Running Ads Inside Fortune Cookies?

0:00From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

0:22You know what I love? I love an idea that's so crazy, it just might work. So crazy, it just might work. I actually just spent some time trying to find the origin of that phrase. I don't know that it exists. It's probably just been around in some form or another for so long, but I did find that clip from the Dana Carvey movie, Master of Disguise. Anyway, I love an idea that's so crazy. It just might work because it makes you realize how even when you are trying to be a creative person, even when you are trying to identify opportunities that other people have not, you can't see them all because they are everywhere.

1:02And once you hear how people take something that looks like a wall and turn it into a door, you start to get inspired to figure out how to create something out of nothing yourself. How to take seriously ideas that other people might have discarded or never even let their brain go to at all. And then, even more fun, you have to start solving problems that nobody else had ever even considered, had never even bothered to consider were problems that were ever worth solving because they had never gone down the road that you considered going. And that is a version of what we are going to be talking about today, because I found a company that has an idea that is so crazy, it just might work.

1:41And it starts with something that you have seen and probably eaten many, many, many, many times. We all know what a fortune cookie is. We all love reading them. But what if those fortunes could also be advertising space? This is an opportunity to reach a lot of people in an emotional way, in this engaging, emotional one-on-one way. Like you have a moment of a consumer's attention. And that's kind of how the idea was born. That is Matt Williams. He is the co-founder and chief cookie officer of a company called Open Fortune. And you might be wondering, chief cookie officer? Well, it was a deal with him and his co-founder.

2:25I took chief cookie officer. He took chief fortune officer. just kind of the reverse because he's more on the logistics and ops side and I'm more on the creative and fortune writing side. Well, I'd say he won because chief cookie officer is definitely the more fun name. And all right, maybe you're thinking here, okay, crazy idea. It just might work. This is kind of wacky. Sure. And it sounds fun. And who doesn't like fortune cookies, but also how serious could this be? Oh no, this is serious. They're working with the likes of Zelle, Purple, Disney, Warner Brothers, Coke, Duolingo, Hulu. You got a lot of big, big brands who are now advertising inside of fortune cookies.

3:03But this is not as simple as it sounds because it's not just about getting some fortune cookies and printing some ads on it. No, no. Turns out that actually putting this kind of wacky business into practice required a lot of very smart, strategic business thinking. And that is what we are going to get into on this episode of problem solvers. It is how to take an idea that is so crazy and then make it work. Coming up after the break. This ad is going to be different than basically every other ad you've ever heard on the show. Why? Because I'm not telling you about somebody else's thing. I'm telling you about my own thing.

3:39I, Jason Pfeiffer, host of problem solvers, I have one thing right now that you can do to improve your work and build a career or company you love. And what is that one thing? Well, it is a newsletter that I write, which is called One Thing Better. Now, because I am the host of this podcast and editor-in-chief of Entrepreneur Magazine, I get to talk to just incredible people, and I am always absorbing the advice that they give me. And I know it is easy to be inundated with advice. It's just too much of it, and with newsletters too, too much of that. That is why I keep it simple. Each week, I take everything that I've learned, I distill it down one thing.

4:22One thing better. One thing better you can do. Easy, simple, actionable. Put it into practice right now. One thing better. The newsletter brings you literally just that. One way you can improve. One way you can do the work you love better. Sign up for free at onethingbetter.email. Yes, that is the website. one that is O-N-E, one thing better dot email. All right, we are back. I am talking today to Matt Williams, the co-founder and chief cookie officer of Open Fortune, which is pioneering fortune cookies as a new advertising space. And we are going to dig into what it actually means to create that business because it is fascinating.

5:11So let's get to it. The tricky part in the beginning was really understanding the true scale of this and who controls all of these cookies that are landing in these 50 ,000 Asian restaurants. And what we realized is that there are a handful of production facilities that are printing the fortunes, putting them in the cookies and distribute them through a distribution network that then land in all these restaurants. Before you move on, just curious, the economy of the fortune cookie, is the average Chinese restaurant just purchasing these and giving them away and functionally eating the cost or building it into the cost of food?

5:50Is there anything else happening there? Yes. For the most part, they are giving them away for free. Some, very few will sell them because people love them that much and people will pay however much they're selling, 25 cents, 50 cents for a cookie, but they're mostly, it's a cost to the restaurant. And so we help in subsidizing that cost to the end of Asia. Right. So that's, and I just wanted to pull that out because I imagine that as you were trying to understand this marketplace and how you could fit in, that was a pain point that you could address. For sure. It's not cheap. I mean, when you think about an average Chinese restaurant, they'll go through anywhere from 6 ,000 to 50 ,000 fortune cookies a month on the high end.

6:36I'm talking small corner takeout place to large Chinese buffet. So it's actually a significant cost at the restaurant. So you identify this as an opportunity. You figure out the market. Can you pick a sponsor and describe the ad inside the cookie just so people can understand what we're talking about? Absolutely. Listen, we have a lot of amazing partners. Our first one ever was in 2018 with Capital One. That was for a 4 % cash back on dining and entertainment credit card. So it was very contextually relevant. So if you and I were eating at a Chinese restaurant, on the front, it would say, don't forget to save your money this month or saving leads to future wealth.

7:25And on the back, it's like you could have received 4 % cash back on this meal that you just ate. We came up with 100 unique fortunes and 100 unique backs with the credit card. So in other words, 100 different versions of this app. Yes. And the fortunes are, we always, always, always, because my co-founder and I, we love fortune cookies. We never wanted to destroy that traditional integrity of the fortune cookie message. Like we'll never say like a credit card is in your future. And on the back is a credit card brand. Like we won't do that. We try to think about the thematic and what is the tone of that brand or the campaign that they're running and write it in this fortune-esque way with our copywriters.

8:12Yeah, that's really cool. Because I mean, first of all, I think the first thing somebody might think is you just took existing fortune cookie, right? Like the fortunes people would have normally gotten, you will see great fortune tomorrow. And then you just stuck an ad on the back. But no, no, no, you were you were writing the fortune too. And the fortune was going to be related to the ad, but not directly teeing up the ad. Correct. I mean, you hit it right on the head. And it's whether the experience is somewhat seamless, because if you look at each the front and the back in a vacuum, you're always getting your fortune.

8:49It's always speaking to you on the back, whether you like that or not, like you still have your fortune. And so we're always making people happy regardless, because you can't say we're taking it. You took our fortune away and put an app because we never do. Never, never, never. One of our favorite campaigns was with a mattress company where I don't know if you know that innuendo, but... Oh, I know exactly where this is going. Well, then you could finish it for me. Sure. So the joke is that you say whatever the fortune is, the end of it is in bed. So you are going to have great fortune in bed, which is a perfect...

9:26Couldn't be more custom made for a mattress company advertising in a fortune cookie. So Jason, as I mentioned at the beginning, the Capital One example was very contextual to the environment in which the consumer was consuming the ad. However, in Purple Mattress's case, the client, it was less contextual to the environment, but more contextual to the actual medium and the fortune and that tradition. But then you could take it one step further where it becomes this mini billboard. It becomes this vehicle to deliver a message. It doesn't have to be contextually relevant. It doesn't have to be dot, dot, dot in bed.

10:08I mean, we work with a lot of movie studios where we'll take the billboard in Times Square, scale it down to size, and it's a mini billboard that's getting into millions and millions of people's hands two weeks before the movie. So it runs the gamut of like very bespoke campaigns and very contextually relevant to like just mimicking what the brand is already doing out in the marketplace. This is such a unique space. And there's not a lot of prior experience from anyone else to draw upon that you must have run into all sorts of surprises as you were doing this. Could you share some problems that you had to solve once you were live and operational?

10:51The biggest one that a lot of times goes unnoticed is the printing process. We developed a proprietary printing process for each of the respective factories that we work with. because prior to us entering the scene, and this was a challenge that they said, listen, we'll work with you if you could pull this off. We don't believe you could pull this off, but if you could reverse engineer our printing processes and print full color, because they never printed at scale full color fortune cookie slips. If you think about prior to 2018, or you would get a slip that's just one color, it might be black, it might be red ink, it might be blue ink, but nothing on the back.

11:34They couldn't print two sides. they couldn't print full color. So my co-founder and I had to reverse engineer a bunch of different printing processes because one factory, for example, prints on this massive, what looks like a massive toilet paper roll, and then laser cuts them, and then they go into the cookie. Whereas another one, they cut them in each individual slip. So let's call it like 10 million slips stacked in this massive, massive vacuum suction machine that then pulls the slip into the cookie. Not only, and in that case, for example, you have to get the paper weight. This sounds crazy.

12:14You have to step back and you're like, wait, we're talking about fortune cookies, but you're like, you have to get, we had to get the weight of the paper so precise or else it wouldn't suck into the cookie. And so when we're printing full color, obviously the color adds weight and a lot of ink right and then and then okay so we figured that out but then we have to find a food grade ink that could also print high res the correct we match all the correct fonts and text codes and everything for these brands so the printing process i would say early on was was the most challenging that it goes kind of unnoticed but that's wild how did you solve for that without going into insane detail because i bet we could have a 17-hour podcast about printing fortune cookies.

13:01But I assume, maybe, correct me if I'm wrong, but I assume that you and your co-founder are not manufacturing printing experts, right? So what does it mean when you said we had to? What did you do? It's so funny. I watched a video last night on nuclear fission, and I was thinking about that machine and what they're doing there versus the machines that we use. It's very, very different. But we had to engineer nonetheless. You know, it was actually working with a lot of third-party printers. And we would take pieces of the machine and we would go visit the printer and say, okay, how can we make a spool, a roll that fits on this piece of this machine?

13:44So we would take just like, you know, the spool that the one factory had and say, how could we figure out how to print on this spool and it has to be, we had all the dimensions. And then the other one was, okay, how could we figure out like how to print these at scale based on this printing? It was basically figuring out the right printing process through, I'd say we spoke to, I'm not over, over a hundred different printers across the U S most are like, absolutely not. We don't know what the hell you're talking about. No, finally we found some and we still work with them to this day because they're like, they helped us figure it out.

14:18Which is an inspiring story there because what you basically just described to me was you as a total outsider who does not know how to construct printing presses walked into these factories that print these fortune cookies. And these people are basically like, I don't know how to do the thing that you want us to do. And I am in this business and I've been in this business a long time. So good luck trying to figure this out. And then you said, all right, we'll figure it out. And what it required was calling a bazillion people and basically just nonstop trying to pair experts up and get them to engage in how to solve your problem until you finally found people who could do it and who had the equipment to do it.

15:00And then you as an outsider sort of engineered in a way, the creation of this thing, the people who were actually in this industry had never figured out how to do themselves. Correct. Yes. That's fantastic. What else? I'm sure there were a million of them, but give me one more that was just, you didn't see this coming. This was way more complicated than you thought. Well, I'd like to talk about the advertising side of things because this is twofold. One is when marketers hear the word fortune cookie, they instantly think that this is some gorilla stunty, like let's hand these things out in Union Square Park in New York City for a day and make the cookies pink and we'll spend$25 ,000 on this little stunt and we'll be done with it.

15:51We got a lot of pushback in the early days and we're like, no, we're not that. Oh, you guys are just like a coffee sleeve. You're just like a pizza box. No, we're not. Why? Because we have scale. We control. We control the market. We have scale. We have scale. We're not stunty. And that was the one of the biggest challenges we had to overcome that and explaining. I mean, everyone, again, has this preconceived notion of what a fortune cookie is. And so that I think was the biggest challenge, like getting these big fortune 1000 advertisers to trust us that like their message. Yeah. And how'd you do it?

16:27What was the light bulb moment that got people to understand that this wasn't just a stunt? It was so kudos to Capital One. We owe them for being our first massive, massive partner. And they put us on the map. The answer is find someone you can prove it with. Yeah, Jason. I mean, I kid you not, like my co-founder and I, when we were trying to pitch this, hundreds and hundreds and hundreds of brands, mostly not responding. And then finally, Actually, my co-founder saw Sean, my co-founder, I keep saying my co-founder, Sean, he saw a Capital One fortune cookie, or sorry, a Capital One ad on TV where they were eating Chinese.

17:11And someone put the card down and said, get 4 % cash back on Chinese. And he's like, holy shit, Matt, Capital One, like, what do we have to do? We found emails and phone numbers and we're like, we're going to Virginia. I don't care. This is too good of a fit. They have to do this. they're eating at a Chinese restaurant, opening fortune cookies on TV. Like the alignment is just too good. We hammered and hammered and hammered, hit their CEO, CMO, everyone. Finally, they're like, this is cool. Let's do it. This is cool to let's do it. Probably took six months and then till it finally hit market. But yeah, that was the light bulb moment.

17:51But there were challenges even after that too, because they're like a lot of brands would say, oh yeah, well it's contextually relevant to Capital One. So why wouldn't they do it? And so it was really saying, no, we're brand agnostic. It doesn't matter if it's contextual or not. Like I mentioned before, that was the hardest part. Yes, it was a big win for us. But then we got pigeonholed almost into like, oh, yeah, you guys, like when it makes sense, when there's a credit card for cash back on dining, or when there's a movie where they're eating Chinese, like it's aligned. No, we're we're pretty much brand agnostic.

18:27We can come up with campaigns. You can throw out a brand right now and I can come up with a campaign. Yeah, Matt, I could ask you questions about this all day. This is really fun, but just to, just to bring it in for a landing from capital one to where you are now, explain where you are now. Like tell me some of the brands you work with. Tell me, tell me the scale. How many, how many, how many cookies are out there with your ads on them? You don't have to give me an actual number unless you have an actual number. Oh, I mean, we just signed a deal for a brand. You'll be seeing it, I promise you, because it's going to be massive, massive, massive scale.

19:04Over 100 million cookies are going to be pushed out with their brand on it over the next six months. It is, and that's out of the$2 billion. We have nearly half of that inventory sold. And so we have campaigns running at all times. Like right now, we just wrapped up a campaign with Dude Wipes, which you can imagine the copy on that after reading Chinese. Zip Recruiter, we just wrapped up a campaign. We're running a campaign with Duolingo because Duo is like showing up everywhere and like these surprising moments. Chime is another partner we're running right now. I mean, I can go on and on. But as you can see, like it's not category.

19:48It's just very category agnostic. Like we could come up with a campaign for any brand. I love it. Hey, Matt, this is super cool. Congratulations on everything. Final question. Give me the quickest thing you can think of. I have a fortune here. This is a real fortune. This is not a stunt. This is just like, I got a fortune out of a dinner a couple of weeks ago and I keep it on my desk because I don't understand at all what it means. Maybe you do. It says, son said, colon, quote, even Popeye didn't eat his spinach until he had to. What do you think that means? I'm so happy you brought that up for two reasons.

20:21One, because you kept it. And that is one thing we tell brands all the time. People keep their slips. Not only do they keep it, they post it on the social media, 7%. So this thing goes viral on social. So that's the crazy thing about you keeping it. And then we're having this conversation because that just shows how many people actually keep their fortune and think about a brand being on the back of that. But secondly, the reason one of the big impetuses behind us even starting this company was because of fortunes like you just read to me. That don't make any sense? It makes no sense. Fortunes are supposed to be inspirational, positive, like about wealth, health, happiness.

20:59Like, yes, that's funny. And it's like, what the hell does this thing mean? But like when we did our market research in the beginning, we interviewed a ton of people in Chinese restaurants. We're like, they're like, we hate our fortunes. These fortunes are stale. Why don't we get new fortunes? And they're just the old, the factories kept recycling, kept recycling. And you might get the same fortune. No more. Like we, you will never get the same fortune again. And so I don't, to answer your question directly, I don't know what that means, but it's not supposed to mean anything. And that's fun, but we're going to make fortunes so much better and make sure you get fortunes that are going to help you start your next business and inspire you because they're supposed to inspire you.

21:41And we're here to inspire and help brands get into people's hands to inspire millions and millions of consumers. Jason, this has been awesome, man. I really appreciate it. Truly grateful for you to take the time and to learn about this. Well, thanks, Matt. You didn't tell me what my fortune meant, but you told me so much more. We'll send you some good ones. That's all for this week. But hey, let's keep the conversation going. I write a newsletter called One Thing Better, where every week I give you one way to improve your work and build a career or company you love. You can subscribe for free at jasonpfeiffer.com slash newsletter, jasonpfeiffer.com slash newsletter.

22:22And if you do, you should definitely reply and say hello. I promise I'll get back to you. Problem Solvers is a production of Entrepreneur Media and comes out every Monday morning. So make sure you're subscribed so you do not miss an episode. Thanks to Deepa Shah for production. My name is Jason Pfeiffer. See you next week.