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& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | DECEMBER 24, 2003
The Hottest Thing in Ice Cream The inventor of Dippin' Dots explains why it takes a lot more than a cool idea to build a successful business Curt Jones, a microbiologist with a weakness for homemade ice cream, invented Dippin' Dots nearly 15 years ago. With his scientific background, Jones notes that his work in the lab was the easy part. It was protecting, marketing, and delivering his unique product that posed the toughest problems. Since opening his first store in 1988, Jones has established and expanded his outfit into an international franchise operation with outlets in Japan, Korea, Australia, Mexico, and Venezuela. Yet despite its growth -- thanks to an expanding partnership with McDonald's (MCD ), there are now thousands of outlets -- his brainchild remains a family business that Jones owns and controls with his wife, daughter, and sister. The ice cream entrepreneur spoke recently to Smart Answers columnist Karen E. Klein, sharing some of the lessons he has learned about launching, building, and running a business. Edited excerpts of their conversation follow: Q: Dippin' Dots are individual beads of ice cream frozen at super-cold temperatures. What kind of logistical challenges does the unique process you developed mean for your company? A: The product has to be kept at 40 degrees below zero, so, first off, we had to have a special freezer at every location where it was sold. We started early on selling Dippin' Dots at theme parks, because we knew that to be financially viable we had to sell a lot of product in each location -- and we needed major foot traffic to do that. We were approached repeatedly by a Japanese firm fairly early on, but we thought we couldn't expand internationally until we built production plants overseas. Then, about 1994, I got to thinking about a contest that ran in my hometown when I was a kid. This company would put a big block of ice in a parking lot in July and people would bet on when it would completely melt away. I started wondering if we could ship our product across the ocean. So, we set up an experiment at our plant in Paducah, Ky. We put a trailer in the parking lot with our ice cream in it and surrounded it with dry ice. It lasted 15 days, just enough time to ship the product across the ocean. Eventually, we entered into an agreement with the company in Japan that wanted to distribute Dippin' Dots. Of course, today we have electrical shipping containers that will keep the product at 60 below -- but we solved the problem long before those became available. Another innovation we came across was in trucking. In the beginning, we delivered all our product in pickups and one-ton trucks, and anytime we had customers interested in selling Dippin' Dots we had to put them on our delivery route. We figured that we couldn't really sell outside a certain area because we couldn't keep the product cold enough. Then we came across a trucking container that holds 360 gallons of product and we fill up the top from a dry ice tank. It holds the product for five days at 50 or 60 below, [which means] you can ship it regular freight, rather than on a refrigerated truck. That find allowed us to take every lead that was interested in selling our product. It's the little things like that, as you grow and have interest nationally or internationally, that you have to figure out in terms of logistics. Q: You did the impossible -- at least the unusual -- and reinvented a product that has been around for a long time. How did you protect your concept from copycats? A: We have had an attorney who worked with us from the beginning, but that doesn't mean that things went smoothly. In '92 or '93, we had a company that tried to knock our product off. Their effort didn't last long because we brought a lawsuit and shut them down pretty quick. But a couple years later, we had another entity that wanted to offer a similar product and we had to get an injunction in place against them. The legal stuff tied us up in courts for more than four years.
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