these people. That’s just not right.”
I left work that day. I called my mom and I said, “I can’t do this. I need to have my own business. I am not going to treat anybody the way that she treated me or made me feel, because nobody deserves to feel like that.” That’s when I said cupcakes was my thing. I went home and I decided, I researched a business plan and I was getting to writing my business plan and Michelle called me, she’s like, “I heard what you want to do.” She was like, let’s join forces. Honestly the rest is history and we’re where we are now.

J:
That’s awesome. Okay. I want to get into something a little bit more tactical, and this is something that I dealt with a lot, I’m sure a lot of our listeners deal with, but that’s partnership. So Michelle, you had a business, presumably you were making money and you had customers and you had instructors working for you and basically you had a business that was self-sufficient. So Samantha comes along and you guys decide, okay, now let’s join forces and team up. What were kind of the discussions around bringing Samantha on as a 50/50 partner?
Because I know I’ve been in situations where I’ve had a business and I brought on partners and 50/50 is kind of like, “Well, it is my business.” Then I’ve been in other situations where I’ve joined with somebody else and it was their business and I was kind of like, “Oh, I don’t know if I feel right being a 50/50 partner in your business.” So there’s always that back and forth between what’s the right relationship and how do we turn this from my business to our business. Did you guys have any of those struggles and what did you do to kind of resolve any issues there?

Michelle:
Yeah. I mean, it was a little bit of a unique experience for us because we did own the other company already 50/50. So the revenue that that was generating was already 50/50. And then I had to really sit there and think about, “Okay, if we merge the two and then we’re able,” because she had a lot of great ideas for other types of programs we could offer. I’m, like I said, the science nerd. So I’ve thought about all the chemistry, the physics, all the science based stuff, but she had a lot of great ideas for, okay, we can offer art and hobby also and here’s what I would like to bring to the table.
So I thought about where it would bring Smartycat Kids if she was on as a partner, how much would it grow if I’m still trying to do it myself and she’s just say my program manager as an employee, or how much could it grow if she’s coming on and now I’m gaining from all of her ideas and her. I call her my muse because, and this will kind of lead into I guess my advice for working with a partner. But I’m a very big picture thinker, super creative side of the brain, which is funny because I love science. But I’m a super big up here thinker, 30,000 foot view. And Samantha has more of a hard time conceptualizing things.
But once you give her the concept, she’s much better at saying, “Okay, well this is how other people are going to perceive it or this is… let’s reign this in a little bit and let’s funnel it down to the direction that I think would hit best for our consumers,” because I just think we should do all the things and I’m like way out there, and she was like, “Okay.” And then helps me. That’s why I say she’s like my muse. She’ll help me get it in the direction that it needs to go.
So knowing that, it’s like, okay, well, how far could I get on my own versus how far could I get if we’re doing this together, equal partners? I don’t want her to feel like she’s a subordinate to me. I want her to be there 100% in it. We’re 50/50 partners, but we’re both in 100%. So I just had to weigh those options and talk with her about it. I gave her the option too. Would you rather be an employee or would… what do you think about joining forces? And we had a discussion.

J:
So I guess that answers part of my question. I didn’t realize you guys were 50/50 in the other business. So you already knew each other, you already knew that you worked well together. And so then making that jump in the science business and the Smartycat business, that was kind of more an obvious place to go. Got it. And I think I cut you off, but it sounds to me and I apologize, but it sounds to me like it’s a great partnership because you’re more of the innovator, the dreamer, the inventor, and she’s more of the execution, tactical, get things done. In my experience, I think that’s just such a great partnership because you two aren’t stepping on each other’s toes, you just compliment each other really well.
Samantha, from your perspective, did you have any issues or any concerns kind of jumping into this business with Michelle that was kind of already established, that she had already… she was running it the way she wanted to be running it. Were you at all concerned that, well, it’s going to be hard to be a 50/50 partner because she’s already set in her ways and can’t really, like she’s not going to let me jump in and do what I want to do. Was there anything there that you were concerned about or that you guys addressed?

Samantha:
To be 100% honest, I didn’t have a lot of concerns. Michelle and I, the one thing about us is we have a really good communication. I know they say that all the time, but communication is really key. If there’s something bothering us, if there’s something wrong, good things, bad things, we talk to each other about it. I mean, we haven’t really had an argument. We get annoyed sometimes, but that’s just human nature. But we have, these past 12 years we have not argued at all. We just really talk things out. And when I got on board, I just told her what my ideas were and she was really open to all of them and we just worked off of each other to be honest.

Carol:
Excellent. I love it. Talk to us about, you form this great partnership. It was a natural fit from the beginning. Talk to us about the growth in the evolution over the next several years of the business. You talked about your original two product offerings. Talk to us about the different types of classes that you offered. And I would love to hear some numbers. How many locations, for example, you were doing classes in, how many kids. Anything financial you’re willing to share. Talk to us about all that growth that happened over the next several years together.

Michelle:
Yeah, I would say, let’s see, we started 2010. No, 2012 is when we officially merged everything together, Smart as a new LLC that we’re 50/50 partners of. I would say, I mean, maybe had a couple of hundred students at that point. I’d really have to look back at the numbers. But I do know that in our first 18 months we doubled. And so that was a clear sign right there that we had made the right decision. It just kept growing and growing until maybe two years ago, we kind of hit a ceiling and we can dive into a little bit of that if you guys want to about why we think that happened, because I think that’s probably beneficial for people to hear.
But we’d gotten it to the point we were in a couple of dozen different locations, we had started a branch down here in my area, in the mid South, where we had a few thousand students a year. And then we were on the trajectory pre-COVID to start partnering nationally with other women like us or men who wanted to start enrichment programs in their area. So it was on a good path and we were featured on CNBC, which helped a lot too. I think it was two years ago, four years ago. I’d have to look back.

Samantha:
2017, 18.

Michelle:
Okay. Three years ago, I guess. Just want to highlight. But anyway, we were on a pretty good path until COVID hit. But even prior to COVID we had hit that ceiling, I want to say around 2018 where we really flat lined and we had to look at our… and we were getting burnt out to be honest. We had to look at each other and say, okay, what’s going on here? Because that burning passion that we had, that like, let’s go get them, let’s take over the world feeling that you really need to get started because it’s so hard and you’ve got to push through so many obstacles, that was really starting to fizzle. And we had to take a hard look back and say… like were close to walking away from it at that point. We were really burnt out and just exhausted and didn’t feel like we were growing anymore.
And I think what happened for us was that, so we have this… I started as one woman’s science show. I loved it. I’m in front of the kids, right? It’s great. But you can’t scale that. I can only go to so many locations a week. So obviously I just start hiring people to then be me and go to these locations for me. And then we get to the point where Samantha’s on. Now we’re at the point, six years later, when you’ve got thousands of students and whatnot, and you’ve got all these layers of employees and it’s removing us further and further back from, I guess, “the front lines”, right? I’m not there inspiring children anymore. Now I’m putting out fires constantly, and Samantha too, with instructors and principals who are kind of being… I won’t even go there, but all these fires you got to put out.
And it’s like that passion for seeing the kids faces light up when we’re doing something awesome with them and letting them get their creativity out and all of that, we weren’t seeing that day-to-day anymore. So that was really when we had to take a step back about 2018 and say, “Okay, what are we going to do differently that can get us back to our core values, our core mission so we can stop.” We didn’t want to just keep building more and more and more locations because it would have just meant more and more employees and keeping removing us from that. That was when we started going on the path of finding kind of like a franchise model, except we didn’t want a franchise because that would’ve met charging people a huge upfront fee and all these legalities with it.
So we kind of decided we’ll give people the option. We’ll coach you, we’ll show you how you can do it and then you can use our licensed curriculum, or you can partner with us and we’ll show you how to do it that way. Like we can find more Samanthas and Michelles across the country to stay with our mission of getting in front of children but working with people who are just as passionate about it as we are, which you just don’t find with the part-time employees that are there to make a quick paycheck.
Anyway, 2018 is when we started to really build that up. Unfortunately that’s when COVID hit as we were getting ready to roll everything out and COVID just completely… we can’t teach people how to conduct in-person classes when nobody’s going to class anywhere, right? So that was when we had a huge, just had to change everything up.

Carol:
I would love to follow up and clarify even a little bit more on that. It sounds like you had already realized in 2018 you were plateauing a bit. You had to take a step back. You were realizing that there were so many layers in between what you now had to do and what your original passion, what your original driving force was for starting this business. You realize that you had to do things differently. You finally got these systems and processes in place to launch it. It sounds like right about the beginning of 2020, correct?

Michelle:
Yeah. Towards the tail end of 2019 is when we were really rolling everything out.

Carol:
Oh my goodness. The timing, right? Are you kidding me? You’re finally in a place to just blast this thing out on a national level. It sounds like not only could you not necessarily not expand it nationally, I would suspect that even what you already had booked in your New Jersey and Tennessee locations, did that come to a screeching halt as well?

Michelle:
Absolutely. I’ll never forget it. March 11th, Sam calls me, “Hey, they’re…”

Samantha:
I was at the grocery store. I’m like, “Michelle, all of these contracts are emailing us and they’re canceling one by one by one.” I’m like, “I don’t know what we’re going to do.”

Michelle:
Yeah. And of course at that point it was being talked about, well, we’re going to shut schools down for two weeks. So it’s, all right, well, that’s going to mess with our spring session that was about to roll out. And then it became really obvious within a week or two this is going to be a longer term thing. And so it was just one after another after another canceled contracts. All of spring was wiped out in about a week and a half, just gone. So a quarter of a year revenue gone. And then summer, it became pretty obvious that was going to be wiped out too.
And now we’re even into fall where we’re not even running any programs for fall because it’s just such a… well, we, obviously between there, decided we needed to make a shift. But regardless, if we hadn’t even thought of that, if we hadn’t thought to rebrand SmartycatTV and all of that, which I’m sure we’ll talk about, we still we would have been in a horrible position. So nine months of revenue just out the window, you’ve got… it was a hit on the head for sure.

Carol:
Absolutely.

J:
Let’s talk through this. Here we are. We’re in early 2020. Samantha calls you up and basically breaks the news that these contracts are going away and potentially you’re thinking not just in the spring, but maybe the summer and the fall and for a long time. How quickly did it hit you that, well, we can die or we can rebrand and rebuild and change things, and what was your thought process at that point?

Samantha:
Right. Well, initially it took us about six weeks to get our act together. It’s almost like you have to adjust your thinking to what the new normal is going to be. What we’ve been doing for the last 12 years was essentially going to be no more for the immediate future, and who knows how much longer. I mean, like you said, we had no idea. So it took us about six weeks to just collect our thoughts and almost, I mean, we had to kind of grieve what our business used to be because we knew we had to make a shift and we had to do it in the most effective way possible because we didn’t have a big window or much time.

Michelle:
Yeah. And you got to remember too. I mean, Samantha was getting close to having her second baby. I’ve got four kids. So as all this is happening, we’re affected like every other parent that we serve. My kids are all of a sudden coming home from school and who knows when they’re going to go back to school and now I’m homeschooling. I have a high schooler, a middle schooler, an elementary age son and a toddler at home. And now I’m being told, “Hey, you’re homeschooling all of them. Good luck.” Like every other parent, right? Super overwhelmed. And you’ve got to figure out how you’re going to completely rework your business that has been in this mode of just kind of its own machine. It was well oiled machine at that point kind of operating on its own. And now we’ve got to figure out how are we going to recreate the company with all new systems for this new normal.
So all of this is happening at the same time. So it did. It took us about six weeks of doing nothing and just being in shock. And also during that six weeks, we didn’t know what’s happening. Every minute the president is saying something different. The schools are calling saying something different. So we didn’t even know what we were working with yet. But once it started to be… at six weeks it was apparent like, okay, this is definitely a new norm. This is not a quick little hiccup in our history. This is going to be a big event. And that’s when we really started thinking, okay, it’s time to go back to the drawing board. It’s time to figure out, do we want to let this die off? That was a very quick no. Okay, we’re not going to just let it die off, so what are we going to do? And that was when we made that go back to the drawing board type decision.

Samantha:
To be honest, we started getting some emails about us doing virtual classes. And at first Michelle and I were like, well, how do we do what we do and make it virtual? Because like all of our lessons are very hands-on and we’re super animated during our lessons. How are we going to do that virtually? So in the very beginning, we weren’t even sure if that was something that we could possibly do and for it to be effective the way our classes are. So, that was something else that we just weren’t sure about, just like everything else during that time period with COVID.

Carol:
I bet. Well, a couple of things. First, kudos for only taking six weeks to grieve. I mean, you had been building this business for 12 years. And you were finally at that point where, like you said, you had your systems, your processes, your customer base, all of your contractors, all of your teachers. It was a very well oiled machine. And then just a year and a half-ish ago when you realized things needed to change, you were ready to launch those changes. And then this hit. I remember back in the beginning of COVID, which PS, doesn’t it feel like it was about 40 years ago at this point? It’s kind of unbelievable it was only six months ago. But I remember so many people were like, you just got to keep pushing. You got to keep grinding. You got to figure it out.
And I think a lot of people were really, I hate to say the word condemned, that sounds very dramatic. But truly, I think people, business owners who actually just took a step back in a few weeks to sit back and be sad and kind of lament just what they had been faced with that was just not allowed. So I think that was awesome that you decided to do the self care necessary. Otherwise you probably would not necessarily have been able to pick yourself up when it was time and move forward. I just had to get that out there.
But second, I like how you mentioned, Samantha, that these parents have been reaching out to you asking for virtual classes and you were saying, “How are we going to do this? Is that even a possible thing?” But then it sounds like the two of you decided it’s not really an option. It’s not can we make this happen, it’s how are we going to make this happen? So how did that evolution come along?

Michelle:
Yeah. Like Sam said, our whole passion is watching the kids light up. It’s that energy in the room because we’re very anti-lecture in our classes. We don’t explain to the kids what’s about to happen. We ask questions in the beginning to get them thinking and hear their feedback and then hypothesize and whatnot. And then we give them the materials and just encourage them as they have at it. We’re very anti tell them what to do, how to do it; step one, two, three. It’s not like that. So the energy in the room when it’s like, okay, for example like you’re going to build a machine that can kick a ball using those recycled materials on that table over there. And when they figure it out and those balls start flying and they’re watching the other teams and they’re getting a little competitive, that energy in the room is really what fuels us and what the kids want to come back for and what the parents love.
So it’s like, how the heck do we put that through a computer screen, a tablet screen, right? So at first it did seem kind of impossible. And we’re also thinking parents all of a sudden have their kids home, they’re busy, they’re working. Are they going to want to go and get all these supplies that are needed and all these kinds of obstacles. So at first you’re seeing all of the challenges. And then at some point you do, you kind of clear that dust away and think, yes, those challenges are there, but how can we do this in a way that solves the problems instead of focusing on these challenges? So we came to quickly realize that we’re going to obviously have to go digital. We are not in a digital world. We don’t know what we’re doing when it comes to that.
We know how to make kids smile, have a great time learning, get them excited about learning. We don’t know how to get in front of parents directly because we were B2B business. Our direct customers were the schools, were the rep departments, were the boy scouts/girl scouts that were booking us. They brought the kids to us. They brought the parents to us, right? So now we got to get in front of parents ourselves. Now we’re a B2C company and it’s like, okay, we don’t know how to do that. We don’t know how to run ads. We don’t know how to… We can record a video easily enough, but everything else was like, okay, we need to get ourselves in front of some experts who know how to do this and can give us some guidance.
So the biggest turning point for us in rebranding and coming up with all of this was making those phone calls and doing those consultations and saying we need to talk to people that know what they’re doing. Because eventually we were going to go virtual, but we’re thinking of it from this lens of what we’ve been doing for the last 12 years. So we’re thinking, how do we take this class exactly the way it was and put it in a computer screen? So we were just going to do Zoom classes or something like that. Talking to people who know digital marketing and things like that. They’re saying back to us, why would you do it that way? You’re not in-person in classes anymore. Well, you’re not thinking of it from the right opportunity really because now you’ve got a chance to reach anyone globally with an internet connection.
If you’re going to try and have 15 kids come on at a time with one teacher, you’re going to have all the same logistical nightmares you had in-person classes because you still got to have all these staff. Every time you have 15, 20 kids, now you need another teacher, another teacher, another teacher. You’re not the face of your business because you’re letting your teachers be the face of the business. They’re like, think about it from a different perspective. Why don’t you guys go on and record the content. That’s you to the kids. You can get that passion out. People are going to see that. You’ll be able to connect with your audience again.
And what if you do a subscription service where people can sign up to get access to your lessons. They planted the seed of a totally different perspective than we ever had. And that was what, if I could give any advice to anybody out there who’s all of a sudden having to rebuild in a new environment. It’s make sure you’re talking to people who understand the new environment and can help you look at it from a different perspective, because you’re going to be looking at it from your old lens, from what used to work.
The people we served before, their needs are not the same as now. Now parents are home. They have different challenges, right? We have to be solving those problems, not the problems for the parents that used to send their kids to our classes. Everything’s different, right? So that was the aha moment for us was we need to change what we’re doing. We need to make sure that it’s solving the right problems for this new normal. And we need to make sure that we’re admitting what we don’t know and finding the right guidance to help us shorten that learning curve.

J:
I love that. And I think, wow, you hit the nail on the head because I think too many of us as business owners, when COVID hit, we talked to a lot of business owners, the first question is always, how do we take what we have and adapt it for online or adapt it for long distance or adapt it for social distancing or adapt it…. It’s always the question of adapting, adapting, adapting. You guys realized that it’s not about adapting. This is an opportunity. This isn’t just how do we salvage the business and keep making money? This is what opportunities do we have to do things completely differently and not just salvage, but actually grow? And yeah, I mean, now in retrospect, it’s pretty obvious like instead of just doing 15 kid classes on Zoom, this is an opportunity to create a completely different offering where you can take your reach from 15 kids at a time to 15 million kids at a time.
And so, yeah, it’s just, I love the way you put that, that you just need to focus and talk to people who understand the new environment and can really help you look at it through a different lens because once you look at it through a different lens, you realize that not only is COVID not necessarily a death sentence for your business, but it could be a great opportunity. So love that. Okay. Samantha, what was the next step? Now that you’re thinking new lens, new focus, opportunity; where did that lead you?

Samantha:
Well, there was a lot of meetings. We talked a lot. We had to iron out exactly what our end goal was going to be or where we wanted to be and we kind of worked backwards. Like Michelle said, it had a lot to do with who we talked to. There was a few people we talked to that it was quite obvious they did not have any sort of vision the way we had envisioned things. And there was some people that just someone basically said to us, well, that’s not going to work and I can’t help you. So there was a lot of discussion between Michelle and I of where we really wanted it to go. One of those things being was we wanted to just make a difference in kids’ lives. We wanted to make learning fun. We wanted to get them excited about learning new things. And I think once we figured out how we could do that virtually, then everything just kind of started to fall into place. New ideas started flowing and it became very organic the evolution of where we are right now.

Carol:
Cool. So it sounds like you really, when you took a step back, went back to the drawing board, you really went back to your original mission and purpose and values and that passion that had you starting the company all these years ago, but you’re reinventing it.

Samantha:
Uh-huh (affirmative).

Carol:
So what are you reinventing it to? You’re talking about making it virtual. You’re talking about reaching potentially millions of children rather than 15 at a time. You’re talking about making learning fun. You’re talking about learning through great experiences while these kids are all struggling with whatever the heck is happening with school. So what have you evolved into?

Michelle:
Yeah, so it’s kind of going to be a twofold thing where we want to put out a lot of free content that’s going to be accessible to everybody. And like we said, anybody with an internet connection. So most of that will go through our SmartycatTV YouTube page. And it’s all going to be just, for the kids obviously fun, exciting if they look at what we’re doing on TV and it really gets them thinking and then all of a sudden they’re grabbing materials around their house and they’re wanting to replicate, right? To the children that are watching us, that’s the mission is to get them fired up, get them excited, get those creative thinking brain cells going and getting them want to our taglines of explore, experiment and create. That’s what we want to get the kids excited about doing at home. Monkey see monkey do, right? They see us having a blast on SmartycatTV and suddenly they want to go do it.
To the parents, we’re struggling too, right? I’m a mom of four and it’s hard. COVID has been hard on everybody. And the parents that are really trying to keep learning from home fun, it’s a struggle, even for me with my own kids. So for parents what we wanted to do was make sure… We’ve spent over 12 years. I can’t even tell you thousands and thousands and thousands of man hours researching activities, testing them out, seeing which ones are home runs and which ones the kids don’t really like. We know that. We have that down to a science. So if we can save parents from that headache of having to research all this and see which ones their kids like, if we put something out there, we’re going to put our personal guarantee that your kids are going to love it. And you’re probably going to have a great time doing it with them because we really focus on making it fun and creative.
So for parents, we want it to be that go to place where it’s a safe place for your kids to come and sit on the tablet if you need a little break, because we all do, and sometimes you want your kid to be able to just sit on the tablet. Well, this is a great way for them to learn without realizing they’re learning. So it kind of solves that problem. And then also if parents want to get involved, we are going to have like a subscription program that goes more in depth. So if parents are wanting to do the fun art and the science at home, again, it’s their go to place. The lessons are all there. We’ll have live Q&As with parents if they have questions for us. It’s a place that the kids can, if they finish their projects, they can post it and it incentivizes them not just to watch, but to go do. So it’s not us in a classroom setting one-on-one, but we’re still able to get our mission across and we’re still able to make it interactive, which was really the important component for us.

J:
It sounds like your entire business model is now changing. The business model used to be kids sign up, they pay you for X number of weeks of blessings. You give the lessons, you take the money and then the next year comes, that great business model. But that business model doesn’t sound like it works in the world of online and YouTube. What is the new business model? Yeah, I guess, just simply what is the new business model?

Michelle:
Instead of trying to do that in Zoom, which honestly I think kind of kills a lot of what you’re trying to translate through the screen for… There’s something about Zoom, and I don’t know. Zoom has been a lifesaver for us in a lot of ways, but anyway with kids and they’re already sitting in front of Zoom all day for school if they’re doing virtual, we didn’t want it to be sitting there in Zoom. What do kids love? Where’s our audience hanging out? Well, they’re hanging out on YouTube, they’re hanging out in Tech-Talk, they’re hanging out in a lot of places probably their parents would rather they don’t hang out. So let’s give them a really fun place to come hang out and also learn. Kind of like Bill Nye The Science Guy was from my generation, but interactive. We really want to have that interactive component. We want to see our Smartycats. We want to cheer them on. We want to whatnot.
Like I said, the YouTube channel be just obvious, you can go on, you can watch your videos. The subscription service that we’re going to offer will give more in depth lessons, more teaching elements, more interactive. You’ll get to be a part of a group online that, like we said, we could do interactive Q&As, we can sit there and incentivize the kids, all those things we covered. So it’ll be every single week they get a new lesson if you sign up and we’ll have some bonus lessons in there too. So it’ll probably end up being more like six lessons a month. And it’s just one low monthly subscription fee.
Kind of like if you were to order those boxes, those kits you can get that they send a science thing in your house, but usually only get one of those a month. This will be four to six lessons, but interactive. Like we said, we don’t like the whole step one, step two, step three, put this here, put this there. It’s going to be that same mission of getting the kids thinking using those creative skills and letting them work through this process with us. So that’s what we’re trying to offer parents.

J:
That’s great. So basically using the YouTube as the free channel to, one, get the word out there and to help those kids and families who either can’t or don’t want to sign up on a subscription based, but it’s still a great marketing channel for you. If you can get a lot of viewers, potentially there’s money to be made in ads and eyeballs. And then have the separate subscription model. So will the subscription model, is it going to be an app on your PC or an app on your tablet? What does the actual technology look like just out of curiosity?

Michelle:
Yeah. For now it’s going to be a website. So you’ll just go to smartycattv.com and you’ll be able to sign up. We are working on building an app also that will be able to be downloaded through your app store, Android. That’s going to take some time and some revenue to invest into it. But eventually, like Sam said, we’re thinking about long-term because this isn’t just like a let’s figure out how we can get, like you said, let’s figure out how we can get money coming in through COVID and then go back to our old model. No, we’ve realized that there’s some power in this new model and we’re really thinking about this long-term. This is not just a COVID thing. COVID sparked it, the idea, but this is something that’s going to benefit parents regardless if their kids are homeschooling or not.

J:
I feel like this is a little bit like masterclass, but for kids.

Michelle:
Yeah.

J:
And the cool thing is that you actually have the ability to scale in multiple ways. Not only do you scale with your customers, but you can scale with your offering as well in theory because before it would be pretty hard to teach, I don’t know, some subject where you don’t have any local experts that can do it. But now you don’t need your experts to be in Tennessee or in what other states?

Michelle:
New Jersey.

J:
New Jersey. Thank you. Tennessee or New Jersey. Now you can take experts from all around the world and so you can grow your content offering as well. That’s scalable. So you’re able to scale from both sides of the equation, both your offering and your audience.

Michelle:
Exactly. And we’ve talked about, when we first started we were like… Because you got to have a new vision. You’ve really got to think of this. We shattered the old box that we were stuck in and you’re trying to figure out what’s the new vision. We sat there talking one day. We were like, at some point we can be sitting there because we’ll bring on, we can’t have a whole class full of kids come on. But we do want to bring on kids from all different parts of the world and it’s like potentially we could have a child from Japan and a child from Indiana, a child from South America, wherever, hopping on and doing these lessons with us virtually. We can be showing them how to do it, and viewers from all over are benefiting also.
So it’s a really cool concept to think like, man, we’re going to get to know so many more kids. And that’s what keeps us fired up, and we’re going to be able to touch so many more kids’ lives and they can be anywhere. They can be anywhere in the world. So anyway, it’s really exciting for us to think about.

Carol:
It’s fascinating, and talk about really just building into that passion. I mean, you’re really now at this point, you’ve reinvented yourself so that you’re growing this international online learning community almost with these events. It’ll be so fascinating a few years from now when it’s huge and there are kids all over the world participating and then you’re going to be like, oh, guess what? Now we’re going to do Smartycat live and you’re going to go right back to what you were doing 12 years ago. It’ll be all brand new again. So it’s just, it’s awesome how it’ll keep coming full circle and keep growing and be bigger than you ever anticipated it was even in the beginning. It sounds like in this case, this is one of those cases where COVID may have just given you just that push you didn’t really even know you needed. So really fun stuff.

Michelle:
Exactly.

J:
What’s the timeline for the offering now? Do you guys currently have the YouTube channel up and running? Do you have the website and subscription model up and running? Where are you today?

Michelle:
Yes. We just actually launched our premier episode of SmartycatTV this past Saturday. We do them every week, so we’re going to have a new live episode. Eventually we’ll start doing our live streaming every Saturday morning kind of like instead of Saturday morning cartoons, you can come join us for Saturday morning Smartycat show. YouTube is already up and that’s that free content that is available. And in about two weeks we will have the subscription service also launched.

Carol:
Love it. This is so awesome. I am so looking forward to getting our kids tuned into SmartycatTV and having all these other kids jump on all this new learning that you’re going to have, and I cannot wait to just keep following along in your journey. Right now though, it’s that part of our show where it’s time for the four more. And this is the part where we ask our guests the same four questions. And then at the end of that, we give you an opportunity to tell us more about yourselves, your business, where we can connect. So are you ready to get started on that?

Michelle:
Let’s do it.

Carol:
Let’s do it. J, I would love for you to take the first question.

J:
Okay. I’m going to ask both of you this question, I’ll let Carol decide who to ask her questions to. But I want to ask this to both of you. What was your first or your worst job and what lessons did you take from that job that you’re still using today? And Samantha, I think I may already know your answer, but feel free to give another one if you’d like.

Samantha:
My worst job is obviously that job that I took at the hair salon where my boss called me stupid. And the lesson learned from that is I will never let anybody treat me that way. And I go forward in life treating others the way I want to be treated, because I think that’s the most valuable thing that you can take with you is treating others the way you want to be treated.

J:
Love it. Michelle, first or worst job?

Michelle:
First or worst job. My first job was working at a diner. I wouldn’t say that was my worst, but it’s not fun, right? I still to this day ridiculously over tip because I have such empathy for every single restaurant worker and server and bartender. I didn’t honestly have any horrible experiences. So I guess I’ll just go with the first job. First job I worked at a diner right across the street from my house and you learn multitasking really quick. And I definitely still use that. How to kind of react to things super fast when you got multiple tables and multiple things going on and they’re all jumbled in your head. So yeah.

Carol:
Excellent. Okay. So here’s the second question. Samantha, you can go first on this one too. What would you say is the very best piece of advice that you have for small business owners or new entrepreneurs that you haven’t yet mentioned today? And Michelle I’ll have you answer it. And if one of you has an answer first, then go for it.

Samantha:
Well, there’s kind of two things that go hand in hand for myself, and that is, I’m not extremely good with change. That’s where Michelle and I balance each other out. She helps me see the good in the change. I would say my advice is to, even though it could be hard, accept that change because you never know what’s on the other side of that door. And the other thing is, surround yourself a good support system. I have Michelle, I have my mom, I have my husband and I had my dad and they were super supportive of everything that I did. You need to surround yourself with those people that want to see you do well in life because I feel like if you don’t have that, those kinds of people around you, when you need that extra, un-fun encouragement, they’re there to give that to you. So those are my two things. I’m sorry I have two.

Carol:
I love them. I love both of them.

Michelle:
I’m probably going to cheat also. Sam’s were so good. I’m probably going to give more than one. But I would say I think the biggest things that will allow somebody who wants to start a small business to be successful is, number one, make sure it’s something you’re actually passionate about because I’ve tried very… I’m just kind of that entrepreneurial spirit and some people are like that. You kind of want to do all the things, right? But if you’re not truly passionate about it, I guarantee you it’s going to get hard. Every business is. If you’re going to be successful, there’s no easy way about it. And you’re going to get burnt out if you don’t truly, truly, truly believe in your mission and your why and have that right mindset.
I would say the other thing is, especially in the beginning, you’ve got to have a lot of grit and you also have to be ridiculously resourceful. There’s going to be people and even to yourself in your own mind so many scenarios that you come up with why you can’t do something and you really have to push yourself to think, what’s my end goal and how can I do it? Not can it be done, because anything can be done, right? Honestly. If it something you’re passionate about, try to keep your slate clean and have an open mind and think, how can I do this? And it might not be the way you originally thought. When I first realized Smartycat Kids was catching on and could be a business, I was going to go rent a retail space.
I had this vision for a science lab that kids would have field trips coming to and be super cool, which is a great idea, nothing wrong with it. But thankfully, I went to a small business advisor who the state provides for free. So if you’re thinking of starting your own business, definitely utilize that opportunity there that they give you. The small business advisor looked at me and said, I don’t know what movie it was that they said if you build it they will come, but don’t treat your business that way. You’re about to drop 20, 30, however many thousand dollars just to open the doors, which is probably a way underestimated number. It’s probably going to spend more like 50,000. And then you’re just hoping you’ll get enough kids in to keep your rent paid, which was a high rent, and all these other things.
So he challenged me. Your idea is great. Your passion is great. How can you do it with what you have right now? How can you start it small and that way you can scale it as you see what’s working Because if you start off too big and too overdeveloped and you’re not really bootstrapping it, you don’t have much wiggle room to adapt. You kind of have to stick to that plan. Whereas if you can start small and really kind of test the waters and see which direction it leads you in, you can be more adaptable and you can make sure that you are understanding your audience and their needs better and go in the direction of what they’re telling you you need, not what’s in your head and you think you want to do, right? Because it’s all about serving your consumer.

Carol:
Love that.

J:
I love that. Love that. Okay. Let me ask you a question. I want to follow up on something you just said there. You had mentioned a free business advisor through the state. What state were you in when you did this and who did you talk to? I don’t know if every state offers this, but I’d love to hear more about how it worked in your state just for others so they can research and see if they have the same thing available to them in their state.

Michelle:
Sure. Yeah. We were in New Jersey and it’s the SBA. You can just look it up. Small Business Administration. I know we have one in Tennessee, so maybe I’m kind of incorrectly assuming every state has it. But if your state does, utilize it, because they don’t charge you anything. They want to see the businesses in their states that are getting formed succeed, right? That’s tax money for them. Especially New Jersey, New Jersey tax those income. So if that is available, definitely utilize it.

J:
That’s great. I know SBA is available in every state, I didn’t realize they did free coaching consulting. So that is an amazing tip that I can’t believe I’ve never heard before. So thank you for that.

Michelle:
This was 12 years ago. Hopefully it’s still available.

J:
I wouldn’t be surprised. I’m actually going to do some research when we hang up. But I wouldn’t be surprised; if it was then, it probably is now. So that’s awesome. Okay. I’m going to take question number three. We’ll start with Samantha again. I want to talk books, business books or motivational books. What is your favorite book that we should be reading? And if it’s not a book, maybe a podcast or a YouTube channel or any resource that you get motivation or education out of the top junior business.

Samantha:
Oh boy.

J:
And for everybody that’s listening, Samantha had a baby three weeks ago, so she’s probably a little bit too busy to be reading much these days.

Samantha:
Someone that Michelle turned me on to and I’m able to listen to him is Dean Grazi-

Michelle:
Graziosi.

Samantha:
Yes. I listen to him and I see his things on social media and all… because when I have time to go on social media, his little motivational things just get me and keep me going every now and then.

J:
He’s great.

Samantha:
Eventually when I have some more time, I will get back to reading. But right now with two kids under 14 months, yeah.

J:
How about you Michelle?

Michelle:
Yeah, that’s funny, because I know so many people have kind of like a love-hate relationship to Dean Graziosi. But he does have some great motivational stuff and Sam did get-

Samantha:
Quick little things that I need right now. Quick little motivations.

Michelle:
I love reading and I do the whole Miracle Morning, which I don’t know if anybody’s familiar. Well, anybody, tons of people are. Everybody’s probably not. But the Miracle Morning, one of the things that you do is part of it is reading every day. My favorite book of all time is The Go-Giver. I really feel like… It’s not as tactical. So there’s some other books that I would recommend that are a little bit more tactical. But if you’re just starting and you’re needing that mindset, I think it does a great job of making you realize serve first. That should be your focus first, the giving part. And you don’t just be a go getter, be a go giver. And how can you lead with value? That book really hit home for me when it came to that.

J:
That’s awesome. Two great recommendations. So for anybody out there, so Bob Burg, I believe, is the author of The Go-Giver, and Hal Elrod is The Miracle Morning and Hal was actually a guest on the BiggerPockets Real Estate Podcast, I believe, a year or two ago. So if anybody wants to check that out, that was a great episode.

Carol:
It was. It was a good one. Okay. Here’s our fourth and final question of four more and this is my favorite fun one. So for each of you, what is something that along the way, whether it be for yourself, your kids, your family, your work, whatever, that you have splurged on that was totally worth it.

Michelle:
I know we don’t splurge, [inaudible 00:57:22] mom’s doing.

Carol:
I’m like, I got a new lip gloss today, it’s huge.

Michelle:
I know, right?

Carol:
It’s huge.

Samantha:
Absolutely worth it. I usually regret things after I splurge on them.

J:
How about vacation or experience?

Michelle:
I know one while Sam’s is thinking. I didn’t even have to splurge that much on it. But when, let’s see, about four years after living in Tennessee, I decided to take, and there were some life circumstances that led to this, but I decided to take this crazy road trip with my kids. And we did all 48 constituent states. I didn’t think about the word. Oh, the Lower 48. We traveled, we did national parks, went camping and saw bisons for the first time.

Carol:
How cool.

Michelle:
Yeah. So I guess that was a splurge, but I actually did it on a shoestring budget because I’m pretty frugal. I like to invest my money as much as possible and not spend it. But that was a crazy experience that I would never trade for anything.

J:
That’s awesome.

Carol:
That’s awesome.

Samantha:
Well, I really have not splurged on anything. So I will make a promise to splurge on something that is fun.

Carol:
There you go.

J:
There you go.

Michelle:
Your home is a splurge, right?

Samantha:
Yes, that’s true. We bought a house two years ago.

Carol:
Excellent.

Samantha:
It’s a home for our kids.

J:
That’s awesome.

Carol:
Perfect.

J:
Cool.

Carol:
The more part. J, [inaudible 00:58:47].

J:
Well, you introduced the four more. I’m so used to me introducing it. I’m like, you throw off my rhythm.

Carol:
I know.

J:
Okay. I will do it. That was the four part of the four more. And that leads us into the more part of the four more. And that’s where each of you can tell our listeners where they can find out more about you, more about your business. Maybe get in touch with you or anything else you want to throw out there for our listeners to hear or to learn about you guys. Samantha, you want to start?

Samantha:
Well, to reach both of us, were at SmartycatTV. We have our Instagram, we have our Facebook and our YouTube. And then-

Michelle:
You can give our email. If you want to do email address, that’s a good way.

Samantha:
Yeah. So our email is [email protected]. If you have any questions or want to reach out to us, you can reach out to us that way. What else? Am I seeing anything?

Michelle:
Our website definitely.

Samantha:
Our website, yes.

Michelle:
The best place to sign up. Yeah. So if you want to go to smartycattv.com, you can sign up for updates. You don’t have to sign up for a subscription, but there’s all kinds of cool stuff that’ll be on there. Definitely it helps us. We say this in every YouTube video, but it’s the truth. We say we can’t do what we do without all the love and support from our Smartycats at home. So anybody that can hop on over to our YouTube channel and just subscribe, hit that little, I sound like my eight-year-old son, hit that subscribe button.

Samantha:
Hit the subscribe and share to all your friends, family.

Michelle:
Exactly, good point. That’s actually probably the biggest component is, yes, you can get in contact with us directly. Everything’s under the SmartycatTV, Facebook, Instagram, like she said, and we’re very responsive on our Facebook page because that’s where we interact with our audience the most. But yeah, if you can share any of this with people, we can only reach so many people ourselves, but we know there are more parents out there that could benefit from this. So anybody who believes in our mission that is willing to share it with the people they know, that’s the biggest helper for us.

J:
Awesome. And we will have those links in our show notes. So for anybody that wants links to the Facebook page, Instagram page or the website or the YouTube channel, check out the show notes. Samantha, Michelle, thank you so much for being here. I would love to have you back in a year or two, just to find out how the new venture is going and growing and scaling.

Michelle:
No pressure.

J:
Thanks. No pressure.

Samantha:
I know, right?

Carol:
So ever. Thank you so much. We so enjoyed this and you are going to be massively successful even more so than you were with the old Smartycat Kids. SmartycatTV is going to be wildly even more amazing. So congratulations in advance to both of you. Thanks for being on the show.

J:
Thanks.

Michelle:
Thank you so much.

Samantha:
Thank you so much.

J:
Talk soon.
I loved that episode. I mean, that was the kind of motivation and inspiration that I think we all need right now during COVID. I know a lot of us are struggling in our businesses. I know, Carol, you’ve struggled with your new business. I’ve struggled with my new business. I know a lot of the people we talk to are struggling. And so we’re all trying to figure out what those pivots look like and what those new opportunities are. And it’s really cool just to hear Michelle and Samantha talk about how they weren’t just able to take their business and figure out how to survive during COVID, but figured out how to really kind of grow and scale their business and use COVID as an opportunity to just take it to the next level.

Carol:
Agreed. And I think it was also really wise that they were the first to admit that they really didn’t know. So they went to experts that did know what was up in that space and really heeded their advice. And rather than just focus on their old way of doing things, really just completely reinventing and realizing the way their old business was is just not going to work and that it was time for something new. And I think it’s just super that they went ahead and did that.

J:
Yep. And best piece of advice I’ve heard in a long time is go to your local SBA, Small Business Administration office, because it’s very possible that they will do free coaching and consulting for your business. Fantastic advice there. I love that. Alrighty. Are we good for this week?

Carol:
Yeah, let’s wrap it up.

J:
Okay. Everybody. Thank you for tuning in. Stay happy, stay healthy, and we will see you again next week. I’m Carol, she’s J. Huh?

Carol:
What!

J:
I know.

Carol:
Try that again.

J:
I will try that one more time. I realized as it was coming out. She’s Carol, I’m J.

Carol:
Now accept the new reality and find your opportunity today.

J:
Love it.

Carol:
See, even when you mix this up, I can still make it happen. Have a great week everybody. Thanks for tuning in.

J:
See you everybody. Thanks.