Exhibit 1: Very cute and photogenic. Clockwise from top left: Tie-dye, cookies and cream, peanut butter pieces, strawberry cream, red velvet, and chocolate chip mint
Baked by Melissa shops are fairly ubiquitous in Manhattan - there are 12 locations in the greater New York City area - but until recently, I had not stopped inside to sample the assortment of miniscule cupcakes within the even more diminutive, stilted, shops (sorry, I’m trying to be unbiased, but to me this place has always shouted pompous.) However, over the years I have seen numerous bakeries and sweet shops fail, and I began to wonder what gave this bakery not only staying but growing power. So… I investigated.
Melissa Ben-Ishay of Baked by Melissa started her cupcake business in June 2008 after she was fired from her highfalutin New York City advertising job; amidst the recession, other bakeries were crumbling (haha) and cupcake competition was – and still is – nearly saturated. Without a store, Melissa baked from her kitchen and hand-delivered cupcakes to catering events and to customers on the subway. What differentiated these cupcakes from the start was their the size: they are bite-sized little creations each coming in at under 50 calories.
As an entrepreneur, I am not as dismissive of this business’s presentation as I am its beginning; I was intrigued to read that Ms. Melissa admitted that one of her biggest challenges in starting her company was recognizing her own weaknesses. Namely, Melissa said that she had to realize that she couldn’t do everything: not only was it necessary to delegate work and to hire employees, but to find said employees that could be trusted. She further expatiated that venture capital and crowdfunding were not options for her business because she wanted her company to stay true to itself. So instead, she got a small business loan and a supportive, optimistic brother and built her business brick by brick.
I admit that’s all respectable. But why has this turgid bakery prospered while others have failed? To get to the root of this, I decided it was time to buy some tiny little Melissa cupcakes. I first went shoe shopping at DSW (not necessary to my story) and then checked Yelp to see that a Baked by Melissa was less than an avenue away. What a horrible day, right? ;)The store that I graced my presence with (kidding) was on 14th street between University Place and 5th Ave. Like I said, the shops are very small; I saw only two employees were working at the time I stopped in. From my at-home-chef calculations, the cupcakes in this store take about half the time to bake as regular-sized cupcakes. That said, if you’re a baker you probably understand that small cupcakes have a larger surface-area to volume ratio than regular cupcakes, so baking time is critical to the moistness and texture of the cake. So maybe small cupcakes take less time to bake, but I would argue that the baking recipe is more critical.
Melissa Ben-Ishay of Baked by Melissa started her cupcake business in June 2008 after she was fired from her highfalutin New York City advertising job; amidst the recession, other bakeries were crumbling (haha) and cupcake competition was – and still is – nearly saturated. Without a store, Melissa baked from her kitchen and hand-delivered cupcakes to catering events and to customers on the subway. What differentiated these cupcakes from the start was their the size: they are bite-sized little creations each coming in at under 50 calories.
As an entrepreneur, I am not as dismissive of this business’s presentation as I am its beginning; I was intrigued to read that Ms. Melissa admitted that one of her biggest challenges in starting her company was recognizing her own weaknesses. Namely, Melissa said that she had to realize that she couldn’t do everything: not only was it necessary to delegate work and to hire employees, but to find said employees that could be trusted. She further expatiated that venture capital and crowdfunding were not options for her business because she wanted her company to stay true to itself. So instead, she got a small business loan and a supportive, optimistic brother and built her business brick by brick.
I admit that’s all respectable. But why has this turgid bakery prospered while others have failed? To get to the root of this, I decided it was time to buy some tiny little Melissa cupcakes. I first went shoe shopping at DSW (not necessary to my story) and then checked Yelp to see that a Baked by Melissa was less than an avenue away. What a horrible day, right? ;)The store that I graced my presence with (kidding) was on 14th street between University Place and 5th Ave. Like I said, the shops are very small; I saw only two employees were working at the time I stopped in. From my at-home-chef calculations, the cupcakes in this store take about half the time to bake as regular-sized cupcakes. That said, if you’re a baker you probably understand that small cupcakes have a larger surface-area to volume ratio than regular cupcakes, so baking time is critical to the moistness and texture of the cake. So maybe small cupcakes take less time to bake, but I would argue that the baking recipe is more critical.
Exhibit 2: Tiny. The cupcakes have diameters just a little larger than quarters One half of the two employees working took my order and very graciously gave me on my request: a strawberry cream, peanut butter pieces, tie-dye, chocolate mint, cookies and cream, and red velvet cupcake. The cost for these 6 itty-bitty cupcakes: $5.50 + tax. (See picture.)
What do I have to say about the taste? They are fine, but non-spectacular. Each one was like that cupcake produced by that neighbor who thinks she’s a wiz because she’s correctly followed a recipe that makes a moist (because of all of the oil), tasty (because of all of the pre-made ingredients like chocolate chips and whip cream) cupcake and wants you to applaud her for her self-perceived genius. To reiterate: nothing special. And I’m quite sure that for the price, there’s no argument for these little mediocrities costing nearly $1.00 each.
What do I have to say about the taste? They are fine, but non-spectacular. Each one was like that cupcake produced by that neighbor who thinks she’s a wiz because she’s correctly followed a recipe that makes a moist (because of all of the oil), tasty (because of all of the pre-made ingredients like chocolate chips and whip cream) cupcake and wants you to applaud her for her self-perceived genius. To reiterate: nothing special. And I’m quite sure that for the price, there’s no argument for these little mediocrities costing nearly $1.00 each.
Exhibit 3: Great packaging, branding and promotion. Inside my bag were: promotions for the cupcake of the month, a Father's day cupcake, and an upcoming summer summer flavors, a sticker, a tattoo, a business card, a napkin, something telling me to Instagram my cupcakes, and a card telling me to download the Baked by Melissa app and enter a code. My self-assigned mission was to discern why Baked by Melissa has survived and thrived. These are my conclusions. This bakery has done very well because they have :
That is all spectacular. I almost get it. But as you may have gleaned, I am not sold. This is what I dislike about them. The bakery is:
Conclusions: I do not advocate Baked by Melissa. However, I acknowledge that Melissa has carved out a little niche that has been widely successful, and I applaud her for having the foresight and determination to be the pioneer in this market that she created almost single- handedly created. That said, I contend that this is a New York City phenomenon: I do not see Baked by Melissa having longevity in other US cities because of the ridiculous price to value.
Sources:
1. WSj: Baked by Melissa Founder Share's Secrets of Success
2. Baked by Melissa Company Website
3. Yelp: Reviews of the original Soho Baked by Melissa location
- Created a niche by making tiny cupcakes that you can sample: because of the size, you can taste a variety and not feel guilty because of the calorie content.
- Made very cute/visually appealing cupcakes. (Instagram worthy… seriously look at exhibit the pictures... So cute.)
- Branded and promoted their shop extremely well: there’s a cupcake of the month, a gaggle of materials in the bag (a tattoo, sticker, business card, napkin), an Instagram prompt, a Baked by Melissa app, and a very pretty cupcake logo. (Exhibit 3… look at all of those extras.)
- Ensured everything is kosher, thereby reaching expanding possible customer segments Extended the business distribution capacities by having a great website and an easy, clear ordering system
- Maintained quality protocols very well. In other words, I feel confident that each cupcake and flavor in each of the restaurants is consistent.
That is all spectacular. I almost get it. But as you may have gleaned, I am not sold. This is what I dislike about them. The bakery is:
- expensive. Are you kidding me? $1.oo for a little bite? As one Yelper said: “I might enjoy these if I were Polly pocket, but I am not.”
- mediocre: I can bake oily, tiny cupcakes from a Betty Crocker premix, and the entire batch will cost about $6 and deliver the same expected taste.
- pretentious. I get it. You’ve propagated these tiny shops that make a profit off of selling next to nothing pretty things. You’re catering to a market of affluent females.
Conclusions: I do not advocate Baked by Melissa. However, I acknowledge that Melissa has carved out a little niche that has been widely successful, and I applaud her for having the foresight and determination to be the pioneer in this market that she created almost single- handedly created. That said, I contend that this is a New York City phenomenon: I do not see Baked by Melissa having longevity in other US cities because of the ridiculous price to value.
Sources:
1. WSj: Baked by Melissa Founder Share's Secrets of Success
2. Baked by Melissa Company Website
3. Yelp: Reviews of the original Soho Baked by Melissa location
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