Imagine discovering an entirely new calling not only for yourself but also your parents after a single encounter on a plane. It happened to Henry Miller, a farm boy from Burlington, Wash., when he was 11 years old. He sat next to a beekeeper on an Alaska Airlines flight. The beekeeper told him about Colony Collapse Disorder, a phenomenon identified in 2006, that has been killing a third — sometimes almost half — of the U.S. bee population every year.
Determined to help save the bees, Miller asked his parents for a beehive for his 12th birthday. He planned to raise bees, sell their honey and donate proceeds to bee research. Miller’s dad suggested making his honey different to compete with a crowd of local honey producers.
He experimented with cookbook recipes. It dawned on him that he should infuse honey with spices to hack recipes that called for both ingredients. Through trial and error, he concocted a new foodie fad in honey bearing six mouth-watering flavors:
Grumpy Grandpa, cayenne and garlic
Diabolical Dad, habanero and lime
Naughty Nana, mild ginger and pepper
Mama Drama, smoky chipotle and cinnamon
Hanky Panky, sweet vanilla and nutmeg
Nutty Uncle, almond and lemon
“They are fantastic in dishes like meatloaf, salad dressings, chicken, vegetables, sweet potatoes, even ice cream,” said Miller. “They can also be used in cocktails, hot and cold beverages, granola, cakes and breads.”
“You can simply mix it with butter and slather it on cornbread,” he added. “If you use traditional honey in the recipe, you can use any of our flavors interchangeably. It’s a great kick-start on your morning toast, yogurt, or oatmeal.”
In merely seven months after getting his first beehive, Miller started selling his honey in front of a small gourmet cheese shop in 2009. He expanded to the Western Washington Fair and then a national tradeshow, Natural Products Expo West. There he won an award for being one of the top five new products and was named “Young Entrepreneur of The Year.” His venture capitalists, aka mom and dad, invested about $300,000 of their retirement savings in the business, Henry’s Humdingers.
During his junior year in high school, Miller went on Shark Tank, seeking $150,000 for 25% equity, valuing his company at $600,000. Dallas Mavericks owner Mark Cuban and cyber security king Robert Herjavec joined forces in offering $300,000 for a whopping 75% equity. Cuban proposed using $150,000 to pay back Miller’s parents. Miller took the deal in hopes of repaying his parents even though he gave up more equity than he had wanted.
When he taped the segment, he had sold only 127 jars online over five years and had $50,000 in sales at natural-foods stores. After his Shark Tank appearance had aired in March 2014, he sold 120,000 jars online over six months. He made enough money to buy new equipment for his production line in Burlington, Wash. Sales are expected to reach $1 million this year.
One of the reasons this story is so interesting to me is that last night I watched my wife make a snack for a group of friends we had coming over. She had this jar of jelly and some cream cheese. I looked at the jar of jelly, and it was something like “Hot Apple Cider Jam”, which was basically some apple jam with jalepeno. Sounded gross, lol, however, I LOVED that jam and my first thought was private labeling something similar and launching it on Amazon. Why not? Back to the main story.
He doubts he would still be in business today if it weren’t forShark Tank. The show opened doors to Amazon Launchpad, a distribution deal in 2,100 Kroger (KR) stores and five QVC appearances in which he sold out multiples times.
Miller shares how he got stung after going on Shark Tank. At the ripe-old age of 19, the Washington State University sophomore is abuzz in business wisdom beyond his years.
Believing in a Mission
Ho: What is your background?
Miller: Before starting this business I was playing Pokemon and doing competitive gymnastics. I lived on a farm in the middle of nowhere. It was a combination of these things that led to my starting a business.
I had a huge imagination and learned a serious work ethic from my gymnastics coach. I started gymnastics with Ray Jiang at the age of 6 and by the time I was in middle school I was doing 20 hours of practice a week. Add that together with living on an isolated property surrounded by a lot of lovable dogs, cats, pigs, giant oxen, a stubborn donkey, an opinionated horse, a shy llama, a goofy turkey and crazy creative parents, who taught me anything is possible, and something is bound to happen.
“If there’s a will, there’s a way” was my childhood mantra. I started this business for one reason, to help save the bees from Colony Collapse Disorder. Sure it’s grown into a business I hope one day will sustain my family. But the bees are still and always will be a part of this. Despite my lack of profits, I have kept my word to donate to bee research just as I initially intended.
Ho: What hardships did you face in developing and launching your business?
Miller: To be honest, if I had known what was in store for my family and me, I don’t think I would have started this business. There was so much we didn’t know about bringing a food product to market. We didn’t understand the money involved with trying to be part of a big distributor. We didn’t understand that retailers use fines as a revenue stream. We thought when we sent an invoice we’d get paid that amount, not 70% of that amount.
Ho: How are you paying yourself?
Miller: I do not get paid, nor do my parents take a salary. We survive mostly on their savings. I attend Washington State University. My mom and dad are at the factory. We do things together on Skype, phone, Google Docs, etc.
I have a second job working in a cheese factory that produces Cougar Gold, an award-winning, aged white cheddar. It gives me some spending money. Secondly, it gives me experience in how other food factories operate.
I started Henry’s Humdingers seven years ago without any business or work experience. Working at the cheese factory helps fill the gaps in my background. I am learning how other facilities operate but, more critically, I am gaining a “factory floor” perspective by working as an employee rather than as an owner and manager.
Getting Stung After Shark Tank
Ho: If you could do the show over, what would you do differently?
Miller: I don’t know if I could have done anything too differently on the actual show. But I certainly could have done a better job after the show. My parents and I had been told about the Shark Tank effect, and so we packed up a lot of product and sent it to a fulfillment center.
We thought the company would do a much better job sending out packages than we could. But it was a complete disaster. They didn’t put any padding except one piece of paper between the jars, and many of them broke. You can’t imagine how angry customers were. Their packages arrived full of broken glass and honey.
I got so many angry emails and phone calls; it was a nightmare. We took back all of our shipping and did it all ourselves. No one cares about your business more than you do. I answered every email and every phone call, apologizing for the problem. I offered everyone a completely new package.
Ho: Did they really give you $300K for 75%? If not, what happened?
Miller: My deal, like many others, did not go through. Robert Herjavec backed out fairly quickly for unspecified reasons. Mark Cuban said he would honor the entire deal, and we moved forward for months itemizing everything, etc. He wanted to relocate the company to Dallas and completely take over.
His lawyers drew up contracts, and the process went on for months. I had my lawyer and accountant review the contracts, and they both said Mr. Cuban was indirectly telling me not to take the deal. So, I took my attorney’s advice and declined the deal.
Mark has remained a mentor to me. He had one of his advisors check in with me the night my Shark Tank episode aired, and he offered to lend me money to fund a large QVC purchase order. Luckily, I haven’t yet had to take him up on it. Mark also very kindly agreed to be one of my college references. He said he would answer business questions when I need advice. We email occasionally.
Abuzz With Business Wisdom
Ho: What is the best advice you’ve received from the Sharks?
Miller: The best advice I got from Mark Cuban was that I needed to establish an infused honey category and not just build my brand. Thus I agreed to do a private label deal with Kroger (KR). Interestingly, after my appearance on Shark Tank infused honey started to “trend.”
Before that, my products had been the only infused honey for sale. I learned from Mark that copycats are essential to the survival of my business because they expand the category. The very existence of copycats means there is a place for my products in the marketplace.
Ho: What are your favorite business websites or resources and why?
Miller: The most useful things are the friendships I’ve made at trade shows. Both big and small companies have been our neighbors at different shows, from the Fancy Food Show in New York to the National Restaurant Show and the Private Label Product Show. We always exchange numbers, and most people are willing to help you. They can’t always solve your problems, but they give you referrals or tell you what their experience was. They are invaluable for feedback on labels, ideas, or just to help you stay sane.
My company uses a wide range of software and online resources. I couldn’t live without Quickbooks. We use Shippingeasy.com for fulfillment. My website is hosted by WordPress.com. I use Authorize.net, Paypal and Square. To keep organized, I like KanbanFlow, Expensify and Tripit. I use Google Docs, Evernote and Skype, especially when I’m away at school. I use Mailchimp for my newsletters.
Ho: What’s the biggest error you’ve ever made in business and what can others learn from it?
Miller: My worst mistake by far was not standing up to my parents or other adults when I felt strongly about a decision. When you’re young and inexperienced, and it’s not your money, it’s difficult to take a stand on something. Money is power. And at age 12 or 14, it is hard to get people to take you or your ideas seriously.
Obviously, my parents listened to me for the most part, or they wouldn’t have followed me down this rabbit hole. They agreed with my decision to have everything made in America. But one time, I did not take a strong enough stand, and it was costly.
I fought my parents’ decision to hire an “expert” to help us with the business. I didn’t like the guy from the start. He spoke to them and never looked me in the eye. He addressed them and never considered what I had to say. I knew he was the wrong fit for Henry’s Humdingers. But I didn’t have a reason to back it up other than my gut feeling. Thirty thousand dollars later, my parents agreed with me. The guy took their money and did almost nothing.
Ho: What motivates you to continue the business in the face of obstacles and lack of profits?
Miller: My motivation is simple survival. My family and I are all in. So turning back isn’t an option. My parents no longer have a retirement fund, so Henry’s Humdingers must succeed.