745 Hannah Cheng: Co-Founder and CEO of Mimi Cheng’s

0:00I am unwilling to give up, but I will start over from scratch as many times as it takes to get where I want to be.

0:09Kara Goldin:You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be, go focus on what you can control. Hi everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Hi, everyone. Welcome back to The Kara Golden Show. Today, we're heading to New York City, the city where food, culture, and entrepreneurship collide. My special guest today is Hannah Chang, who is the co-founder and CEO of Mimi Chang's, the dumpling brand that started as a cult favorite restaurant in New York City and is now expanding into packaged foods and frozen aisles nationwide from a career on the trading floor with JP Morgan to making the leap into food, what started in 2014 as a family run dumpling shop with her sister, Marian, inspired by their mom's recipes has grown into a thriving brand with restaurants, ready-to-eat Taiwanese meals in the Northeast, and frozen dumplings launching at Whole Foods Nationwide this fall.

1:35Kara Goldin:So I'm excited to dig into how Hannah has built Mimi Chang's from scratch, how she's navigated nearly a decade of success in the notoriously tough restaurant business and her vision for making dumplings more than just food, but a lifestyle brand. So Hannah, welcome to the show. So excited to meet you finally. What an intro. Thank you again for having us here. Absolutely. I'm so proud of you. So and so honored that you came on. So let's start simple. When someone eats or someone purchases, someone tries Mimi Chang's dumplings for the first time? What are they really buying into besides amazing, amazing food?

2:19I think they're buying into family heritage as well as just they're buying into themselves. I think we always ask ourselves, one of our North Stars is when you buy our product, how do you feel about yourself? Do you feel like you're worthy of feeding yourself better food? Do you feel like you're worthy of a great dining experience? And we want our product to make our customers feel like they are worthy of all these things.

2:44Kara Goldin:Definitely, definitely. So you started your career at J.P. Morgan. And when you finally made the leap, you were actually on the trading floor. I mean, crazy, amazing, you know, very, very noble career for sure. But you decided to leave Wall Street for this decision, this entrepreneurship, right? So what was it that you said, okay, today's the day or what, like, what really triggered this? Well, I actually did both for two years, which I don't recommend for, from a lifestyle perspective, but from a financial security perspective, it definitely was great to not have to worry about money while I was building out this business.

3:35And then after two years, it felt like the restaurant was a really viable business. So it was time to take the leap and do it full time or, you know, kind of keep talking about it. So the way I thought about was like, I could always come back. It's not like I'm signing this job away in blood and I'll never get it back. I can always find something similar to it and come back, but I'll never get this opportunity again to try running my own business with my sister.

4:06Kara Goldin:It's so interesting because I remember when we were starting Hint and we met with a few people, they were, you know, we were definitely, we decided to go all in. We were self-funding the company as well. But some of the people that we talked to would say, you know, you're, I mean, it's very risky, right? What you're doing. And then there were other people that we knew who thought that we should stay with the job and then start our company, no matter how much money you have, because, you know, you want to minimize the risk. So did you feel like people were kind of giving you this advice? Like, what are you doing?

4:56Kara Goldin:And also, you're starting a company with your sister. I mean, did they just think like, Hannah, what has happened to you? I wouldn't recommend most people do this. I generally, my advice to people is you don't work with family and you don't work with friends unless you've worked with them before. However, I think my sister and I, the way our dynamic is, we've never been competitive growing up and we've always been each other's number one fans. So even though we might not always see eye to eye on every business decision, at the end of the day, we know the other person's intention and motive came from the best place.

5:37So it's she's the best business partner I could have because I have 100 percent trust in her and vice versa. And that removes a lot of the drama and anxiety around starting your own business when you have this person in your corner that you know will always have your back.

5:57Kara Goldin:It's so, so, so true. I couldn't agree more. It's not for everybody, but especially if you have different skill sets. for sure. So what were those early days like? You're taking this idea, was the idea that you would open a restaurant, multiple restaurants that you would be on the shelves at Whole Foods? What was kind of the first idea and then the first step that you took? So our initial idea was always a frozen food company. So we joke now that the restaurant's been a 12-year-long marketing play for us to get on shelf to retail. And one of my friends, I remember at the time, you know, frozen food 12 years ago is very different than what it is today.

6:45COVID has changed a lot of consumer behavior and expectations around the freezer aisle, for the better, in my opinion. And my friend 12 years ago at this time said, well, you don't have a brand. People are not going to know to come look for you in the frozen aisle. And my college roommate and best friend, her grandfather actually helped launch the Reo's sauce side of the business. And so since I was 18, I kept hearing about this restaurant, how they had one restaurant and then created this incredible sauce line. And so we thought to ourselves, why don't we follow Reo's model? We'll open up one restaurant, build some brand equity, show proof of concept and then go into retail.

7:28And then of course, opening restaurants, I think in general, especially in New York City, is one of the hardest things you can do career wise. And we did it with zero restaurant experience. We signed a 10 year lease, brick and mortar lease in New York without having ever done a pop up, which again is not the advice I give to entrepreneurs these days, but luckily it worked out for us. And as we built that restaurant and we learned actually how to run a restaurant, which that in itself was a trial by fire, we just kept getting hungry and hungrier for to open more and more restaurants because as we hired amazing people, amazing people like to grow and to get promoted.

8:09And it's very hard to do that with one location. So we kept opening more restaurants, building more brand equity. And then COVID, we were actually having our best year ever in 2020. And then COVID hit and it came all to a screeching halt. And it actually forced us to go back into Frozen. Actually, Eva Chen from Instagram, she was DMing us saying like, how can I help support a small business? And she's like, why don't you do Frozen? And I was like, you know what? We've been talking about doing Frozen for so many years. And we had explored it twice before. And what we found each time was a lot of times people, you know, have these stories where restaurants start a CPG line because they think it'll be an additive line of business, not knowing that it's a completely different business.

9:03You can't run it as a hobby or as a side business. So each time we dug into it further and further, we realized this isn't the time for us to do that yet. And then with COVID and with Eva saying like, hey, I'll put on my Instagram if you guys do this. We're like, you know what? We have nothing to lose at this point. The restaurants closed. So we did. And the dumplings sold so well. We started delivering them to the Hamptons, to upstate, and we did gold belly and we saw the demand for it. Again, COVID was a captive market, very different. But the fact that there was this level of interest felt very promising.

9:40So it felt like the right time to move in to Frozen.

9:43Kara Goldin:I love it. So you started with one restaurant and today, how many restaurants do you have? So we started with one and then we have, we've opened four in total, but as we expanded into retail and we saw how well it was doing and the opportunity, like the size of the opportunity at the end of the day, you only have so many hours in the day. And if our goal in five years is to be a huge frozen food company, and not somebody who operated a handful of restaurants with a frozen food company, we decided it was the right time to pare down our restaurants. So we still have our original location in the East Village as a way to stay connected to the community, as well as an R &D kitchen, just a way to stay plugged into the hospitality world.

10:29And we actually have a location opening in JFK Terminal 1 next summer, which we're very excited about. And then our frozen food business also has a food service side to the business. So you can find it at different stadiums, restaurants, hotels, things like that.

10:45Kara Goldin:That's awesome. So the first two years when you were opening Mimi Chang's, but still on the training floor, you were taking your mom's recipes. How much was your mom involved in those decisions about which recipes? And did you change any of those recipes prior to launching? So they were all her recipes. And of course, she had zero measurements, as like most good home cooks don't have. They send you a list of ingredients and then you kind of tinker around with it. And she and my dad came to New York originally for two weeks for the opening and ended up staying for two months to help out. And now every time they come visit, they always have a return ticket booked.

11:33I think they're a little scarred from getting stuck for so long working for free. And so she helped us perfect our recipes because a recipe at home, it doesn't just scale up proportionally in a restaurant. And just the way a restaurant recipe doesn't scale up proportionally to a co-manufacturer level, you always have to tinker a little bit for the process, for the equipment.

11:55Kara Goldin:So you and your sister, Marianne, started Mimi Chang's together. Heather. So what would you say to other entrepreneurs? You've touched on this a little bit, but the pros and cons of being in business with a family member, I think that the one thing that you and I were chatting about even before we got started is that if you have different skill sets, that's such a key. But can you talk a little bit about the dynamic there? For sure. So we always describe ourselves as a Vinton diagram. And the way the duties kind of fall is that I'm more front of house and she's sorry, she's more front of house and I'm more back of house.

12:35So, for example, the financials, the planning, the supply chain, logistics, everything where from idea conception to getting on shelf mainly falls within my domain. And then from on shelf to customer experience falls in Marion's domain. But of course, you know, we weigh in.

12:58Kara Goldin:So you open Mimi Chang's, the restaurant, and you're, I guess, opening these other restaurants in the early days as well. Did you have a moment when you thought, this is really a brand, right? Like this, there's an expectation when people come in and it could be more. I know you started thinking about this as a brand that was, you know, potentially going to be frozen. But what was the moment when you kind of trusted that this was, that it's going to happen? Oh, that's such a good question. I don't know if there's a specific time or date or event that I can point to. It was almost more of a gut feeling.

13:46And I think in general, when you lead with your heart and what you're really, truly excited and passionate about and you stick to your priorities, I think that that idea of intention and passion always comes through regardless of what stage it's at. at. So I don't think I have a specific time I can point to for sure. But, you know, we're always excited when people recognize the brand and also surprised, even though it's been 11 years later. So, yeah.

14:22Kara Goldin:So COVID, it was the point when you started really doing direct to consumer, as you mentioned. So how many years was that from the time that you actually started the first restaurant? Six years, five and a half. Yeah. Yeah. And did you ever think it was going to take that long to actually do it? You know, it's not that it took a long time. I felt like we had a lot of learning to do in different ways before we got to retail. We had always been exploring retail even within during those five years. And I remember someone had connected us with the largest dumpling company in the world, the individual who used to run their dumpling category.

15:08And he would tell us about their Costco roadshows and how they had multi-million dollar marketing budgets. And it was so hard that he as a grown man would like break down crying regularly on these roadshows. And I'm thinking to myself, we don't have a$3 million marketing budget. We are not ready to play in this field yet. We still have so much to learn. And COVID really forced our hand in this. And it also, like I mentioned before, it changed the expectations from consumers about frozen food. You know, it used to be a lot of sad TV dinners, a certain type of frozen pizza, and now it's Roberta's pizza, it's restaurant quality food.

15:48And people are realizing, especially during COVID, that frozen food is actually an amazing way to get high quality food because the nutrition and tastes are preserved right on the spot. And I think that really helped open up the door and buyer, you know, almost like they were ready to see more innovation in this category because of COVID.

16:14Kara Goldin:Yeah, definitely. And also Frozen, the ability for consumers to receive Frozen, right? As more and more people were doing that, more and more companies were doing that, you know, the costs and the ability to do that for a brand also changed significantly. Did you find that as well? Maybe in the early days you were looking into it and by the time COVID came around, it was still hard, but it was definitely changing. You know, I think that it's a double-edged sword because COVID changed and made people more receptive to frozen food. But then on the supply chain side, the logistics for Frozen went haywire.

16:58The cost of Frozen freight was astronomical, and quite a few businesses decided to leave Frozen retail because of that. And as we were going to Frozen, everybody who was familiar with the CPG world kept telling us like, oh, you're going into Frozen. That's the hardest aisle to be in. And I think I just got used to hearing that from the restaurants, because when we were starting to think about opening a restaurant, everybody said, why would you do that? It's the hardest industry to go into, especially in New York City, which is arguably one of the most competitive and top culinary destinations in the world.

17:37Who do you guys think you are opening a restaurant with zero culinary degrees, zero culinary experience? We just had the heart and desire to do this and to share what it was. We wanted to create an experience that felt more similar to what we grew up with. So like really great food in terms of taste and quality of ingredients, but not also really fun crossover fusion flavors. You know, I kind of hate the word authentic because what's authentic to you is not what's authentic to me. For me, authenticity is the same as eating congee for breakfast as much as it is eating scallion pancakes, but also with avocado, egg and cheese in it, because that is my experience.

18:21That's my cultural mashup. And we just found food, especially dumplings, to be such a fun palette, a way to cross over and just have fun with different flavors.

18:32Kara Goldin:Was there a dumpling that you put on either your menu or you launched with that you thought, this is going to be amazing, and it wasn't? Or is there one that you launched that you were like, I don't know, I guess we could try. And it just killed it. Yeah, there definitely are a handful of those that come to mind. And so one of my favorite flavors is a more traditional flavor, which is actually fish dumplings. And we made it from scratch. They were super fresh. Nobody liked it. It was probably a worth selling flavor. And then the flavors that have done really well are top two flavors over the last decade.

19:14One has been our collaboration with Pizza Loves Emily. It's this amazing cheeseburger with a gochujang-based sauce, white cheddar cheese, caramelized onions, crushed pretzels. It sounds bizarre to put it all in a dumpling. And I guarantee you, it will be one of your most memorable best bites you've ever had. And our chicken parm has also been, we've done many variations of a chicken parm, including our own in-house recipes. We've done a collab with John and Vinny's with a really fun crispy cheese skirt around the dumplings. And I think there's this old misconception about anything with red sauce in the freezer aisle that it kind of will taste like jarred sauce with oregano.

20:00And did you get a chance to try the cheeseburger? Sorry, the chicken parm dumplings last night? I did. It was so good. I'm so glad you enjoyed it because we were so meticulous about the sauce. we said like we really want the red sauce to taste like a red sauce that you make from scratch. And that's what we did with this dumpling. And so when you try it, it tastes really fresh and people it actually captures the essence of chicken parm just like in a new fun format. And so I would say those two flavors have been our best sellers. And then the traditional fish dumpling has been our worst seller.

20:38But I was talking to someone last week and they were we're talking about Mimi Chang's and they said the thing that they love most was that they never knew what our monthly special was going to be, but they knew we would deliver on flavor. And that's what we've always strived to do is to make really good food, tasty food, healthy and accessible. Definitely.

21:01Kara Goldin:So how many dumplings does somebody eat in a sitting? I mean, when I look at kind of the serving size of a, obviously this varies, but what is sort of typical for people? So what's interesting is that in Asian cultures, dumplings tend to be more of the main entree because it's a dish that has everything you would need. It has protein, it has vegetables, It has little carbs. So it's really a complete meal. But I feel like in American culture, it tends to be more of an appetizer. So I would say like as an appetizer, you're probably looking at at least three to five. And for me personally, as a meal, I would like about eight to 10, depending on how hungry I am.

21:45Kara Goldin:Definitely. So when you think about the Mimi Chang's cult status in New York City, how do you think you got there? Like, how do you think you just became known for doing what you're doing and obviously good and good quality? But was there anything that really kind of you attribute that to? Maybe it's collaborations. You've talked a bit about that. But was there any one thing or do you think it was a combination of multiple things? I always think there's no such thing as a magic bullet. But I think what really put us on the map was the quality of the ingredients we were sourcing. And that was a big story that we told around it.

22:31And I think it was one of those early situations where we weren't trying to be the cheapest option on the block. We were looking to be the highest quality option. And then on top of that, I think our monthly specials, people were really intrigued by those. And as we built rapport and trust and people were like, okay, these specials are actually really amazing and fun. We were able to get kind of crazier and crazier with the flavors that we did. But I don't think there was one thing. I think, again, it kind of goes back to just leading with your heart and like making every business decision from that point, from a point of finding joy and passion versus is this the best business decision?

23:15And, you know, there's definitely been times where we've like, oh, this special probably won't be the best seller, but how fun would it be to do it? And we've done it. I love it.

23:25Kara Goldin:So there are many people who think about taking investment. You've self-funded your product to date. You're also an angel investor and who has looked at and invested in various deals. What lessons from being an entrepreneur yourself and just from building Mimi Chang's has influenced how you invest? I would imagine that having you as an investor in a company I know firsthand is, you know, it's a great asset because you're not just talking to somebody who's sitting in, you know, the position of having been a private equity or a venture, right? You've actually been an operator. And I think that that's key.

24:17Kara Goldin:And also an operator that starts at zero. right? Which is also so key. But what are, if you were to name a couple of things or a couple of lessons that you've learned that really influence how you invest? Yeah, I think, so we, our restaurants have been self-funded and then our new business venture with the frozen food, we actually decided to fundraise, which we can chat about that after this question, because that was also an interesting process to decide whether or not to actually bring on outside investments. But I think it's exactly what you said. It brings so much credibility and also the network.