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er than piping on thick gobs of it, she hand-frosted them, which made them look more artisanal and also resulted in a better frosting-to-cake ratio. She added a double dot made of sugar that became her product’s sig- nature look (and which is also trade- marked), and the Sprinkles cupcake was born. She debuted her one-item business at the height of the low-carb craze at what was possibly its epicenter, Bever- ly Hills, Calif. “Nobody thought this idea would work,” she said, but driving around Los Angeles she realized that there were a lot of doughnut shops and burger plac- es, and she realized that despite the low-carb talk, there was a place in peo- ple’s hearts and stomachs for starch. She figured that if she made the cupcakes worth the calories, “people would make the splurge.” And she was right. “We had a line out the door since day one,” she said. In fact they sold out of cupcakes be- fore noon. She and her husband Charles had no restaurant experience; Nelson hadn’t even interned during pastry school. “We had to build the plane as we were flying it,” she said. And they had to do it as business was booming. The Beverly Hills location was near many talent agencies, and ac- tress Katie Holmes became a fan and was talking about it just as Tom Cruise was pursuing her romantically, causing a media frenzy of people wanting to talk to her. To curry favor, the media would
bring Sprinkles to her to try to score an interview. Soon other celebrities became fans, and the concept grew. The cupcakes became favorite gifts among Angele- nos, assisted by Nelson designing gift boxes that resembled those in which roses were delivered and making pre- mium cupcakes that were gift-worthy. A second Sprinkles opened in New- port Beach, Calif., and then she opened her third location in Dallas, which Nel- son said was “very strategic,” convinc- ing people that it wasn’t just a Southern California phenomenon but could work anywhere. Her role in Cupcake Wars, and the fact that people love cupcakes, meant word-of-mouth preceded their open- ings in new markets; the demand was there before they opened. As the company grew, she said she was concerned that she didn’t have ac- tual industry experience and thought maybe she should hire industry veter- ans to help. “I think it took me awhile to grow into the idea of being a leader and grow into my own power,” she said. “The irony is once we had the mon- ey to hire someone with that pedigree, they came into Sprinkles and they stuck out like a sore thumb,” she said. They didn’t fit Sprinkles’ entrepreneurial style, and she realized she had devel- oped an “awesome, unique, corporate culture.” Eight or nine years in, she sold Sprinkles to private equity firm KarpRe - illy, and then didn’t know what to do with herself. “You actually thrive on getting up
every day and solving problems,” she said. “That hustler part of you never goes away.” “That next opportunity actually found me,” she said. She was at a neighbor’s party and took a bite of pizza that had the best aspects of Neapolitan pies, but without being soggy in the middle. She met the chef, Daniele Udit. “I could just see the brand that I could build around him,” and the first Pizzana opened in Brentwood, Calif. It has since grown to seven loca- tions, five in Los Angeles, one in Dallas, and one in Houston. “We are elevating a simple food at Sprinkles and Pizzana, but that’s where the similarities end,” she said. Sprinkles is a 5-minute transaction (or less at the chain’s revolutionary cupcake ATMs), and Pizzana is a full-service restaurant. “But the biggest difference is we have some experience, so realtors ar- en’t hanging up on us when we call,” she said. She also now has good sup- plier relationships and veteran staff: Three of her original Sprinkles employ- ees now work for Pizzana. She’s launching an app and loyal- ty program for Pizzana, called “Cacio Club,” and looking to expand while also looking for new investments. CN2 Ventures is her investment company, and she’s looking for compa- nies for which she has a personal affin - ity, and she said she also has to like the founders. Also, “they have to be really good at selling, because there’s no time in business when you’re not selling,” she said.
SWEET SUCCESS Candace Nelson — co-founder of Sprinkles and Pizzana, entrepreneur, author, TV host, and guest shark on “Shark Tank” — shares how she turned a humble cupcake shop into a mainstream sensation, and why she’s aiming to do it all over again in the pizza business.
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